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 December 31, 2008

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)

Bangalore , Karnataka, India
(Jurisdiction of incorporation or organization)

Electronics City, Hosur Road, Bangalore - 560 100, Karnataka, India. +91-80-2852-0261
(Address of principal executive offices)

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

Form 20-F þ Form 40-F 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

EXHIBIT 99.13

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 December 31, 2008. 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 January 13, 2009, we announced our results of operations for the quarter ended December 31, 2008. 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 January 13, 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 Third Quarter ended December 31, 2008", 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 quarter and nine months ended December 31, 2008 and 2007 (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 U.S. GAAP. We have attached this fact sheet to this Form 6-K as Exhibit 99.5.

On January 13, 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 January 13, 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 December 31, 2008, 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 International Financial Reporting Standards for the quarter and nine months ended December 31, 2008; Indian GAAP Balance Sheet, Profit & Loss Account, Cash Flow statement, Schedules, Notes on Accounts and Auditors Report for the quarter and nine months ended December 31, 2008; Indian GAAP Consolidated Balance Sheet, Consolidated Profit & Loss Account, Consolidated Cash Flow statement, Consolidated Schedules, Consolidated Notes on Accounts and Auditors Report and U.S. GAAP Unaudited Consolidated Financial Information for the quarter and nine months ended December 31, 2008. We have attached these documents to this Form 6-K as Exhibits 99.10, 99.11, 99.12 and 99.13, 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: January 16, 2009	Chief Executive Officer

INDEX TO EXHIBITS

No.	Exhibits
99.1	IFRS Press Release
99.2	Indian GAAP Press Release
99.3	Transcript of January 13, 2009 Press Conference
99.4	Presentation: Performance of the Infosys group for the Third Quarter ended December 31, 2008
99.5	Fact Sheet regarding Registrant's Profit and Loss Account Summary for the quarter and nine months ended December 31, 2008 and 2007 (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 U.S. GAAP
99.6	Transcript of January 13, 2009 2:00 p.m. IST Earnings Call
99.7	Transcript of January 13, 2009 6:00 p.m. IST Earnings Call
99.8	Transcript of January 13, 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 International Financial Reporting Standards for the quarter and nine months ended December 31, 2008
99.11	Indian GAAP Balance Sheet, Profit & Loss Account, Cash Flow statement, Schedules, Notes on Accounts and Auditors Report for the quarter and nine months ended December 31, 2008
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 nine months ended December 31, 2008
99.13	U.S. GAAP Unaudited Consolidated Financial Information for the quarter and nine months ended December 31, 2008

EX-99.1

EXHIBIT 99.1
IFRS Press Release

Infosys Technologies (NASDAQ: INFY) Announces Results for the Quarter ended December 31, 2008

Q3 revenues grew by 8.0% year on year; constant currency 14.6%

Q3 revenues sequentially declined by 3.7%; in constant currency grew by 1.0%

Bangalore, India – January 13, 2009

Highlights

Consolidated results for the quarter ended December 31, 2008

• Third quarter revenues at $ 1,171 million, up 8.0% from the corresponding quarter last fiscal; in constant currency 14.6%
• Earnings per American Depositary Share* (ADS) increased to $ 0.58 from $ 0.55 in the corresponding quarter last fiscal; YoY growth was 5.5%
• 30 new clients were added during the quarter by Infosys and its subsidiaries
• Gross addition of 5,997 employees (net 2,772) for the quarter by Infosys and its subsidiaries
• 103,078 employees as on December 31, 2008 for Infosys and its subsidiaries

*The tax provision for quarters ended December 31, 2008 and December 31, 2007 includes a net tax reversal of $ 12 million and $ 13 million respectively. Excluding this reversal, the earnings per share for the quarters ended December 31, 2008 and December 31, 2007 would have been $ 0.56 and $ 0.53 respectively, resulting in a YOY growth of 5.7%.

“In a challenging environment, our focus is on creating value for clients, running an optimized business, and evolving our business model that will allow us to emerge stronger when the global economy starts recovering,” said S. Gopalakrishnan, CEO and Managing Director.

Business outlook

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

Outlook under IFRS#
Quarter ending March 31, 2009

• Consolidated revenues are expected to be in the range of $ 1,128 million and $ 1,170 million; YoY decline of 1.2% to growth of 2.5%; in constant currency, growth of 4.7% – 8.6%
• Consolidated earnings per American Depositary Share are expected to be $ 0.55; same as last year@

Fiscal year ending March 31, 2009

• Consolidated revenues are expected to be in the range of $ 4.67 billion and $ 4.71 billion; YoY growth of 11.8% – 12.8%; in constant currency 15.6% – 17.6%
• Consolidated earnings per American Depositary Share@@ are expected to be $ 2.23; YoY growth of 9.9%

# Exchange rates considered for major global currencies: AUD / USD 0.69; GBP / USD 1.45; Euro / USD 1.41
@ Including tax reversal pertaining to earlier period of $ 5 million for the quarter ended March 31, 2008. Excluding the tax reversal, the YOY growth is expected to be 1.8%
@@ Including net tax reversal pertaining to earlier periods of $ 19 million in fiscal 2009 and $ 30 million in fiscal 2008 respectively. Excluding the tax reversal, the earnings per share is expected to be $ 2.20 for the year ending March 31, 2009; YoY growth of 11.1%

Expansion of services and significant projects

Infosys is increasingly focusing on value-based pricing models for its offerings. After the successful launch of our retail solution ShoppingTrip360, Infosys partnered with Bharti Airtel to provide a superior experience to customers of its Direct-To-Home TV service through Infosys’ Digital Convergence Platform.

Banking and Capital Markets continue to provide us significant projects. A leading bank engaged Infosys in multiple projects including customization of services, running targeted advertisement campaigns to improve cross-sell rates, and streamlining the company’s online product application process. A credit rating agency engaged Infosys to implement and support its CRM to analyze campaigns and segment its customers better. Infosys partnered with a financial information firm to accelerate its product innovation cycle. A financial services firm sought Infosys’ expertise for a multi-year governance, risk and compliance implementation program.

Customers across industries continue to repose trust in Infosys to improve their businesses and operations. An energy major sought Infosys’ help to transform its IT shared services organization supporting its oil, gas and power businesses across Europe, America, and Asia. A manufacturing firm chose Infosys to support its global sales and distribution SAP platform. An aircraft company engaged Infosys in software acceptance testing and quality measurements of its applications. An auto financial services firm consulted Infosys for setting up its Business Process Outsourcing office. A firm in the document management industry partnered with Infosys to address the performance and scalability of its data warehousing systems. Infosys' performance engineering services will address performance prediction, capacity planning, performance engineering and a governance framework for performance management. A high tech major engaged Infosys to implement a complex identity and access mana gement platform.

Clients sought our engineering services. An aero-structures company engaged Infosys to design, develop and analyze aircraft structures. For an aerospace company, we are developing fuselage structures and for another, we are engineering aircraft structure, systems, interiors and wiring harness.

We continue to make inroads into new markets. Infosys will manage the transition of applications for an insurance and banking company that is restructuring its core systems to improve overall efficiency. A bank engaged Infosys to implement Microsoft CRM. A Middle Eastern company consulted Infosys to set up the business process of its insurance division which includes developing the company’s business requirements, detailed process maps, and planning for business analysis.

“Our robust and flexible operating and financial models position us well in the current uncertain economic environment,” said V. Balakrishnan, Chief Financial Officer. “Our operating margins during the quarter increased primarily due to depreciation of rupee which was to some extent offset by the depreciation of other major currencies against the US dollar.”

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 103,000 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 potential acquisi tions, 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, 2008 and on Form 6-K for the quarters ended June 30, 2008 and September 30,2008. 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.

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	Bani Paintal Dhawan, India +91 (80) 2852 2408 Bani_Dhawan@infosys.com	Peter McLaughlin, USA +1 (213) 268 9363 Peter_Mclaughlin@infosys.com

Unaudited Condensed Financial Statements in compliance with International Financial Reporting Standards (IFRS) for the nine months ended December 31, 2008

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Balance Sheets

(Dollars in millions except share data)

	As of
	December 31, 2008	March 31, 2008
ASSETS
Current Assets
Cash and cash equivalents	$1,948	$2,058
Available-for-sale financial assets	–	18
Investments in certificates of deposit	41	–
Trade receivables	721	824
Unbilled revenue	164	120
Prepayments and other assets	77	107
Total current assets	$2,951	3,127
Non-current assets
Property, plant and equipment	938	1,022
Goodwill	142	174
Intangible assets	9	11
Deferred income tax assets	89	73
Income tax assets	38	55
Other non-current assets	49	45
Total non-current assets	1,265	1,380
Total assets	$4,216	$4,507
LIABILITIES AND EQUITY
Current Liabilities
Trade payables	$3	$12
Derivative financial instruments	43	29
Current income tax liabilities	117	101
Client deposits	5	1
Unearned revenue	87	71
Employee benefit obligations	14	35
Provisions	15	13
Other current liabilities	274	300
Total current liabilities	558	562
Non-current liabilities
Non-current liabilities	54	29
Total liabilities	612	591
Equity
Share capital-Rs. 5 ($ 0.16) par value 600,000,000 equity shares authorized, issued and outstanding 572,641,503 and 571,995,758 as of December 31, 2008 and March 31, 2008, respectively	64	64
Share premium	666	655
Retained earnings	3,297	2,896
Other components of equity	(423)	301
Total equity	3,604	3,916
Total liabilities and equity	$4,216	$4,507

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Income Statements 

(Dollars in millions except share data)

	Three months ended December 31,		Nine months ended December 31,		Year ended March 31,
	2008	2007	2008	2007	2008
Revenues	$1,171	$1,084	$3,542	$3,034	$4,176
Cost of sales	661	629	2,049	1,789	2,453
Gross profit	510	455	1,493	1,245	1,723
Operating Expenses:
Selling and marketing expenses	55	52	184	174	230
Administrative expenses	82	89	265	243	334
Total operating expenses	137	141	449	417	564
Operating profit	373	314	1,044	828	1,159
Other income (expense)	(39)	(3)	(85)	15	4
Finance income	46	43	135	125	171
Profit before income taxes	380	354	1,094	968	1,334
Income tax expense	48	42	134	118	171
Profit after tax	$332	$312	$960	$850	$1,163
Attributable to:
Minority interest	–	–	–-	–	–
Equity holders	332	312	960	850	1,163
Net profit	$332	$312	$960	$850	$1,163
Earnings per equity share
Basic ($)	0.58	0.55	1.69	1.49	2.04
Diluted ($)	0.58	0.55	1.68	1.49	2.04
Weighted average equity shares used in computing earnings per equity share
Basic	569,755,757	568,512,968	569,571,267	568,421,831	568,564,740
Diluted	570,449,069	570,452,274	570,650,033	570,376,939	570,473,287

Unaudited U.S.GAAP Financial Statements for the nine months ended December 31, 2008

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Balance Sheets

 (Dollars in millions except share data)

	As of
	March 31, 2008	December 31, 2008
	(1)
ASSETS
Current assets
Cash and cash equivalents	$2,058	$1,948
Investments in liquid mutual fund units	18	–
Investments in certificates of deposit	–	41
Trade accounts receivable, net of allowances	824	721
Unbilled revenue	120	164
Prepaid expenses and other current assets	107	77
Deferred tax assets	2	5
Total current assets	3,129	2,956
Property, plant and equipment, net	1,022	938
Goodwill	150	122
Intangible assets, net	25	17
Deferred tax assets	66	79
Advance income taxes	55	38
Other assets	45	49
Total assets	$4,492	$4,199
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$12	$3
Income taxes payable	101	117
Client deposits	1	5
Unearned revenue	71	87
Other current liabilities	386	383
Total current liabilities	571	595
Non-current liabilities
Other non-current liabilities	11	11
Stockholders’ equity
Common stock, Rs. 5 ($ 0.16) par value 600,000,000 equity shares authorized, issued and outstanding 571,995,758 and 572,641,503 as of March 31, 2008 and December 31, 2008, respectively	64	64
Additional paid-in capital	718	730
Accumulated other comprehensive income	311	(413)
Retained earnings	2,817	3,212
Total stockholders’ equity	3,910	3,593
Total liabilities and stockholders’ equity	$4,492	$4,199

(1) March 31, 2008 balances were obtained from the audited financial statements

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Statements of Income

(Dollars in millions except share data)

	Three months ended December 31,		Nine months ended December 31,
	2007	2008	2007	2008
Revenues	$1,084	$1,171	$3,034	$3,542
Cost of revenues	629	661	1,789	2,048
Gross profit	455	510	1,245	1,494
Operating Expenses:
Selling and marketing expenses	52	55	174	184
General and administrative expenses	89	82	243	265
Amortization of intangible assets	2	2	6	7
Total operating expenses	143	139	423	456
Operating income	312	371	822	1,038
Other income, net	40	7	140	50
Income before income taxes	352	378	962	1,088
Provision for income taxes	42	48	118	134
Net income	$310	$330	$ 844	$954
Earnings per equity share
Basic	$0.54	$0.58	$1.49	$1.68
Diluted	$0.54	$0.58	$ 1.48	$1.67
Weighted average equity shares used in computing earnings per equity share
Basic	568,512,968	569,755,757	568,421,831	569,571,267
Diluted	570,363,129	570,082,857	570,439,766	570,341,551

EX-99.2

EXHIBIT 99.2
Indian GAAP Press Release

Infosys Technologies Announces Results for the Quarter ended December 31, 2008

Q3 revenues grew by 35.5% year on year; sequential growth 6.8%

Bangalore, India – January 13, 2009

Highlights

Consolidated results for the quarter ended December 31, 2008

• Income was Rs. 5,786 crore for the quarter ended December 31, 2008; YoY growth was 35.5%
• Net profit after tax was Rs. 1,641* crore for the quarter ended December 31, 2008; YoY growth was 33.3%
• Earnings per share increased to Rs. 28.66* from Rs. 21.54 in the corresponding quarter in the previous year; YoY growth was 33.1%

* The net profit for the quarters ended December 31, 2008 and December 31,2007 includes a net tax reversal pertaining to earlier periods amounting to Rs. 62 crore and Rs. 50 crore respectively. Excluding this reversal, the earnings per share for the quarters ended December 31, 2008 and December 31, 2007 would have been Rs. 27.58 and Rs. 20.66 respectively, resulting in a YoY growth of 33.5%.
Others

• 30 new clients were added during the quarter by Infosys and its subsidiaries
• Gross addition of 5,997 employees (net 2,772) for the quarter by Infosys and its subsidiaries
• 1,03,078 employees as on December 31, 2008 for Infosys and its subsidiaries

“In a challenging environment, our focus is on creating value for clients, running an optimized business, and evolving our business model that will allow us to emerge stronger when the global economy starts recovering,” said S. Gopalakrishnan, CEO and Managing Director.

Business outlook

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

Outlook under Indian GAAP – consolidated

Quarter ending March 31, 2009*

• Income is expected to be in the range of Rs. 5,494 crore and Rs. 5,699 crore; YoY growth of 21.0% – 25.5%
• Earnings per share is expected to be Rs. 26.49; YoY growth of 21.4%**

Fiscal year ending March 31, 2009*

• Income is expected to be in the range of Rs. 21,552 crore and Rs. 21,757 crore; YoY growth of 29.1% – 30.3%
• Earnings per share*** is expected to be Rs. 102.92; YoY growth of 26.2%

* Conversion 1 US$ = Rs. 48.71
** Including net tax reversal of Rs. 20 crore pertaining to earlier period for the quarter ended March 31, 2008. Excluding the tax reversal, the YOY growth is expected to be 23.4%
*** Including tax reversal pertaining to earlier periods of Rs. 93 crore in fiscal 2009 and Rs. 121 crore in fiscal 2008 respectively. Excluding the tax reversal, the earnings per share is expected to be Rs.101.30 for the year ending March 31, 2009; YoY growth of 27.6%

Outlook under IFRS#

Quarter ending March 31, 2009

• Consolidated revenues are expected to be in the range of $ 1,128 million and $ 1,170 million; YoY decline of 1.2% to growth of 2.5%; in constant currency, growth of 4.7% – 8.6%
• Consolidated earnings per American Depositary Share are expected to be $ 0.55; same as last year@

Fiscal year ending March 31, 2009

• Consolidated revenues are expected to be in the range of $ 4.67 billion and $ 4.71 billion; YoY growth of 11.8% – 12.8%; in constant currency 15.6% – 17.6%
• Consolidated earnings per American Depositary Share@@ are expected to be $ 2.23; YoY growth of 9.9%

# Exchange rates considered for major global currencies: AUD / USD 0.69; GBP / USD 1.45; Euro / USD 1.41
@ Including tax reversal pertaining to earlier period of $ 5 million for the quarter ended March 31, 2008. Excluding the tax reversal, the YOY decline is expected to be 1.8%
@@ Including net tax reversal pertaining to earlier periods of $ 19 million in fiscal 2009 and $ 30 million in fiscal 2008 respectively. Excluding the tax reversal, the earnings per share is expected to be $ 2.20 for the year ending March 31, 2009; YoY growth of 11.1%

Awards and recognition

Industry leaders and customers commended Infosys’ endeavor to enhance customer experience and achieve organizational excellence.

We won the Outsourcing Institute and Vantage Partners’ first-ever customer relationship management award. We were recognized in the Most Admired Knowledge Enterprise (MAKE) study for our excellence in knowledge management through content sharing, collaboration and professional networking. NASSCOM acclaimed the best practices of Infosys Women’s Inclusivity Network (IWIN) to promote gender empowerment and leadership development.

Infosys’ solution won the Hitachi Data Systems Diamond Award for 'Best Virtualization Strategy', and the Platinum Award for 'Best Green Strategy for a Data Center'. Infosys is now a member of The Global Dow, an index that measures blue chips by size, reputation and importance.

Infosys BPO won the 2008 Six Sigma and Business Improvement Award for Organizational Business Improvement in Transactional Services at the third Annual Global Lean, Six Sigma & Business Improvement Summit, USA. Infosys BPO was also conferred the 'Group Excellence in Business Continuity Management' award at the second Asia Business Continuity Awards ceremony held in Singapore.

Expansion of services and significant projects

Infosys is increasingly focusing on value-based pricing models for its offerings. After the successful launch of our retail solution ShoppingTrip360, Infosys partnered with Bharti Airtel to provide a superior experience to customers of its Direct-To-Home TV service through Infosys’ Digital Convergence Platform.

Banking and Capital Markets continue to provide us significant projects. A leading bank engaged Infosys in multiple projects including customization of services, running targeted advertisement campaigns to improve cross-sell rates, and streamlining the company’s online product application process. A credit rating agency engaged Infosys to implement and support its CRM to analyze campaigns and segment its customers better. Infosys partnered with a financial information firm to accelerate its product innovation cycle. A financial services firm sought Infosys’ expertise for a multi-year governance, risk and compliance implementation program.

Customers across industries continue to repose trust in Infosys to improve their businesses and operations. An energy major sought Infosys’ help to transform its IT shared services organization supporting its oil, gas and power businesses across Europe, America, and Asia. A manufacturing firm chose Infosys to support its global sales and distribution SAP platform. An aircraft company engaged Infosys in software acceptance testing and quality measurements of its applications. An auto financial services firm consulted Infosys for setting up its Business Process Outsourcing office. A firm in the document management industry partnered with Infosys to address the performance and scalability of its data warehousing systems. Infosys' performance engineering services will address performance prediction, capacity planning, performance engineering and a governance framework for performance management. A high tech major engaged Infosys to implement a complex identity and access man agement platform.

Clients sought our engineering services. An aero-structures company engaged Infosys to design, develop and analyze aircraft structures. For an aerospace company, we are developing fuselage structures and for another, we are engineering aircraft structure, systems, interiors and wiring harness.

We continue to make inroads into new markets. Infosys will manage the transition of applications for an insurance and banking company that is restructuring its core systems to improve overall efficiency. A bank engaged Infosys to implement Microsoft CRM. A Middle Eastern company consulted Infosys to set up the business process of its insurance division which includes developing the company’s business requirements, detailed process maps, and planning for business analysis.

“On a constant currency basis, pricing declined by 1.8% during the quarter,” said S.D. Shibulal, Chief Operating Officer. “We are comfortable with the current pricing environment and believe that the pricing could get impacted if the situation worsens further.”

Finacle^TM

With its transformational capabilities and wide array of modular solutions, Finacle^TM, our universal banking solution, continues to see high traction with banks globally with a strong momentum in Europe, Middle East and Australia (EMEA) and The Americas. Finacle^TM added six customers this quarter - two from EMEA and four from Asia Pacific (APAC). This includes one of the largest international banking groups in Central and Eastern Europe as well as the recently announced contract for Punjab National Bank’s six regional rural banks (RRBs). Seven banks went live on Finacle^TM this quarter. This includes three each in EMEA and APAC and one from The Americas.

Infosys BPO

Infosys BPO is providing customer service support for order handling and resolution to a telecom company. A reinsurer is working with Infosys BPO to achieve a flexible business model for its premium accounting cash management operations.

Process innovation

During the quarter, Infosys applied for an aggregate of 25 patents in the U.S. and India. With this, Infosys has an aggregate of 196 patent applications (pending) in both countries and has been granted two patents by the United States Patent and Trademark Office.

Liquidity and capital expenditure

Cash and cash equivalents, including investments in liquid mutual funds and certificate of deposits, as on December 31, 2008 was Rs. 9,686 crore (Rs. 7,933 crore as on December 31, 2007).

“Our robust and flexible operating and financial models position us well in the current uncertain economic environment,” said V. Balakrishnan, Chief Financial Officer. “Our operating margins during the quarter increased primarily due to depreciation of rupee which was to some extent offset by the depreciation of other major currencies against the US dollar.”

Human resources

During the quarter, Infosys and its subsidiaries added 5,997 employees (gross). The net addition during the quarter was 2,772.

“We have seen a decline in attrition this quarter,” said T. V. Mohandas Pai, Member of the Board and Head – HRD and Education & Research. “We have enhanced our investment in training and certification as part of our efforts to improve productivity and capability.”

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 103,000 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 potential acquis itions, 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, 2008 and on Form 6-K for the quarters ended June 30, 2008 and September 30, 2008. 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.

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	Bani Paintal Dhawan, India +91 (80) 2852 2408 Bani_Dhawan@infosys.com	Peter McLaughlin, USA +1 (213) 268 9363 Peter_Mclaughlin@infosys.com

INFOSYS TECHNOLOGIES LIMITED

in Rs. crore

Balance Sheet as at	December 31, 2008	March 31, 2008
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	286	286
Reserves and surplus	16,832	13,204
	17,118	13,490
APPLICATION OF FUNDS
FIXED ASSETS
Original cost	5,636	4,508
Less: Accumulated depreciation	2,152	1,837
Net book value	3,484	2,671
Add: Capital work-in-progress	847	1,260
	4,331	3,931
INVESTMENTS	1,184	964
DEFERRED TAX ASSETS	117	99
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	3,293	3,093
Cash and bank balances	7,854	6,429
Loans and advances	2,829	2,705
	13,976	12,227
LESS: CURRENT LIABILITIES AND PROVISIONS
Current liabilities	1,869	1,483
Provisions	621	2,248
NET CURRENT ASSETS	11,486	8,496
	17,118	13,490

NOTE:
The audited Balance Sheet as at December 31, 2008 has been taken on record at the Board meeting held on January 13, 2009.

INFOSYS TECHNOLOGIES LIMITED

in Rs. crore, except per share data

Profit and Loss Account for the	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Income from software services and products	5,429	3,999	15,011	11,413
Software development expenses	2,915	2,219	8,276	6,504
GROSS PROFIT	2,514	1,780	6,735	4,909
Selling and marketing expenses	240	172	712	541
General and administration expenses	318	281	945	790
	558	453	1,657	1,331
OPERATING PROFIT BEFORE DEPRECIATION	1,956	1,327	5,078	3,578
Depreciation	169	138	485	404
OPERATING PROFIT BEFORE TAX	1,787	1,189	4,593	3,174
Other Income, net	48	152	256	550
Provision for investments	(2)	–	(2)	–
NET PROFIT BEFORE TAX	1,833	1,341	4,847	3,724
Provision for taxation	235	155	597	436
NET PROFIT AFTER TAX	1,598	1,186	4,250	3,288
Balance Brought Forward	8,624	6,545	6,642	4,844
Less: Residual dividend paid	–	–	1	–
Additional dividend tax	–	–	–	–
	8,624	6,545	6,641	4,844
AMOUNT AVAILABLE FOR APPROPRIATION	10,222	7,731	10,891	8,132
Dividend
Interim	–	–	572	343
Final	–	–	–	–
Total dividend	–	–	572	343
Dividend tax	–	–	97	58
Amount transferred to general reserve	–	–	–	–
Balance in profit and loss account	10,222	7,731	10,222	7,731
	10,222	7,731	10,891	8,132
EARNINGS PER SHARE Equity shares of par value Rs. 5/- each
Before Exceptional Items
Basic	27.92	20.77	74.27	57.58
Diluted	27.89	20.70	74.13	57.38
Number of shares used in computing earnings per share
Basic	57,25,89,357	57,13,46,568	57,24,04,867	57,12,55,430
Diluted	57,32,82,669	57,32,85,874	57,34,83,633	57,32,10,538
Total Public Shareholding @
Number of shares	36,87,28,400	36,77,38,769	36,87,28,400	36,78,42,758
Percentage of shareholding	64.39	64.34	64.39	64.31

NOTE:

• The audited Profit & Loss Account for the quarter ended December 31, 2008 has been taken on record at the Board meeting held on January 13, 2009
• 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	December 31, 2008	March 31, 2008
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	286	286
Reserves and surplus	17,230	13,509
	17,516	13,795
APPLICATION OF FUNDS
FIXED ASSETS
Original cost	6,712	5,439
Less: Accumulated depreciation	2,359	1,986
Net book value	4,353	3,453
Add: Capital work-in-progress	919	1,324
	5,272	4,777
INVESTMENTS	198	72
DEFERRED TAX ASSETS	138	119
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	3,510	3,297
Cash and bank balances	8,463	6,950
Loans and advances	2,924	2,771
	14,897	13,018
LESS: CURRENT LIABILITIES AND PROVISIONS
Current liabilities	2,343	1,912
Provisions	646	2,279
NET CURRENT ASSETS	11,908	8,827
	17,516	13,795

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 December 31, 2008 has been taken on record at the Board meeting held on January 13, 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 December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Income from software services and products	5,786	4,271	16,058	12,150
Software development expenses	3,075	2,325	8,720	6,725
GROSS PROFIT	2,711	1,946	7,338	5,425
Selling and marketing expenses	274	205	834	693
General and administration expenses	406	349	1,200	972
	680	554	2,034	1,665
OPERATING PROFIT BEFORE DEPRECIATION	2,031	1,392	5,304	3,760
Depreciation	187	153	533	441
OPERATING PROFIT BEFORE TAX	1,844	1,239	4,771	3,319
Other income, net	40	158	223	565
Provision for investments	(2)	–	(2)	–
NET PROFIT BEFORE TAX	1,882	1,397	4,992	3,884
Provision for taxation	241	166	617	474
NET PROFIT AFTER TAX	1,641	1,231	4,375	3,410
Balance Brought Forward	8,892	6,719	6,828	4,941
Less: Residual dividend paid	–	–	1	–
Additional dividend tax	–	–	–	–
	8,892	6,719	6,827	4,941
AMOUNT AVAILABLE FOR APPROPRIATION	10,533	7,950	11,202	8,351
Dividend
Interim	–	–	572	343
Final	–	–	–	–
Total dividend	–	–	572	343
Dividend tax	–	–	97	58
Amount transferred to general reserve	–	–	–	–
Balance in profit and loss account	10,533	7,950	10,533	7,950
	10,533	7,950	11,202	8,351
EARNINGS PER SHARE
Equity shares of par value Rs. 5/– each
Before Exceptional Items
Basic	28.66	21.54	76.44	59.70
Diluted	28.63	21.47	76.30	59.49
Number of shares used in computing earnings per share
Basic	57,25,89,357	57,13,46,568	57,24,04,867	57,12,55,430
Diluted	57,32,82,669	57,32,85,874	57,34,83,633	57,32,10,538
Total Public Shareholding @
Number of shares	36,87,28,400	36,77,38,769	36,87,28,400	36,78,42,758
Percentage of shareholding	64.39	64.34	64.39	64.31

@ 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
Q3 FY 09 RESULTS
JANUARY 13, 2009

CORPORATE PARTICIPANTS

 Kris Gopalakrishnan
 Infosys Technologies - CEO and MD

 S.D. Shibulal
 Infosys Technologies - COO

 V. Balakrishnan
 Infosys Technologies - CFO

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

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

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

Amitabh Chaudhry
Infosys BPO - CEO

PRESS CONFERENCE PARTICIPANTS

Deepu
Business Standard

Gautam Das
Deccan Chronicle

Suresh
Bloomberg

Shamit
Business Line

Shiva Shankar
Mid-day

Meenu Shekar
Business India

Bala
UTVi

Balaji
Rediff

Aiyasha
Star News

Sumeet
Reuters

Bani Paintal Dhawan

Good afternoon everyone.  Welcome to Infosys quarter three result announcement.  It is a pleasure to meet you again.  We will start the proceedings by a presentation by Kris on the company’s financial performance.  Shibu will present on the company’s operational performance.  Kris will come back to provide the financial outlook.  This will be followed by the Q&A.  I would request you to press the black button in the panel in front of you, identify yourself and release it after you have asked the question.  Sorry, it is the red button in front of you.  Over to Kris now.

Kris Gopalakrishnan

Thanks Bani and good afternoon to everyone.  Thank you very much for coming to the news conference on performance for the third quarter ended December 31, 2008.  We have had good all round performance.  On every parameter you would look at, the company has done reasonably well.  In constant currency terms, we have grown 1% sequentially.  Our revenue is within the guidance which we gave.  Reported revenues, of course, dropped 3.7% but in constant currency grew 1% sequentially, in dollar terms. I am talking to you in dollar terms.  I will come back to the rupee performance.  There is a volume growth of 2% this quarter.  Offshore volumes of course grew more than onsite volumes and this is, of course, beneficial to the clients as well as to Infosys.  We added 30 new clients.  We won 4 large deals.  Our utilization improved.  Our attrition came down.  We added almost 6,000 less by 3 people, almost 6,000 new employees this quarter at a gross level and we are looking to add another 3,700 employees this quarter taking the total for the year to 27,000.  When we started the year, we said 25,000, but we will end up the year with about 27,000 gross additions and for the next year also, we have actually already made campus offers.  So, we will be continuing recruitment.  Our DSO, account receivable is 56 days again.  We have improved on last quarter’s performance.  So all around, the company has done well.  Now, looking at the actual numbers, now of course this is a safe harbor clause, the income in Indian GAAP was rupees Rs. 5,786 crores.  The year on year growth on rupee terms is 35.5% actually and net profit after tax is rupees Rs. 1,641 crores, again a year-on-year growth of 33.3%.  Earnings per share, year-on-year growth was 32.7%. So all good numbers.  30 new clients were added.  As I said, we added 5,997 employees at the gross level and today Infosys has 103,000 odd employees.  Looking at the profit and loss statement, we have an operating profit before depreciation of Rs. 2,031 crores, an operating profit before tax and interest of Rs. 1,844 crores and a net profit after tax of Rs. 1,641 crores.  I will come back after Shibu has taken you through the operational performance, but basically all round good performance.  Shibu…

S. D. Shibulal

Good afternoon.  As Kris said, this has been a very good quarter for us.  We have seen improvement all around even in very difficult times.  So many of these numbers which you have seen are slightly different from what you have seen in the past because of the currency fluctuations.  For example, if you look here, the North America has gone from 61.5% to 64.5% and Europe has come down, but just to give you some color. Europe declined by 12.5% sequentially on reported currency but it has actually only declined by 1.2%. So it is not material.  It has only declined by 1.2% in constant currency.  So, many of these numbers, one has to look in constant currency.  Utilization has gone up, excluding trainees, it has gone to 74.5%. So it has gone up from last quarter.  Revenue by project type, fixed price has gone up.  Our strategy is to increase fixed price and non-effort-based pricing.  Both are reflected in the fixed price here.  The fixed price has gone up quarter on quarter.  Onsite/offshore - onsite, if you look at the volume growth, the volume growth has been 2% this quarter, quarter on quarter the volume growth was 2%.  At the same time, onsite came down by 1% and offshore went up by 3.3%.  So, that shows interest in value for money, it shows interest in quality, interest in offshore and that is what is reflected here.  We added 30 new clients this quarter.  Total number of clients is 583.  Number of million dollar clients have come down marginally by 2.  Our repeat business this quarter was 97%.  We have received a number of awards and recognitions.  It is all listed here.  We were recognized as the Most Admired Knowledge Enterprise, the MAKE award.  Women Inclusivity Network (IWIN), NASSCOM has acclaimed the best practices of IWIN.  We are also member of The Global Dow, an index that measures the blue chip by size, reputation and importance in the global arena. We are focused on value-based pricing models, non-effort-based pricing models, either they are based on transactions, they are based on devices, some of them are based on outcomes.  So, we are focused more and more on value-based pricing which is getting reflected in the fixed price actually and fixed price percentage going up.  We successfully launched the retail solution Shopping Trip 360 and we also launched a solution for the home TV, direct to home TV service along with Airtel.  It is a digital convergence platform which we have developed.  It is our own intellectual property and the solution is launched along with Airtel.  There are multiple engagements which are listed on this page.  We work with marquee customers across all verticals.  Even in these tough times, our revenue in financial service and retail has gone up by 4.1% in constant currency in financial services and 2.9% in constant currency in retail.  Banking product is doing very well.   We are seeing good momentum in Europe, Middle East and Australia and in US.  We have applied for aggregate of 25 patents in US and in India during this quarter.  About 196 patent applications pending.  Total employee strength is 103,000.  We added 5,997 employees gross in Q3 and plan to add 3,700 gross in Q4 and that means we will add gross 27,000 employees this year.  The breakup is here.  The net addition is 2,772.  We also recruited 1,388 laterals in Q3.  We have 21 million square feet of space available which can accommodate 90,000 employees and an additional 3 million square feet under construction and that will accommodate another 14,000 employees.  Now let me request Kris to come back to give you the next quarter guidance.  Thank you.

Kris Gopalakrishnan

Thank you very much Shibu.  Our guidance for the fourth quarter, the last quarter of this fiscal is only adjusted because of the currency fluctuation and the decrease in revenue per employee which we saw, 1.8% in constant currency terms which we saw.  Other than that, it stays the same. The income is expected to be in the range of Rs. 5,494 crores to Rs. 5,699 crores.  That will give us a year-on-year growth of 21% to 25.5%.  Earnings per share is expected to be rupees Rs. 26.49.  That is a year-on-year growth of 21.4% and for the full year, our revenue is expected to be in the range of Rs. 21,552 crores to Rs. 21,757 crores which is an year-on-year growth of 29.1% to 30.3% and the earnings per share is rupees Rs. 102.92.  In summary as I said, this is again a reiteration of how strong the Infosys model is. In a challenging environment, our focus on creating value for our clients, our focus on running an optimized and efficient business has allowed us to show good performance in all the parameters you would evaluate a company.  As I said, we have added clients, we have grown volumes, we have grown in revenue terms slightly.  We have seen improvement in margin, we have seen reduction in attrition, we have seen improvement in utilization.  So every parameter you would look at, we have shown actually improvement.  Yes pricing has been impacted but we are comfortable with the current pricing environment and believe that the model is strong and we will be able to sustain the margins.  If the situation worsens further, yes, pricing could get impacted but to some extent we are able to manage these things.  These are business cycle. So as the business cycle improves, the situation improves, we believe that Infosys is in a very strong position and will emerge stronger.  This quarter the operating margin increased primarily due to the depreciation of the rupee.  It has been offset, of course, by depreciation of all other currencies but we are able to sustain the margins.  We have enhanced our investment in training and certification as part of our effort to improve productivity and capability, prepare our employees to actually provide more value to our clients and it is an efficient way of keeping the employees occupied and busy.  So with that we come to the end of the formal presentation.  Now we are open for questions.  Please identify yourself and then ask the question as usual.  Thank you.

Deepu

Kris, this is Deepu from Business Standard Newspaper.  One question for you.  What I can see from your client data, in the 100 million dollar plus client list, you have lost one client it seems.  It used to be 5 in quarter ended September 30 and now it is 4 and I believe the same client you have won in the first quarter.  Any specific reason why you lost this client and what space the client is into, is it in telecom and what is the specific reason for that?

Kris Gopalakrishnan

We have not lost this client.  This quarter the revenue from one of those clients is slightly lower than $ 100 million.  So when you look at the number of clients giving us more than $ 100 million, it is 4 rather than 5 but we have not lost the client.  Some of those numbers have come down because of also the currency fluctuation.  This quarter if you look at pound sterling, it has depreciated by 18% against dollar.  Australian dollar has depreciated by 23% against US dollar and Euro has depreciated by almost 11% against the dollar.  So that has had an impact when you report the revenues in dollar terms for some of these clients.

Gautam Das

Hi, this is Gautam Das from Deccan Chronicle.  Kris, when do you think that tech slump could recede, that is one and two, CIOs are spending exactly where, in what service lines, in what categories?  Thank you.

Kris Gopalakrishnan

The expert opinions and there is some variation here, are that improvement will be seen towards the end of 2009 or early part of 2010.  So we are looking at challenging period for the next 12 to 18 months.  Having said that, budgets are being finalized by companies right now.  By February mid, we expect budgets to be finalized and the expectation is that the budgets would be down slightly or may be constant.  In our discussions with our clients, they are giving indication that this year you should see allocation to offshore increasing.  We will have to wait and see.  We believe that we have a very strong value proposition for our clients and so hopefully we should see some benefit from this.  Where are customers investing?  Typically, maintenance, sustenance, infrastructure management, business process outsourcing, those are the areas where we are seeing good traction.  We are seeing some interesting opportunities in consulting also.  So, there is broad demand in various areas at this point.

Gautam Das

Another question.  Have you seen any upsides from the Satyam fiasco in terms of customer acquisition?

Kris Gopalakrishnan

See the situation is like this.  Some companies, some of those are actually our clients also, have approached us and we have taken the position that we have not proactively going to approach these companies but if they approach us, then we will take it as we would take any new business.  We would look at the request, put together a proposal and if the proposal is acceptable to the client, then we will take it forward.  So we have to wait and see.  The situation is also dynamic in the sense that the regulators, the government has put in a new board and we will have towait and see. Maybe this has an impact on Satyam, it will stabilize the situation and situation may be different.  So we will have to wait and see.

Suresh

Hi, this is Suresh from Bloomberg.  Do you all have an idea how many clients you’ll share business with… Telstra the other day said that they are going to consolidate vendors, they have 4 vendors including you’ll, EDS IBM, and Satyam and they are going to consolidate it to 2.  So, you’ll would have some idea where you and Satyam are joint vendors for some businesses where you think you might benefit.

Shibulal

We do not comment on specific customers.

Suresh

Could you share numbers at least, broadly at least you have about 10 clients with whom where you do business together with Satyam. So that would give us an idea of where you think you might benefit from?

S. D. Shibulal

There must be a number of customers but we do not have an exact number. There must be a number of customers.

Shamit

This is Shamit from Business Line.  A question to Kris.  Are there any particular verticals where you see budgets getting finalized before the other verticals and the second question is has there been any slowness in new projects?

Kris Gopalakrishnan

So, let me answer the second question first.  Definitely the velocity of business has slowed down and we have been seeing this now for two quarters starting September middle we saw that slowdown happening and that continues. The decision making is longer, due diligence is increasing and internally also customers want to make sure that they invest in projects which give them the maximum returns, the best returns, etc.  So that is very much there.  Then the question was…

Shamit

Are there any particular verticals where do you see budgets getting finalized before the other verticals?

Kris Gopalakrishnan

No.  See we are seeing few budgets getting finalized but I wouldn’t want to consider that as a trend or as an indication but we believe that most of the budgets would get finalized by mid February, then we can get a better idea and then we can give you a better feel for the numbers.

Shiva Shankar

I am Shiva Shankar from Mid Day.   Mohandas had said Infosys won’t hire employees from Satyam.  What is the company’s stand now?

T. V. Mohandas Pai

What we had said was that we had asked our HR not to act on any CVs received from employees of Satyam. Not to act and we said that because in the time of crisis, it is not right for people in industry to hire or poach people from companies in trouble.  Right now, it is very important that people stay together in Satyam and work their way out and come out because a lot of careers are at stake.  If 1,000 or 2,000 people were to leave and go away, the company could be impaired, that is why we said that. But it is no reflection on employees of Satyam. Let me say that because there have been many people who say that is a reflection.  It is no reflection, we respect them.  They are people of integrity.  Yeah, they are people of integrity, they are people of great competence and we respect them and later when things improve, we will consider everybody on merit.  We have a very open system.

Meenu Shekar

Meenu Shekar from the Business India.  Mohan, when it comes to clients, you say that if clients approach Infosys, you will take it on a case-by-case basis as you do. But if employees were to approach Infosys, why don’t you take them on an employee-to-employee basis.  At that point of time, why do you look at the company and not when it comes to the clients?

T. V. Mohandas Pai

We have said this because right now there is a crisis.  If clients approach, client talk is going to take time and that will be considered on merit as a separate case.  Right now, it is very important to restore confidence in the system and I think a new board has come, they have taken over. So things are much, much better than what it was maybe last week. So we will wait and watch but this is a position as of date.

Gautam Das

Gautam again from Deccan Chronicle.  Kris, can you quantify the pricing pressure bit?

Kris Gopalakrishnan

So this quarter, the impact in constant currency terms is 1.8%.  The blended pricing declined sequentially by 6.1% in reported currency and constant currency 1.8%. But this is not across the board.  In fact in many instances, we are able to find a win-win solution with the client.  They have some budget constraints, they are facing challenging times and we are able to work with them based on their budgets etc. and in most cases that is an option we would like to take with the clients. You have seen that there is a shift to offshore. That is beneficial to the clients.  It helps us staff the projects better, it helps us service the clients better. So it is a win-win scenario. So there are many options which we are putting on the table and the straight pricing is just only one of the options.  We believe that most clients would look at all these options and that is what we are seeing in our case before they ask for any price cut.

Gautam Das

Just another final question.  Are there any financing options?  There were some reports that said that companies with strong balance sheet would absorb the upfront cost of investment turning the, capex into an opex?

Kris Gopalakrishnan

See, turning capex into opex is not financing option.  It is a business model option.  See some of the new models like Software as a Service, platform-based BPO solution, etc. require let us say the service provider to create the solution, host it and then provide this service on a transaction basis.  So it is pay-as-you-go kind of model.  In that model, Infosys would develop the solution and host it.  So we are making the R&D investment.  We are making the capital investment and the client would pay based on usage of the service. So for example, we have a solution for purchase order processing, it is a procurement solution.  Our BPO and Enterprise Solutions group have that solution and here the pricing is based on volumes of transactions that pass through the system.  So that is a good example of the change that is happening in the business model.

Shamit

This is Shamit again.  We have seen your SG&A has come down quiet a bit compared to last year.  So, would you work on further decreasing your SG&A and secondly how much do you expect revenue from your non-linear revenue to add to your total revenue?

V. Balakrishnan

See SG&A, we always said there could be some 50 to 100 basis points which you can squeeze out.  That is what we have done.  I do not think it will come materially down from what it is today because we all need to get our salaries but I think it will be at this level for some time.  I would like Shibu to talk about the non-linear.

S. D. Shibulal

So, our fixed price has gone up from 34.1% to 36.3%.  It is a reflection of fixed price and non-effort based pricing.  If I take out Finacle which is a product, at this point, our non-effort based pricing would be about 3% to 4%.

Bala

This is Bala here from UTVi.  I just wanted to know your strategy going forward for campus recruitment?  Have you honored all the campus offers that you have made so far and going forward next year what is your strategy?

T. V. Mohandas Pai

As of this date, we have sent letters to everybody to whom offers were made earlier to join.  I think out of 18,100 offers, I think about 2,700 or 2,800, they are outstanding, we have sent letters.  So by March, it will all be closed.  They will all be in.  For the next year we have made 20,000 offers, and we will honor all those offers.  This company has always honored offers.  We are in the process of sending letters to them to say what period of time they would be joining.  We have asked them to come to a portal, and there is a whole process of handholding to make sure that from the time that we tell them about the intention to hire them to the time they actually join, there is a big process all over.

Deepu

This is Deepu from Business Standard once again.   Kris, just a follow up to my earlier question.  You said, the $ 100 million clients, now the revenue has come down a little bit, slightly less than $ 100 million?  Can you just quantify how much less because if I go to $ 90 million dollar client and 80 million dollar clients, I can see one client is missing out of that.  So now the same client is giving you $ 70 million plus revenue or how much less?

Kris Gopalakrishnan

So that particular client has come down to about $ 5 million dollars.  So it is just slightly below $ 100 million, but within still $ 90 to $ 100 million but it is possible that some other client drop from 90 to 100 to 80 to 90, etc.  We have not lost any of the large clients.  It is just that because of the impact of currency etc., some of the revenues reported in dollar terms have come down this quarter because of the significant movement in currency.  Again I want to reiterate, Pound-Sterling which is a large market for us, UK, has dropped by 18%.  Australia, again a significant market for us, has dropped by 23% and Euro has dropped by 11%.  So it will have an impact.  Let us say, you are billing a client $ 100, suddenly you are looking at $ 77 if it is an Australian client, you are looking at say $ 82 if the client is in UK.  That is what has impacted some of these things.

S. D. Shibulal

I also just want to point out something here that if you look at $ 70 million clients, it has gone up by one. The $ 60 million has gone up.  If you look at $ 30 million client, it has gone from 34 to 37.  The $ 20 million have gone up from 56 to 58.  So there have been movements both ways.

Male Speaker

 (Inaudible) _____3.7 and then 2.5?

V. Balakrishnan

Pricing on a constant currency has come down by 1.8%.  So if you look at the revenue growth, revenue growth sequentially declined by 3.7% in dollar terms and if you look at constant currency, it grew by 1%.  So most of the decline, what you saw in the revenue is mainly because of currency.  Net income, we gave a guidance of 57 cents.  We had a 7-cent benefit because of rupee-dollar.  We had an 8-cent impact because of the other currencies.  So net impact is 1 cent, which is forty five paise per share on the net income because of cross currency.

Male Speaker

Okay, in terms of rupee also now, at what price did you hedge?        

V. Balakrishnan

See, if you look at the rupee, the cross currency impacted the EPS by around Rs 3.23 per share and we had a rupee benefit of Rs. 4.19.  So net EPS as compared to guidance is Rs. 27.58, mainly because of the benefit we got from rupee and we have a hedging position of $ 576 million.  Last quarter was $ 932 million.  So, we have reduced it because we believe short-term, the chances of rupee appreciating is very low.

Male Speaker

Hedging position is how much?

V. Balakrishnan

$ 576 million.

Male Speaker

$ 576 million, okay.

Aiysha

Balakrishnan, Aiysha here from Star News.  We just heard your comment on one of the channels commenting on Satyam scam or scandal.  You said this case is a testing time for the regulatory authorities.  Do you think the regulatory authority should be redefined and they should begiven more powers so that the industry is not embarrassed by such kind of scams in the future?

V. Balakrishnan

I think all that will happen.  It will get evolved but what I am saying is there are several regulators in this country.  All of them have to act together, more decisively, very strongly and in a short time and should bring in credibility to the system very quickly.  Otherwise, it will go on for years, like the stock scam, the investigation is still going on and not concluded.  So we need decisive actions, quick actions so that you set an example. It will be a deterrent for others so that people will think twice before they do it again.  Even in US after the Enron, there were several regulations but again, there was a scam, Madoff scam.  So, scam will happen.  You cannot stop it, but you can set a clear example, so it will be a deterrent for others.  People will think twice before they do it.

Aiysha

You said there will be addition of 27,000 employees by this year end.  I mean total, 27,000 is that so?

T. V. Mohandas Pai

What I said was that we had originally said that we will hire 25,000 people for this year.  We said that in the first quarter, reiterated in the second quarter, end of the third quarter we are saying for the full year, we estimate that the 25,000 number to go to 27,000.

Aiysha

The lay-off process across the world after this recession has stabilized in the industry?

T. V. Mohandas Pai

No I am talking about Infosys, not the industry.  We have not had any lay-offs.  I am talking about Infosys.

Aiysha

Sir, this process has stabilized somewhere, I mean across the industry?

T. V. Mohandas Pai

What I would reckon is that companies are looking at the work force and deciding what they need to do but one message is very clear.  Tolerance for non-performance is non-existent.  Earlier, when there was a boom, people used to accept non-performance, no performance or whatever it is because they wanted people.  Now, I think people are very tough.  People who are not working hard, people who are not performing.  People whose conduct is not very good, there is no tolerance for them and that is part of this cleaning up the system that is happening today.

Male Speaker

What was your rate of attrition in Q3 and what is its impact on the future hirings the decreased drop in the rate?

T. V. Mohandas Pai

Our attrition last 12 months in Q3 is 11.8%, out of which 1.4% is involuntary attrition and the previous quarter was 12.8%.  Again, 1.4% was involuntary attrition.  Involuntary attrition is substantially people who do not complete our test after their training at Mysore.  Because we are clear, if you do not complete your test, after your finish your training and you get one more opportunity, then you do not carry on.  So it is largely that.  We have had about 1,790 odd people leave us this quarter in Technology and Services business.  It is the lowest on record in the last 8 quarters and is very largely due to the economic condition, and the fact that there is not much hiring.  We also have taken several steps in the company to improve our performance management system which will make sure that high performers are retained at all times.

Female Speaker

This is regarding the World Bank and Wipro issue that has come up recently.  One how credible is Wipro’s explanation that it is a normal practice. Is that so and has Infosys ever offered shares to customers on the Direct Share Program?

V. Balakrishnan

No, I think Wipro has clarified the position.  As far as we are concerned, we never had any Direct Share Program in any of our ADR issues in the past.

Male Speaker

Could you explain little bit about this client acquisition coming down, previous quarter plus also as against a year ago. What does it reflect actually, it has come down to 30 from 40 and 47 a year ago, that is the first one?

S. D. Shibulal

I believe is that we are adding clients at a healthy pace.  There may be some change quarter on quarter and year on year.  We today have 583 customers which is a pretty large number.  Our repeat business is 97%, which means that most of our revenue is coming from customers who are doing business with us for a long period of time and our top clients have grown by 3.2% and the rest is grown by 0.1% and overall growth of 1% in constant currency.  So these are all good numbers.  At the same time, we are focused on two things.  One is expanding our business with existing customers and No.2 is adding new customers but at the same time, we want to add customers in the Fortune 2000 because those are the customers who can grow with us over a period of time.  So, we have 583 customers, not all of them are Fortune 2000 because there may be some customers which are not in the Fortune 2000.

Male Speaker

What is the outlook for this quarter.  Do you see the trend, 47% to 30%, almost 50% you are down in client acquisition?

S. D. Shibulal

Yeah, I know, we don’t give a guidance for the number of customers we will add.  We will add customers.

Male Speaker

And then what is the reason attributed for revenue in geographies, US going up and Europe down, and is it also because of constant currency?

S. D. Shibulal

Yeah, lot of that is to do with constant currency because if you look at it in North America actually, constant currency went up by 1.5% and reported currency 1.1%.  Europe shows a dip but that is because of the currency because the Europe on reported currency declined 12.5% but the decline is nowhere near that.  The decline in constant currency is only 1.2% which is neither material nor secular in nature. So it is not something one needs to worry about because it is not secular in nature and Rest of the World grew by 5.8% in constant currency.

Male Speaker

There seems some stabilization returning in the BFSI space whereas telecom continues to be a pain area and in fact, what I can see from the revenue by industry is in your balance sheet, the contribution of telecom has also gone down significantly, any specific reason for that?

Ashok Vemuri

Yeah, I think in the BFSI segment, there continues to be significant amount of turbulence still.  I think there clearly is a revalidation if you will, of the kind of value proposition that we bring to the table as reflected in the fact that we have grown at 4.1% in constant currency terms and 1% in reporting currency terms. We have also added close to 9 new accounts on both sides of the pond and we continue to find that even though there is some amount of pricing pressure, the clients are still willing to pay us a premium for some of the services that we are bringing to the table.  I would not say that we have bottomed out in terms of what is still expected to come out.  I think the commentary is still that there are still certain bad news that may continue to come out from some of our clients in some of the segments but clearly, their percentage of work from a technology process and process outsourcing perspective, the percentage of business that is going to go to service companies like us is actually going up.  Our product has also done significantly well and continues to gain traction not only in the Asian markets but also increasingly in Europe as well as in the US.

Subhash Dhar

On telecom, if you look at the decline, most of the decline has happened because of the cross-currency effect.  There is no big crisis on the demand side.  However, telecom spenders tend to give us large engagements and therefore there is some lumpiness in our revenue expectations across quarters. That is to be expected.  I think we need to see that over a longer period of time.  So if you really look at these two factors.  One, the fact that most of the impact has been because of cross currency and that is primarily because in telecom more than half of our business is outside of North American market which makes it a little unique in terms of the portfolio that we run in Infosys and the fact that the engagements are usually large engagements. So they tend to have slightly lumpy movements across quarters.

Female Speaker

Can you give us a sense of what is happening in the BPO space?

Amitabh Chaudhry

On the BPO side, on a constant currency basis, we actually grew 4% quarter on quarter and the real numbers have actually come down a little bit.  This has been one of our best quarters in terms of client wins.  We actually had reduction in our staff as we continue to reposition our model based on a lower growth rate.  Also as we move up the value chain, we need a different set of people. So I think some of our existing people are finding it tough to move up and as our standards become stronger, they are failing certifications as Mohan pointed out as we are doing in the case of Infosys Technologies also.  Our international centers continue to expand and we are continuing to see growth in those areas.  We expect Manila and China to expand quite well in the next couple of quarters based on the client wins we have had.  Our solutions and platform story continues to make headway.  We have added one more client on the platform side and HRO.  Some of the solutions are selling extremely well in the market place.  We believe we have made a huge impact in the media and entertainment space and stuff like that.  So, overall a good quarter in a tough environment.  Obviously, with 58% of our revenues in Pounds and Euros we have been impacted negatively in terms of revenues but we have managed well.  Our net margins have grown by more than 1% in this quarter.  Obviously, positively impacted by the rupee depreciation but also by the cost cuts and the cost efficiency measures that we have taken in our overall operating model.

Male Speaker

Hi (Inaudible)____

Kris Gopalakrishnan

See in this environment, we are proactively converting some of our projects to fixed price projects.  This is one way in which we can work with our clients, meet their expectations on budget and still meet our expectation of improving productivity, maintaining margins, etc.  So it is a win-win situation.  We will have to wait and see whether when the situation improves, when the cycle changes and economic growth comes back, would clients would go back to time and material or not.  We will have to wait and see.  This is something which we have been proactively doing to meet the expectations of our clients.  For the near future probably the percentages would be around the same or may be fixed price will continue to go up slightly but I am talking about medium to long term.

Male Speaker

How many projects (Inaudible) _____

Kris Gopalakrishnan

No, no we don’t have Satyam as a vendor partner.  There are many customers where both of us are there.  I don’t have the number on how many customers both of us are working together but there are definitely many customers where both of us are working together.

Male Speaker

 (Inaudible) _____

Kris Gopalakrishnan

Let me clarify this again.  We are not proactively going after Satyam’s business.  If a company approaches Infosys, we will treat it in a similar fashion as we would treat a new request for proposal, a new project and if the client is agreeable to our proposal, our terms and conditions, then we would take it up.  Now when it comes to employees, the matter is completely different because they are not client employees, they are Satyam employees and then we have then go through a very complicated process.  Right now our position is that we would use Infosys employees to deliver the work and that is the position we have taken at this point.

Male Speaker

(Inaudible) _____ spending money as the reports have come committing, the minister also has committed…..is committing money to bail out Satyam.

Kris Gopalakrishnan

That is something between the government and Satyam.  If there is a request, I think the government has to decide.  My view, this is my personal view now, is that there are many ways they can do this. Only in probably extreme conditions the government should look at funding industry.  There are other ways in which you can probably extend credit from bank and things like that. That is probably the first option I mean they should look at.

Male Speaker

IT sector getting tax benefits in the last 10 years. Because of financial fraud a company has got into this kind of a mess and government stepping in actually its condoning what actually happened there.  My question is how is the industry and the company like you take this view?  Government bailing out money after giving tax benefits.

Kris Gopalakrishnan

See, the government is trying to protect jobs, right?  There are 53,000 employees in Satyam.  I mean government is trying to make sure that jobs are protected, etc. and I think in that sense we should all support this.  You know these 53,000 employees were not the cause of all these problems. So that is how we should look at it.

Male Speaker

There was a strong belief that to shore up Satyam any person, particularly Mr. Narayana Murthy from Infosys should have been there in the new board constituted by the government.  What is your stand?

Kris Gopalakrishnan

We had made it very clear that there is a conflict of interest.  Satyam is a competitor to Infosys or Infosys is a competitor to Satyam and none of us can serve on the board of Satyam.  It should be people from other industries and people like Kiran Karnik who has an IT background but he is more of an industry person but not really associated with any particular company.  So those are the right kind of people who should be on the board of Satyam and that is what I think has happened.

Male Speaker

I have a question (inaudible) _____  to ensure there is no further (inaudible)_____ industry.

Kris Gopalakrishnan

I will start off and may be Mohan and Bala would also have something to add.  In the short-term, you know definitely customers and investors would look for comfort, would look for, you know, trust building measures from companies.  If you look at our own disclosure this quarter, we have actually listed every single bank and the amount of money Infosys has in that bank.  Now, we have put that out because then anybody can contact the bank and find out whether the money is really there or not.  So, there is an expectation that you know you have to be ready for a higher amount of disclosure and things like that and I think it is good.  Now, medium to long term, I think you know the focus completely shifts, and I strongly believe that medium to long term the growth opportunity still exist.  If we have the right service, the right solution, the right capabilities, we have the ability to scale, you can take advantages of those growth opportunities, and so medium to long term, the focus will be actually on building those solutions, those capabilities, the leadership, the management, etc., required to take advantage of the growth opportunity.  So, the focus actually would shift from you know whatever has happened.  It is unfortunate that when there is a downturn, this also happen, but you know, I would not say that this would be a long lasting concern for investors or companies.  Mohan you want to add something.

T. V. Mohandas Pai

There are three things that Indian industry needs to do to make sure that such a thing may not happen again.  Indian industry, I am not saying Indian IT industry, Indian industry.  India as a whole.  I think the first thing is to make sure is the enhanced level of disclosure and transparency.  You will have to give a lot more information, you have got to be much more transparent, so that all stakeholders understand the state of affairs.  So, what the disclosure and transparency is, I think we have to look at best practices and maybe you know work together to come out with that.  The second thing that needs to be done is to have an institutional framework within every company which makes sure that no one person has such authority that it can be abused.  For example, within Infosys, we have this kind of structure, we have a very empowered audit committee.  We have a group of independent directors who spend a lot of time and energy and get into details. Our internal audit reports directly to the audit committee.  Statutory auditors have a direct access to the audit committee.  We have a whistleblower policy where any employee who feels something is wrong can write to the audit committee.  We have a direct hotline to the audit committee chairman, so that information can flow seamlessly.  Our internal systems are open to hundreds and thousands of project manages who can see their own project, how many people are allocated, what projects are done, what is the profitability, all our leadership many of them are sitting here know exactly what is happening within their own unit.  There is total transparency across all stakeholders.  The chance that any one person can manipulate is extremely limited, and we also made sure that the institutional mechanism between the internal audits, statutory audits, the audit committee, the board of directors works the maximum extent.  The independent directors meet among themselves, that is two.  Third thing what is required is effective enforcement of regulations in the country.  We have to create a culture where good people are rewarded and bad people go to jail.  We should create a culture in the country where regulators come down hard like Bala said to give strong deterrent punishment in a short while and not let cases drag on in courts for many, many years.  So, once that is done, I think the chance of something like this happening will reduce substantially.  Will it be eliminated, no.

Male Speaker

What is your reaction on the World Bank blacklisting Wipro, and there we heard even German was taken by surprise not knowing what the employees are doing, and what are the main (inaudible) _____ 56:14.

Kris Gopalakrishnan

Wipro has clarified the situation and given the details.  So, there are no other, you know, comments from us.  We have also said that you know we did not have a direct share program at Infosys in our ADS offerings.

Sumeet

Hi, this is Sumeet here from Reuters News.  Could you give me a quick view on your consulting and China units, the two units have continued to make loses, and do you see any upside to your consulting business in the near term due to the M&A activity that is going on in the market.  Thanks.

S. D. Shibulal

So, both are in investment mode.  China is recruiting.  The number of employees have crossed 1000 this quarter.  We had challenges with the customers early on in making China a viable delivery center, but that is changing now.  We are seeing more and more clients willing to accept China as a delivery center.  The quality of work coming out of China is very good and that is a big plus point.  Consulting also continued to be in investment mode.  The revenues have crossed a good number 100 million, I do not have the number in front of me, but the revenues are growing and the synergies between Infosys Consulting and the rest of the organization is allowing us to win good transformational deals.  So, if you remember last quarter, we had multiple transformational deals.  This quarter also we have won two or three transformational deals and that is the result of synergies between Infosys Consulting and the Infosys, the downstream organization.

Sumeet

Could you give me a timeframe when do you see these two units breaking even?

S. D. Shibulal

Consulting should breakeven in the next year, and China in the near future.

Bani Paintal Dhawan

Thank you everyone, we request you to join us for lunch.

Kris Gopalakrishnan

Thank you from our side, and see you all next quarter.  Thank you.

EX-99.4

EXHIBIT 99.4
Presentation

EX-99.5

Q4 Fact Sheet

EX-99.6

INFOSYS TECHNOLOGIES LIMITED - AFTERNOON EARNINGS CALL - AFTERNOON EARNINGS CALL

EX-99.7

EXHIBIT 99.7
Evening Earnings Call

INFOSYS TECHNOLOGIES LIMITED
EVENING CALL
Q3 FY 09 RESULTS
JANUARY 13, 2009

CORPORATE PARTICIPANTS

Kris Gopalakrishnan
Infosys Technologies - CEO and MD

S.D. Shibulal
Infosys Technologies - COO

V. Balakrishnan
Infosys Technologies - CFO

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

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

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

Amitabh Chaudhry
Infosys BPO - CEO

CONFERENCE CALL PARTICIPANTS

Bhavan Suri
William Blair

Moshe Katri
Cowen & Co

Joe Foresi
Janney Montgomerry

George Pric
Stifel Nicolaus

Rod Bourgeois
Bernstein

Trip Chowdhry
Global Equities

Ed Caso
Wachovia

Julio Quinteros
Goldman Sachs

Jamie Friedman
Susquenhanna

Mark Zgutowicz
Piper Jaffray

International Moderator

Good day everyone and welcome to the Infosys third quarter earnings for fiscal 2009 conference call.  Today’s conference is being recorded.  At this time, I would like to turn the conference over to Sandeep Mahindroo.  Please go ahead sir.

Sandeep Mahindroo

Thanks Jennifer.  Good morning everyone and welcome to this call to discuss Infosys financial results for the quarter ending December 31, 2008.  I am Sandeep from the Investor Relations team in New York.  Joining us today on this call is CEO and MD, Mr. S. Gopalakrishnan; COO, Mr. Shibulal; and CFO,  Mr. V. Balakrishnan along with the other members of the senior management.  We 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 and year ending March 31, 2009.  Subsequently, we will open up the discussion for Q&A.  Before I pass it on to the management, 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 risk that the company faces.  A full statement and explanation of these risks is available in our filings with the SEC which can be found on www.sec.gov. I would now pass it on to Mr. Gopalakrishnan.

Kris Gopalakrishnan

Thanks Sandeep and good morning, good afternoon, good evening to everyone wherever you are.  Thank you very much for participating in this call.  Despite a challenging environment including drastic movement in cross currencies, we have delivered a reasonable performance.  It is an all round performance.  Revenues in constant currency grew 1% sequentially in dollar terms.  The reported revenues of course dropped sequentially by 3.7% but in constant currency terms the revenue grew 1%.  Volume growth was 2%.  We had a blended pricing decline of 1.8% in constant currency terms but operating margin increased by 2.3% sequentially during the quarter.  We added almost 6,000 gross employees.  We met our guidance and the revenue was in the range in which we had talked about.  Our repeat business continues to be high at 97%.  We added 30 new clients during this quarter.  We closed 4 large deals of $ 50 million plus.  Our attrition has come down to 11.8%.  Utilization has gone up from 74.1% to 74.8%.  So all around, good performance.   We are looking to add another 3,700 gross employees.  Most of these are at entry level honoring the commitments we have made in the campuses and given the challenging environment, we feel we have delivered a good performance.  We have kept our guidance the same except for two things that were taken into consideration.  One is the currency movement, second is the blended pricing decline.  Other than that, we have kept the guidance for Q4 the same.  The environment continues to be challenging.  We feel that our model has again proved to be resilient.  We have proved that we are able to sustain margins in these difficult times and as things improve, when the cycle ends and recovery starts, we should be in a strong position to take advantage of this.  We have $ 1.98 billion dollars of cash on hand and overall a good performance.  Now , I will pass it on to my colleague Shibulal to give you more details on the business performance.

S. D. Shibulal

This is Shibu.  As Kris said, this has been a very good quarter for us.  In spite of multiple issues, we have delivered on the guidance.  Billing rates have come under pressure.  Our prices have come down by 1.8% on constant currency.  We believe it is manageable at this point.  There are multiple price negotiations.  Our strategy is to convert the price negotiations into more of value conversations.  We can convert deals to fixed price, to transaction-based pricing, link volume to price, etc. etc.  We also believe that if the situation gets worse, the pricing could come under pressure again.  We have not seen any material cancellation of projects as of right now.  They seem to run their course.  At the same time, the velocity of business has come down.  Decision making is slow.  Scrutinies are higher and that has impacted our growth.  Budgets are not finalized.  We are looking to February-March for finalizing budgets.  We have won 4 large deals, $ 50 to $ 100 million dollars this quarter and there are multiple deals in the pipeline.  Utilization has gone up, 74.8% compared to 74.1%.  We are comfortable with 76% to 80%.  Three subsidiaries, Infosys China, Infosys Consulting and Infosys Mexico are still in the investment phase but we need to look at these more from our MIS reporting rather than from the statutory reporting.  We have added 30 new clients this quarter.  Our top 10 clients grew 3.2% in constant currency and non-top 10 grew 0.1% sequentially in constant currency.  The contribution from the largest, the top client came down as percentage terms but in actual numbers in constant currency it has only moved down by a couple of million dollars, not anything material.  We will add 27,000 people this year.  We applied for 9,000 visas and out of that, the government has taken up 4,800.  Our visa utilization is 49% which is very healthy.  With that, let me now hand over to Bala to discuss the financials.

V. Balakrishnan

Good morning everybody.  This quarter was good.  Our revenues were $ 1.171 billion.  It is a decline of 3.7% on a reported number basis but if you look at the constant currency, it grew by 1% and it grew by around 14.6% on year-on-year basis.  I think if you look at the guidance we gave in the beginning of the quarter, we said the revenues will be somewhere between $ 1.175 billion to $ 1.220 billion.  If we restate it for the currency, the range could be $ 1.137 billion to $ 1.181 billion, the actual is $ 1.171 billion.  So, we met the guidance.  Even if you look at the EPS, we gave a guidance of 57 cents.  The actual is around 58 cents.  If you remove the 2 cents because of the tax reversals pertaining to earlier years, it is 56 cents.  It is mainly because of the cross currency impact.  Even though we had a benefit of 7 cents in the EPS because of the rupee depreciation against the dollar, we had an impact of 8 cents because of the cross-currency movements.  If you look at the gross margin for the quarter, it is around 43.6%, almost same as last quarter.  Operating margin has gone up.  It is 31.8% as compared to 29.5%.  It is basically because of the rupee impact.  We got a benefit of 4.7% in the margins because of rupee because it depreciated by close to 11% and we had a negative impact because of cross currency on the operating margin of 1% and the utilization coming down from 70.7% last quarter to 68.5% this quarter, impacted the margin by around 1.3%.  There were offsetting factors like reduction in SG&A and the reduction in overall per capita revenue.  So net-net at the net margin level, our net margin is 28.3%.  Last quarter, it was 26.2%.  If you remove the tax reversal, it is 27.3 % compared to 26.2% last quarter.  As you all know, in the beginning of the year, we gave a guidance of 19% to 21% for growth in revenues.  We reduced it to 13% to 15% in the beginning of the quarter mainly to factor in a currency impact and also the general economic environment.  Now, we are revising it to 12% to 13%.  If you look at the difference between 19% to 21% in the beginning and a 12% to 13% what we give today, the differences are mainly because of the currency.  Currency is around 4% to 5%.  So on a constant currency basis, the way to look at 12% to 13% is to look at constant currency, it will be around 16% to 18%.  Our guidance for the next quarter factors in the reduced per capita revenue because we have seen the per capita revenue reducing by 1.8% on constant currency terms in the third quarter.  We are taking the same per capita revenue for the fourth quarter and we are maintaining the guidance just adjusting it for currencies.  If you look at the non-operating income, we have a loss because of translation and hedging.  Last quarter, we had a loss of $ 28 million because of the currency.  This quarter, we have a loss of $ 44 million.  We had a benefit in the operating income because the rupee depreciated.  Operating income went up by $ 41 million dollars because of the rupee depreciation, but we had an impact on non-operating of around $ 44 million.  I think net-net at the net income level, the impact is minimized.  Subsidiaries have done well.  If you look at IBPO, they had $ 67 million of revenue, the net margin is 16%.  Australia did $ 26 million in revenue.  The revenue has come down there mainly because of currency.  At net income, they have 6.2% as net margins.  Consulting made a loss of $ 2.6 million.  China, made a loss of $ 2 million , Mexico, $ 0.5 million.  All these subsidiaries are still in the investment phase and that is the reason why they are making losses.  This quarter, the currency market has been quite volatile.  The economic environment has been challenging.  Even in this environment with all this volatility, we are able to maintain the growth, we are able to maintain the margins, we are able to have better DSO.  The DSO days were 56 days for the quarter.  In a quarter where there were a lot of holidays, where the environment is challenging, we are able to collect most of our receivables and make sure the DSA days are reduced.  We are ending the quarter with $ 1.98 billion of cash.  We believe that is very important in an environment like this which gives you a lot of comfort to not only us but also to the customers and other stake holders who wants to deal with us.  With this, I conclude.  Now we can open up the floor for Q&A.  Thank you.

Sandeep Mahindroo

Jennifer, we can start the Q&A.

International Moderator

Yes sir.  The question and answer session will be conducted electronically.  If you would like to ask a question, please do so by pressing the * key followed by the digit 1 on your touchtone telephone.  If you are using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment.  Once again, it is *1 on your touchtone telephone to ask a question and we would ask that you would limit yourself to one question.  We will pause for just a moment.  We will go ahead and take our first question from Bhavan Suri with William Blair.

Bhavan Suri

Hey guys, good quarter.  A couple of quick questions regarding the pricing issues.  The first, could you elaborate a little more on kind of discussions you have had with customers around pricing and then where are you experiencing these conversations.  Are they any specific vertical or any specific geo or is it across the board?

S. D. Shibulal

So we are having pricing discussions with few customers across verticals and across geos.  If you look at the past 10 quarters or so, you can clearly see that our prices have gone up, our revenue productivity has gone up quarter on quarter.  We have been able to convince our customers of the value which we provide and they have been willing to pay us higher value, higher rates throughout that period.  Today, the customers are undergoing trouble and they are under pressure.  So, that is why some of the discussions are happening.  Also, we are seeing, at least in some occasions, competitors cutting price globally and in offshore.  So our direction is usually to try and convert that discussion into a vital discussion on the value which we deliver and on the total cost of ownership.  So, we can look at linking those discussions through additional volume.  We can look at converting the deal into fixed price, we can look at converting the deal into other pricing models, we can look at productivity improvement.  So, we explore all these possibilities and usually we end up in combination in some of these possibilities and…

Bhavan Suri

Sorry.  And then I guess could you give you me some idea sort of, you said a handful of customers, a few customers, the magnitude of that and is there a risk that other customers kind of see you doing this and then bring their rate card and say we want lower rates, like could you quantify sort of the magnitude of it and then sort of the risk for the rest of the base to do that?

Kris Gopalakrishnan

See, that is why we don’t work with the rate card level.  We try to work with the clients to fix price the project so that we can get something out of it by improving productivity etc.  We can meet the customer expectations on their budgets etc.  We can also leverage our bench offshore. So we can offer some free resources again to meet their requirements and things like that, temporarily. So we are doing many things such that we meet their requirements and we keep our pricing intact as much as possible.  Of course, overall there will be some small impact and that is what you are seeing but by and large we are trying to keep it as minimum as possible.  In some cases, we are tying up the increases with volume increases, so that it is seen as volume discounts.

Bhavan Suri

Okay.  If I can squeak one last question in here, Bala if you look at the lowered guidance for the full year, what is the impact of that lower pricing rate on that say 2% decline in guidance?  Is there a portion of that that is due to the pricing versus the currency?

V. Balakrishnan

Well, if you look at the numbers, in the beginning of the year we said 19% to 21%.  In the beginning of this quarter, we said 13% to 15%.  Now we are saying 12% to 13%.  The reduction is mainly because of currency.  The impact of pricing is hardly some 0.5%, but the balance is mainly currency.  So, from 19%, if you look at 12%, there is a decline of 7% to 8%.  Of that, 4% to 5% is currency, balance was due to economic environment.  The pricing adjustment for the fourth quarter is only 0.5%.

Bhavan Suri

Okay, thanks.

International Moderator

Okay, we will move forward to our next question which will come from Moshe Katri with Cowen and Company.

Moshe Katri

Hey thanks.  Can you give us the revenue growth of the various verticals by constant currency?  Hello…

S. D. Shibulal

Yeah, I will give it to you now.  The revenue growth in constant currency, BFSI 4.1% in constant currency.  Manufacturing declined 3.7% in constant currency.  Retail grew by 2.9% in constant currency.  Telecom declined 3.4% in constant currency.  The remaining segments, others grew by 4.3% in constant currency.

Moshe Katri

Okay.  And then Bala, can you talk about the different moving parts that drove margins, you had a pretty strong gross and operating margin performance during the quarter.

V. Balakrishnan

Well, the operating margin has increased by around 2%.  It was 31.9% this quarter.  Last quarter, it was 29.9%.  Mainly because of rupee-dollar because rupee depreciated by around 11% against the dollar.  That gave a favorable impact of 4.7% on the margin but it was offset by the cross currency move of around 1% and also the decline in utilization of 1.3%.  There were some offsetting factors like reduction in SG&A which was more than compensated by the decrease in per capita revenue.  So, net-net, the operating margin went up by around 2%.

Moshe Katri

Okay.  And then Kris, you spoke very briefly about client’s budgets.  What are your preliminary thoughts based on what clients are telling you looking at 09, looking at overall budget, looking at the, you know, allocation for offshore?

Kris Gopalakrishnan

We believe that budgets would get finalized mid February.  That is the indication we are getting.  We also believe that budgets would be flat or maybe down, down may be upto 4%, may be 5%.  Discussion with clients, they have given us an indication that offshore allocation would increase.  We don’t have a percentage at this point.  They are just saying that please don’t reduce your recruitment plans etc., because we believe that offshore would increase and you need to be prepared for that.  So that is the stage at which we are at this point.  We will get a better picture of this probably mid February.  Now, they are also telling us that on the caution side, if things continue to be bad or worsen, even if the budgets are there, they may hesitate to spend or they may not be allowed to spend. So that caution is also definitely there.

Moshe Katri

Okay.  And then finally, BFSI held up really well during the quarter.  Can you talk about what you are seeing there in general and then maybe talk about some of the recent wins, I think you have added about 30 customers, maybe you can talk about which part came from BFSI.  Thanks.

Kris Gopalakrishnan

So, let me ask Ashok, he is here with me, to talk about BFSI.

Ashok Vemuri

Yeah thanks Kris.  So, the BFSI segment actually from a client addition perspective, of the 30, 9 clients are from BFSI and this is across both the US as well as Europe.  We are also beginning to see increased interest from our clients and prospects in other parts of the world, whether it is in Asia as well as in Latin America etc.  We have seen both volume growth and of course, pricing does continue to be a challenge but at this point in time, we are getting a premium for value-added services and we are seeing pricing either being maintained where it was and this is negotiation time for us, contractual negotiation time for us. So we are seeing pricing essentially being tied at a very flat level.  We are also seeing the kind of services that we have built out and the capabilities that we have built out and the investments that we have made are finding traction and increasing traction in the market place, especially in the areas of regulatory, risk management compliance, etc.  Also from our product perspective, that continues to gain traction both in Asia as well as increasingly in Western Europe and with clients in the US.  From a budget perspective, we do expect, as Kris mentioned, that the budgets will come in around the mid February time.  The good news there is that even though we may not be seeing increased allocations or increased dollars, the percentage to offshore companies is actually increasing and we are very confident from the commentary that we are hearing in the market that unlike last year there will not be too much of variation in budget closure and too much variability but the fact that the budgets will get definitely closed, albeit the numbers may be lesser.

Moshe Katri

Thanks. Good execution

Kris Gopalakrishnan

Of the client additions, 9 are in the BFSI space as Ashok said, 6 are in manufacturing, 4 in retail.  Rest are all over.  Out of this, 11 customers are in North America, 8 are in Europe, 11 rest of the world.

Moshe Katri

Thanks Kris.

International Moderator

Okay.  We will move to our next question which will come from Joseph Foresi with Janney Montgomerry.

Joseph Foresi

Hello gentlemen.  My first question here is just the decision to take up the hiring guidance.  Obviously, we know that it is a tough environment out there and it sounds like you are doing this because a lot of your potential customers have said that you might need excess capacity, not stop hiring, I wondered if you could just give us some insight as to why you wouldn’t at this point try to do more with less.

T. V. Mohandas Pai

No, let me explain this.  In the beginning of the year, we said we will hire 25,000 people as a target for the year.  It had three components.  The first component was the people who are freshers for whom we had made 18,000 offers last year.  The second component was the laterals and the third component was in the BPO.  Now, as of this quarter, we already hired about nearly 24,000 people.  Part of the increase compared to the pro rata figures that we had are due to the fact that the higher percentage of people than estimated from the fresher batch joined the company.  We make a certain estimate.  A higher percentage joined.  Now, we sat down and made a full evaluation to see what is going to be the gross numbers for the entire year and we found it is going to be closer to 27,000 based upon the offers made the previous year and percentage joins, based upon the lateral hires that we are doing currently in very, very small numbers for specialized skills and the joins in the BPO.  So we are not having an additional hiring target.  We are not hiring more people than required for this year.  We are just coming out with a statement as to what the estimated final count of hiring will be at a gross level.  That is for this year.  For the next year, our hiring is based upon the offers we made some time the previous year in the calendar year 2008 because the fresher batch is hired nearly 1 to 1-1/4 years ahead of our need because we always hire in advance.  So, we had made 20,000 offers already close to the first quarter itself.  So we had already made those offers because the college hiring starts from January-February of the calendar year and possibly ends by about June-July.  Out of 20,000, we estimate maybe 75% of the people may join. So 15,000 people may join next year.  The date of joining is going to be decided and intimated to them in a closed band or otherwise and we got to tell them.  Most of them will join at a particular point and they may not be available for billing in the next financial year because the period of training is 16 weeks.  After 16 weeks, they have to take a test and pass with a 4 out of 5 CGPA.  If they don’t get that, they go outside the company and right now to avoid people going into the bench and not having work, we have given them additional training of 8 more weeks.  So for the next year if things do not improve or things do not change in a big manner, we could have an extended training session.  So most of the people who join, they join at different quarters and they may still be training.  They may not add to the billable resources next year, but this is what we want to explain about the hiring.

Kris Gopalakrishnan

You will also realize that this quarter, including trainees, the utilization is 69%.  We are able to sustain or improve the margins. So our model includes the cost of training there.  Cost is not that very high.  So, we believe that we are looking at this from a long-term perspective.  By honoring our commitments, we are creating goodwill in the campuses.  By creating this trained pool of resources, we are preparing ourselves for the future and we will be able to respond faster if we see opportunities in the market.  So we see this as a strength of the model and a competitive advantage in some sense.

Joseph Foresi

Okay.  Just, I mean traditionally you would link or at least the analyst community believes that you would link headcount to revenue growth.  So as hiring numbers have gone up, can we expect that same link or is there not a link between the two?

Kris Gopalakrishnan

See, traditionally we would have planned for a utilization of 78% to 80%.  The utilization is lower because growth has slowed down. So you will have to use that factor.  Utilization will continue to be lower than our optimum level for the next few quarters unless of course growth picks up and we are able to use these people.  Attrition also is coming down.  So, that will also reduce utilization.  We are looking at how we can leverage this, how we can maybe take advantage of this, but right now it looks like utilization will be lower but the costs are not too high and we hope to sustain the margins in spite of all this.

Joseph Foresi

Just one last question on the labor front.  Let’s assume that the outlook for next year is potentially worse than maybe some the data points which you are giving right now and there is not as much work for your projected hiring scheduled, what is management’s view as far as how to handle that, would you be pushing out offers or assuming things get very bad, would you look at potential layoffs?

T. V. Mohandas Pai

No, let me explain that again.  Out of 15,000 people who may join, next year we will have an opening balance of maybe 105,000 people or 104,000 people.  Assuming an attrition rate of 10% because a 10% attrition would be a normal attrition even in the worst period.  In the most difficult period that we had in 2001, we had an attrition of something like 6.7% to 6.9%.  So, if you have a 10% attrition rate, you will normally have about 10,000 people leaving over a period of time for higher studies or whatever. Let’s not forget that 20% of people who leave, leave for higher studies and about 10% of people who level, leave because they drop out of the workforce on account of marriage or family reasons or something else.  So a 10% attrition rate means we will have 10,000 people, that means that we have net increase of 5,000 people and those 5,000 people will not be billable by the end of the financial year as per our current training schedule.  So they will not be sitting idle there. They will be in training.  I think we have found a nice balance in the target that we have set for the next year.

Joseph Foresi

Okay.  And just one last quick question, just may be on the Satyam front.  If management could give any of its sort of views on customer relationships, I know you have some overlapping customers and its view on taking business or additional business on from the potential fallout and also employees, if you guys can just present your views.  Thanks.

Kris Gopalakrishnan

So we are seeing some requests from our clients.  We are treating these as new requests and we would put together a proposal, give it to the customer, the customer accepts the proposal, then we will take this forward as we would any other business that comes our way.  We are not proactively canvassing for Satyam business for obvious reasons.  It is not the right thing to do and if a request comes, we will take it up.  Over and above this, of course, there is some increased due diligence from our customers.  Infosys is very well prepared, whatever questions the clients have, we are able to answer.  In fact, whatever the questions investors have also we are able to answer.  We have increased our level of disclosure.  We want to make sure that we give comfort to customers, prospects, investors etc., about the corporate governance practices at Infosys.  We have increased the disclosures as I said.  I don’t think this will increase the time taken to close deals etc. Already the velocity of business had been impacted because of the economic slowdown.  We don’t see this having an impact, especially in the medium to long term.

Joseph Foresi

Okay, thank you.

International Moderator

We will go ahead and move forward to our next question from George Price with Stifel Nicolaus.

George Price

Hi.  Thanks very much.  Just a couple of topics.  First, wanted to understand why telecom even on a constant currency basis was down 3.4% if that is even beyond British Telecom business or BT really moved a whole lot and if you could relate it that comment in the press on indications about over 1,000 employees working in BT possibly being benched in March and the fact that you are still hiring even if that occurs.  Thank you.

Subhash Dhar

Hi this is Subhash Dhar representing the communications business.  On the constant currency basis, yeah, the telecom vertical did decline.  I think there are a couple of reasons for that.  One is, of course, that the telecom industry has very few clients which are large accounts for us and therefore any decision freezing that happens takes with it a bunch of revenues.  So there is some lumpiness in that industry both in terms of business coming and getting frozen at times, that is one.  Second, we did have some vacations enforced in December in actually some of the biggest clients which was a first, it was something we have encountered in the past but has never been enforced in the past years but it was enforced in the year which went by.  So, that gave us a couple of weeks of impact on some of our biggest clients.

George Price

Okay and if you could just comment on the press article talking about the potential benching, I think it was 1200 employees at BT, possibly by March and may be how I presume to how you are thinking about quarter-over-quarter growth into the June quarter?

Subhash Dhar

Well, we do not know where that article came from.  As of now, we do not have a policy on commenting on specific customers, but we clearly do not understand where that article came from.

George Price

Okay, so that is something like you don’t, I guess, just asked a June quarter question. Do you think you could see another quarter-over-quarter decline in June?

Subhash Dhar

We expect it to be flat on a constant currency basis.

George Price

And that is an overall question for the business, not just telecom?

Subhash Dhar

Yeah, for the business.

George Price

Okay, thank you.

Subhash Dhar

Right.

International Moderator

We will move a question from Rod Bourgeois with Bernstein.

Rod Bourgeois

Yes, Rod Bourgeois here.  We talked about pricing on the earlier call but I wanted to clarify what you are assuming precisely in your guidance for the March quarter and if you got any assumptions on that, in terms of how it may play out over the next year. Are you assuming flat pricing in dollar terms or you still need a similar decline in pricing as what occurred in the December quarter?

S. D. Shibulal

So right now, we are assuming flat pricing in dollar terms for Q4.  Same pricing as end of Q3.

Rod Bourgeois

Okay great and is there something happening in the market that would cause you to believe that the pricing decline will attenuate now?  Is there a mix factor or some other dynamic happening where the pricing concession requests are subsiding at this point?

Kris Gopalakrishnan

No, by and large, we have been able to manage the pricing by giving various options and choices to our clients. So that their requirements are met, their budgets are met and our requirement to hold on to the pricing is met.  Now, fixed pricing by moving work offshore, by looking at, we have a bench anyway, so by giving for the short period, may be some additional resources to clients etc. So we are able to meet their expectations and manage our requirements also.  So that is what we are doing.  In some cases, we are linking pricing decreases with volume and growth.  So volume discount is again something we do always and so it is part of that.  So we are trying to manage this as best as we can.  Now if the situation just continues like this, we believe that we will be able to handle it better but if the environment worsens, then you know it could become challenging.  So, we have to wait and see.  We do not know what is going to happen there.

Rod Bourgeois

Okay, but from what you are seeing right now, with your value approaches to deal structuring, you think pricing can definitely be flat in the March quarter, but it is definitely a factor that you are monitoring closely.   Is that the way to look at it?

Kris Gopalakrishnan

Yes.  We feel that we can handle the margins.  We are saying the margins will be flat.  We have assumed that pricing will be the same level as Q3 and then, we are monitoring the situation very, very carefully.  Every pricing discussion gets escalated up to the Chief Operating Officer and the CFO.  So we are fully aware of its impact.  We have a portfolio approach.  So based on our ability to absorb that, we take the decision.  So, we have a portfolio approach, we look at it company wide, we look at the impact. So it is centralized at this point and we tightly control this.

Rod Bourgeois

Okay and I think you have indicated on this topic, but just wanted to followup, I mean we have seen in the last several months kind of an elongation of decision making cycles because of all the macro issues that are out there and in the last two to three months, we have had the Satyam fiasco as well as the Mumbai terrorist attacks.  Are you expecting any further elongation in decision-making cycles or you feel like the worst is behind, just on that front?

Kris Gopalakrishnan

No, whatever has happened in Mumbai and with Satyam, we are not seeing at this point any increase in decision making time etc.  Already velocity of business had slowed down past September, that is when the collapse of the various banks happened, etc. That is when the pendulum swung to the other side in terms of what everybody expected the economy to do.  Till then, there was hope that it may not happen but after that everybody decided the worst is going to happen. So the pendulum swung to the other extreme. Velocity came down after September.  We have not seen anything different now.  It continues to be challenging and slow.

Rod Bourgeois

Thank you guys very much.

International Moderator

We will go ahead and look forward to a question from Trip Chowdhry with Global Equities.

Trip Chowdhry

Thank you and very good execution.  I was just wondering regarding the H1 visas, it starts to be opened again in the month of April.  How do you see your needs would be regarding H1 visas and do you see it will be the same as last year, up or down and how about the pricing on visas and has your guidance incorporated the fee structures and the expenses related to visa.  Thank you.

Kris Gopalakrishnan

It considers that there is a seasonality to visa and typically in Q1, we will have higher visa expenses etc. That we normally factor in.  Now what the visa policy would be, what the regime is etc., we do not know at this point.  All data what we have is what you also have and our assumptions are all based on that it continues to be what it is today.  There is no new information we have about that.

Trip Chowdhry

Thanks.

International moderator

Okay, your next question comes from Ed Caso with Wachovia.

Edward Caso

Good morning, congratulations on managing in a tough environment.  A couple of quick questions here.  Is there a breakup fee for the Axon deal and how much was it in dollars?

V. Balakrishnan

Well, we got around GBP 4 million as a break inducement fee for the Axon deal.  There was an expense of around GBP 1.8 million and the net GBP 2.2 million is shown in the non-operating income.

Edward Caso

Any licence fees out of the ordinary in this quarter?  I thought that I heard that the product business is doing well.

V. Balakrishnan

There is nothing extraordinary except in the tax line item.  We had a reversal of $ 12 million pertaining to earlier years.  Other than that, I do not think there is any exceptional item.

Edward Caso

Are there anything different on your approval for variable comp and could you give us some thoughts on where wages stand, sort of going forward?

V. Balakrishnan

Well the variable component for this quarter is similar or slightly higher than the last two quarters. There is no change there.  Going forward, the variable payout depends on the revenue growth and the operating margins.  So that is the function of those two.  At least for third quarter there is no reduction in the variable pay.  It is almost similar to first two quarters or slightly higher than that.

Edward Caso

I was curious about, I know we were sort of coming up on the annual wage cycle here in April. Any thoughts at this point, I assume wages have been increase has been dropping, I mean is it looking like they are going to be flat year over year, coming up in FY 10?

Kris Gopalakrishnan

We believe that salary increases would be muted, if any this year.  The environment has considerably softened at this point. So it may be very much muted this year.

Edward Caso

Final question, on the BPO business, I think it was down, if I saw the numbers right.  How much of that is sort of the timing of the contract and how much of that is just sort of lower volumes that you might be doing?

Kris Gopalakrishnan

I have Amitabh with me, so he will talk about BPO.  Amitabh?

Amitabh Chaudhry

I am not very clear whether it was a revenue question, but if it was, then yes.  The basic decline in revenue is because of currency. 58% of our revenues come in GBP and Euros and if you take a look on a constant currency basis, we actually grew 4 plus percent quarter-on-quarter from a BPO perspective.  So it is mainly because of the currency that we have got hit in a big way this quarter because of GBP and Euro depreciation against the dollar.

Edward Caso

Thank you.

International Moderator

Alright, we will move to a question from Julio Quinteros with Goldman Sachs.

Julio Quinteros

Hey guys, sort of a quick question. I mean I realized that the constant currency growth rate relative to the beginning of the year has not moved all that much, but when you look at the rate of deceleration from the beginning of the year to what is projected into the fourth quarter, it looks like we are finishing the fourth quarter at roughly the 5% to 9% year-over-year growth in constant currency and if you sort of project that growth rate out into fiscal 2010. What drivers or what are you seeing right now in the business that will actually lead to any acceleration into fiscal year 2010?

Kris Gopalakrishnan

Julio, you see in constant currency terms, the growth rate would probably be around 15% to 16%.

Julio Quinteros

That is for the full year but for the fourth quarter, it is finishing at 5% to 9% right?

Kris Gopalakrishnan

Okay fourth quarter okay.  Now going forward, yes it is going to be a challenging environment.  We are looking at all drivers for growth, looking at what else we can do.  The feeling is that if there is some stability recovery does not have to really happen but if there is some stability, then customers will feel confident in kicking off some projects and that should give us some increase in growth. So that is what we see now. We are waiting for the budgets to be finalized. We will know by probably mid February. That will also give us some indication about allocation to offshore.  In our discussion with clients, they are telling us that please do not significantly reduce your recruitments and things like that. So we will have to wait and see.

Julio Quinteros

Okay got it.  Then, just a couple of quick questions looking at the balance sheet.       Bala, can you just talk about the other comprehensive losses that we are seeing?  I think the accumulated other comprehensive income is now negative $ 413 million in the details of the balance sheet for the buildup of the book of shareholders equity.  Just sort of what is dragging that down because the balance started with a positive $ 39 million and it is now down to negative 413?  What are the drivers on that?

Kris Gopalakrishnan

Can you repeat that, we were not able to completely follow that question?  It is about balance sheet.

Julio Quinteros

On the balance sheet, in the buildup for stockholders equity, the accumulated other comprehensive income entry is negative 413 million?

V. Balakrishnan

Yes, that is a translation loss or gain because when the rupee depreciates or appreciates in a big way in any quarter, that number comes out bigger because rupee depreciated by 11% this quarter.  So that is a translation of the balance sheet items at a particular date.

Julio Quinteros

Got it and then on the decline in the DSOs for the quarter.  Can you just walk back to why your DSOs went down so much?  Are you actively going after your accounts to try and collect some cash and by the same token, it does not appear like you are picking up any reserves or doubtful accounts.  Can you just sort of give us a balance in terms of the faster collections but no real improvement in the doubtful accounts’ reserves?

Kris Gopalakrishnan

See, in an environment like this, we are focussed on collecting the money as quickly and as diligently as possible. So there has been tremendous focus from everyone on collection and our people have done a good job.  It is just that they have done a good job. That is all.

Julio Quinteros

And then what about on the doubtful accounts side?  Why would not you also be taking up the doubtful account reserves?

Kris Gopalakrishnan

Again, can you just repeat that Julio.

Julio Quinteros

Why would the doubtful accounts balance not be going up at the same time?  It does not look like it actually went up for the quarter.

V. Balakrishnan

Are you saying that we are writing off more receivables?

Julio Quinteros

No, no, no the doubtful accounts.  I can followup afterwards, no problem, thanks.

V. Balakrishnan

No no, look Julio.  We provide for all receivables more than 180 days.  Even for receivables less than 180 days, if there are concerns, we do provide for it.  We do not have any large uncollectable receivables at any point of time.  This quarter the DSO days basically went down because in the environment like this, we said we have to go behind all customers and make sure we collect money on time because this is the environment where people have lot of challenges on the liquidity front.  So the DSOs actually came down because we are aggressive in collecting the money.  In spite of more holidays in this quarter, our sales force went out and collected most of the dues from the clients and that is why the DSO days came down.

Julio Quinteros

And Bala very quickly for the last quarter, the implied operating margin, it looks like it is down from the third quarter just based on the comments for flat margins for the year.  The level that it has come down to, just back-of-the-envelope calculations, something like 23% down from 31%.  What are you guys factoring into that fourth quarter operating margins for it has declined so much?

V. Balakrishnan

See Julio for the fourth quarter, we are assuming the rupee dollar rate to be at 48.71.  If you remember 49.42 is the average rate for the third quarter. That is one.  Number two, in the third quarter, we had the substantial benefit of the rupee depreciation.  There was an impact of close to 3.7% on operating margin because of the currency and we had the equal amount of impact on the non-operating line items because of translation hedging loss.  So on the net level, if you look at the fourth quarter guidance, the net margins are similar to what we have seen in the third quarter.  There was an operating gain in the third quarter.  There was a non-operating loss. Both we have not assumed in the fourth quarter.

Julio Quinteros

Thank you.

International Moderator

Okay, our next question will come from James Friedman with Susquehanna.

James Friedman

Hi, thanks for taking my question and I know it is bit of an indelicate one but with regard to Satyam, would you see the developments at Satyam as being a net benefit or net positive to Infosys and why?

Kris Gopalakrishnan

If we take an industry view, it is sad, it is disappointing, it is dismaying.  If you take a company view, there are positives and negatives again.  We have to provide additional information to our clients.  They are increasing their due diligence and things like that and if you are able to convince probably, it will give you more business and more opportunity.  So there are some positives also.

James Friedman

Okay, Mohan with regard to your expectations on wages, is there any chance to potentially reduce wages in fiscal 2010?

T. V. Mohandas Pai

I do not think there is potential to reduce wages which people get because it does not work that way.  We must remember that 30% of what we pay as salaries offshore is variable.  The offshore cost is about 15% to 16% of revenues, the 30% of that is variable that means we have about may be 5% of revenues as variable in the compensation and it is not possible to reduce anybody’s salary.  The second thing is that industry-wide like Kris said, the salary increase for the next year will be very, very muted.  I am not sure how many companies are even going to give salary increases, as some companies are talking about not giving any increases.  So in any case, it will be very muted because opportunities are very much less. 

James Friedman

No, Mohan, I think many of the people on this call can confirm that in fact it is possible to reduce salaries.  Okay, it is my last question.

T. V. Mohandas Pai

No, I think, well, well there are two or three things.  It depends on what you define as salary.  For example, if you have a salary of $ 100 - $ 50 is variable and $ 50 is fixed.  You get 50 and that 50 which is variable, they may not get it.  So that is a large part.  But if you say the entire 100 can be reduced, we are told that it requires a contract to be changed because there is an employment contract that has to be changed. People have to be called and I do not thing we are at a stage when we need to do anything like that.

James Friedman

Okay and then with regard to the use of funds.  You have quite a cash than your peers.  Balakrishnan, I know you have spoken in the past about relative merits of dividend versus a re-purchase but could you refresh your thinking about that?

V. Balakrishnan

Well, the thinking is same.  We do not need to refresh.

James Friedman

Can you refresh our thinking about your thinking?

V. Balakrishnan

What we said was between buyback and dividend, dividend is better for shareholders because it is actually in the hands of shareholders in India.  Having said that, we want to have sufficient cash in the balance sheet to make sure our growth is not impacted and give us comfort in the business and we also clearly defined what are the return expectation in the business.  As long as the returns are not impacted, we are willing to have cash to give us comfort in the business and make sure the growth is not impacted and if at some point of time, the returns are going to get hurt and if we do not find alternatives of cash, we are willing to return it to the shareholders.  We have done it already three times.

James Friedman

Are your offering special dividends or ordinary?

V. Balakrishnan

Well we have given special dividends in the last three instances.  So, if there is extra cash available in the system where we do not find any strategic use, we will look at that.

Kris Gopalakrishnan

Last question please.

International Moderator

Your last question from Mark Marostica with Piper Jaffray.

Mark Zgutowicz

Thank you.  It is actually Mark Zgutowicz for Mark Marostica.  Just a couple of clarifications on the hiring front, where do you anticipate net hires to finish this year?

T. V. Mohandas Pai

We are about 103,000 and we have said that this quarter we are going to hire about 3,500. I will just give you the figures, just one minute. Yes, we will hire about 3700 gross, that is 3700 gross.  Last quarter, we had a gross addition of 5,997 and the net addition about 2,700.  So, we had an attrition of 3,200 people.  Out of 3,200 people, we had an attrition of about 1,750 odd in the services business and the balance 1,400 odd in the BPO business.  So the BPO business is still running at an attrition of about 30% to 31%.  The BPO may not see any net addition and we have got 1000 people in the BPO, there could be a slight decline.  Even if you assume that 1,500 attrition in the services business and maybe 1,000 in the BPO business, that is 2,500, there could be a net increase of may be 1,000 to 1,200.

Mark Zgutowicz

Okay, so that narrowed down, you had roughly 19,000 net additions in a way, is that number going to be flat or down?

T. V. Mohandas Pai

Yes, I think we will hire something like about may be 18,500 to 19,000 net hires this year and that will be about 103,000 people to end with.

Mark Zgutowicz

Okay, good that is all folks, and then just further clarification on negotiated salary.  For your fresher hires next year, just trying to get clearer here, the salaries that will be negotiated will be flat year-over-year or down, some number what would that be?

T. V. Mohandas Pai

Okay, let me clarify. I have got the data here.  We ended last year with 91,187 people.  Quarter three, we are at 103,078.  Even if you add maybe 1,000 to 1,200 people. We could end up this year with 104,500 and that will be about a net addition this year overall for the group of something like about 13,000 people.  It is not 19,000, it is 13,000.  I am sorry. I got the data, right.

Mark Zgutowicz

13,000?  So that 13,000 is down from the 19,000 net hires last year

T. V. Mohandas Pai

Yes, yes that is fiscal 2009, fiscal 2008-2009. We will go up from 91,000 to let us say 104,500; and yeah previous year, we had a net hires of about 19,000. As far the freshers’ salary go, the freshers’ salary for the next year is what we offered when we made the offer last year.

Mark Zgutowicz

Okay, it is reported that somebody’s fresher salaries maybe at not Infosys have been renegotiated at lower levels, some 10% to 20% is that not the case at Infosys?

T. V. Mohandas Pai

No, we have made an offer in the letter to all freshers in colleges last year because that is what we need to do and we will stick to that offer.  When they come and join us, we will stick to that offer, and the offer is not very different from what was the compensation for freshers in this fiscal year.

Mark Zgutowicz

Okay, okay, and then just a bit of clarification on visibility.  I think I heard you say that you expect telecom, the telecom business to be roughly flat.  I am just trying to get a sense of what gives you confidence that it will be flat year-over-year in the current quarter, and if that has something to do with your $ 50 million plus deal pipeline. maybe you can talk a little bit about what sectors contributed to Q3 and what you expect to see contributing to Q4?

Subhash Dhar

Well, I think overall at the constant currency level, we expect it to be flat, that is what we are saying.  Was there a specific question on that or?

Mark Zgutowicz

I was just trying to get a sense of your confidence level of it being flat constant currency.  Is the $ 50 million plus pipeline more concentrated on the telecom side or what could be your confidence that telecom business should be flat year-over-year?

Kris Gopalakrishnan

See, telecom has a few large customers.  In fact if you look at the pipeline, we have ten large deals in the pipeline.  There are two out of that which are in the telecom area.  We have not actually factored in that we will win any of the large deals at this point, because they could take anywhere from three months to sometimes nine to twelve months to close.  So we have not factored that in.  It is just that we have some large relationships and few customers only in telecom and we have some visibility into their spend pattern etc., and that is what gives us the confidence.

Unfortunately, we are completely out of time.  I want to thank all of you for participating in the call.  If you have further questions, you can contact Sandeep or Shekar, the Investor Relationship managers in US and India and we will reply to all your questions.  Thank you and see you next quarter or in between in one of the investor meetings or something like that.  Thank you all very much.

International Moderator

This concludes today’s teleconferencing.  Thank you all for your participation.

EX-99.8

EXHIBIT 99.8
CNBC Board Room

INFOSYS TECHNOLOGIES LIMITED
CNBC
Q3 FY 09 RESULTS
JANUARY 13, 2009

CORPORATE PARTICIPANTS

Kris Gopalakrishnan
Infosys Technologies - CEO and MD

S. D. Shibulal
Infosys Technologies - COO

V. Balakrishnan
Infosys Technologies - CFO

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

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

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

Chandrashekar Kakal
Infosys Technologies – Head – Enterprise Solutions and Member – Executive Council

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

Udayan Mukherjee

We have the Infosys top management joining us now to talk about this quarter and of course the tumult surrounding the IT sector right now.  Kris, Bala, and Shibu as always joined in, and we will get many other members of the Infosys top management in just a second.  Gentlemen, good morning, thanks very much for joining in.  Some of the dollar numbers in this quarter are a bit unnerving, the fall in Europe quarter on quarter, the fall in manufacturing vertical. Are these numbers related to just principally one client or is there a weakening of the environment that has led to this slip?

Kris Gopalakrishnan

The segmented reporting we have done is still not adjusted for constant currency and depending on where some of these customers are, so for example. Europe, definitely, the pound sterling has depreciated quite a bit against the dollar.  So it has had an impact.  Australian currency has depreciated by 23%, pound sterling, if I am not wrong, by 18% has depreciated.  So it has had an impact on the segmented reporting, but otherwise, a good all-round performance. Volume increase sequentially in constant currency, 1% increase in revenue, 30 new clients added, repeat business is 97%, DSO is 56 days - a good all-round performance and we continue to add employees, utilization has gone up. So good all-round performance actually.

Udayan Mukherjee

But in dollar terms, the revenue numbers are a bit short of the lower end of the guidance which you gave out and you are scaling back dollar revenue guidance for the next quarter as well for the full year.  That doesn’t smack of a very bullish environment that you are working in.

Kris Gopalakrishnan

No, the environment is challenging, everybody understands that the environment is challenging, but we have met our guidance in terms of the constant currency guidance.  If you look at $ 1,171 million, it will be within the range if you adjust the guidance for constant currency. So it will be within the range.  If you look at guidance also, we have adjusted for currency movement and we have adjusted for that 1.8% drop in pricing.  So that is the only adjustment we have done.

Udayan Mukherjee

Shibu, what is going on with Europe, can you tell us because you don’t talk client specific, but it appears that your largest client in Europe is going through a lot of pain.  How significantly does it affect your outlook for the future?

S. D. Shibulal

Actually, talking of Europe, Europe has gone down 1.2% in constant currency, even though it has gone down by approximately 12% in the reported currency.  So, the actually drop is only 1.2% which is really not material on a quarter on quarter basis because it does not show any secular trend.  Even the large client, on constant currency, it has gone down by a couple of million dollars.  There is really no major downtrend even in the large client.  So both of those numbers which you are seeing, the large clients as well as Europe going down, is mostly because of the currency movement and not because of the business environment or any secular change in the business environment in Europe.

Kris Gopalakrishnan

Actually, pound sterling has dropped down an average by 17.8%, so it is a significant drop.

Mitali Mukherjee

Bala, you have done a lot of squeezing on costs this time around. Can you hold these sort of margins over the next few quarters because things have been tightened quite a bit from what we see?

V. Balakrishnan

No, I think the margin has gone up by around 2.3% mainly due to currency because rupee depreciated by close to 11%.  It had a positive impact of around 4.7% on the margin, the cross currency impacted the margin by around 1%, utilization by around 1.3%. So net-net, we have seen the margin increasing by 2.3%.  See, this is a fabulous quarter.  The revenues are within the guidance.  If you reset the guidance for constant currency, they are within the range.  We improved the margins.  The attrition rate has come down.  Because it is a very volatile currency environment we are living in; UK pound has depreciated against the dollar by around 18%, Australian dollar by 23%, Euro by 12%.  It is all huge volatility and if you look at the growth in constant currency, it is a fabulous growth. So I think we have to discount the currency and then see the performance.  If you look at the full year guidance, we are revising it to 12%-13%.  In constant currency, it is 16% to 18%. That is the volatility in the currency we are seeing this year.

Mitali Mukherjee

Kris, for the next quarter though in dollar terms, you have guided to pretty muted revenue growth, I think the concern over here is whether you are seeing demand growth bottoming out right now or you are still seeing it in a downtrend?  Do you have a finger on that yet?

Kris Gopalakrishnan

No, see the stability has not been reached.  There is probably still some more bad news which will affect the sentiment.  What Infosys has demonstrated that under the circumstances, we are able to perform and we will emerge stronger; definitely probably the bottom has not been reached. 

Udayan Mukherjee

Shibu, just comment on the whole client situation, you have added clients but you have lost clients in the quarter as well because the total number of clients have actually gone down between quarters and you have disclosed that you have lost a $ 100-million client, are you seeing some client attrition in the environment?

S. D. Shibulal

Nothing which is special in this environment.  We have added clients, 30 new clients have been added.  Total number of clients today is 583.  Out of the 30 clients we added, we have one client which is a Fortune 500.  Our million dollar clients also, it has come down by 2 actually, from 325 to 323 which is not material in my mind.  The clients are going through a turbulent time right, and they are struggling.  There is leadership change in many of our clients, ownership change in many of our clients.  At the same time, we are not seeing any project cancellation.  All the projects which are in flight are continuing. But the new projects, there is a slowness.  Velocity has come down in the business and the decisions are taking longer.  They have been scrutinized higher.  That is on the negative side.  On the positive side, they are looking for value for money.  In fact, that reflects in our offshore revenues going up and the onsite revenues coming down.  If you look at the volume growth, the volume grew by 2% but the onsite came down by 1% and the offshore grew by 3.3%.  So it goes back to the point that when in tough times, there is a flight to quality, there is a flight to value and that is what is reflected in those numbers.

Kris Gopalakrishnan

Udayan, we did not lose the 100-million dollar client, their revenue is now below 100 million, that is all.

Udayan Mukherjee

Okay.

Mitali Mukherjee

Shibu, on the constant currency basis, pricing is down about 2% this time around, we understand. Can you just break that up into onsite and offshore and how much of a decline you have seen in pricing in both?

S. D. Shibulal

Okay.  I think the pricing came down by 1.8% quarter on quarter and it is still manageable for us, really it is manageable at this level.  We have pricing discussions with a number of clients.  We are trying to link it to volume so that the volume and the pricing goes hand in hand and we believe it is manageable at this point in time.  We are also seeing at least some people in the industry dropping prices because of the pressure they are in.  We also believe that in case the situation gets even worse, there could be more pressure on the price.

Udayan Mukherjee

Bala, what do you expect to see in terms of utilization and how it impacts your margins going forward because clearly this time your number of addition of employees is far lower than what you did last quarter?

V. Balakrishnan

Utilization could come down if the volume growth comes down, but we are trying to do is we are building the model for the long term.  In our business, we can’t just go to the market and hire people.  We have to hire them, train them, keep them ready. So we are hiring people. We increased the guidance for this year. Earlier it was 25,000, now we are saying 27,000. So we are going to get them in, train them better and keep them ready.  When the market turns around, we will be in a better position to take the growth opportunities.  We always said that our financial model is tuned for times like this.  It has proven yet again.  We are able to maintain our margins, increase our margins.  We are able to take the impact of low utilization and still grow.  I think this is the test of the model.

Mitali Mukherjee

Kris, this is the tail-ending the year, but we don’t seem to have a clear idea of what is happening with budget spend.  Do you have a clear idea of what happens even in the calendar year, FY10?

Kris Gopalakrishnan

So some clients are already starting to look at their budgets, squeeze their budgets but a clear picture will come like last year some time in February when most clients would actually finalize their budgets.  It is expected that, of course, the budgets will be lower than last year but in almost all cases as we have been saying, the clients are telling us again and again that their allocation to offshore would increase and I also believe that the larger companies have particularly been positively affected when they look at offshore.  That I think trend will also continue.

Udayan Mukherjee

Shibu, you do get a clear picture only in February with the budgets, but you get some impression in January when your initial dialogues starts with the clients.  What is it suggesting that initial dialogue, will it be significantly lower budget in 2009 compared to 2008?

S. D. Shibulal

We have very few indications at this point in time.  I would expect it to be flat to marginally down rather than a huge down actually, but that is a very intuitive thing.  There is no data to put behind it because we still don’t have the complete picture.

Udayan Mukherjee

Marginally, you would define as 0 to 2% or more than that?

S. D. Shibulal

I would define it as 0% to 4% but that is okay.  But at the same time, please remember we also believe that this year in FY 2010, the coming year, budgets are not going to be etched in stone, so most customers will have a budget which is signed off, but it could change if the situation gets worse or it could improve if the situation gets better. So that is, in our mind it is possible next year.  That is where it is.

Mitali Mukherjee

Bala, I guess we will talk with Mohan in detail about this, but I believe attrition levels have gone down this time around and you have also lowered the kind of employee addition you have got going.  How are you going to handle SG&A cost for the next few quarters?

V. Balakrishnan

So that is what I have been saying that our model is fine-tuned to take some of the impacts like this.  We can live with lower utilization, still maintain the margins because we have enough flexibility in the model.  Having said that, we don’t want to be caught by surprise when there is growth.  We have to fine tune the model, keep ready the capacity. So that when the growth comes in, we are better prepared to take.  So, that is why we increased the guidance and we are willing to live with a lower utilization and we believe we will be able to maintain margins with that.

Mitali Mukherjee

Shibu, I just want to scratch this point about the telecom vertical a little bit more because the market is quite taken aback with the fall there is in telecom, specifically this time around, is it (a) specific client issue, your largest client in telecom or are you seeing this across other companies as well, what exactly happened this quarter?

S. D. Shibulal

So, as I said, the largest client has not really declined.  In constant currency terms, it has come down by only couple of million dollars. There was no big fall and I am not also seeing any secular trend in telecom to say that there is a secular trend of decline.  Many of these changes are due to the currency movement in Europe and other parts of the world.

V. Balakrishnan

There was a 15% decline in telecom revenues. If you look at constant currency, it is only a 3% decline.

Udayan Mukherjee

What about manufacturing, the same question Shibu?

S. D. Shibulal

Manufacturing declined by 6% sequentially, but on constant currency, it is only by 3.7%.  See, I will give you all the numbers.  BFSI for example grew by 1.0% sequentially but in constant currency terms it has grown 4.1%.  Manufacturing declined 6%, but in constant currency 3.7%.  Retail grew, again another trouble segment, grew for us by 2.9% in constant currency and 0.3% in reported currency.  Telecom declined, as Bala said and others grew 0.6% sequentially, 4.3% in constant currency.  So, if you look at the segments, the trouble segments, BFSI and retail both grew for us sequentially in constant currency and in reported currency.

Udayan Mukherjee

Sure.  Kris, there has been a lot which has been said about how the Satyam episode might affect the top vendors.  You said categorically that you are not hiring employees from Satyam, but if clients wanted to transition, Satyam’s clients wanted to transition to your company, would you be open, your doors, would they be open to such companies?

Kris Gopalakrishnan

So what we have said is that proactively we are not approaching these clients.  If they approach Infosys asking us to do additional work because some of them are clients for both Infosys and Satyam, then we would look at it just as we would look at any requests which comes to us and as part of that if they again tell us that you need to look at employees, etc., there is a process we need to go through and that is what we have said.  We will strictly follow that process.

Udayan Mukherjee

So, if a company X which works with Satyam today calls you proactively and says I want to now move to Infosys and there are 500 people working on my project who have been doing this for many months now, would you be considering to take on that client with the 500 employees who had serviced…

Kris Gopalakrishnan

No, see this is more complicated because they are not even client’s employees, they are Satyam’s employees. So we have to go through the process. We can’t just take over those 500 employees, it is not right.

Mitali Mukherjee

The flip side to that Kris is that people are concerned that may be deal velocity will go down over the next few quarters because due diligence will increase.  It is not just about how capable you are.  It is the financial parameters as well of the company they are doing business with.  Do you see that happening?

Kris Gopalakrishnan

Yes, we expect the due diligence to increase but we are ready. We are ready with whatever information the clients would like about Infosys.  In fact if you look at the disclosures and things like that, we have actually increased the disclosures.  We are listing every single bank we have accounts, the amount we have, everything.  So we are ready with whatever questions they would have and we will share any information they would like to have from Infosys.  So, we are ready.

Mitali Mukherjee

Shibu, just on that point of pricing that you were making, how rampant is this pricing cut that you are seeing and there has been talks that Infosys has actually had to walk out of these over pricing issues.  Do you want to comment on that?

S. D. Shibulal

We always look at pricing as a portfolio approach. Because we have to react to the market and we have to look at pricing as a portfolio approach.  Our aspiration is to have good prices, our aspiration is to have high margins and that is our aspiration.  At the same time, it is a portfolio. We do walk away from situations where the pricing is absolutely unacceptable to us.  So at some point in time, we do walk away from deals where the pricing is completely unacceptable to us.

Udayan Mukherjee

Bala, on the point that Kris was making, can you tell us where your 9,800 crores cash is sitting…
I mean you are disclosing it anyway, can you tell us then where the cash lies?

V. Balakrishnan

Udayan, see when some events like this happen, you have to go back and check your processes.  Our auditors have been getting independent verification from all the banks directly.  That has been happening for many quarters and you should also increase the disclosure.  So this time, we are giving by bank, how much of money we have in each of the banks as a schedule to our financial statements.  Investors can look at it.  It is a very important disclosure in this country.

Udayan Mukherjee

Tell us while you are at it, I mean you are disclosing, so why not tell us as well, I mean where is the banks, etc., you must know at the top of your mind.

V. Balakrishnan

Well, the largest portfolio we have with State Bank of India, we have Rs. 2,000 crores. We have close to Rs. 1,000 crores with HDFC institution and we have some Rs. 300 crores with HDFC bank.  67% of our portfolio is kept with nationalized banks in India.  So we will disclose all the banks, all the amounts, it is a very important disclosure.  I think it should be mandatory in this country so that investors can independently verify with the banks whether the money is actually available.

Udayan Mukherjee

I wanted to ask you this question Bala because as a CFO, you deal most directly with the auditors when they go through.  Could it have happened that auditors did not check balances, I mean how could it have slipped that Rs. 5,000 crores of cash which the auditors did not notice was not there, how could it have happened in practical terms?

V. Balakrishnan

I think one of the process which the auditors follow is an independent verification of the bank balance from the bank directly.  If that process is not followed and if you go by what the management says, then there could be some slippage in the processes.  That has to be tightened.  I don’t know whether all the audit firms follow that.  I don’t know what is the situation in Satyam.  It has to be investigated and found out.

Udayan Mukherjee

But is it not a standard procedure that when you have told that Rs. 5,000 crores is lying in the bank that auditor would check it automatically, I mean is it basic standard procedure?

V. Balakrishnan

I think that is basic because that is the first thing they teach you when you start doing the audit profession.  I don’t know how it fell through in the Satyam issue but I think people have to investigate that and if there are any loopholes, they have to fill it.  I think Satyam case is going to be a test of credibility for the regulators in India.  They have to go out strongly, take decisive action and quick action so that this kind of events won’t happen.  See, even in well-regulated markets like US, after Enron, there are so many regulations but still the Madoff scam happened.  So you can’t stop the scams.  If the management is bent upon doing that, you can’t stop it but at least you can fix the issue, set an example, so it will be a deterrent for other people not to do this.

Mitali Mukherjee

Kris, the other thing the market is flummoxed by the kind of margins Satyam talked about, 3%, I mean we haven’t even heard that in mid cap technology companies.  Just as someone who is watching the industry, do you think it is possible to work on that kind of margin and we work with what we have right now, revenues that were talked about on Satyam?

Kris Gopalakrishnan

See, margins are always in a range in an industry.  The best companies have the highest margins and the worst companies sometimes lose money.  So it depends on how you run the company and how you manage to a great extent.  The reason why Infosys has very high margins is because we run the business efficiently every single day.  We constantly look at every single expense item and make sure that it is necessary and we get the best possible option on that expense item.  So, it is well managed.  So, that is the thing.  Now, I don’t know about Satyam, the situation what is the actual margin, etc.  I think they are planning to do another audit, etc., so we will know.  So, I don’t know actually.

Udayan Mukherjee

Shibu, I want to ask you one question about whether it is a logical move that you expect from the large clients of Satyam to try and move away to the top vendors now because it could be a significant thing for large companies I mean there are only two or three of you and if you suddenly get a billion dollars of new volumes coming into a difficult market, it materially might change your outlook.  Do you see that transition happening, that clients big and small would want to move away from that and to come to you?

S. D. Shibulal

See, in today’s market, trust is an extremely important thing.  The value of trust has tremendously gone up in tough times and in trouble times and so trust is an extremely important thing and we are a trusted brand.  So the possibility exists but at the same time it also will depend upon multiple other factors.  If the new board and the new management give the confidence to the customers that look there are viable options, we are a stable organization, we have the liquidity, then things will change.  Different customers will react in different fashion and as Kris said, even if the clients want to do it, we have to go through the proper process.  We have to make sure that they request us, we have to make sure we go through the due diligence, we have to make sure that it is treated as normal deal, normal process to go through that transition.  So there are multiple steps which has to happen and that is how it is going to happen.

Udayan Mukherjee

More members from the Infosys top team join in. Mohandas Pai, Ashok Vemuri, and B.G. Srinivas with us right now.  Gentlemen, morning, thanks for joining and Mohan 2,700 employees added this quarter which is much lower than the previous quarter.  Is that a signal that you are slowing down things because of the kind of volume growth that you expect to see?

T.V. Mohandas Pai

Yes we are reconfiguring what we are hiring.  We had said in the beginning of the year, we will hire 25,000.  Now, it is going to be 27,000.  So we have hired people to whom we have made commitments and we are hiring only some few specialists but general hiring has almost come to a standstill.  So, what is happening now is to make sure that all the commitments that we have made are honoured and people come in.  We have also made sure that we extend our training.  After people finish the initial four months of training, we are asking them to undergo an additional two months of training in other technology or another language to make sure that they become much more capable because we have a bench and utilization is just about 74% and we want to utilize people’s times better and we are looking forward to better days.

Udayan Mukherjee

I was asking this question earlier to Kris but what is your position on any kind of business that might come from Satyam or with any kind of attendant employee strength which are working on those clients.  Have you taken a formal stance on that on what Infosys will do?

T.V. Mohandas Pai

I think we have said publicly that if some client comes and ask us for business, ask us to takeover the business and to have a look, we will consider that. But the move has to come from the client.  We will not go and pitch for the business because it is not the right thing to do.  I think there are some ethics that we need to follow in business.

Udayan Mukherjee

Don’t you think that if you don’t do it somebody else will and you will miss an opportunity.  I mean if you do not do it, TCS might take that business, so why….

T.V. Mohandas Pai

Well, it is up to some of the company to do that.  It is up to the client to chose.  I mean the client also has a choice, and the client I am sure will take the right appropriate decision what is in their own interest.  So, there are two hands in this whole transaction, and from our part, we will play by the rules.

Ms. Mitali Mukherjee

What if it is a lucrative deal Mohan, but it comes attendant with absorbing the staff that is currently working on that project which might be about 200, 500 Satyam employees?

T.V. Mohandas Pai

No, I think we should look at transactions on merit as and when they come.  Let us see what happens.  Right now, it is all very speculative.  So, let us wait for some time.

Ms. Mitali Mukherjee

Ashok, BFSI is sticky this time round.  I think on constant currency it is up a little bit.  How do you see the next few quarters shaping up and more importantly are you getting a pulse check right now on what is happening with budget spends?

Ashok Vemuri

Yeah, so it has been another very interesting quarter for financial services companies as well as service providers such as us who service them.  You are right, on a constant currency basis, we grew at about 4.1% and on a reported currency basis as well, we have grown about 1%.  Nine new client additions in this quarter, in the BFSI sector from forty that we have added and this is on both sides of the ponds.  So, that is a fairly healthy flow.  Some of these are clients that are absolutely new to this whole concept of outsourcing and some that have decided to rationalize their service providers and have chosen us over some others. Clearly we expect to see the turbulence to continue in this market.  The fact that we have grown is a validation of the kind of value that we are providing and bringing to the table.  From a budget perspective, early conversations do indicate to us that budgets have either been flat or slightly down.  The percentage of spend for a service provider such as offshoring companies is going to go up.  We are also seeing that the percentage of that which will have to be delivered from offshore or from other Global Delivery Centers that we have will also go up and what we are also seeing is that unlike last time when the budgets were being indecisive till about April, we do expect the budgets to close very quickly albeit the numbers may be lower.

Udayan Mukherjee

BG, let us start with manufacturing because even in constant currency terms, you are down 3.5% on quarter roughly, where are you experiencing the pain?

B.G. Srinivas

See, again within manufacturing, there are some sectors which have been impacted adversely.  Automotive is the worse hit.  The high-tech sector, semiconductors are also equally challenged.  So there have been reduction in the budgets and also a slowdown in the decision making.  So, these are some sectors which are actually impacting the slowdown whereas other sectors including aerospace, engineering sectors continue to do well.  The process sector though has been hit but they are not translating that into IT cost reductions.  So there we are continuing to see growth and again across Europe and US, we see signs of clients looking at cost consolidation in terms of what they need to do to rationalize their IT applications.  In fact most of them are on packages and then they are looking at consolidating their individual instances of packages and that is an early move and we are engaged in some of these areas. If we look at year-on-year for the manufacturing, there has been a significant upside, 14.6% to 19.6% within one fiscal year.  So that is something which we see a positive trend but in the near term, we will continue to see challenges in some of these core sectors I mentioned and the decision making will continue to be slow and but however overall, the sector continues to show trends which will attract the offshore vendors like Infosys and also the facts that in some of these cases, we have engaged with the client very strategically in the sense that we are engaged in transforming their business processes, leveraging packages like SAP and all.

Ms. Mitali Mukherjee

Mohan, what is the full year target now for hiring for 2009?

T.V.Mohandas Pai

27,000.

Ms. Mitali Mukherjee

For 2009?

T.V.Mohandas Pai

Yeah, 2009 is 27,000.  For next year, we have made 20,000 offers. There is an intention to honor all those offers.  So, we are working out when they will join and give them details.

Ms. Mitali Mukherjee

There had been some concerns Mohan at this time around, customers actually forced vendors to ask the employee to take days off, extended holidays to avoid billing, particularly on many onsite projects, is that true?

T.V.Mohandas Pai

Well, some of the customers had an extended holiday during the Christmas time and then some of us asked our staff members overseas to take leave on those days because there is no work.  The challenge was to get them back and ask them to come back or to stay there and take the leave because they were quite extended periods. So I think most companies did that.

Mitali Mukherjee

How long were the extensions, ballpark?

T.V.Mohandas Pai

Well may be 5 to 7 days.

Udayan Mukherjee

Ashok, you will get a better sense in February of what 2009 is looking like in terms of budgets, Shibu spoke about may be 0% to 4% lower budgets for 2009, would that hold true for BFSI as well?

Ashok Vemuri

Yeah, I think it will hold true of BFSI sector.  I think the important thing is that I said the fact that the percentage of spend to offshoring companies is actually going up and that is something that is documented and people have talked about it.  Also, I think there are certain sectors where we have inherently built capabilities that continue to be invested in whether it is wealth management, whether it is in trading, whether it is in payments or transaction engines.  Clearly our clients are looking for a value.  They continue to want us to do end-to-end.  They want us to take some stringent SLAs and when we do that, they do not shy away from paying the premium that we and they think that we deserve and that is actually very gratifying because we have invested in all these capabilities and we are bringing them to bear.  So I actually do think that even though the budgets will fall slightly in the range that Shibu talked about overall from what we have seen, we will continue to be in the game and in a big way as well.

Udayan Mukherjee

Mohan, what is your sense of what this Satyam episode will do for the sector because there are two views, one is that the top vendors, the top companies like yours might benefit, the other is that overall there might be an air of mistrust and therefore IT outsourcing might go down to India marginally

T.V. Mohandas Pai

I do not think IT sourcing will go down to India marginally or otherwise.  People will take decisions based upon what the thing is best for them.  I mean there has been one instance of corporate failure.  It is a large one, all of us accept that, and I think people of the world are seeing what regulators are doing to bring this under control.  I mean we have seen all market economies have failures like this and business does not stop, but people have become more cautious, they will ask you many questions about your corporate governance standards, the risk committees will get into greater depth and ask questions and I think this will lead to further consolidation because people will look at risk and find out in their own estimation which are the better companies and they will look at it, there will be some impact across industry and across sectors.

Mitali Mukherjee

I am sure you have spoken in the past so Mohan with some of your clients about how competition is faring.  There is a fair amount of overlap in terms of clients that many domestic IT companies have.  What kind of feedback did you hear about Satyam as a performer in the past few quarters?

T.V. Mohandas Pai

Well, I think they have done reasonably well.  I mean there is nothing that anybody has heard, that anybody has done badly, they have done reasonably well.  They had their shares of wins and some customers like them.  Look this is so shocking.  I mean there is nothing that you have heard that anybody has not heard till this happened.

Ms. Mital Mukherjee

Yeah, almost impossible.

Udayan Mukherjee

Is it is inconceivable for you that Satyam was not profitable at all with the kind of clients and work that you knew of that they were engaging in because everybody shocked about the 3% operating margin number, do you think it is conceivable or it does not appear that they could be working with that kind of operating metric?

T.V. Mohandas Pai

Well, if you look across industry you find that Infosys has never discounted prices and always sold on value and you have seen some of the players discount prices, which has not been good and we have seen many of them win on lower prices rather than win on value or win on whatever they do for the clients and if you look at it and the fact that they had high margins. Well it meant that they are either very efficient or something else. I don’t know because I do not think anybody understood the magnitude of what was happening.

Mitali Mukherjee

BG in your conversation with clients what do you think seems the bigger hiccup, trying to get them to come around to your idea of pricing or are just struggling with the quantum of volume growth you might see in Europe now?

B.G.Srinivas

In Europe, again you will have to distinguish each country and if you take three large markets, UK, Germany, and France, again they have distinct behaviors.  We continue to see challenges in the short-term on pricing pressures in UK where there is high degree of maturity for outsourcing and offshoring. However, in the continent, there is not so much of pricing pressure.  These countries and the clients in these countries have yet to fully leverage offshore companies. So they are in this process of vendor consolidation today and in that context, offshoring is becoming an integral part of the vendor consolidation.  Though it is early stages, the decision making is going to be further slowed down by the current crisis which most clients are facing. However, in the short-term while we see slowdown and challenges on decision making, in the long-term, the traction in the continent will pick up towards offshore companies because the confidence building exercises have just started.

Udayan Mukherjee

A quick word on telecom as well BG.  Do you look at it as a problem vertical going forward with challenges?

B.G.Srinivas

Again, not withstanding one large client in UK, in fact today we see traction in continent, both in France and Germany where some of the telecom majors have announced targeted budget cuts and there is no way they can achieve those budget cuts without engaging with offshore players which they never did in the past.  So, they have started to talk to us, even in the Nordics, again we see the telecom companies talking to offshore vendors.  The traction will be slower but then once that business opens up, then overall within Europe, the telecom sector is still spending money.  There is still some degree of spending going on because their business models are changing, their revenue streams are changing, and in that context, we do not see this as a systemic challenge for the telecom sectors as a whole in Europe.

Udayan Mukherjee

Two more members of the Infosys top management joining.   Subhash Dhar who heads Communications Media and Entertainment and Chandrasekhar Kakal who heads the Enterprise Solutions business joins in.

Kakal and Subhash, thanks for joining in.  Let me ask you Kakal first about what do you think the Satyam episode might do to the enterprise end of the market because Satyam was a reasonably strong player in SAP and the enterprise end.  Do you expect this to directly benefit you as a company?

Chandrasekhar Kakal

Actually package implementation space continues to see strong traction because as the globalization continues ERP packages really play a very big role because the clients need to have in the globalization scenario a 360-degree view of their business and also when the economic downturn happens, cost reduction really becomes much more important and that can be achieved only by having very good systems, having a good view of their business and also implementing the cost reduction measures whether it is in the order management or supply chain or even human capital management that can be done only through good ERP systems.  So from this episode, obviously clients will start looking out for stable partners who can be long-term partners with them.  Probably, we will see some upturn because of that.

Udayan Mukherjee

How easy or difficult is it for an entrenched ERP client to switch away business and how time consuming could such a transition be?

Chandrasekhar Kakal

It is not easy to do a transition of such nature, because the production support and maintenance of an ERP system could be a business critical system.  It is not going to be very easy but over a period of time, the transition is possible.  We have taken over many systems from other system integrators in the past. So the transition is possible.  There is a methodology that can be used for taking over from some other system integrators, it is possible.  So clients will start looking at the long-term partnership in this scenario rather than actually looking at some short-term gains or short-term price reductions, short-term lower price advantages because these are the mission critical systems that are required for governing their business operations.

Udayan Mukherjee

Yes.

Ms. Mitali Mukherjee

Is there a cost involved as well in this Chandrasekhar for the client, I mean, is there is a severance that you have to pay when you terminate these sorts of deals?

Chandrasekhar Kakal

See, it depends on the contractual terms.  Generally, it could be that within the notice period it can be transitioned to somebody else.  If the contractual terms are such that there is a severance fee to be paid, then it has to be foreseen to that.   Otherwise, generally not.

Ms. Mitali Mukherjee

Subhash, you track telecom as well.  BG was making a point that there was one major client issue this time around.  Is that primarily what has pulled down the telecom verticals’ performance?

Subhash Dhar

I think there are two structural issues with this industry that you need to understand.  One is our own which is one of those verticals where we do more than half of our business outside of the North American market because we have been active for a while compared to the other verticals.  So that combined with the cross currency effect has traded a huge impact on our reported revenues.  The second is that this industry has few but very large spenders.  So that reflects in our top clients.  For example, there are many telecom clients in our top clients and therefore, there is some lumpiness of the revenue and the demand the way it works.  So tracking it quarter-on-quarter does create a distorted view.  I think the better view would be a more year-on-year tracking.  So, I think that really needs to be understood if you want to track telecom on a quarter-on-quarter basis.

Udayan Mukherjee

You also head SG&A Subhash out here and spends have gone down.  Is it a margin versus volume call or you think there are perils to cutting SG&A in this kind of a difficult environment?

Subhash Dhar

No I think, it is as I think Mohan said we are reconfiguring the way we spend on some of these heads.  It is more bank for the buck that we are looking for.  We are also restructuring the Client Services Group in terms of the quality, the productivity, the nature of people that we want to have in the front.  We are hiring in sales as we speak.  We are spending more in upgrading their skills.  So I think and at the same time we are making sure that we use technology to our advantage in terms of how we use video conferencing and those techniques to do a lot of the meetings that we otherwise end up doing a lot of non-productive travel and cost also.  So I think we have got some of those levers that we are leveraging and I think that is what you saw in this whole thing but I think it is all about smart and lean sales and marketing going forward.

Ms. Mitali Mukherjee

But if we have to call a trend to sales and marketing you would say the spending trend is on the way down?

Subhash Dhar

I don’t think there is a trend that you can see here.  As I said there are very few places at Infosys that we are hiring right at this point, and one of them is sales and marketing.  So, if you ask me in that window, that is actually going up as we hire more people who may join us in a couple of quarters.

Ms. Mitali Mukherjee

Chandrasekhar just to talk about the entire Axon episode, what made you step back?

Chandrasekhar Kakal

Actually, we did a fair valuation of the company and we determine that at six pounds, it makes sense and it makes synergy for us and then there was another offer and they offered higher price and especially under the current market conditions and all that, we thought that it is not prudent on our part to revise the price upwards and the management of Axon took a decision to go with the other party and that is what happened.  Otherwise also our package implementation practice is growing and we continue to add people, we continue to see tractions in the customers.  There is wide adaption of the ERP and other services on packages that we are offering in the market.  Vertical industries have adapted much more than before and the overseas expansion is happening.  We are seeing our own practice growing.  So, we will continue to focus on our practice growth to make that happen.

Udayan Mukherjee

Thanks gentleman for joining in.  That is the Infosys management with their quarter.  The market’s response has not been too bad.  Now whether it is a function of being happy with the numbers or being very cautious with expectations before the event and then a bit of relief after the event, that we don’t know, but it certainly has not done badly this morning

EX-99.9

EXHIBIT 99.09
Form of Advertisement placed in Indian Newspaper

	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 nine months ended December 31, 2008

(in Rs. crore, except per share data)

Particulars	Quarter ended December 31,		Nine months ended December 31,		Year ended March 31,
	2008	2007	2008	2007	2008
Income from software services, products and business process management	5,786	4,271	16,058	12,150	16,692
Software development and business process management expenses	3,075	2,325	8,720	6,725	9,207
Gross profit	2,711	1,946	7,338	5,425	7,485
Selling and marketing expenses	274	205	834	693	916
General and administration expenses	406	349	1,200	972	1,331
Operating profit before depreciation and minority interest	2,031	1,392	5,304	3,760	5,238
Depreciation	187	153	533	441	598
Operating profit before tax and minority interest	1,844	1,239	4,771	3,319	4,640
Other income, net	40	158	223	565	704
Provision for investments	(2)	–	(2)	–	–
Net profit before tax and minority interest	1,882	1,397	4,992	3,884	5,344
Provision for taxation (refer to note 7 and 8)	241	166	617	474	685
Net profit after tax and before minority interest	1,641	1,231	4,375	3,410	4,659
Minority interest	–	–	–	–	–
Net profit after tax and minority interest	1,641	1,231	4,375	3,410	4,659
Paid-up equity share capital (par value Rs. 5/- each, fully paid) (refer to note 5)	286	286	286	286	286
Reserves and surplus	17,230	14,018	17,230	14,018	13,509
Earnings per share (par value Rs. 5/- each)
Basic	28.66	21.54	76.44	59.70	81.53
Diluted	28.63	21.47	76.30	59.49	81.26
Dividend per share (par value Rs. 5/- each)
Interim dividend	–	–	10.00	6.00	6.00
Final dividend	–	–	–	–	7.25
Special dividend	–	–	–	–	20.00
Total dividend	–	–	10.00	6.00	33.25
Total dividend percentage	–	–	200.00	120.00	665.00
Total Public Shareholding #
Number of shares	36,87,28,400	36,77,38,769	36,87,28,400	36,77,38,769	36,78,42,758
Percentage of shareholding	64.39	64.34	64.39	64.34	64.31

# Total public shareholding as defined under Clause 40A of the Listing Agreement (excludes shares held by founders and American Depositary Receipt holders).

Note: The audited results of Infosys Technologies Limited for the quarter and nine months ended December 31, 2008 is available on our website ww.infosys.com

Other information:

(in Rs. crore)

Particulars	Quarter ended December 31,		Nine months ended December 31,		Year ended March 31,
	2008	2007	2008	2007	2008
Staff costs	3,004	2,219	8,406	6,469	8,878
Items exceeding 10% of aggregate expenditure	–	–	–	–	–
Details of other income:
Interest on deposits with banks and others	229	169	612	494	672
Dividend on investments in liquid mutual funds	–	1	3	7	9
Miscellaneous income, net (refer to note 9)	29	2	32	7	11
Exchange differences, net	(218)	(14)	(424)	57	12
Total	40	158	223	565	704

Notes:

1.	The audited financial statements have been taken on record by the Board of Directors at its meeting held on January 13, 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.
2.	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. The financial statements of the parent 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. The consolidated financial statements are prepared by applying uniform accounting policies.
3.	An interim dividend of Rs. 10.00 per share (200% on an equity share of par value of Rs. 5/-) was declared at the board meeting held on October 10, 2008 and paid on October 20, 2008. The interim dividend declared in the previous year was Rs. 6.00 per share (120% on an equity share of par value of Rs. 5/-).
4.	The final dividend of Rs. 7.25 per share (145% on an equity share of par value of Rs. 5/-) and a special dividend of Rs. 20.00 per share (400% on an equity share of par value of Rs. 5/-) for fiscal 2008 was approved by the shareholders at the Annual General Meeting of the company held on June 14, 2008 and the same was paid on June 16, 2008.
5.	The Finance Act, 2007 included Fringe Benefit Tax (FBT) on Employee Stock Option’s Plan (ESOPs). FBT liability crystallizes on the date of exercise of stock options. During the nine months ended December 31, 2008 and year ended March 31, 2008, the company issued 6,45,745 shares and 7,85,896 equity shares, respectively, pursuant to the exercise of stock options by certain employees under the 1998 and 1999 stock option plans. During the nine months ended December 31, 2007, 3,44,075 equity shares were issued pursuant to the exercise of stock options by employees under both the 1998 and 1999 stock option plans. FBT on exercise of stock options of Rs. 2 crore each for the nine months ended December 31, 2008 and year ended March 31, 2008, respectively, has been paid by the company and subsequently recovered from the employees. Consequently, there is no impact on the profit and loss account.
6.	Information on investor complaints pursuant to Clause 41 of the Listing Agreement for the quarter ended December 31, 2008.

Nature of complaints received	Opening balance	Additions	Disposal	Closing balance
Dividend related	–	216	216	–

7.	Pursuant to the changes in the Indian Income Tax Act, the company has calculated its tax liability after considering Minimum Alternate Tax (MAT). This has not resulted in an additional tax expense as MAT can be set off against any future tax liability. Accordingly, Rs. 298 crore is shown under "Loans and Advances" in the balance sheet as of December 31, 2008.
8.	The tax provision for the quarter ended December 31, 2008, includes a net reversal of Rs. 62 crore pertaining to earlier periods, comprising Rs. 158 crore for provisions no longer required which is offset by a charge of Rs. 96 crore due to re-assessment of an uncertain tax position. Further, the tax provision for the nine months ended December 31, 2008, December 2007 and fiscal 2008 includes a reversal of Rs. 93 crore (net), Rs. 101 crore and Rs. 121 crore (net), respectively.
9.	Miscellaneous income of Rs. 29 crore during the quarter ended December 31, 2008, includes a net amount of Rs. 18 crore, consisting of Rs. 33 crore received from Axon Group Plc, as inducement fees offset by Rs. 15 crore of expenses incurred towards the transaction.
10.	During the quarter ended December 31, 2008, 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 this quarter based on dimunition other than temporary.
11.	During the year ended March 31, 2008, the company voluntarily settled with the California Division of Labor Standards Enforcement towards possible overtime payment to certain employees in California for a total amount of Rs. 102 crore. Also, the company recorded health insurance liabilities based on the maximum individual claimable amounts by employees and during the year ended March 31, 2008, the company completed its reconciliation of amounts actually claimed by employees to date, including past years, with the aggregate amount of recorded liability resulting in a write-back of net excess provision of Rs. 71 crore.
12.	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 has been amortized on a straight line basis to the net profit and loss account over 10 years representing the average future service life of employees.

Matters relating to Subsidiaries:

Infosys BPO

During the year ended March 31, 2008, Infosys completed the purchase of 3,60,417 shares of Infosys BPO from its employee shareholders consequent to the forward share purchase agreement entered with them in February 2007. Further, during the quarter ended December 31, 2007, Infosys BPO acquired 100% of the equity shares of P-Financial Services Holding B.V for a consideration of Rs. 107 crore by entering into a Sale and Purchase Agreement with Koninklijke Philips Electronics NV (Philips). The transaction was accounted as a business combination and had resulted in a goodwill of Rs. 83 crore.

During the quarter ended December 31, 2008, the investments held by P-Financial Services Holding B.V in its wholly owned subsidiaries Pan-Financial Shared Services India Private Limited, Infosys BPO (Poland) Sp. Z.o.o., and Infosys BPO (Thailand) Limited were transferred to Infosys BPO, consequent to which P-Financial Services Holding B.V was liquidated. As at December 31, 2008, Infosys holds 99.98% of the equity in Infosys BPO.

Infosys Consulting

During the nine months ended December 31, 2008 and year ended March 31, 2008, an additional investment of US$ 5 million (Rs. 22 crore) and US$ 20 million (Rs. 81 crore), respectively, was made in Infosys Consulting Inc, which is a wholly owned subsidiary. As of December 31, 2008, the company has invested an aggregate of US$ 45 million (Rs.193 crore) in the subsidiary.

Infosys Mexico

During the year ended March 31, 2008, the company incorporated Infosys Technologies S. DE R.L. de C.V., a wholly owned subsidiary in Mexico. As of December 31, 2008, the company has invested an aggregate of Mexican Peso 60 million (Rs. 22 crore) in the subsidiary.

Infosys China

During the nine months ended December 31, 2008 and year ended March 31, 2008, the company disbursed an amount of US$ 2 million (Rs. 9 crore) and US$ 3 million (Rs. 10 crore) as loan to its wholly owned subsidiary, Infosys Technologies (China) Co. Limited. As of December 31, 2008, the company has invested US$ 10 million (Rs. 46 crore) as equity capital and US$ 10 million (Rs. 49 crore) as loan in the subsidiary.

Others:

Segment reporting (Consolidated - Audited)

(in Rs. crore)

Particulars	Quarter ended December 31,		Nine months ended December 31,		Year ended March 31,
	2008	2007	2008	2007	2008
Revenue by industry segment
Financial services	2,022	1,572	5,500	4,431	5,972
Manufacturing	1,134	622	3,118	1,707	2,454
Telecom	969	901	2,962	2,576	3,597
Retail	727	514	1,969	1,433	1,971
Others	934	662	2,509	2,003	2,698
Total	5,786	4,271	16,058	12,150	16,692
Less: Inter-segment revenue	–	–	–	–	–
Net revenue from operations	5,786	4,271	16,058	12,150	16,692
Segment profit before tax, depreciation and minority interest:
Financial services	716	528	1,768	1,356	1,844
Manufacturing	371	171	966	472	687
Telecom	364	325	1,107	895	1,278
Retail	245	165	624	431	597
Others	335	203	839	606	832
Total	2,031	1,392	5,304	3,760	5,238
Less: Other un-allocable expenditure	187	153	533	441	598
(excluding un-allocable income)
Operating profit before tax and minority interest	1,844	1,239	4,771	3,319	4,640

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
January 13, 2009	Chief Operating Officer	Chief Executive Officer and Managing Director

The Board has also taken on record the unaudited consolidated results of Infosys Technologies Limited and its subsidiaries for the quarter and nine months ended December 31, 2008, 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	Quarter ended December 31,		Nine months ended December 31,		Year ended March 31,
	2008	2007	2008	2007	2008
Revenues	1,171	1,084	3,542	3,034	4,176
Cost of revenues	661	629	2,049	1,789	2,453
Gross profit	510	455	1,493	1,245	1,723
Net income	332	312	960	850	1,163
Earnings per American Depositary Share (ADS)
Basic	0.58	0.55	1.69	1.49	2.04
Diluted	0.58	0.55	1.68	1.49	2.04
Total assets	4,216	4,160	4,216	4,160	4,507
Cash and cash equivalents	1,948	1,936	1,948	1,936	2,058
Liquid mutual funds/ Certificates of deposit	41	35	41	35	18

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

(in US$ million)

Particulars	Quarter ended December 31,		Nine months ended December 31,		Year ended March 31,
	2008	2007	2008	2007	2008
Consolidated net profit as per Indian GAAP	334	312	963	852	1,166
Amortization of intangible assets	(1)	–	(2)	–	–
Share- based compensation (IFRS 2)	(1)	–	(1)	(2)	(3)
Consolidated net income as per IFRS	332	312	960	850	1,163

Note: The unaudited consolidated results of Infosys Technologies Limited and its subsidiaries for the quarter and nine months ended December 31, 2008, prepared as per U.S. GAAP is available on our website www.infosys.com

Certain statements in this release concerning our future growth prospects are forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, 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 the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability, our ability to manage growth, intense competition in information technology, business process outsourcing and consulting 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 overrun s 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 potential acquisitions, liability for damages on our service contracts, the success of the companies in which we have made strategic investments, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property, economic slowdowns or adverse economic conditions in the markets for our services 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, 2008, Quarterly Reports on Form 6-K for the quarters ended June 30, 2008 and September 30, 2008 and our other recent filings. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to updat e any forward-looking statements that may be made from time to time by or on our behalf.

EX-99.10

EXHIBIT 99.10
IFRS Earnings Release

Unaudited Condensed Financial Statements in compliance with International Financial Reporting Standards (IFRS) for the nine months ended December 31, 2008

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Balance Sheets

(Dollars in millions except share data)

	As of
	December 31, 2008	March 31, 2008
ASSETS
Current assets
Cash and cash equivalents	$1,948	$2,058
Available-for-sale financial assets	—	18
Investments in certificates of deposit	41	—
Trade receivables	721	824
Unbilled revenue	164	120
Prepayments and other assets	77	107
Total current assets	2,951	3,127
Non-current assets
Property, plant and equipment	938	1,022
Goodwill	142	174
Intangible assets	9	11
Deferred income tax assets	89	73
Income tax assets	38	55
Other non-current assets	49	45
Total non-current assets	1,265	1,380
Total assets	$4,216	$4,507
LIABILITIES AND EQUITY
Current liabilities
Trade payables	$3	$12
Derivative financial instruments	43	29
Current income tax liabilities	117	101
Client deposits	5	1
Unearned revenue	87	71
Employee benefit obligations	14	35
Provisions	15	13
Other current liabilities	274	300
Total current liabilities	558	562
Non-current liabilities
Non-current liabilities	54	29
Total liabilities	612	591
Equity
Share capital-Rs. 5 ($0.16) par value 600,000,000 equity shares authorized, issued and outstanding 572,641,503 and 571,995,758 as of December 31, 2008 and March 31, 2008, respectively	64	64
Share premium	666	655
Retained earnings	3,297	2,896
Other components of equity	(423)	301
Total equity	3,604	3,916
Total liabilities and equity	$4,216	$4,507

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

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Income Statements

(Dollars in millions except share data) 

	Three months ended December 31,		Nine months ended December 31,		Year ended March 31,
	2008	2007	2008	2007	2008
Revenues	$1,171	$1,084	$3,542	$3,034	$4,176
Cost of sales	661	629	2,049	1,789	2,453
Gross profit	510	455	1,493	1,245	1,723
Operating Expenses:
Selling and marketing expenses	55	52	184	174	230
Administrative expenses	82	89	265	243	334
Total operating expenses	137	141	449	417	564
Operating profit	373	314	1,044	828	1,159
Other income (expense)	(39)	(3)	(85)	15	4
Finance income	46	43	135	125	171
Profit before income taxes	380	354	1,094	968	1,334
Income tax expense	48	42	134	118	171
Profit after tax	$332	$312	$960	$850	$1,163
Attributable to:
Minority interest	—	—	—	—	—
Equity holders	332	312	960	850	1,163
Net profit	$332	$312	$960	$850	$1,163
Earnings per equity share
Basic ($)	0.58	0.55	1.69	1.49	2.04
Diluted ($)	0.58	0.55	1.68	1.49	2.04
Weighted average equity shares used in computing earnings per equity share
Basic	569,755,757	568,512,968	569,571,267	568,421,831	568,564,740
Diluted	570,449,069	570,452,274	570,650,033	570,376,939	570,473,287

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 millionsexcept share data)

	Shares	Share capital	Share premium	Other components of equity	Retained Earnings	Total	Minority interest	Total equity
Balance as of April 1, 2007 as per Previous GAAP	571,209,862	$64	$631	$85	$1,830	$2,610	$1	$2,611
Effects of transition	—	—	—	—	112	112	(1)	111
Balance restated as per IFRS	571,209,862	$64	$631	$85	$1,942	$2,722	—	$2,722
Changes in equity for nine months ended December 31, 2007
Translation differences	—	—	—	273	—	273	—	273
Net income directly recognized in equity	—	—	—	273	—	273	—	273
Net profit	—	—	—	—	850	850	—	850
Total recognized income and expense	—	—	—	273	850	1,123	—	1,123
Shares issued	344,075	—	6	—	—	6	—	6
Dividends	—	—	—	—	(209)	(209)	—	(209)
Share-based compensation	—	—	2	—	—	2	—	2
Balance as of December 31, 2007	571,553,937	$64	$639	$358	$2,583	$3,644	—	$3,644
Balance as of April 1, 2008	571,995,758	$64	$655	$301	$2,896	$3,916	—	$3,916
Changes in equity for nine months ended December 31, 2008
Translation differences	—	—	—	(724)	—	(724)	—	(724)
Net expenses directly recognized in equity	—	—	—	(724)	—	(724)	—	(724)
Net profit	—	—	—	—	960	960	—	960
Total recognized income and expense	—	—	—	(724)	960	236	—	236
Shares issued	645,745	—	10	—	—	10	—	10
Dividends	—	—	—	—	(559)	(559)	—	(559)
Share-based compensation	—	—	1	—	—	1	—	1
Balance as of December 31, 2008	572,641,503	$64	$666	$(423)	$3,297	$3,604	—	$3,604

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

Unaudited Consolidated Statements of Changes in Equity

(Dollars in millionsexcept share data)

	Shares	Share capital	Share premium	Other components of equity	Retained Earnings	Total	Minority interest	Total equity
Balance as of April 1, 2007 as per Previous GAAP	571,209,862	$64	$631	$85	$1,830	$2,610	$1	$2,611
Effects of transition	—	—	—	—	112	112	(1)	111
Balance restated as per IFRS	571,209,862	$64	$631	$85	$1,942	$2,722	—	$2,722
Changes in equity for the year ended March 31, 2008
Translation differences	—	—	—	216	—	216	—	216
Income tax benefit arising on exercise of share options	—	—	6	—	—	6	—	6
Net income directly recognized in equity	—	—	6	216	—	222	—	222
Net profit	—	—	—	—	1,163	1,163	—	1,163
Total recognized income and expense	—	—	6	216	1,163	1,385	—	1,385
Shares issued	785,896	—	15	—	—	15	—	15
Dividends	—	—	—	—	(209)	(209)	—	(209)
Share-based compensation	—	—	3	—	—	3	—	3
Balance as of March 31, 2008	571,995,758	$64	$655	$301	$2,896	$3,916	—	$3,916

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

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Cash Flow Statements

(Dollars in millions)

	Nine months ended December 31,		Year ended March 31,
	2008	2007	2008
Operating activities:
Net profit	$960	$850	$1,163
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	120	110	149
Share-based compensation	1	2	3
Income tax expense	134	118	171
Changes in working capital, net of acquisition
Trade receivables	(47)	(35)	(211)
Prepayments and other assets	21	(49)	(49)
Unbilled revenue	(70)	(54)	(41)
Trade payables	(8)	1	7
Client deposits	4	2	1
Unearned revenue	31	15	(6)
Other liabilities and provisions	73	33	109
Cash generated from operations	1,219	993	1,296
Income taxes paid	(123)	(70)	(137)
Net cash provided by operating activities	1,096	923	1,159
Investing activities:
Payment for acquisition of business, net of cash acquired	(3)	(26)	(26)
Expenditure on property, plant and equipment	(226)	(265)	(373)
Loans to employees	(2)	5	1
Non-current deposits placed with corporations	(16)	(4)	(7)
Acquisition of minority interest in subsidiary	—	—	(6)
Investment in available-for-sale financial assets	(60)	(489)	(511)
Redemption of available-for-sale financial assets	76	462	500
Investment in certificates of deposit	(43)	—	—
Net cash used in investing activities	(274)	(317)	(422)
Financing activities:
Proceeds from issuance of common stock on exercise of employee stock options	10	6	15
Payment of dividends	(559)	(209)	(209)
Income tax benefit arising on exercise of share options	—	—	6
Net cash used in financing activities	(549)	(203)	(188)
Effect of exchange rate changes on cash and cash equivalents	(383)	139	115
Net increase in cash and cash equivalents	273	403	549
Cash and cash equivalents at the beginning	2,058	1,394	1,394
Cash and cash equivalents at the end	$1,948	$1,936	$2,058
Supplementary information:
Unclaimed dividends	$1	$1	$1

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

Notes to the Unaudited Consolidated Financial Statements

1 Company overview and significant accounting policies

1.1 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 subsidiaries, Infosys Technologies (Australia) Pty. Limited (Infosys Australia), Infosys Technologies (China) Co. Limited (Infosys China), Infosys Consulting, Inc. (Infosys Consulting) and Infosys Technologies S. DE R.L. de C.V. (Infosys Mexico) is a leading global technology services organization. The 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 and infrastructure management services. In addition, the Group offers software products for the banking industry and business process ma nagement 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. These consolidated interim financial statements were authorized for issue by the board of directors on January 13, 2009.

1.2 Basis of preparation of financial statements

These consolidated financial statements as at and for the three months and nine months ended December 31, 2008, are 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 covered by IFRS 1, First-time Adoption of IFRS, as they are part of the period covered by the Group’s first IFRS financial statements for the year ending March 31, 2009 and are prepared in accordance with IAS 34, Interim Financial Reporting.

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 added on a line-by-line basis and inter-company 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. Minority 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 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 which 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 disc losed 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 current contract estimates.

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.

In arrangements for software development and related services and maintenance services, the company has applied the guidance in IAS 18 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 undeli vered components of a transaction (i.e. maintenance), have been allocated to the delivered components for which specific fair values do not exist (i.e. software development). Accordingly, after identifying these separable components, maintenance revenues are recognized ratably over the term of the underlying maintenance arrangement while software development and related services revenues are recognized using the percentage-of-completion method.

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 implementat ion, 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.

Revenues from business process management and other services are derived from both, time-and-material and fixed-price contracts. Revenue on time-and-material contracts is recognized as the related services are rendered. Revenue from fixed-price contracts is recognized using the percentage-of-completion method.

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 by reducing the amount of discount from the amount of revenue recognized at the time of sale. In some arrangements, the level of discount varies with increases in the levels of revenue transactions. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer. The company recognizes discount obligations as a reduction of revenue based on the ratable allocation of the discount to each of the underlying revenue transactions that result in progress by the customer toward earning the discount. The company recognizes the liability based on its estimate of the customer's future purchases. 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 amoun t 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 company presents revenues net of sales and value-added taxes in its consolidated income statement.

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 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 expenditure 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 income statement 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 income statement. 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 using the purchase method under the provisions of IFRS 3, 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, plus costs directly attributable to the acquisition. 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 fair value of identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess is negative, it is recognized immediately in the income statement.

Goodwill arising on the acquisition of a minority interest in a subsidiary represents the excess of the cost of the additional investment over the fair value of the net assets acquired at the acquisition date.

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 and share capital. 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 cash on deposit with banks and corporations. 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. 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.

(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 equity. When an investment is derecognized, the cumulative gain or loss in equity is transferred to the income statement. 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 income statement 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 the income statement.

(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. The cumulative loss that was recognized in the equity is transferred to the income statement 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 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 Income statement 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 the income statement 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 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 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 income statement. For available-for-sale financial assets that are equity securities, the reversal is recognized directly in equity.

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 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. 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 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 and Infosys Mexico 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 the income statement. 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 a monthly 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 profit or loss.

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 income statement except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. 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 are reviewed at each reporting date and are reduced t o 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 substantially 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 a verage 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 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 the statement of financial position as an asset or liability, respectively in accordance with IAS 19. 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 income statement 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. Certain employees of Infosys BPO were 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.

Effective April 1, 2005, a portion of the monthly contribution amount was paid directly to the employees as an allowance and the balance amount was contributed to the Infosys Superannuation Trust.

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.

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 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 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, dividend income, and gains on the disposal of available-for-sale financial assets. Interest income is recognized using the effective interest method. 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
	December 31, 2008	March 31, 2008
Cash and bank deposits	$1,738	$1,737
Deposits with corporations	210	321
	$1,948	$2,058

Cash and cash equivalents as of December 31, 2008 and March 31, 2008 include restricted cash balances of $1 million and $1 million, respectively. The restrictions are primarily on account of unclaimed dividends.

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
	December 31, 2008	March 31, 2008
Current Accounts
ABN Amro Bank, China	$3	$2
Bank of America, Mexico	1	2
Bank of America, USA	37	81
Citibank N.A., Australia	5	8
Citibank N.A., Czech Republic	—	2
Citibank NA, Japan	—	1
Deutsche Bank, India	11	10
Deutsche Bank, Poland	2	3
Deutsche Bank, Thailand	1	1
Deutsche Bank-EEFC account in Euro, India	3	8
Deutsche Bank-EEFC account in Swiss Franc, India	—	3
Deutsche Bank-EEFC account in United Kingdom Pound Sterling, India	9	4
Deutsche Bank-EEFC account in US dollars, India	3	32
Deutsche Bank, Belgium	2	1
Deutsche Bank, France	1	—
Deutsche Bank, Germany	1	1
Deutsche Bank, Netherlands	—	1
Deutsche Bank, Spain	—	1
Deutsche Bank, UK	9	19
Deutsche Bank, Zurich, Switzerland	1	—
HSBC Bank, UK	1	1
ICICI Bank, India	8	6
ICICI Bank-EEFC account in Euro, India	—	1
ICICI Bank-EEFC account in United Kingdom Pound Sterling, India	1	1
ICICI Bank-EEFC account in US dollars, India	2	4
National Australia Bank Limited, Australia	5	25
Royal Bank of Canada, Canada	2	3
	$108	$221
Deposit Accounts
ABN Amro Bank, India	26	—
Axis Bank, India	—	63
Bank of Baroda, India	107	125
Bank of India, India	—	125
Bank of Maharashtra, India	103	97
Barclays Bank, India	30	75
Canara Bank, India	114	29
Citibank N.A., Czech Republic	1	—
Corporation Bank, India	90	110
DBS Bank, India	9	—
HDFC Bank, India	59	112
HSBC Bank, India	105	63
ICICI Bank, India	8	256
IDBI Bank, India	103	125
ING Vysya Bank, India	10	5
National Australia Bank Limited, Australia	43	38
Punjab National Bank, India	114	6
Standard Chartered Bank, India	54	—
State Bank of India, India	413	250
State Bank of Mysore, India	103	—
Syndicate Bank, India	107	—
The Bank of Nova Scotia, India	31	37
	$1,630	$1,516
Deposits with corporations
HDFC	$210	$250
GE Capital Services India Ltd.	—	71
	210	321
Total	$1,948	$2,058

2.2 Certificates of deposit

	As of
	December 31, 2008	March 31, 2008
ICICI Bank	$21	—
Punjab National Bank	20	—
Total	$41	—

2.3 Business Combinations

On April 1, 2008, Infosys Australia acquired 100% of the equity shares of Mainstream Software Pty Limited for a cash consideration of $3 million, of which $1 million is yet to be paid. Consequent to this acquisition, intellectual property rights amounting to $3 million have been recorded and are being amortized over a period of two years, being management’s estimate of the useful life of the asset.

On October 1, 2007, Infosys BPO acquired 100% of the equity shares of P-Financial Services Holding B.V. This business acquisition was conducted by entering into a Sale and Purchase Agreement with Koninklijke Philips Electronics N.V. (Philips), a company incorporated under the laws of the Netherlands, for acquiring the shared service centers of Philips for finance, accounting and procurement business in Poland, Thailand and India for cash consideration of $27 million. The acquisition of Poland and India centers were consummated on October 1, 2007 and Thailand center on December 3, 2007.

The purchase price has been allocated based on management’s estimates and independent appraisals of fair values as follows:

 (Dollars in millions)

Component	Acquiree’s carrying amount	Fair value adjustments	Purchase price allocated
Property, plant and equipment	$3	—	$3
Net current assets	4	—	4
Deferred income tax liabilities	—	(1)	(1)
Intangible assets - Customer contracts	—	11	11
	$7	$10	$17
Goodwill			10
Total purchase price			$27

The amount of cash acquired from the above business acquisition was not material.

The contract strengthens Infosys BPO’s presence in Europe and Asia, including new centres in Poland, Thailand and India and consequently, the excess of the purchase consideration paid over the fair value of assets acquired has been attributed towards goodwill. The identified intangible customer contracts are being amortized over a period of seven years, being management's estimate of the useful life of the asset.

Further, during the three months ended December 31, 2008, the investments held by P-Financial Services Holding B.V in its wholly owned subsidiaries Pan-Financial Shared Services India Private Limited, Infosys BPO (Poland) Sp. Z.o.o., and Infosys BPO (Thailand) Limited were transferred to Infosys BPO, consequent to which P-Financial Services Holding B.V was liquidated.

2.4 Income taxes

The provision for income taxes in the income statement comprises:

(Dollars in millions)

	Nine months ended December 31,
	2008	2007
Current taxes
Domestic taxes	$116	$85
Foreign taxes	50	54
	166	139
Deferred taxes
Domestic taxes	(30)	(19)
Foreign taxes	(2)	(2)
	(32)	(21)
Aggregate taxes	$134	$118

Current tax expense for the nine months ended December 31, 2008, December 31, 2007 and year ended March 31, 2008 include a net tax benefit of $19 million, $26 million and $30 million, respectively. The tax benefit of $19 million for the nine months ended December 31, 2008 comprises of $39 million for provisions no longer required which is offset by a charge of $20 million due to re-assessment of an uncertain tax position.

Entire deferred tax income for the nine months ended December 31, 2008, December 31, 2007 and year ended March 31, 2008 relates to origination and reversal of temporary difference.

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 for ten consecutive years, beginning from the financial year when the unit started producing computer software or April 1, 1999, whichever is earlier. The tax holidays on all facilities under STPs would not be available from 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 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, 2008, Infosys’ U.S. branch net assets amounted to approximately $471 million. As of December 31, 2008, the company had not triggered the BPT and intends to maintain the current level of its net assets in the United States, as it is consistent with its business plan. Accordingly, a BPT provision has not been recorded.

Deferred income tax liabilities have not been recognized on temporary differences associated with investments in subsidiaries and branches (including the temporary differences arising from undistributed profits and foreign exchanges translation differences) 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
	December 31, 2008	March 31, 2008
Deferred income tax assets
Property, plant and equipment	$24	$23
Minimum alternate tax credit carry-forwards	61	44
Others	4	7
Total gross deferred income tax assets	89	74
Deferred income tax liabilities
Intangible asset	—	(1)
Total gross deferred income tax liabilities	—	(1)
Net deferred income tax assets	$89	$73
Deferred income tax assets to be recovered after more than 12 months	$85	$67
Deferred income tax liabilities to be recovered after more than 12 months	—	(1)
Deferred income tax assets to be recovered within 12 months	4	7
	$89	$73

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 10B 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 $61 million and $44 million has been recognized on the balance sheet as of December 31, 2008, and March 31, 2008, respectively, which can be carried forward for a period of seven years from the year of recognition.

2.5 Earnings per share

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

	Nine months ended December 31,
	2008	2007
Basic earnings per equity share - weighted average number of equity shares outstanding	569,571,267	568,421,831
Effect of dilutive common equivalent shares - share options outstanding	1,078,766	1,955,108
Diluted earnings per equity share - weighted average number of equity shares and common equivalent shares outstanding	570,650,033	570,376,939

2.6 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 only 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.

2.6.1 Industry segments

(Dollars in millions)

Nine months ended December 31, 2008	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	$1,212	$687	$656	$434	$553	$3,542
Identifiable operating expenses	506	293	238	182	222	1,441
Allocated expenses	320	181	172	114	149	936
Segment profit	386	213	246	138	182	1,165
Unallocable expenses						121
Operating profit						1,044
Other income						(85)
Finance income						135
Profit before income taxes						1,094
Income tax expense						134
Net profit						$960
Depreciation						$118
Non-cash expenses other than depreciation						$3

Nine months ended December 31, 2007	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	$1,107	$427	$643	$357	$500	$3,034
Identifiable operating expenses	455	189	238	149	208	1,239
Allocated expenses	312	120	181	101	141	855
Segment profit	340	118	224	107	151	940
Unallocable expenses						112
Operating profit						828
Other income						15
Finance income						125
Profit before income taxes						968
Income tax expense						118
Net profit						$850
Depreciation						$110
Non-cash expenses other than depreciation						$2

2.6.2 Geographic segments

(Dollars in millions)

Nine months ended December 31, 2008	North America	Europe	India	Rest of the World	Total
Revenues	$2,225	$957	$43	$317	$3,542
Identifiable operating expenses	936	380	10	115	1,441
Allocated expenses	587	253	11	85	936
Segment profit	702	324	22	117	1,165
Unallocable expenses					121
Operating profit					1,044
Other income					(85)
Finance income					135
Profit before income taxes					1,094
Income tax expense					134
Net profit					$960
Depreciation					$118
Non-cash expenses other than depreciation					$3

Nine months ended December 31, 2007	North America	Europe	India	Rest of the World	Total
Revenues	$1,895	$838	$40	$261	$3,034
Identifiable operating expenses	804	326	10	99	1,239
Allocated expenses	533	236	12	74	855
Segment profit	558	276	18	88	940
Unallocable expenses					112
Operating profit					828
Other income					15
Finance income					125
Profit before income taxes					968
Income tax expense					118
Net profit					$850
Depreciation					$110
Non-cash expenses other than depreciation					$2

2.7 Litigation

The Group is subject to legal proceedings and claims which have arisen in the ordinary course of its business. Legal actions, when ultimately concluded and determined, will not, in the reasonable opinion of management, have a material effect on the results of operations or the financial position of the group.

2.8 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 the 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 demand 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 is pending before the Commissioner of Income tax (Appeals), Bangalore. The Company is in the process of filing an appeal before the Commissioner of Income Tax (Appeals), Bangalore for the tax demand related to fiscal 2005.

EX-99.11

EXHIBIT 99.11
Indian GAAP Standalone Statement, Notes and Report

Auditor’s Report on Quarterly Financial Results and Year to Date Results of Infosys Technologies Limited Pursuant to the Clause 41 of the Listing Agreement

To
Board of Directors of Infosys Technologies Limited

We have audited the quarterly financial results of Infosys Technologies Limited (the Company) for the quarter ended 31 December 2008 and the year to date results for the period 1 April 2008 to 31 December 2008, 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, priscribed Companies (Accounting Standards) Rules, 2006, and other accounting principles generally accepted in India.

We conducted our audit in accordance with the 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 misstatements. 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 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 31 December 2008 as well as the year to date results for the period from 1 April 2008 to 31 December 2008.

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 BSR & Co.
Chartered Accountants

Natrajan Ramkrishna
Partner
Membership No. 32815
Bangalore
13 January 2009

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 31 December 2008, the Profit and Loss Account of the Company for the quarter and nine months ended on that date and the Cash Flow Statement of the Company for the nine months 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 misstatements.  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 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:

1. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 December 2008;
2. in the case of the Profit and Loss Account, of the profit of the Company for the quarter and nine months ended on that date; and
3. in the case of the Cash Flow Statement, of the cash flows of the Company for the nine months ended on that date.

for B S R & Co.
Chartered Accountants

Natrajan Ramkrishna
Partner
Membership No. 32815
Bangalore
13 January 2009

INFOSYS TECHNOLOGIES LIMITED

in Rs. Crore

Balance Sheet as at	Schedule	December 31, 2008	March 31, 2008
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	1	286	286
Reserves and surplus	2	16,832	13,204
		17,118	13,490
APPLICATION OF FUNDS
FIXED ASSETS	3
Original cost		5,636	4,508
Less: Accumulated depreciation		2,152	1,837
Net book value		3,484	2,671
Add: Capital work-in-progress		847	1,260
		4,331	3,931
INVESTMENTS	4	1,184	964
DEFERRED TAX ASSETS	5	117	99
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	6	3,293	3,093
Cash and bank balances	7	7,854	6,429
Loans and advances	8	2,829	2,705
		13,976	12,227
LESS: CURRENT LIABILITIES AND PROVISIONS
Current Liabilities	9	1,869	1,483
Provisions	10	621	2,248
NET CURRENT ASSETS		11,486	8,496
		17,118	13,490
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	23

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	Nandan M. Nilekani	S. Gopalakrishnan	S. D. Shibulal
Partner	Chairman and Chief Mentor	Co-Chairman	Chief Executive Officer and Managing Director	Chief Operating Officer
Membership No. 32815
	Deepak M. Satwalekar	Marti G. Subrahmanyam	Omkar Goswami	Rama Bijapurkar
	Director	Director	Director	Director
	Claude Smadja	Sridar A. Iyengar	David L. Boyles	Jeffrey S. Lehman
	Director	Director	Director	Director
	K. Dinesh	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan
	Director	Director	Director	Chief Financial Officer
Bangalore	Parvatheesam K.
January 13, 2009	Company Secretary

INFOSYS TECHNOLOGIES LIMITED

in Rs. crore, except per share data

Profit and Loss Account for the	Schedule	Quarter ended December 31,		Nine months ended December 31,
		2008	2007	2008	2007
Income from software services and products		5,429	3,999	15,011	11,413
Software development expenses	11	2,915	2,219	8,276	6,504
GROSS PROFIT		2,514	1,780	6,735	4,909
Selling and marketing expenses	12	240	172	712	541
General and administration expenses	13	318	281	945	790
		558	453	1,657	1,331
OPERATING PROFIT BEFORE DEPRECIATION		1,956	1,327	5,078	3,578
Depreciation		169	138	485	404
OPERATING PROFIT BEFORE TAX		1,787	1,189	4,593	3,174
Other income, net	14	48	152	256	550
Provision for investments (refer note 23.2.16)		(2)	-	(2)	-
NET PROFIT BEFORE TAX		1,833	1,341	4,847	3,724
Provision for taxation (refer to note 23.2.12)	15	235	155	597	436
NET PROFIT AFTER TAX		1,598	1,186	4,250	3,288
Balance Brought Forward		8,624	6,545	6,642	4,844
Less: Residual dividend paid		-	-	1	-
Dividend tax on the above		-	-	-	-
		8,624	6,545	6,641	4,844
AMOUNT AVAILABLE FOR APPROPRIATION		10,222	7,731	10,891	8,132
Dividend
Interim		-	-	572	343
Final		-	-	-	-
One time special dividend		-	-	-	-
Total dividend		-	-	572	343
Dividend tax		-	-	97	58
Amount transferred to general reserve		-	-	-	-
Balance in profit and loss account		10,222	7,731	10,222	7,731
		10,222	7,731	10,891	8,132
EARNINGS PER SHARE *
Equity shares of par value Rs. 5/- each
Basic		27.92	20.77	74.27	57.58
Diluted		27.89	20.70	74.13	57.38
Number of shares used in computing earnings per share
Basic		57,25,89,357	57,13,46,568	57,24,04,867	57,12,55,430
Diluted		57,32,82,669	57,32,85,874	57,34,83,633	57,32,10,538
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	23

* Refer to note 23.2.20

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	Nandan M. Nilekani	S. Gopalakrishnan	S. D. Shibulal
Partner	Chairman and Chief Mentor	Co-Chairman	Chief Executive Officer and Managing Director	Chief Operating Officer
Membership No. 32815
	Deepak M. Satwalekar	Marti G. Subrahmanyam	Omkar Goswami	Rama Bijapurkar
	Director	Director	Director	Director
	Claude Smadja	Sridar A. Iyengar	David L. Boyles	Jeffrey S. Lehman
	Director	Director	Director	Director
	K. Dinesh	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan
	Director	Director	Director	Chief Financial Officer
Bangalore	Parvatheesam K.
January 13, 2009	Company Secretary

INFOSYS TECHNOLOGIES LIMITED

in Rs. Crore

Cash Flow Statement for the	Schedule	Nine months ended December 31,
		2008	2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit before tax		4,847	3,724
Adjustments to reconcile net profit before tax to cash provided by operating activities
Depreciation		485	404
Interest and dividend income		(586)	(480)
Effect of exchange differences on translation of foreign currency cash and cash equivalents		28	(37)
Changes in current assets and liabilities
Sundry debtors		(200)	(129)
Loans and advances	16	(488)	(244)
Current liabilities and provisions	17	403	107
Income taxes paid	18	(512)	(227)
NET CASH GENERATED BY OPERATING ACTIVITIES		3,977	3,118
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets and change in capital work-in-progress	19	(885)	(970)
Investments in subsidiaries		(22)	(103)
Investments in securities	20	(193)	-
Interest and dividend received	21	761	362
NET CASH USED IN INVESTING ACTIVITIES		(339)	(711)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital on exercise of stock options		48	25
Dividends paid during the period		(2,131)	(713)
Dividend tax paid during the period		(362)	(121)
NET CASH USED IN FINANCING ACTIVITIES		(2,445)	(809)
Effect of exchange differences on translation of foreign currency cash and cash equivalents		(28)	37
NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS		1,165	1,635
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		7,689	5,610
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	22	8,854	7,245
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	23

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	Nandan M. Nilekani	S. Gopalakrishnan	S. D. Shibulal
Partner	Chairman and Chief Mentor	Co-Chairman	Chief Executive Officer and Managing Director	Chief Operating Officer
Membership No. 32815
	Deepak M. Satwalekar	Marti G. Subrahmanyam	Omkar Goswami	Rama Bijapurkar
	Director	Director	Director	Director
	Claude Smadja	Sridar A. Iyengar	David L. Boyles	Jeffrey S. Lehman
	Director	Director	Director	Director
	K. Dinesh	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan
	Director	Director	Director	Chief Financial Officer
Bangalore	Parvatheesam K.
January 13, 2009	Company Secretary

INFOSYS TECHNOLOGIES LIMITED

in Rs. crore, except as otherwise stated

Schedules to the Balance Sheet as at		December 31, 2008	March 31, 2008
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*	286	286
	57,26,41,503 (57,19,95,758) 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]
		286	286
	Forfeited shares amounted to Rs. 1,500/- (Rs. 1,500/-) * For details of options in respect of equity shares, refer to note 23.2.11 * Also refer to note 23.2.20 for details of basic and diluted shares
2	RESERVES AND SURPLUS
	Capital reserve	6	6
	Share premium account - Opening balance	2,851	2,768
	Add: Receipts on exercise of employee stock options	48	58
	Income tax benefit arising from exercise of stock options	-	25
		2,899	2,851
	General reserve - Opening balance	3,705	3,258
	Add: Transferred from Profit and Loss Account	-	447
		3,705	3,705
	Balance in Profit and Loss Account	10,222	6,642
		16,832	13,204

INFOSYS TECHNOLOGIES LIMITED

in Rs. crore, except as otherwise stated

Schedules to the Balance Sheet
3	FIXED ASSETS
		Original cost				Depreciation and amortization				Net book value
		As at April 1,2008	Additions during the period	Deductions/ Retirement during the period	As at December 31, 2008	As at April 1,2008	For the Period	Deductions/ Retirement during the period	As at December 31, 2008	As at December 31, 2008	As at March 31, 2008
	Land : free-hold	131	40	-	171	-	-	-	-	171	131
	leasehold	98	3	-	101	-	-	-	-	101	98
	Buildings*	1,953	647	-	2,600	377	110	-	487	2,113	1,576
	Plant and machinery *#	823	263	44	1,042	397	128	44	481	561	426
	Computer equipment *#	961	200	73	1,088	760	168	73	855	233	201
	Furniture and fixtures *#	539	144	53	630	302	78	53	327	303	237
	Vehicles	3	1	-	4	1	1	-	2	2	2
		4,508	1,298	170	5,636	1,837	485	170	2,152	3,484	2,671
	Previous period	3,889	674	4	4,559	1,739	404	4	2,139	2,420
	Previous year	3,889	1,067	448	4,508	1,739	546	448	1,837	2,671

 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
 # During the nine months ended December 31, 2008, certain assets which were old and not in use having a gross book value of Rs. 166 crore (net book value Nil) were retired

INFOSYS TECHNOLOGIES LIMITED

in Rs. Crore

Schedules to the Balance Sheet as at		December 31, 2008	March 31, 2008
4	INVESTMENTS*
	Trade (unquoted) - at cost
	Long- term investments
	In 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	46	46
	Infosys Technologies (Australia) Pty Limited
	1,01,08,869 (1,01,08,869) equity shares of A$ 0.11 par value, fully paid	66	66
	Infosys Consulting, Inc., USA
	4,50,00,000 (4,00,00,000) common stock of US $1.00 par value, fully paid	193	171
	Infosys Technologies, S. De R.L. De C.V., Mexico	22	22
		986	964
	In other investments	11	11
	Less: Provision for investments	11	11
		986	964
	Non-trade(unquoted), current investments, at the lower of cost and fair value
	Certificates of deposit	198	-
	Aggregate amount of unquoted investments	1,184	964
	* Refer to note 23.2.16 for details of investments
	** Investments include 17,37,092 (17,37,092) options of Infosys BPO
5	DEFERRED TAX ASSETS
	Fixed assets	106	85
	Sundry debtors	4	7
	Others	7	7
		117	99
6	SUNDRY DEBTORS*
	Debts outstanding for a period exceeding six months
	Unsecured
	considered doubtful	33	20
	Other debts
	Unsecured
	considered good**	3,293	3,093
	considered doubtful	56	20
		3,382	3,133
	Less: Provision for doubtful debts	89	40
		3,293	3,093
	* Includes dues from companies where directors are interested	6	2
	** Includes dues from subsidiaries (refer to note 23.2.7)	34	8
7	CASH AND BANK BALANCES
	Cash on hand	-	-
	Balances with scheduled banks in Indian Rupees**
	In current accounts *	154	243
	In deposit accounts	7,419	5,772
	Balances with non-scheduled banks in foreign currencies **
	In current accounts	281	414
		7,854	6,429
	*Includes balance in unclaimed dividend account (refer to note 23.2.24a)	3	2
	**Refer to note 23.2.13 for details of balances in scheduled and non-scheduled banks
8	LOANS AND ADVANCES
	Unsecured, considered good
	Loans to subsidiary (refer to note 23.2.7)	49	32
	Advances
	prepaid expenses	14	27
	for supply of goods and rendering of services	6	10
	advance to gratuity fund trust	-	12
	interest accrued but not due	6	186
	withholding and other taxes receivable	114	13
	others	2	7
		191	287
	Unbilled revenues	787	472
	Advance income taxes	183	215
	MAT credit entitlement (refer to note 23.2.12)	280	169
	Loans and advances to employees
	housing and other loans	44	42
	salary advances	67	64
	Electricity and other deposits	30	24
	Rental deposits	13	11
	Deposits with financial institution and body corporate (refer to note 23.2.14)	1,234	1,421
		2,829	2,705
	Unsecured, considered doubtful
	Loans and advances to employees	2	1
		2,831	2,706
	Less: Provision for doubtful loans and advances to employees	2	1
		2,829	2,705
9	CURRENT LIABILITIES
	Sundry creditors
	goods and services *	41	36
	accrued salaries and benefits
	salaries	32	46
	bonus and incentives	257	329
	unavailed leave	234	149
	for other liabilities
	provision for expenses	380	239
	retention monies	45	52
	withholding and other taxes payable	259	206
	Mark to Market loss on forward and options contracts	171	116
	Gratuity obligation - unamortised amount relating to plan amendment	30	33
	Others	3	3
		1,452	1,209
	Advances received from clients	24	4
	Unearned revenue	390	268
	Unclaimed dividend	3	2
		1,869	1,483
	*Includes dues to subsidiaries (refer to note 23.2.7)	40	7
10	PROVISIONS
	Proposed dividend	-	1,559
	Provision for
	tax on dividend	-	265
	income taxes *	563	381
	post-sales client support and warranties	58	43
		621	2,248
* Refer to note 23.2.12

INFOSYS TECHNOLOGIES LIMITED

in Rs. Crore

Schedules to Profit and Loss Account for the		Quarter ended December 31,		Nine months ended December 31,
		2008	2007	2008	2007
11	SOFTWARE DEVELOPMENT EXPENSES
	Salaries and bonus including overseas staff expenses	2,275	1,743	6,329	4,987
	Overseas group health insurance	33	(43)	106	7
	Contribution to provident and other funds	63	42	160	125
	Staff welfare	19	15	51	35
	Technical sub-contractors - subsidiaries	208	192	643	575
	Technical sub-contractors - others	76	48	234	167
	Overseas travel expenses	100	75	303	221
	Visa charges and others	24	28	101	104
	Software packages
	for own use	66	65	208	154
	for service delivery to clients	5	8	27	22
	Communication expenses	12	15	41	40
	Computer maintenance	6	5	18	15
	Consumables	4	6	15	15
	Rent	6	6	19	17
	Provision for post-sales client support and warranties	18	14	21	20
		2,915	2,219	8,276	6,504
12	SELLING AND MARKETING EXPENSES
	Salaries and bonus including overseas staff expenses	182	117	497	367
	Overseas group health insurance	2	(2)	4	-
	Contribution to provident and other funds	1	-	2	1
	Staff welfare	1	1	4	2
	Overseas travel expenses	20	20	76	63
	Visa charges and others	1	1	2	2
	Traveling and conveyance	-	1	2	2
	Commission and earnout charges	5	3	16	10
	Brand building	12	14	55	41
	Professional charges	4	5	17	17
	Rent	3	3	10	9
	Marketing expenses	5	4	13	13
	Telephone charges	3	2	10	6
	Communication expenses	-	1	1	1
	Printing and stationery	-	-	1	1
	Advertisements	1	1	1	4
	Sales promotion expenses	-	1	1	2
		240	172	712	541
13	GENERAL AND ADMINISTRATION EXPENSES
	Salaries and bonus including overseas staff expenses	68	57	197	162
	Overseas group health insurance	-	(2)	-	(2)
	Contribution to provident and other funds	4	3	10	9
	Professional charges	51	42	160	115
	Telephone charges	38	31	106	87
	Power and fuel	33	26	97	79
	Traveling and conveyance	22	27	65	69
	Overseas travel expenses	1	3	10	10
	Visa charges and others	1	-	2	-
	Office maintenance	33	32	100	86
	Guest house maintenance*	2	1	3	2
	Insurance charges	4	3	13	15
	Printing and stationery	3	3	8	10
	Donations	7	5	19	15
	Rent	5	3	15	11
	Advertisements	-	1	3	5
	Repairs to building	10	6	22	14
	Repairs to plant and machinery	7	4	16	13
	Rates and taxes	5	14	21	26
	Professional membership and seminar participation fees	4	2	7	7
	Postage and courier	1	2	6	7
	Books and periodicals	1	1	2	3
	Provision for bad and doubtful debts	14	15	52	36
	Commission to non-whole time directors	1	1	4	3
	Freight charges	1	1	1	1
	Bank charges and commission	-	-	1	1
	Research grants	1	-	3	4
	Miscellaneous expenses	1	-	2	2
		318	281	945	790
	*For non training purposes
14	OTHER INCOME, NET
	Interest received on deposits with banks and others*	218	165	586	476
	Dividend received on Investment in liquid mutual funds (non-trade unquoted)	-	-	-	4
	Miscellaneous income (refer to note 23.2.15 & note 23.2.23)	23	6	33	18
	Exchange (losses) / gains	(193)	(19)	(363)	52
		48	152	256	550
	*includes tax deducted at source	54	8	129	46
15	PROVISION FOR TAXATION
	Income taxes*	231	186	726	511
	MAT credit entitlement	6	(25)	(111)	(57)
	Deferred taxes	(2)	(6)	(18)	(18)
		235	155	597	436
*Refer to note 23.2.12

INFOSYS TECHNOLOGIES LIMITED

in Rs. Crore

Schedules to Cash Flow Statements for the		Nine months ended December 31,
		2008	2007
16	CHANGE IN LOANS AND ADVANCES
	As per the balance sheet*	2,829	2,360
	Add: Gratuity transitional liability	9	-
	Gratuity obligation - unamortised amount relating to plan amendment (refer to Note 23.2.21)	(30)	(37)
	Less: Deposits with financial institutions included in cash and cash equivalents**	(1,000)	(1,050)
	Interest accrued but not due	(6)	(169)
	MAT credit entitlement	(280)	(57)
	Advance income taxes separately considered	(183)	(147)
		1,339	900
	Less: Opening balance considered	(851)	(656)
		488	244
	* includes loans to subsidiary and net of gratuity transitional liability ** Excludes restricted deposits held with LIC of Rs. 234 crore (Rs.148 crore) for funding leave liability
17	CHANGE IN CURRENT LIABILITIES AND PROVISIONS
	As per the balance sheet	2,490	1,614
	Add/ (Less): Unclaimed dividend	(3)	(3)
	Gratuity obligation - unamortised amount relating to plan amendment	(30)	(37)
	Provisions separately considered in the cash flow statement
	Income taxes	(563)	(286)
	Dividends	-	-
	Dividend Taxes	-	-
		1,894	1,288
	Less: Opening balance considered	(1,491)	(1,181)
		403	107
18	INCOME TAXES PAID
	Charge as per the profit and loss account	597	436
	Add/(Less): Increase/(Decrease) in advance income taxes	(32)	(205)
	Increase/(Decrease) in deferred taxes	18	18
	Increase/(Decrease) in MAT credit entitlement	111	57
	(Increase)/Decrease in income tax provision	(182)	(79)
		512	227
19	PURCHASE OF FIXED ASSETS AND CHANGE IN CAPITAL WORK-IN-PROGRESS
	As per the balance sheet	1,298	674
	Less: Opening Capital work-in-progress	(1,260)	(957)
	Add: Closing Capital work-in-progress	847	1,253
		885	970
20	INVESTMENTS IN SECURITIES *
	As per the balance sheet**	1,179	942
	Less: Investment in subsidiaries	(22)	(103)
	Opening balance considered	(964)	(839)
		193	-
	* Refer to note 23.2.16 for investment and redemptions **Excluding Rs. 5 Crore interest accrued on certificates of deposit
21	INTEREST AND DIVIDEND RECEIVED
	Interest accrued but not due opening balance	186	51
	Add: Interest and dividend income	586	480
	Less: Interest accrued on certificates of deposit	(5)
	Less: Interest accrued but not due closing balance	(6)	(169)
		761	362
22	CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
	As per the balance sheet	7,854	6,195
	Add: Deposits with financial institutions (excluding interest accrued but not due)**	1,000	1,050
		8,854	7,245
** Excludes restricted deposits held with LIC of Rs. 234 crore (Rs.148 crore) for funding leave liability

Schedules to the Financial Statements for the quarter and nine months ended December 31, 2008

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 subsidiaries, Infosys Technologies (Australia) Pty. Limited ("Infosys Australia"), Infosys Technologies (China) Co. Limited ("Infosys China"),  Infosys Consulting, Inc. ("Infosys Consulting") and Infosys Technologies S. DE R.L. de C.V. ("Infosys Mexico") is a leading global technology services organization. The Company provides end-to-end business solutions that leverage technology thereby enabling clients to enha nce business performance. The Company provides solutions that span the entire software life cycle encompassing technical consulting, design, development, re-engineering, maintenance, systems integration, package evaluation and implementation, testing and infrastructure management services. In addition, the Company offers software products fo r 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 specified in the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India. These financial statements should be read in conjunction with the annual financial statements for the year ended March 31, 2008. 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 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 financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired.  An impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal.  The impairment loss to be expensed is determined as the excess of the carrying amount over the higher of the asset's net sales price or present value as determined above.

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, fixed-timeframe contracts, where there is no uncertainity as to measurement or collectibility of consideration, is recognized based upon the percentage-of-completion. 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 services are performed. Maintenance revenue is recognized ratably over the term of the underlying maintenance agreement.

The company accounts for volume discounts and pricing incentives to customers by reducing the amount of discount from the amount of revenue recognized at the time of sale. In some arrangements, the level of discount varies with increases in the levels of revenue transactions. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer. The company recognizes discount obligations as a reduction of revenue based on the ratable allocation of the discount to each of the underlying revenue transactions that result in progress by the customer towards earning the discount. The company recognizes the liability based on its estimate of the customer's future purchases. 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 catch-up adjustment.

The company presents revenues net of sales and 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

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 expenditure required to settle the present obligation at the reporting date. Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonably estimated.  Where no reliable estimate can be made, a disclosure is made as contingent liability.

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 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.

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 continuing with 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.

23.1.6  Depreciation and amortization

Depreciation on fixed assets is applied on the straight-line basis 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 within a year 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. Management estimates the useful lives for the other fixed assets as follows:-

Buildings	15 years
Plant and machinery	5 years
Computer equipment	2 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.

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 law. The company recognizes the net obligation of a defined benefit plan in the balance sheet as an asset or liability, respectively in accordance with AS-15. 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 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 contribution plan. Aggregate contributions along with interest thereon is paid at retirement, death, incapacitation or termination of employment.  Both the employee and the company make monthly contributions to the Infosys Technologies Limited Employee's Provident Fund Trust equal to a specified percentage of the covered employee’s salary. The company also contributes certain portion to a government administered pension fund on behalf of its employees. The interest rate payable by the Trust to the beneficiaries every year is being notified 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.d  Compensated absences

The company 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 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

Revenue expenditure incurred on research and development is expensed as incurred. Capital expenditure incurred on research and development is depreciated over the estimated useful lives of the related assets.

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 and futures 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 Accounting Standard 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 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, 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 the 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 eac h reporting date.

23.1.11.  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.  Minimum alternate tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the company will pay normal tax after the tax holiday period. Accordingly, it is recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the company and the asset can be measured reliably.

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 being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantively enacted regulations.  Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and 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 stock options in exc ess 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 (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.

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.  Long-term investments are carried at cost and 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 and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, 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 certain specific expenses

in Rs. crore

	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Salaries and bonus including overseas staff expenses *	2,525	1,917	7,023	5,516
Contribution to provident and other funds	68	45	172	135
Staff welfare	20	16	55	37
Overseas group health insurance #	35	(47)	110	5
Overseas travel expenses	121	98	389	294
Visa charges and others	26	29	105	106
Traveling and conveyance	22	28	67	71
Technical sub-contractors - subsidiaries	208	192	643	575
Technical sub-contractors - others	76	48	234	167
Software packages	-		-
For own use	66	65	208	154
For service delivery to clients	5	8	27	22
Professional charges	55	47	177	132
Telephone charges	41	33	116	93
Communication expenses	12	16	42	41
Power and fuel	33	26	97	79
Office maintenance	33	32	100	86
Guest house maintenance**	2	1	3	2
Commission and earnout charges	5	3	16	10
Brand building	12	14	55	41
Rent	14	12	44	37
Insurance charges	4	3	13	15
Computer maintenance	6	5	18	15
Printing and stationery	3	3	9	11
Consumables	4	6	15	15
Donations	7	5	19	15
Advertisements	1	2	4	9
Marketing expenses	5	4	13	13
Repairs to building	10	6	22	14
Repairs to plant and machinery	7	4	16	13
Rates and taxes	5	14	21	26
Professional membership and seminar participation fees	4	2	7	7
Postage and courier	1	2	6	7
Provision for post-sales client support and warranties	18	14	21	20
Books and periodicals	1	1	2	3
Provision for bad and doubtful debts	14	15	52	36
Commission to non-whole time directors	1	1	4	3
Sales promotion expenses	-	1	1	2
Freight charges	-	1	1	1
Bank charges and commission	-	-	1	1
Research grants	1	-	3	4
Miscellaneous expenses	2	-	2	2
	3,473	2,672	9,933	7,835
Fringe Benefit Tax (FBT) in India included in the above	11	4	22	12

*During the quarter ended and nine months ended December 31, 2007, the Company voluntarily settled with the California Division of Labor standards enforcement (DLSE) towards possible overtime payment to certain employees in California for a total amount of Rs. 102 crore.  
 
#The Company records health insurance liabilities based on the maximum individual claimable amounts by employees. During the quarter ended and nine months ended December 31, 2007, the Company completed its reconciliation of amounts actually claimed by employees to date, including past years, with the aggregate amount of recorded liability and the net excess provision of Rs. 71 crore was written back.

**for non-training purposes 

23.2.2. Capital commitments and contingent liabilities

in Rs. Crore

	As at
Particulars	December 31, 2008		March 31, 2008
Estimated amount of unexecuted capital contracts
(net of advances and deposits)		463		600
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		2
Claims against the company, not acknowledged as debts*		101		3
(Net of Amount Rs.101 crore (Rs.101 crore) crore paid to statutory authorities)
	in million	in Rs. Crore	in million	in Rs. Crore
Forward contracts outstanding
In US$	$185.00	901	$521.00	2,085
In Euro	€ 17.00	117	€ 10.00	63
In GBP	£8.00	56	-	-
In AUD	AUD 3.00	10	-	-
Options contracts outstanding
Range barrier options in US $	$269.50	1,313	$100.00	400
Euro Accelerator in Euro	-	-	€ 12.00	76
Target Redemption structure (GBP)	-	-	-	-
Euro Forward extra	-	-	€ 5.00	32

* 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.98 crore), including interest of Rs.43 crore (Rs.18 crore) upon completion of their tax review for fiscal 2004 and fiscal 2005. The tax demand is 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 is pending before the Commissioner of Income tax (Appeals), Bangalore. For fiscal 2005, the appeal will be filed with Commissioner of Income tax (Appeals) in due course. 

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 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.

As of the Balance Sheet date, the company’s net foreign currency exposure that is not hedged by a derivative instrument or otherwise is Rs. 339 crore (Nil as at March 31, 2008).

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 December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Capital goods	29	59	151	228
Software packages	2	3	3	7
	31	62	154	235

23.2.5. Activity in foreign currency

in Rs. Crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Earnings in foreign currency (on receipts basis)
Income from software services and products	5,337	3,826	14,706	10,944
Interest received on deposits with banks	2	5	19	14
Expenditure in foreign currency (on payments basis)
Travel expenses (including visa charges)	111	92	379	303
Professional charges	32	16	89	54
Technical sub-contractors - subsidiaries	208	192	643	556
Other expenditure incurred overseas for software development	1,655	1,319	4,817	3,909
Net earnings in foreign currency (on the receipts and payments basis)	3,333	2,212	8,797	6,136

 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:

in Rs. Crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Lease rentals recognized during the period	14	12	44	37

in Rs. Crore

Lease obligations	As at
	December 31, 2008	March 31, 2008
Within one year of the balance sheet date	41	28
Due in a period between one year and five years	137	88
Due after five years	19	24
	197	140

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 December 31, 2008 and March 31, 2008 :

 in Rs. Crore

Particulars	Cost	Accumulated depreciation	Net book value
Building	59	16	43
	58	13	45
Plant and machinery	19	12	7
	22	13	9
Computer equipment	1	1	-
	2	2	-
Furniture & fixtures	6	5	1
	10	8	2
Total	85	34	51
	92	36	56

The aggregate depreciation charged on the above during the quarter and nine months ended December 31, 2008 amounted to Rs.2 crore and Rs.6 crore respectively (Rs.2 crore and Rs.6 crore respectively for the quarter and nine months ended December 31, 2007.)

The company has non-cancelable operating leases on equipped premises leased to Infosys BPO. The leases extend for periods between 36 months and 58 months from the date of inception. The lease rentals received are included as a component of sale of shared services (Refer to note 23.2.7). Lease Rental commitments from Infosys BPO:

in Rs. Crore

Lease rentals	As at
	December 31, 2008	March 31, 2008
Within one year of the balance sheet date	-	4
Due in a period between one year and five years	-	-
Due after five years	-	-
	-	4

The rental income from Infosys BPO for the quarter and nine months ended December 31, 2008 amounted to Rs.4 crore and Rs.12 crore respectively (including payment of Rs.4 crore and Rs.8 crore for an extension period) and Rs.4 crore and Rs.13 crore respectively for the quarter and nine months ended December 31, 2007.

23.2.7. Related party transactions

List of related parties:

Name of subsidiaries	Country	Holding, as at
		December 31, 2008	March 31, 2008
Infosys BPO	India	99.98%	99.98%
Infosys Australia	Australia	100%	100%
Infosys China	China	100%	100%
Infosys Consulting	USA	100%	100%
Infosys Mexico	Mexico	100%	100%
Infosys BPO s. r. o *	Czech Republic	99.98%	99.98%
Infosys BPO (Poland) Sp Z.o.o *	Poland	99.98%	-
Infosys BPO (Thailand) Limited *	Thailand	99.98%	-
Pan Financial Shared Services India Private Limited *	India	99.98%	-
P-Financial Services Holding B.V. Netherlands **	Netherlands	-	99.98%
Mainstream Software Pty Limited***	Australia	100%	-

* Infosys BPO s.r.o, Infosys BPO (Poland) Sp Z.o.o, Infosys BPO (Thailand) Limited and Pan Financial Shared Services India Private Limited are wholly owned subsidiaries of Infosys BPO.

** During the quarter ended December 31, 2008, the investments held by P-Financial Services Holding B.V in its wholly owned subsidiaries Pan-Financial Shared Services Indian Private Limited, Infosys BPO (Poland) Sp. Z.o.o., and Infosys BPO (Thailand) Limited was transferred to Infosys BPO, consequent to which P-Financial Services Holding B.V was liquidated.

*** Mainstream Software Pty Limited is a wholly owned subsidiary of Infosys Australia

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

The details of the related party transactions entered into by the company, in addition to the lease commitments described in note 23.2.6, for the quarter and nine months ended December 31, 2008 and 2007 are as follows:

in Rs. Crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Capital transactions:
Financing transactions
Infosys Mexico	-	18	-	22
Infosys Consulting	-	-	22	81
Loans
Infosys China	-	-	10	11
Revenue transactions:
Purchase of services
Infosys Australia	113	114	356	361
Infosys China	25	14	57	39
Infosys Consulting	59	61	206	170
Infosys BPO	1	-	1	-
Infosys Mexico	10	1	23	1
Purchase of shared services including facilities and personnel
Infosys BPO (Including subsidiaries)	4	4	15	6
Interest Income
Infosys China	1	-	2	-
Sale of services
Infosys Australia	2	1	3	2
Infosys China	2	-	2	-
Infosys Consulting	-	1	4	1
Sale of shared services including facilities and personnel
Infosys BPO (Including subsidiaries)	14	11	38	32
Infosys Consulting	1	1	2	1

Details of amounts due to or due from and maximum dues from subsidiaries for the nine months ended December 31, 2008 and year ended March 31, 2008:

in Rs. Crore

Particulars	As at
	December 31, 2008	March 31, 2008
Loans and advances
Infosys China	49	32
Debtors
Infosys China	21	8
Infosys Australia	4	-
Infosys Consulting	8	-
Infosys Mexico	1	-
Creditors
Infosys China	17	7
Infosys Australia	13	-
Infosys Consulting	10	-
Infosys Mexico	-	-
Maximum balances of loans and advances
Infosys BPO (Including subsidiaries)	-	2
Infosys Australia	32	31
Infosys China	49	32
Infosys Mexico	3	-
Infosys Consulting	17	16

During the quarter and nine months ended December 31, 2008, an amount of Rs.5 crore and Rs.15 crore respectively (Rs.5 crore and Rs.15 crore respectively for the quarter and nine months ended December 31, 2007) was donated to Infosys 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 nine months ended December 31, 2008 and December 31, 2007 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 December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Capital	31	-	31	-
Revenue	55	45	152	154

23.2.10. Dues to micro and small enterprises 
 
The company has no dues to micro and small enterprises during the quarter and nine months ended December 31, 2008 and as at December 31, 2008 and March 31, 2008.

23.2.11. 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 December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Options outstanding, beginning of period	12,15,945	20,84,124	15,30,447	20,84,124
Granted	-	-	-	-
Less: exercised	65,406	1,62,633	3,41,008	1,62,633
forfeited	28,222	-	67,122	-
Options outstanding, end of period	11,22,317	19,21,491	11,22,317	19,21,491

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.

Number of options granted, exercised and forfeited during the	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Options outstanding, beginning of period	11,03,862	18,31,218	14,94,693	18,97,840
Granted	-	-	-	-
Less: exercised	76,242	1,81,442	3,04,737	1,81,442
forfeited	17,865	4,477	1,80,201	71,099
Options outstanding, end of period	10,09,755	16,45,299	10,09,755	16,45,299

The aggregate options considered for dilution are set out in note 23.2.20

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 Income and basic and diluted earnings per share as reported would have reduced to the proforma amounts as indicated:-

in Rs. crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Net Profit:
As Reported	1,598	1,186	4,250	3,288
Less: Stock-based employee compensation expense	1	3	5	9
Adjusted Proforma	1,597	1,183	4,245	3,279
Basic Earnings per share as reported	27.92	20.77	74.27	57.58
Proforma Basic Earnings per share	27.89	20.71	74.16	57.40
Diluted Earnings per share as reported	27.89	20.70	74.13	57.38
Proforma Diluted Earnings per share	27.86	20.64	74.02	57.20

The Finance Act, 2007 included Fringe Benefit Tax (“FBT”) on Employee Stock Option’s Plan (ESOPs). FBT liability crystallizes on the date of exercise of stock options. During the quarter and nine months ended December 31, 2008, 65,406 and 3,41,008 equity shares, 76,242 and 3,04,737 equity shares were issued pursuant to the exercise of stock options by employees under the 1998 and 1999 stock option plans, respectively. FBT on exercise of stock options of Rs.2 crore for the nine months ended December 31, 2008 has been paid by the Company and subsequently recovered from the employees. For the quarter ended December 31, 2008, FBT on exercise of stock options was less than Rs.1 crore. Consequently, there is no impact on the profit and loss account.

23.2.12. 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. Most of Infosys’ operations are conducted through Software Technology Parks (“STPs”). Income from STPs are tax exempt for the earlier of 10 years commencing from the fiscal year in which the unit commences software development, or March 31, 2010.

Infosys also has operations in Special Economic Zone ("SEZ"). 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 amendments 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.280 crore and Rs.169 crore was carried forward and disclosed under "Loans and Advances" in the balance sheet as of December 31, 2008 and March 31, 2008, respectively. 
 
The tax provision for the quarter ended December 31, 2008 includes a net reversal of Rs. 62 crore pertaining to earlier periods, comprising of Rs. 158 crore for provisions no longer required which is offset by a charge of Rs. 96 crore due to re-assessment of an uncertain tax position. Further, the tax provision for the nine months ended December 31, 2008, December 2007 and fiscal 2008 includes a reversal of Rs. 93 crore (net), Rs. 101 crore and Rs. 121 crore (net) respectively.

23.2.13. 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
	December 31, 2008	March 31, 2008
In Current accounts
ABN Amro Bank, Taiwan	1	-
Bank of America, USA	174	272
Citibank NA, Australia	23	30
Citibank NA, Thailand	1	-
Citibank NA, Japan	1	2
Deutsche Bank, Belgium	11	5
Deutsche Bank, Germany	2	5
Deutsche Bank, Netherlands	1	3
Deutsche Bank, France	5	2
Deutsche Bank, Zurich, Switzerland	2	1
Deutsche Bank, UK	44	76
HSBC Bank, UK	5	2
Royal Bank of Canada, Canada	9	12
Deutsche Bank, Spain	2	2
Nordbanken, Stockholm, Sweden	-	1
Svenska Handelsbanken, Sweden	-	1
	281	414

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

in Rs. crore

Balances with scheduled banks in India	As at
	December 31, 2008	March 31, 2008
In Current accounts
Citibank-Unclaimed dividend accounts	1	1
Deustche Bank	52	39
Deustche Bank-EEFC account in Euro	1	23
Deustche Bank-EEFC account in Swiss Franc	1	10
Deustche Bank-EEFC account in United Kingdom Pound Sterling	44	17
Deustche Bank-EEFC account in US dollars	13	127
HDFC Bank-Unclaimed dividend accounts	1	-
ICICI Bank	34	20
ICICI Bank-EEFC account in US Dollar	6	5
ICICI bank-Unclaimed dividend accounts	1	1
	154	243
In Deposit accounts

ABN Amro Bank	100	-
Axis Bank	-	250
Bank of Baroda	500	500
Bank of India	-	500
Bank of Maharashtra	493	362
Barclays Bank	140	280
Canara Bank	528	115
Corporation Bank	425	440
DBS Bank	25	-
HDFC Bank	260	450
HSBC Bank	488	250
ICICI Bank	10	1,000
IDBI Bank	500	475
ING Vysya Bank	25	-
Punjab National Bank	535	-
Standard Chartered Bank	240	-
State Bank of India	2,000	1,000
State Bank of Mysore	500	-
Syndicate Bank	500	-
The Bank of Nova Scotia	150	150
	7,419	5,772
Total Cash and bank balances as per balance sheet	7,854	6,429

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 December 31,		Nine months ended December 31,
	2008	2007	2008	2007
In current accounts
ABN Amro Bank , Taipei, Taiwan	2	2	3	2
Bank of America, Palo Alto, USA	956	637	956	637
Citibank NA, Melbourne, Australia	179	98	179	117
Citibank NA, Tokyo, Japan	45	14	45	14
Deutsche Bank, Brussels, Belgium	31	37	33	38
Deutsche Bank, Frankfurt, Germany	26	17	26	17
Deutsche Bank, Amsterdam, Netherlands	41	1	41	2
Deutsche Bank, Paris, France	9	4	9	5
Deutsche Bank, Spain	2	2	2	2
Deutsche Bank, Zurich, Switzerland	18	6	36	15
Deutsche Bank, UK	267	146	350	169
HSBC Bank PLC, Croydon, UK	4	19	8	32
Nordbanken, Stockholm, Sweden	1	1	1	1
Royal Bank of Canada, Toronto, Canada	42	13	42	13
Svenska Handels Bank, Stockholm, Sweden	2	1	3	1
UFJ Bank, Tokyo, Japan	1	3	6	3
Morgan Stanley Bank,US-Account	3	-	9	-
Citibank NA, Singapore	12	-	24	-
Citibank NA, Thailand	-	-	1	-
Deutsche Bank, Zurich, Switzerland USD account	8	-	31	-

23.2.14. Loans and advances

 “Advances” mainly comprises prepaid travel and per-diem expenses and advances to vendors.

Deposits with financial institutions and body corporate:

in Rs. crore

Particulars	As at
	December 31, 2008	March 31, 2008
Deposits with financial institutions and body corporate:
HDFC Limited	1,000	1,000
GE Capital Services India	-	260
Life Insurance Corporation of India (LIC)	234	161
	1,234	1,421

Maximum balance (Including accrued Interest) held as deposits with financial institutions and body corporate:

in Rs. crore

	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Deposits with financial institutions and body corporate:
HDFC Limited	1,000	1,030	1,056	1,030
GE Capital Services India	-	203	271	268
Life Insurance Corporation of India	234	148	234	148

Mr. 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 23.2.24.b.)

23.2.15. Fixed assets

Profit / (loss) on disposal of fixed assets during the quarter and nine months ended December 31, 2008 and 2007 is less than Rs. 1 crore and accordingly disclosed in note 23.3
Depreciation charged to the profit and loss account relating to assets costing less than Rs. 5,000/- each and other low value assets.

in Rs. crore

	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Charged during the period	38	5	43	8

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 December 31, 2008.

23.2.16. Details of Investments

in Rs. crore

Particulars	As at
	December 31, 2008	March 31, 2008
Long- term investments
OnMobile Systems Inc., (formerly Onscan Inc.) USA
53,85,251 (53,85,251) common stock at US$ 0.4348 each, fully paid, par value US$ 0.001 each *	9	9
M-Commerce Ventures Pte Ltd, Singapore
563 (563) redeemable preference shares of Singapore $ 1, fully paid, at a premium of Singapore $ 1,110 per redeemable preferred stock #	-	2
Merasport Technologies Private Limited **
2,420 equity shares at Rs. 8,052 each, fully paid, par value Rs. 10 each	2	-
	11	11
Less: Provision for investment	11	11
	-	-

* During the year ended March 31, 2008 all of the Preferred Stock investments in OnMobile Systems Inc., U.S.A had been converted to Common Stock.

# During the nine months ended December 31, 2008 investments in M-Commerce Ventures Pte Ltd., Singapore were liquidated.

** During the quarter ended December 31, 2008, 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 this quarter based on dimunition other than temporary.

Details of investments in and disposal of securities during the quarter and nine months ended December 31, 2008 and 2007:

in Rs. crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Investment in securities
Subsidiaries	-	18	22	103
Long-term investments	2	-	2	-
Certificate of deposits*	198	-	198	-
Liquid Mutual funds	-	-	-	1,518
	200	18	222	1,621
Redemption / Disposal of Investment in securities
Long-term investments	-	-	-	-
Liquid Mutual funds	-	-	-	1,518
	-	-	-	1,518
Net movement in investments	200	18	222	103

* Balances held in Certificate of deposits

in Rs. crore

Particulars	As at
	December 31, 2008	March 31, 2008
10,000 Units of Rs. 100,000 each of ICICI Bank	99	-
10,000 Units of Rs. 100,000 each of Punjab National Bank	99	-
	198	-

Particulars of investments made during the quarter and nine months ended December 31, 2008 and 2007:

in Rs. crore

Particulars of investee companies	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Infosys Consulting	-	-	22	81
Infosys Mexico	-	18	-	22
Infosys China	-	-	-	-
Infosys BPO	-	-	-	-
	-	18	22	103

Investment in Infosys Mexico

On June 20, 2007 the company incorporated a wholly owned subsidiary, Infosys Technologies S. DE R.L. de C.V. in Mexico ("Infosys Mexico"). As of December 31, 2008, the Company has invested an aggregate of Mexican Peso 60 million (Rs. 22 crore) in the subsidiary.

Investment in Infosys BPO

Buyback of shares and options

During the year ended March 31, 2008 Infosys completed the purchase of 3,60,417 shares of Infosys BPO from its employee shareholders by paying an aggregrate consideration of Rs.22 crore consequent to the forward share purchase agreement entered with them in February 2007.

Investment in Infosys Consulting

During the year ended March 31, 2008, the company invested US$ 20 million (Rs. 81 crore) in its wholly owned subsidiary Infosys Consulting Inc. During the nine months ended December 31, 2008, the company made an additional investment of US$5 million (Rs.22 crore). As of December 31, 2008, the company has invested an aggregate of US$45 million (Rs.193 crore) in the subsidiary.

23.2.17. 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 December 31, 2008 and 2007:

in Rs. crore

	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	1,940	1,039	860	720	870	5,429
	1,511	561	801	507	619	3,999
Identifiable operating expenses	795	451	371	305	355	2,277
	603	255	345	210	273	1,686
Allocated expenses	427	229	189	158	193	1,196
	373	139	197	125	152	986
Segmental operating income	718	359	300	257	322	1,956
	535	167	259	172	194	1,327
Unallocable expenses						169
						138
Operating income						1,787
						1,189
Other income (expense), net						46
						152
Net profit before taxes						1,833
						1,341
Income taxes						235
						155
Net profit after taxes						1,598
						1,186

Industry Segments

Nine months ended December 31, 2008 and 2007:

in Rs. crore

	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	5,251	2,824	2,613	1,948	2,375	15,011
	4,239	1,607	2,305	1,413	1,849	11,413
Identifiable operating expenses	2,249	1,211	1,086	847	1,016	6,409
	1,807	729	1,030	608	813	4,987
Allocated expenses	1,232	663	615	457	557	3,524
	1,057	401	576	352	462	2,848
Segmental operating income	1,770	950	912	644	802	5,078
	1,375	477	699	453	574	3,578
Unallocable expenses						485
						404
Operating income						4,593
						3,174
Other income (expense), net						254
						550
Net profit before taxes						4,847
						3,724
Income taxes						597
						436
Net profit after taxes						4,250
						3,288

Geographic Segments

Quarter ended December 31, 2008 and 2007:

in Rs. crore

	North America	Europe	India	Rest of the World	Total
Revenues	3,573	1,325	55	476	5,429
	2,545	1,081	53	320	3,999
Identifiable operating expenses	1,501	558	10	208	2,277
	1,076	409	17	184	1,686
Allocated expenses	786	292	12	106	1,196
	628	267	13	78	986
Segmental operating income	1,286	475	33	162	1,956
	841	405	23	58	1,327
Unallocable expenses					169
					138
Operating income					1,787
					1,189
Other income (expense), net					46
					152
Net profit before taxes					1,833
					1,341
Income taxes					235
					155
Net profit after taxes					1,598
					1,186

Geographic Segments 

Nine months ended December 31, 2008 and 2007:

in Rs. crore

	North America	Europe	India	Rest of the World	Total
Revenues	9,664	3,835	180	1,332	15,011
	7,230	3,037	161	985	11,413
Identifiable operating expenses	4,163	1,564	45	637	6,409
	3,171	1,217	41	558	4,987
Allocated expenses	2,266	902	42	314	3,524
	1,804	757	41	246	2,848
Segmental operating income	3,235	1,369	93	381	5,078
	2,255	1,063	79	181	3,578
Unallocable expenses					485
					404
Operating income					4,593
					3,174
Other income (expense), net					254
					550
Net profit before taxes					4,847
					3,724
Income taxes					597
					436
Net profit after taxes					4,250
					3,288

23.2.18. 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 December 31, 2008 the company has provided for doubtful debts of Rs.56 crore (Rs. 20 crore as at March 31, 2008) 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. 

23.2.19. 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 December 31,		Nine months ended December 31,
		2008	2007	2008	2007
Interim dividend for fiscal 2009	10,97,63,357	110	-	110	-
Interim dividend for fiscal 2008	10,92,19,011	-	66	-	66
Final dividend for fiscal 2007	10,92,18,536	-	-	-	71
Final dividend for fiscal 2008	10,95,11,049	-	-	79	-
Special dividend for fiscal 2008	10,95,11,049	-	-	219	-

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

Particulars	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Number of shares considered as basic weighted average shares outstanding	57,25,89,357	57,13,46,568	57,24,04,867	57,12,55,430
Add: Effect of dilutive issues of shares/stock options	6,93,312	19,39,306	10,78,766	19,55,108
Number of shares considered as weighted average shares and potential shares outstanding	57,32,82,669	57,32,85,874	57,34,83,633	57,32,10,538

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:

in Rs. Crore

Particulars	As at
	December 31, 2008	March 31, 2008
Obligations at period beginning	217	221
Service Cost	36	47
Interest cost	8	16
Actuarial (gain)/ loss	6	(9)
Benefits paid	(19)	(21)
Amendment in benefit plans	-	(37)
Obligations at period end	248	217

Defined benefit obligation liability as at the balance sheet is wholly funded by the company

Change in plan assets
Plans assets at period beginning, at fair value	229	221
Expected return on plan assets	9	18
Actuarial gain	6	2
Contributions	23	9
Benefits paid	(19)	(21)
Plans assets at period end, at fair value	248	229

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	248	229
Present value of the defined benefit obligations at the end of the period	248	217
Asset recognized in the balance sheet	-	12

Assumptions         

Interest rate	5.25%	7.92%
Estimated rate of return on plan assets	5.25%	7.92%

in Rs. Crore

	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Gratuity cost for the period
Service cost	19	12	36	32
Interest cost	(1)	4	8	12
Expected return on plan assets	1	(4)	(9)	(13)
Actuarial (gain)/loss	2	(3)	-	(4)
Plan amendment amortization	(1)	(1)	(3)	(3)
Net gratuity cost	20	8	32	24
Actual return on plan assets	5	5	15	15

Investment details of plan assets

100% of the plan assets are invested in debt instruments.

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 December 31, 2008 and March 31, 2008 amounted to Rs. 30 crore and Rs.33 crore, respectively and disclosed under "Current Liabilities".

The company expects to contribute approximately Rs. 15 crores to the gratuity trust during fiscal 2009.

23.2.22.a Provident Fund

The Guidance on Implementing AS 15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) states benefit 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.35 crore and Rs.29 crore to the provident fund during the quarter ended December 31, 2008 and 2007 and Rs.101 crore and Rs.81 crore during the nine months ended December 31, 2008 and 2007 respectively.

23.2.22.b Superannuation

The company contributed Rs.13 crore and Rs.11 crore to the superannuation plan during the three months ended December 31, 2008 and 2007 and Rs.39 crore and Rs.31 crore during the nine months ended December 31, 2008 and 2007 respectively.

23.2.23 Miscellaneous Income

 Miscellaneous income of Rs. 23 crore during the quarter ended December 31, 2008 includes a net amount of Rs. 18 crore consisting of Rs. 33 crore received from Axon Group Plc, towards the inducement fee offset by Rs. 15 crore towards expenses incurred in relation to this transaction. 
 
23.2.24 Cashflow statement

23.2.24.a Unclaimed dividend

The balance of cash and cash equivalents includes Rs. 3 crore as at December 31, 2008 (Rs. 2 crore as at March 31, 2008) set aside for payment of dividends.

23.2.24.b Restricted cash

Deposits with financial institutions and body corporate as at December 31, 2008 include an amount of Rs.234 crore (Rs. 161 crore as at March 31, 2008) 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 below.

Balance Sheet Items

in Rs. crore

Schedule Description		As at
		December 31, 2008	March 31, 2008
3	Fixed assets
	Depreciation & Amortization for the period
	Vehicles	0.36	0.36
7	Cash on Hand	0.01	-
8	Loans And Advances
	Advance to gratuity fund trust	0.02	12.38
23.2.7	Related party transactions
	Debtors- Infosys BPO s.r.o.	0.35	-
	Creditors- Infosys BPO	0.49	-
	Creditors- Infosys Mexico	0.34	-
23.2.13	Balances with non-scheduled banks
	- Bank of Baroda	0.05	0.02
	- State Bank of India	0.05	0.02
	Balances with non-scheduled banks
	- ABN Amro Bank, Denmark	0.01	0.01
	- ABN Amro Bank, Taiwan	0.93	0.23
	- Citibank NA, Singapore	0.46	0.02
	- Citibank NA, Thailand	0.53	0.31
	- Nordbanken, Sweden	0.21	0.89
	- Svenska Handelsbanken, Sweden	0.02	1.23
	- The Bank of Tokyo-Mitsubishi UFJ, Ltd., Japan	0.07	-
	- Deutsche Bank, Zurich, Switzerland	0.11	1.34

Profit & Loss Items  

in Rs. crore

Schedule	Description	Quarter ended December 31,		Nine months ended December 31,
		2008	2007	2008	2007
Profit & Loss
12	Selling and Marketing expenses
	Overseas group health insurance	0.28	(2.00)	0.23	0.43
	Contribution to provident and other funds	-	0.46	-	1.32
	Visa charges and others	-	-	-	1.13
	Printing & Stationery	0.29	0.29	0.77	0.86
	Office maintenance	0.09	0.15	0.30	0.30
	Computer maintenance	-	0.09	-	0.11
	Software Packages for own use	0.02	0.01	0.04	0.08
	Communication Expenses	0.23	-	1.08	0.43
	Rates and Taxes	0.01	-	0.02	0.01
	Sales Promotion expenses	(0.11)	-	1.23	0.94
	Consumables	-	0.07	0.12	0.18
	Insurance charges	0.02	-	0.02	-
	Advertisements	0.48	0.57	1.44	3.72
13	General and Administrative expenses
	Provision for doubtful loans and advances	0.19	0.12	0.49	0.30
	Overseas group health insurance	0.28	-	0.23	(0.17)
	Visa charges others	0.99	(0.01)	2.47	0.22
	Auditor’s remuneration :
	Statutory audit fees	0.16	0.16	0.47	0.48
	Certification Charges	0.01	0.01	0.04	0.03
	Out-of-pocket expenses	-	0.01	0.02	0.03
	Research grants	0.93	0.41	2.99	3.93
	Bank charges and commission	0.55	0.25	1.18	0.85
	Miscellaneous Expenses	-	0.47	0.78	-
	Advertisements	0.49	1.36	3.42	5.36
23.2.1	Agg regate expenses
	Provision for doubtful loans and advances	0.19	0.12	0.49	0.30
	Sales promotion expenses	(0.11)	-	1.23	0.94
	Auditor’s remuneration
	Statutory audit fees	0.16	0.16	0.47	0.48
	Certification Charges	0.01	0.01	0.04	0.03
	Out-of-pocket expenses	-	0.01	0.02	0.03
	Bank charges and commission	0.55	0.25	1.18	0.85
	Research grants	0.93	0.41	2.99	3.93
	Miscellaneous Expenses	-	0.47	0.78	-
23.2.7	Related party transactions
	Revenue transactions
	Interest income - Infosys China	0.75	0.48	1.75	0.48
	Sale of services - Infosys conulting	0.13	0.36	4.13	0.36
23.2.15	Profit on disposal of fixed assets, included in miscellaneous income	0.05	0.01	0.11	0.05
	(Loss) on disposal of fixed assets, included in miscellaneous expenses	-	-	-	(0.01)
	Profit/(loss) on disposal of fixed assets, net	0.05	0.01	0.11	0.04
23.2.13	Maximum Balances with non-scheduled banks
	- ABN Amro Bank, Copenhagen, Denmark	0.07	0.11	0.07	0.25
	- Citibank NA, Singapore	-	0.07	-	0.08
	- Citibank NA, Thailand	0.01	0.33	-	0.33

Cash Flow Statement Items

in Rs. crore

Schedule	Description	Nine months ended December 31,
		2008	2007
Cash Flow	Profit/ loss on sale of fixed assets	0.11	0.04
Statement	Provisions for investments	1.84	0.36
	Proceeds on disposal of fixed assets	0.16	0.04

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 nine months ended December 31, 2008 and 2007 :

in Rs. crore

Name	Salary	Contributions to provident and other funds	Perquisites and incentives	Total Remuneration
Co-Chairman
Nandan M Nilekani	0.08	0.01	0.19	0.28
	0.06	0.01	0.22	0.29
	0.22	0.05	0.41	0.68
	0.15	0.04	0.38	0.57
Chief Executive Officer and Managing Director
S Gopalakrishnan	0.08	0.01	0.19	0.28
	0.06	0.01	0.22	0.29
	0.22	0.05	0.42	0.69
	0.15	0.04	0.38	0.57
Chief Operating Officer
S D Shibulal	0.09	0.02	0.18	0.29
	0.05	0.01	0.22	0.28
	0.22	0.05	0.40	0.67
	0.14	0.04	0.36	0.54
Whole-time Directors
K Dinesh	0.08	0.02	0.20	0.30
	0.06	0.01	0.22	0.29
	0.22	0.05	0.42	0.69
	0.15	0.04	0.38	0.57
T V Mohandas Pai	0.09	0.03	0.49	0.61
	0.09	0.03	0.51	0.63
	0.27	0.07	1.72	2.06
	0.24	0.07	0.93	1.24
Srinath Batni	0.09	0.02	0.31	0.42
	0.08	0.02	0.33	0.43
	0.26	0.06	1.18	1.50
	0.22	0.06	0.61	0.89
Chief Financial Officer
V Balakrishnan	0.07	0.02	0.44	0.53
	0.07	0.02	0.45	0.54
	0.21	0.05	1.94	2.20
	0.20	0.06	0.64	0.90
Executive Council Members
Ashok Vemuri	0.54	-	0.49	1.03
	0.40	-	0.80	1.20
	1.44	-	2.04	3.48
	1.17	-	1.23	2.40
Chandra Shekar Kakal	0.06	0.01	0.31	0.38
	0.06	0.01	0.25	0.32
	0.19	0.04	1.21	1.44
	0.18	0.04	0.44	0.66
B.G. Srinivas	0.45	-	0.97	1.42
	0.44	-	0.71	1.15
	1.40	-	2.79	4.19
	1.23	-	1.34	2.57
Subhash B. Dhar	0.06	0.01	0.16	0.23
	0.05	0.01	0.22	0.28
	0.17	0.04	0.93	1.14
	0.13	0.03	0.28	0.44

Particulars of remuneration and other benefits of non-executive/ independent directors and for the quarter and nine months ended December 31, 2008 and 2007 :

Name	Commission	Sitting fees	Reimbursement of expenses	Total remuneration
Non-Whole time Directors
Deepak M Satwalekar	0.18	-	-	0.18
	0.14	-	-	0.14
	0.51	-	-	0.51
	0.41	-	0.01	0.42
Prof.Marti G. Subrahmanyam	0.19	-	0.09	0.28
	0.11	-	0.02	0.13
	0.52	-	0.24	0.76
	0.35	-	0.11	0.46
Dr.Omkar Goswami	0.15	-	-	0.15
	0.11	-	-	0.11
	0.42	-	0.02	0.44
	0.34	-	0.01	0.35
Claude Smadja	0.17	-	0.05	0.22
	0.11	-	-	0.11
	0.49	-	0.20	0.69
	0.32	-	0.12	0.44
Rama Bijapurkar	0.14	-	-	0.14
	0.11	-	-	0.11
	0.40	-	0.01	0.41
	0.34	-	-	0.34
Sridar A Iyengar	0.18	-	-	0.18
	0.11	-	0.03	0.14
	0.51	-	0.14	0.65
	0.33	-	0.10	0.43
David L. Boyles	0.17	-	0.05	0.22
	0.11	-	-	0.11
	0.49	-	0.18	0.67
	0.35	-	-	0.35
Jeffrey S. Lehman	0.18	-	-	0.18
	0.10	-	-	0.10
	0.49	-	0.17	0.66
	0.32	-	-	0.32
N R Narayana Murthy *	0.17	-	-	0.17
	0.12	-	-	0.12
	0.46	-	-	0.46
	0.37	-	-	0.37

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

EX-99.12

EXHIBIT 99.12
Indian GAAP Consolidated Statement, Notes and Report

Auditor’s Report on Quarterly Consolidated Financial Results and Consolidated Year to Date Results of Infosys Technologies Limited Pursuant to the Clause 41 of the Listing Agreement

To
Board of Directors of Infosys Technologies Limited

We have audited the quarterly consolidated financial results of Infosys Technologies Limited (the Company) for the quarter ended 31 December 2008 and the consolidated year to date results for the period 1 April 2008 to 31 December 2008, 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 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, prscribed by Companies (Accounting Standards) Rules, 2006, and other accounting principles generally accepted in India ..

We conducted our audit in accordance with the 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 misstatements. 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 results:

(i). include the quarterly financial results and year to date of the following entities:

(a) Infosys BPO Limited;
(b) Infosys BPO s.r.o;
(c) Infosys Consulting Inc;
(d) Infosys Technologies (Australia) Pty Limited;
(e) Infosys Technologies (China) Co. Limited;
(f) Infosys Technologies S. De R.L.De C.V. – Mexico ;
(g) Infosys BPO (Poland) Sp z.o.o (formerly known as P- Financial Services Poland Sp z.o.o);
(h) Infosys BPO (Thailand) Limited (formerly known as P-F Services Centre Thailand Limited);
(i) Pan Financial Shared Services India Private Limited; and
(j) Mainstream Software Pty 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 31December 2008 as well as the consolidated year to date results for the period from 1 April 2008 to 31 December 2008.

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 BSR & Co.
Chartered Accountants

Natrajan Ramkrishna
Partner
Membership No. 32815

Bangalore
13 January 2009

AUDITORS’ REPORT TO THE BOARD OF DIRECTORS OF
INFOSYS TECHNOLOGIES LIMITED ON THE CONSOLIDATED FINANCIAL STATEMENTS OF
INFOSYS TECHNOLOGIES LIMITED AND ITS SUBSIDIARIES

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 31 December 2008, the consolidated Profit and Loss Account of the Infosys Group for the quarter and nine months ended on that date and the consolidated Cash Flow Statement of the Infosys Group for the nine months 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 the 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 misstatements. 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 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 31 December 2008;
(b) in the case of the consolidated Profit and Loss account, of the profit of the Infosys Group for the quarter and nine months 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 nine months ended on that date.

for BSR & Co.
Chartered Accountants

Natrajan Ramkrishna
Partner
Membership No. 32815

Bangalore
13 January 2009

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore

Consolidated Balance Sheet as at	Schedule	December 31, 2008	March 31, 2008
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	1	286	286
Reserves and surplus	2	17,230	13,509
		17,516	13,795
MINORITY INTEREST		–	–
		17,516	13,795
APPLICATION OF FUNDS
FIXED ASSETS	3
Original cost		6,712	5,439
Less: Accumulated depreciation and amortization		2,359	1,986
Net book value		4,353	3,453
Add: Capital work-in-progress		919	1,324
		5,272	4,777
INVESTMENTS	4	198	72
DEFERRED TAX ASSETS	5	138	119
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	6	3,510	3,297
Cash and bank balances	7	8,463	6,950
Loans and advances	8	2,924	2,771
		14,897	13,018
LESS: CURRENT LIABILITIES AND PROVISIONS
Current liabilities	9	2,343	1,912
Provisions	10	646	2,279
NET CURRENT ASSETS		11,908	8,827
		17,516	13,795
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	24

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	Nandan M. Nilekani	S. Gopalakrishnan	S. D. Shibulal
Partner	Chairmanand Chief Mentor	Co-Chairman	Chief Executive Officer and Managing Director	Chief Operating Officer
Membership No. 32815
	Deepak M. Satwalekar	Marti G. Subrahmanyam	Omkar Goswami	Rama Bijapurkar
	Director	Director	Director	Director
	Claude Smadja	Sridar A. Iyengar	David L. Boyles	Jeffrey S. Lehman
	Director	Director	Director	Director
	K. Dinesh	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan
	Director	Director	Director	Chief Financial Officer
Bangalore	Parvatheesam K.
January 13, 2009	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 December 31,		Nine months ended December 31,
		2008	2007	2008	2007
Income from software services, products and business process management		5,786	4,271	16,058	12,150
Software development and business process management expenses	11	3,075	2,325	8,720	6,725
GROSS PROFIT		2,711	1,946	7,338	5,425
Selling and marketing expenses	12	274	205	834	693
General and administration expenses	13	406	349	1,200	972
		680	554	2,034	1,665
OPERATING PROFIT BEFORE DEPRECIATION AND MINORITY INTEREST		2,031	1,392	5,304	3,760
Depreciation		187	153	533	441
OPERATING PROFIT BEFORE TAX AND MINORITY INTEREST		1,844	1,239	4,771	3,319
Other income, net	14	40	158	223	565
Provision for investments (refer note 24.2.11)		(2)	–	(2)	–
NET PROFIT BEFORE TAX AND MINORITY INTEREST		1,882	1,397	4,992	3,884
Provision for taxation (refer to note 24.2.8)	15	241	166	617	474
NET PROFIT AFTER TAX AND BEFORE MINORITY INTEREST		1,641	1,231	4,375	3,410
Minority interest		–	–	–	–
NET PROFIT AFTER TAX AND MINORITY INTEREST		1,641	1,231	4,375	3,410
Balance Brought Forward		8,892	6,719	6,828	4,941
Less: Residual dividend paid		–	–	1	–
Additional dividend tax		–	–	–	–
		8,892	6,719	6,827	4,941
AMOUNT AVAILABLE FOR APPROPRIATION		10,533	7,950	11,202	8,351
Dividend
Interim		–	–	572	343
Final		–	–	–	–
One time special dividend		–	–	–	–
Total dividend		–	–	572	343
Dividend tax		–	–	97	58
Amount transferred to General Reserve		–	–	–	–
Balance in profit and loss account		10,533	7,950	10,533	7,950
		10,533	7,950	11,202	8,351
EARNINGS PER SHARE *
Equity shares of par value Rs. 5/- each
Basic		28.66	21.54	76.44	59.70
Diluted		28.63	21.47	76.30	59.49
Number of shares used in computing earnings per share
Basic		57,25,89,357	57,13,46,568	57,24,04,867	57,12,55,430
Diluted		57,32,82,669	57,32,85,874	57,34,83,633	57,32,10,538
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	24

* Refer to note 24.2.16The 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	Nandan M. Nilekani	S. Gopalakrishnan	S. D. Shibulal
Partner	Chairmanand Chief Mentor	Co-Chairman	Chief Executive Officer and Managing Director	Chief Operating Officer
Membership No. 32815
	Deepak M. Satwalekar	Marti G. Subrahmanyam	Omkar Goswami	Rama Bijapurkar
	Director	Director	Director	Director
	Claude Smadja	Sridar A. Iyengar	David L. Boyles	Jeffrey S. Lehman
	Director	Director	Director	Director
	K. Dinesh	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan
	Director	Director	Director	Chief Financial Officer
Bangalore	Parvatheesam K.
January 13, 2009	Company Secretary

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore

Consolidated Cash Flow Statement for the	Schedule	Nine months ended December 31,
		2008	2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit before tax and minority interest		4,992	3,884
Adjustments to reconcile net profit before tax to cash provided by operating activities
Depreciation		533	441
Interest and dividend income		(615)	(501)
Profit on sale of Investments		–	–
Effect of exchange differences on translation of foreign currency cash and cash equivalents		28	40
Effect of foreign currency translation on subsidiaries		(32)	–
Changes in current assets and liabilities
Sundry debtors	16	(213)	(141)
Loans and advances	17	(498)	(323)
Current liabilities and provisions	18	457	233
Income taxes paid	19	(557)	(279)
NET CASH GENERATED BY OPERATING ACTIVITIES		4,095	3,354
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets and change in capital work-in-progress	20	(1,015)	(1,063)
Payment for acquisition by subsidiary		(10)	(107)
Payment for acquisition of shared service centre		(6)	–
Investments in/ disposal of securities	21	(121)	(111)
Acquisition of minority interest in subsidiary		–	(2)
Proceeds from disposal of fixed assets.		–	–
Interest and dividend received	23	783	383
NET CASH USED IN INVESTING ACTIVITIES		(369)	(900)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital on exercise of stock options		48	25
Dividends paid during the period, including dividend tax		(2,493)	(834)
NET CASH USED IN FINANCING ACTIVITIES		(2,445)	(809)
Effect of exchange differences on translation of foreign currency cash and cash equivalents		(28)	(26)
NET INCREASE IN CASH AND CASH EQUIVALENTS		1,253	1,619
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		8,235	6,008
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	22	9,488	7,627
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	24

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	Nandan M. Nilekani	S. Gopalakrishnan	S. D. Shibulal
Partner	Chairmanand Chief Mentor	Co-Chairman	Chief Executive Officer and Managing Director	Chief Operating Officer
Membership No. 32815
	Deepak M. Satwalekar	Marti G. Subrahmanyam	Omkar Goswami	Rama Bijapurkar
	Director	Director	Director	Director
	Claude Smadja	Sridar A. Iyengar	David L. Boyles	Jeffrey S. Lehman
	Director	Director	Director	Director
	K. Dinesh	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan
	Director	Director	Director	Chief Financial Officer
Bangalore	Parvatheesam K.
January 13, 2009	Company Secretary

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore, except per share data

Schedules to the Consolidated Balance Sheet as at		December 31, 2008	March 31, 2008
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*	286	286
	57,26,41,503 (57,19,95,758) 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]
		286	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
	* 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	(10)	22
	Share premium account - As at April 1,	2,851	2,768
	Add: Receipts on exercise of employee stock options	48	58
	Income Tax benefit arising from exercise of stock options	–	25
		2,899	2,851
	General reserve - As at April 1,	3,802	3,255
	Add: Transfer from Profit and Loss Account	–	547
		3,802	3,802
	Balance in Profit and Loss Account	10,533	6,828
		17,230	13,509

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

Schedules to the Consolidated Balance Sheet

in Rs. Crore, except as otherwise stated

3.	FIXED ASSETS
	Particulars	Original cost				Depreciation and amortization				Net book value
		As at April 1, 2008	Additions/ Adjustments	Deletions/ Retirement/ Adjustments	As at December 31, 2008	As at April 1, 2008	For the period	Deletions/ Retirement/ Adjustments	As at December 31, 2008	As at December 31, 2008	As at March 31, 2008
	Goodwill	689	13	–	702	–	–	–	–	702	689
	Land: free-hold	131	40	–	171	–	–	–	–	171	131
	leasehold	99	3	–	102	–	–	–	–	102	99
	Buildings	1,958	682	–	2,640	378	111	–	489	2,151	1,580
	Plant and machinery#	869	294	44	1,119	416	128	33	511	608	453
	Computer equipment#	1,076	232	74	1,234	848	198	73	973	261	228
	Furniture and fixtures#	581	163	54	690	327	88	54	361	329	254
	Leasehold improvements	33	17	–	50	17	8	–	25	25	16
	Vehicles	3	1	–	4	–	–	–	–	4	3
		5,439	1,445	172	6,712	1,986	533	160	2,359	4,353	3,453
	Previous period	4,642	816	5	5,453	1,836	441	5	2,272	3,181
	Previous year	4,642	1,245	448	5,439	1,836	598	448	1,986	3,453

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

# During the nine months ended December 31, 2008, certain assets which were old and not in use having a gross book value of Rs. 166 crore (net book value Nil) were retired

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore

Schedules to the Consolidated Balance Sheet as at		December 31, 2008	March 31, 2008
4	INVESTMENTS *
	Trade (unquoted) - at cost
	Long- term investments	12	12
	Less: Provision made for investments	12	12
		–	–
	Non-trade (unquoted), current investments, at the lower of cost and fair value
	Certificates of deposit	198	–
	Liquid mutual funds	–	72
		198	72
	Aggregate amount of unquoted investments	198	72
	* refer to note 24.2.11
5	DEFERRED TAX ASSETS
	Fixed assets	114	91
	Sundry debtors	3	7
	Others	21	21
		138	119
6	SUNDRY DEBTORS
	Debts outstanding for a period exceeding six months
	Unsecured
	considered good	–	–
	considered doubtful	36	21
	Other debts
	Unsecured
	considered good*	3,510	3,297
	considered doubtful	56	20
		3,602	3,338
	Less: Provision for doubtful debts	92	41
		3,510	3,297
	* Includes dues from companies where directors are interested	6	2
7	CASH AND BANK BALANCES
	Cash on hand	–	–
	Balances with scheduled banks**
	In current accounts *	186	293
	In deposit accounts in Indian Rupees	7,718	5,913
	Balances with non-scheduled banks in foreign currencies**
	In deposit accounts	212	153
	In current accounts	347	591
		8,463	6,950
	*Includes balance in unclaimed dividend account (Refer note 24.2.21.a)	3	2
	**Refer to note 24.2.19 for details of balances in scheduled and non-scheduled banks
8	LOANS AND ADVANCES
	Unsecured, considered good
	Advances
	Prepaid expenses	18	33
	For supply of goods and rendering of services	17	13
	Advance to gratuity trust	–	12
	Interest accrued and not due	13	186
	Withholding and other taxes receivable	133	13
	Others	11	21
		192	278
	Unbilled revenues	800	482
	Advance income taxes	186	218
	MAT credit entitlement (refer to note 24.2.8)	298	175
	Loans and advances to employees
	Housing and other loans	44	42
	Salary advances	81	73
	Electricity and other deposits	31	32
	Rental deposits	34	25
	Deposits with financial institution and body corporate (refer to note 24.2.9)	1,259	1,446
		2,925	2,771
	Unsecured, considered doubtful
	Loans and advances to employees	2	1
		2,927	2,772
	Less: Provision for doubtful loans and advances to employees	3	1
		2,924	2,771
9	CURRENT LIABILITIES
	Sundry creditors
	Goods and services	16	53
	Accrued salaries and benefits
	Salaries	54	80
	Bonus and incentives	332	413
	Unavailed leave	280	190
	For other liabilities
	Provision for expenses	627	450
	Retention monies	47	53
	Withholding and other taxes payable	279	218
	Mark to Market loss on forward and options contracts	211	118
	Payable for acquisition of subsidiary	3	–
	Gratuity obligation - unamortised amount	30	33
	Others	10	10
		1,889	1,618
	Advances received from clients	24	6
	Unearned revenue	427	286
	Unclaimed dividend (refer to note 24.2.21.a)	3	2
		2,343	1,912
10	PROVISIONS
	Proposed dividend	–	1,559
	Provision for
	Tax on dividend	–	265
	Income taxes*	572	402
	Post-sales client support and warranties	74	53
		646	2,279

* Refer to note 24.2.8

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore

Schedules to Consolidated Profit and Loss Account for the		Quarter ended  December 31,		Nine months ended December 31,
		2008	2007	2008	2007
11	SOFTWARE DEVELOPMENT AND BUSINESS PROCESS MANAGEMENT EXPENSES
	Salaries and bonus including overseas staff expenses	2,543	1,960	7,121	5,592
	Overseas group health insurance	34	(43)	108	(17)
	Contribution to provident and other funds	73	49	187	140
	Staff welfare	21	18	60	42
	Overseas travel expenses	153	124	488	381
	Traveling and conveyance	–	–	–	2
	Technical sub-contractors	101	62	299	214
	Software packages
	For own use	71	68	222	163
	For service delivery to clients	5	9	27	23
	Communication expenses	21	22	68	56
	Rent	16	15	53	32
	Computer maintenance	6	5	19	17
	Consumables	4	6	17	17
	Provision for post-sales client support and warranties	17	14	20	19
	Miscellaneous expenses	10	16	31	44
		3,075	2,325	8,720	6,725
12	SELLING AND MARKETING EXPENSES
	Salaries and bonus including overseas staff expenses	209	140	588	443
	Overseas group health insurance	2	(1)	5	–
	Contribution to provident and other funds	1	1	3	3
	Staff welfare	1	1	4	3
	Overseas travel expenses	24	25	92	77
	Traveling and conveyance	1	1	4	3
	Brand building	12	14	56	42
	Commission and earnout charges	5	3	16	61
	Professional charges	4	6	18	19
	Rent	4	4	12	12
	Marketing expenses	6	6	17	16
	Telephone charges	3	2	10	6
	Printing and stationery	–	–	1	–
	Advertisements	–	1	1	5
	Sales promotion	–	1	2	2
	Communication expenses	1	1	3	1
	Miscellaneous expenses	1	–	2	–
		274	205	834	693
13	GENERAL AND ADMINISTRATION EXPENSES
	Salaries and bonus including overseas staff expenses	115	93	315	255
	Overseas group health insurance	–	(2)	2	(2)
	Contribution to provident and other funds	5	3	13	9
	Staff welfare	–	–	–	1
	Overseas travel expenses	5	6	23	17
	Traveling and conveyance	26	29	75	76
	Telephone charges	43	35	122	99
	Professional charges	60	48	183	131
	Power and fuel	38	30	113	91
	Office maintenance	41	36	120	96
	Guesthouse maintenance	2	1	3	1
	Insurance charges	7	5	20	19
	Printing and stationery	3	4	10	14
	Rates and taxes	6	14	23	28
	Donations	7	5	19	15
	Rent	8	5	20	17
	Advertisements	1	1	4	6
	Professional membership and seminar participation fees	3	2	7	7
	Repairs to building	9	6	23	15
	Repairs to plant and machinery	6	5	16	14
	Postage and courier	3	2	9	8
	Books and periodicals	–	1	2	3
	Recruitment and training	2	–	5	2
	Provision for bad and doubtful debts	10	17	55	38
	Provision for doubtful loans and advances	–	–	1	–
	Commission to non-whole time directors	1	1	4	3
	Auditor's remuneration
	Statutory audit fees	–	–	1	–
	Bank charges and commission	1	–	2	–
	Research grants	1	–	3	3
	Miscellaneous expenses	3	2	7	6
		406	349	1,200	972
14	OTHER INCOME, NET
	Interest received on deposits with banks and others*	229	169	612	494
	Dividend received on investment in liquid mutual funds (non-trade unquoted)	–	1	3	7
	Miscellaneous income, net (refer to note 24.2.10 and 24.2.20)	29	2	32	7
	Exchange gains / (losses)	(218)	(14)	(424)	57
		40	158	223	565
	*includes tax deducted at source	55	9	131	69
15	PROVISION FOR TAXATION
	Income taxes*	241	198	759	557
	MAT credit entitlement	2	(25)	(123)	(64)
	Deferred taxes	(2)	(7)	(19)	(19)
		241	166	617	474

* Refer to note 24.2.8

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore

Schedules to Consolidated Cashflow Statements for the		Nine months ended December 31,
		2008	2007
16	CHANGE IN SUNDRY DEBTORS
	As per the Balance Sheet	3,510	2,608
	Less: Opening balance considered	(3,297)	(2,436)
	Sundry debtors pertaining to acquired company	–	(31)
		213	141
17	CHANGE IN LOANS AND ADVANCES
	As per the Balance Sheet*	2,924	2,438
	Add: Gratutity transitional liability	9	–
	Gratuity obligation - unamortised amount relating to plan amendment (refer to note 24.2.17)	(30)	37
	Less: Deposits with financial institutions, included in cash and cash equivalents **	(1,025)	(1,087)
	MAT credit entitlement	(298)	(62)
	Advance income taxes separately considered	(186)	(150)
	Interest accrued and not due	(13)	(169)
		1,381	1,007
	Less: Opening balance considered	(883)	(673)
	Loans and advances pertaining to acquired company	–	(11)
		498	323
	* Net of gratuity transitional liability
	** Excludes restricted deposits held with LIC of Rs. 234 crore (Rs.148 crore) for funding leave liability
18	CHANGE IN CURRENT LIABILITIES AND PROVISIONS
	As per the Balance Sheet	2,989	2,014
	Add/ (Less): Unclaimed dividend	(3)	(3)
	Gratuity obligation - unamortised amount relating to plan ammendment	(30)	37
	Payable for acquisition made by subsidiary	(3)	–
	Provisions separately considered in the cash flow statement
	Income taxes	(572)	(301)
	Dividends	–	–
	Dividend tax	–	–
		2,381	1,747
	Less: Opening balance considered	(1,924)	(1,488)
	Current liabilities and provisions pertaining to acquired company	–	(26)
		457	233
19	INCOME TAXES PAID
	Charge as per the Profit and Loss Account	617	474
	Add: Increase/ (Decrease) in advance income taxes	(32)	(203)
	Increase / (Decrease) in deferred taxes	19	23
	Increase / (Decrease) in MAT credit entitlement	123	62
	Less:(Increase)/Decrease in income tax provision	(170)	(77)
		557	279
20	PURCHASE OF FIXED ASSETS AND CHANGE IN CAPITAL WORK-IN-PROGRESS
	Additions as per Balance Sheet*	1,420	723
	Less: Opening Capital work-in-progress	(1,324)	(965)
	Add: Closing Capital work-in-progress	919	1,305
		1,015	1,063
	* Excludes goodwill of Rs. 100 crore and net fixed assets of Rs. 10 crore related to acquired company for the year ended March 31, 2008.
	* Excludes goodwill of Rs. 13 crore related to acquisition by subsidiary during the quarter ended June 30,2008 and effect of exchange rate fluctuations of Rs.12 Crores as at December 31,2008.
21	INVESTMENTS IN / (DISPOSAL OF) SECURITIES *
	As per the Balance Sheet #	193	136
	Less:Profit on Sale of Investments	–	–
	Less: Opening balance considered	(72)	(25)
		121	111
	* Refer to note 24.2.11 for details of investments and redemptions
	# Excludes interest accrued on certificates of deposit of Rs 5 crores (Rs. Nil)
22	CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
	As per the Balance Sheet	8,463	6,540
	Add: Deposits with financial institutions (excluding interest accrued and not due)**	1,025	1,087
		9,488	7,627
	** Excludes restricted deposits held with LIC of Rs.234 crore (Rs.148 crore) for funding leave liability
23	INTEREST AND DIVIDEND RECEIVED
	Interest accrued but not due opening balance	186	51
	Add: Interest and dividend income	615	501
	Less: Interest acrrued and not due closing balance	(18)	(169)
		783	383

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

Schedules to the Consolidated Financial Statements for the quarter and nine months ended December 31, 2008

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 subsidiaries, Infosys Technologies (Australia) Pty. Limited ("Infosys Australia"), Infosys Technologies (China) Co. Limited ("Infosys China"), Infosys Consulting, Inc.("Infosys Consulting") and Infosys Technologies S. DE R.L. de C.V. ("Infosys Mexico") is a leading global technology services organization. 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, maintenance, 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 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 as specified in the Companies (Accounting Standards) Rules, 2006 and guidelines issued by the Securities and Exchange Board of India. 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 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 on Consolidated Financial Statements as specified in the Companies (Accounting Standards) Rules, 2006. The financial statements of Infosys - the parent company, Infosys BPO, Infosys China, Infosys Australia, Infosys Mexico and Infosys Consulting 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. Exchange difference resulting from the difference due to translation of foreign currency assets and liabilities in subsidiaries is disclosed as foreign currency translation reserve.

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 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 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.

Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. The impairment loss to be expensed is determined as the excess of the carrying amount over the higher of the asset's net sales price or present value as determined above.

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 uncertainity as to measurement or collectibility of consideration, is recognized based upon the percentage-of-completion. 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 services are performed. Maintenance revenue is recognized ratably over the term of the underlying maintenance agreement.

The Group accounts for volume discounts and pricing incentives to customers by reducing the amount of discount from the amount of revenue recognized at the time of sale. In some arrangements, the level of discount varies with increases in the levels of revenue transactions. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer. The Group recognizes discount obligations as a reduction of revenue based on the ratable allocation of the discount to each of the underlying revenue transactions that result in progress by the customer toward earning the discount. The Group recognizes the liability based on its estimate of the customer's future purchases. 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 adjustment.
The Group presents revenues net of sales and value-added taxes in its 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 company's right to receive dividend is established.

24.1.4 Provisions

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 expenditure required to settle the present obligation at the reporting date. Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonably estimated. Where no reliable estimate can be made, a disclosure is made as contingent liability.

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 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 Group 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.

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 continuing with 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. Goodwill comprises the excess of purchase consideration over the fair value of the net assets of the acquired enterprise. Impairment is recorded in the profit and loss account to the extent the net discounted cash flow is lower than its carrying value.

24.1.6 Depreciation and amortization

Depreciation on fixed assets is applied 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 within a year 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. 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 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.

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 law. The Group recognizes the net obligation of a defined benefit plan in the balance sheet as an asset or liability, respectively in accordance with AS-15. 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 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 were also eligible for superannuation benefit. Infosys BPO 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 contribution plan. Aggregate contributions, along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the company make monthly contributions to the Infosys Technologies Limited Employee's Provident Fund Trust equal to a specified percentage of the covered employee's salary. The company also contributes certain portion to a government administered pension fund on behalf of its employees. The interest rate payable by the trust to the beneficiaries every year is being notified by the government. The company has an obligation to make good the short fall, 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 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 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

Revenue expenditure incurred on research and development is expensed as incurred. Capital expenditure incurred on research and development is depreciated over the estimated useful lives of the related assets.

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 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 and futures 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 Accounting Standard 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 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 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 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. Minimum alternate tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Group will pay normal tax after the tax holiday period. Accordingly, it is recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the company and the asset can be measured reliably.

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 being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantively enacted regulations. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and 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. 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 stock options in excess of compensation charged to 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 (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.

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 the lower of cost and fair value. Cost for overseas investments comprises the Indian Rupee value of the consideration paid for the investment. Long-term investments are carried at cost and 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 and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, 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 certain specific expenses:

in Rs. crore

	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Salaries and bonus including overseas staff expenses *	2,867	2,193	8,024	6,290
Overseas group health Insurance #	36	(46)	115	(19)
Contribution to provident and other funds	79	53	203	152
Staff welfare	22	19	64	46
Overseas travel expenses	182	155	603	475
Traveling and conveyance	27	30	79	81
Technical sub-contractors	101	62	299	214
Software packages
for own use	71	68	222	163
for service delivery to clients	5	9	27	23
Professional charges	64	54	201	150
Telephone charges	46	37	132	105
Communication expenses	22	23	71	57
Power and fuel	38	30	113	91
Office maintenance	41	36	120	96
Guesthouse maintenance **	2	1	3	1
Rent	28	24	85	61
Brand building	12	14	56	42
Commission and earnout charges	5	3	16	61
Insurance charges	7	5	20	19
Printing and stationery	3	4	11	14
Computer maintenance	6	5	19	17
Consumables	4	6	17	17
Rates and taxes	6	14	23	28
Advertisements	1	2	5	11
Donations	7	5	19	15
Marketing expenses	6	6	17	16
Professional membership and seminar participation fees	3	2	7	7
Repairs to building	9	6	23	15
Repairs to plant and machinery	6	5	16	14
Postage and courier	3	2	9	8
Provision for post-sales client support and warranties	17	14	20	19
Books and periodicals	-	1	2	3
Recruitment and training	2	-	5	2
Provision for bad and doubtful debts	10	17	55	38
Provision for doubtful loans and advances	-	-	1	-
Commission to non-whole time directors	1	1	4	3
Sales promotion expenses	-	1	2	2
Auditor's remuneration
statutory audit fees	-	-	1	-
Bank charges and commission	1	-	2	-
Research grants	1	-	3	3
Miscellaneous expenses	14	18	40	50
	3,755	2,879	10,754	8,390
Fringe Benefit Tax (FBT) in India amounting included in the above	12	4	24	15

* During the nine months ended December 31, 2007, the Company voluntarily settled with the California Division of Labor standards enforcement (DLSE) towards possible overtime payment to certain employees in California for a total amount of Rs. 102 crore.

#The Company records health insurance liabilities based on the maximum individual claimable amounts by employees. During the quarter ended December 31, 2007, the Company completed its reconciliation of amounts actually claimed by employees to date, including past years, with the aggregate amount of recorded liability and the net excess provision of Rs. 71 crore was written back.

** For non-training purpose

24.2.2    Capital commitments and contingent liabilities

in Rs. Crore

Particulars	As at
	December 31, 2008		March 31, 2008
Estimated amount of unexecuted capital contracts
(net of advances and deposits)		500		664
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		7
Claims against the company, not acknowledged as debts
(Net of amount paid to statutory authorities of Rs.101 crore (Rs.101 crore)*		101		3
	in million	in Rs. Crore	in million	in Rs. Crore
Forward contracts outstanding
In US $	$255.00	1,242	$586.30	2,346
In Euro	Euro 20.00	137	Euro 14.80	93
In GBP	GBP13.50	95	GBP3.00	24
In AUD	AUD 3.00	10	-	-
Options contracts outstanding
Euro Forward Extra in Euro	-	-	Euro 5.00	32
Range barrier options in US $	$269.50	1,313	$100.00	400
Euro Accelerator	-	-	Euro 12.00	76
Range barrier options in GBP	-	-	GBP7.50	60

* 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. 98 crore), including interest of Rs. 43 crore (Rs.18 crore) upon completion of their tax review for fiscal 2004 and fiscal 2005 respectively. The tax demand is 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 is pending before the Commissioner of Income tax (Appeals), Bangalore. For fiscal 2005, the appeal will be filed with Commissioner of Income tax (Appeals) before the statutory time limit i.e 31 January 2009.

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 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 nine months ended December 31, 2008 and 2007 and maximum obligations on long-term non-cancelable operating leases payable as per the rentals stated in the respective agreements:-

in Rs. Crore

	Quarter ended December 31,		Nine months ended  December 31,
Particulars
	2008	2007	2008	2007
Lease rentals recognized during the period	28	24	85	61
in Rs. Crore
Lease obligations			As at
			December 31, 2008	March 31, 2008
Within one year of the balancesheet date			80	65
Due in a period between one year and five years			205	145
Due after five years			61	76

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 nine months ended December 31, 2008, an amount of Rs. 5 crore and Rs.15 crore (Rs. 5 crore and Rs.15 crore for quarter and nine months ended December 31, 2007) was donated to Infosys 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 nine months ended December 31, 2008 and 2007 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 December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Capital	31	-	31	-
Revenue	55	45	152	154

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  December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Options outstanding, beginning of period	12,15,945	20,84,124	15,30,447	20,84,124
Granted	-	-	-	-
Less: exercised	65,406	1,62,633	3,41,008	1,62,633
forfeited	28,222	-	67,122	-
Options outstanding, end of period	11,22,317	19,21,491	11,22,317	19,21,491

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.

Number of options granted, exercised and forfeited during the	Quarter ended December 31,		Nine months ended  December 31,
	2008	2007	2008	2007
Options outstanding, beginning of period	11,03,862	18,31,218	14,94,693	18,97,840
Granted	-	-	-	-
Less: exercised	76,242	1,81,442	3,04,737	1,81,442
forfeited	17,865	4,477	1,80,201	71,099
Options outstanding, end of period	10,09,755	16,45,299	10,09,755	16,45,299

The aggregate options considered for dilution are set out in note 24.2.16

Infosys BPO's 2002 Plan

Infosys BPO's 2002 Plan provides for the grant of stock options to employees of Infosys BPO and was approved by the Board of Directors and stockholders in September 2002. All options under the 2002 Plan are exercisable for equity shares. The 2002 Plan is administered by a Compensation Committee comprising three members, all of whom are directors of Infosys BPO. The 2002 Plan provides for the issue of 52,50,000 equity shares to employees, at an exercise price, which shall not be less than the Fair Market Value ("FMV") on the date of grant. Options may also be issued to employees at exercise prices that are less than FMV only if specifically approved by the members of the company in general meeting. The options issued under the 2002 Plan vest in periods ranging between one through six years, although accelerated vesting based on performance conditions is provided in certain instances.

The activity in Infosys BPO's 2002 Plan for the quarter and nine months ended December 31, 2008 and 2007 :-

Number of options granted, exercised and forfeited	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Options outstanding, beginning of period	-	375	-	2,200
Granted	-	-	-	-
Less: exercised	-	-	-	-
forfeited	-	(375)	-	(2,200)
Options outstanding, end of period	-	-	-	-

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 Income and basic and diluted earnings per share as reported would have reduced to the proforma amounts as indicated:-

Particulars	Quarter ended December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Net Profit:
As Reported	1,641	1,231	4,375	3,410
Less: Stock-based employee compensation expense	2	3	5	9
Adjusted Proforma	1,639	1,228	4,370	3,401
Basic Earnings per share as reported	28.66	21.54	76.44	59.70
Proforma Basic Earnings per share	28.63	21.49	76.35	59.54
Diluted Earnings per share as reported	28.63	21.47	76.30	59.49
Proforma Diluted Earnings per share	28.60	21.42	76.21	59.33

The Finance Act, 2007 included Fringe Benefit Tax ("FBT") on Employee Stock Option's Plan (ESOPs). FBT liability crystallizes on the date of exercise of stock options. During the quarter and nine months ended December 31, 2008, 65,406 and 3,41,008 equity shares, 76,242 and 3,04,737 equity shares were issued pursuant to the exercise of stock options by employees under the 1998 and 1999 stock option plans, respectively. FBT on exercise of stock options of Rs. 2 crore for the nine months ended December 31, 2008 has been paid by the Company and subsequently recovered from the employees. For the quarter ended December 31, 2008, FBT on exercise of stock options was less than Rs.1 crore. Consequently, there is no impact on the profit and loss account.

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. Most of Infosys' operations are conducted through Software Technology Parks ("STPs"). Income from STPs are tax exempt for the earlier of 10 years commencing from the fiscal year in which the unit commences software development, or March 31, 2010.

Infosys also has operations in Special Economic Zone ("SEZ's"). 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.298 crore and Rs.175 crore is carried forward and disclosed under "Loans and Advances" in the balance sheet as of December 31, 2008 and March 31, 2008, respectively.

The tax provision for the quarter ended December 31, 2008 includes a net reversal of Rs. 62 crore pertaining to earlier periods, comprising of Rs. 158 crore for provisions no longer required which is offset by a charge of Rs. 96 crore due to re-assessment of an uncertain tax position. Further, the tax provision for the nine months ended December 31, 2008, December 2007 and fiscal 2008 includes a reversal of Rs. 93 crore (net), Rs. 101 crore and Rs. 121 crore (net) respectively.

24.2.9    Loans and advances

in Rs. Crore

	As at
Particulars	December 31, 2008	March 31, 2008
Deposits with financial institutions and body corporate:
HDFC Limited	1,025	1,000
GE Capital Services India Limited	-	285
Life Insurance Corporation of India	234	161
	1,259	1,446

Mr. 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 nine months ended December 31, 2008 and 2007 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 December 31, 2008.

24.2.11. Details of Investments

Details of investments in and disposal of securities for the quarter and nine months ended December 31, 2008 and 2007:

in Rs crore

	Quarter ended December 31,		Nine months ended December 31,
Particulars
	2008	2007	2008	2007
Investment in securities
Long-term investments #	2	-	2	-
Certificates of deposit*	198	-	198	-
Liquid Mutual funds	-	242	258	1,960
	200	242	458	1,960
Redemption / Disposal of Investment in securities
Liquid Mutual funds	-	121	330	1,849
	-	121	330	1,849
Net movement in investment	200	121	128	111

# During the quarter ended December 31, 2008, 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 this quarter based on dimunition other than temporary.

* Balances held in Certificates of deposit are as follows:

Particulars	As at
	December 31, 2008	March 31, 2008
10,000 Units of Rs. 100,000 each of ICICI Bank	99	-
10,000 Units of Rs. 100,000 each of Punjab National Bank	99	-
	198	-

24.2.12. Holding of Infosys in its subsidiaries

Name of the subsidiary	Country of incorporation	Holding as at
		December 31, 2008	March 31, 2008
Infosys BPO	India	99.98%	99.98%
Infosys Australia	Australia	100%	100%
Infosys China	China	100%	100%
Infosys Consulting	USA	100%	100%
Infosys Mexico	Mexico	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%
Pan Financial Shared Services India Private Limited *	India	99.98%	99.98%
P-Financial Services Holding B.V. Netherlands **	Netherlands	-	99.98%
Mainstream Software Pty Limited***	Australia	100%	-

* Infosys BPO s.r.o, Infosys BPO (Poland) Sp Z.o.o, Infosys BPO (Thailand) Limited and Pan Financial Shared Services India Private Limited are wholly owned subsidiaries of Infosys BPO.

 **During the quarter ended December 31, 2008, the investments held by P-Financial Services Holding B.V in its wholly owned subsidiaries Pan-Financial Shared Services India Private Limited, Infosys BPO (Poland) Sp. Z.o.o., and Infosys BPO (Thailand) Limited was transferred to Infosys BPO, consequent to which P-Financial Services Holding B.V was liquidated.

***Mainstream Software Pty Limited is a wholly owned subsidiary of Infosys Australia

Infosys BPO

During the year ended March 31, 2008 Infosys completed the purchase of 3,60,417 shares of Infosys BPO from its employee shareholders by paying an aggregrate consideration of Rs.22 crore consequent to the forward share purchase agreement entered with them in February 2007. Further, Infosys BPO acquired 100% of the equity shares of P-Financial Services Holding B.V. for a consideration of Rs. 107 crore by entering into a Sale and Purchase Agreement with Koninklijke Philips Electronics NV (Philips). The transaction was accounted as a business combination which resulted in a Goodwill of Rs. 83 crore. As of December 31, 2008 Infosys holds 99.98% of the equity in Infosys BPO.

Investment in Infosys Mexico

On June 20, 2007 the company incorporated a wholly owned subsidiary, Infosys Technologies S. DE R.L. de C.V. in Mexico ("Infosys Mexico"). As of December 31, 2008, the Company has invested an aggregate of Rs. 22 crore (Mexican Peso 60 million) in the subsidiary.

Investment in Infosys Consulting

During the year ended March 31, 2008, the company invested Rs. 81 crore (US$ 20 million) in its wholly owned subsidiary Infosys Consulting Inc. During the nine months ended December 31, 2008, the company made an additional investment of Rs.22 crore (US$ 5 million). As of December 31, 2008, the company has invested an aggregate of Rs. 193 crore (US$ 45 million) in the subsidiary.

Investment by Infosys Australia

During the nine months ended December 31, 2008 Infosys Australia acquired Mainstream Software Pty Limited for a consideration of Rs. 13 crore. Consequent to such acquisition Goodwill to the extent of Rs.13 crore have been recognised in the books.

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 December 31, 2008, the Group has provided for doubtful debts of Rs.56 crore (Rs. 20 crore as at March 31, 2008) 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 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 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 December 31, 2008 and 2007:

in Rs. crore

Particulars	Financial Services	Manufacturing	Telecom	Retail	Others	Total
Revenues	2,022	1,134	969	727	934	5,786
	1,572	622	901	514	662	4,271
Identifiable operating expenses	804	482	365	301	367	2,319
	608	279	326	207	276	1,696
Allocated expenses	502	281	240	180	233	1,436
	436	172	250	142	183	1,183
Segmental operating income	716	371	364	246	334	2,031
	528	171	325	165	203	1,392
Unallocable expenses						187
						153
Operating income						1,844
						1,239
Other income/(expense), net						38
						158
Net profit before taxes						1,882
						1,397
Income taxes						241
						166
Net profit after taxes						1,641
						1,231

Nine months ended December 31, 2008 and 2007:

in Rs. crore

Particulars	Financial Services	Manufacturing	Telecom	Retail	Others	Total
Revenues	5,500	3,118	2,962	1,969	2,509	16,058
	4,431	1,707	2,576	1,433	2,003	12,150
Identifiable operating expenses	2,283	1,330	1,072	826	1,009	6,520
	1,827	754	955	599	833	4,968
Allocated expenses	1,449	822	783	519	661	4,234
	1,248	481	726	403	564	3,422
Segmental operating income	1,768	966	1,107	624	839	5,304
	1,356	472	895	431	606	3,760
Unallocable expenses						533
						441
Operating income						4,771
						3,319
Other income/(expense), net						221
						565
Net profit before taxes						4,992
						3,884
Income taxes						617
						474
Net profit after taxes						4,375
						3,410

Geographic segments

Quarter ended December 31, 2008 and 2007:

in Rs. crore

Particulars	North America	Europe	India	Rest of the World	Total
Revenues	3,732	1,478	67	509	5,786
	2,660	1,219	53	339	4,271
Identifiable operating expenses	1,530	604	10	175	2,319
	1,090	457	17	132	1,696
Allocated expenses	926	367	17	126	1,436
	737	338	15	93	1,183
Segmental operating income	1,276	507	40	208	2,031
	833	424	21	114	1,392
Unallocable expenses					187
					153
Operating income					1,844
					1,239
Other income/(expense), net					38
					158
Net profit before taxes					1,882
					1,397
Income taxes					241
					166
Net profit after taxes					1,641
					1,231

Nine months ended December 31, 2008 and 2007:

in Rs. crore

Particulars	North America	Europe	India	Rest of the World	Total
Revenues	10,098	4,333	196	1,431	16,058
	7,591	3,353	161	1,045	12,150
Identifiable operating expenses	4,232	1,721	44	523	6,520
	3,219	1,308	40	401	4,968
Allocated expenses	2,659	1,144	53	378	4,234
	2,138	944	46	294	3,422
Segmental operating income	3,207	1,468	99	530	5,304
	2,234	1,101	75	350	3,760
Unallocable expenses					533
					441
Operating income					4,771
					3,319
Other income/(expense), net					221
					565
Net profit before taxes					4,992
					3,884
Income taxes					617
					474
Net profit after taxes					4,375
					3,410

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	Number of shares to which the dividends relate	Quarter ended December 31,		Nine months ended December 31,
		2008	2007	2008	2007
Interim dividend for fiscal 2009	10,97,63,357	110	-	110	-
Interim dividend for fiscal 2008	10,92,19,011	-	66	-	66
Final dividend for fiscal 2007	10,92,18,536	-	-	-	71
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  December 31,		Nine months ended  December 31,
	2008	2007	2008	2007
Number of shares considered as basic weighted average shares outstanding	57,25,89,357	57,13,46,568	57,24,04,867	57,12,55,430
Add: Effect of dilutive issues of shares/stock options	6,93,312	19,39,306	10,78,766	19,55,108
Number of shares considered as weighted average shares and potential shares outstanding	57,32,82,669	57,32,85,874	57,34,83,633	57,32,10,538

24.2.17  Gratuity Plan

Effective April 1,2006 the company adopted the revised accounting standard on employee benefits. Pursuant to the adoption, the transitional obligations of the company amounted to Rs. 9 crore. As required by the standard, the obligation has been recorded with the transfer of Rs. 9 crore to general reserves during fiscal year ended March 31, 2007.

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:

in Rs. Crore

	As at
	December 31, 2008	March 31, 2008
Obligations at period beginning	224	225
Service cost	39	50
Interest cost	9	17
Actuarial loss/(gain)	7	(8)
Benefits paid	(21)	(23)
Amendement in benefit plan	-	(37)
Obligations at period end	258	224
Defined benefit obligation liability as at the balance sheet is wholly funded by the company
Change in plan assets
Plans assets at period beginning, at fair value	236	225
Expected return on plan assets	9	18
Actuarial gain	8	2
Contributions	26	14
Benefits paid	(21)	(23)
Plans assets at period end, at fair value	258	236
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	258	236
Present value of the defined benefit obligations at the end of the period	258	224
Asset recognized in the balance sheet	-	12
Assumptions
Interest rate	5.25%	7.92%
Estimated rate of return on plan assets	5.25%	7.92%

in Rs. Crore

	Quarter ended  December 31,		Nine months ended December 31,
	2008	2007	2008	2007
Gratuity cost for the period
Service cost	22	12	39	33
Interest cost	(1)	4	9	12
Expected return on plan assets	1	(4)	(9)	(13)
Actuarial gain	1	(2)	-	(3)
Plan amendment amortization	(1)	(1)	(3)	(3)
Net gratuity cost	22	9	36	26
Actual return on plan assets	6	5	17	15

Investment details of plan assets
100% of the plan assets are invested in debt instruments.

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 December 31, 2008 and March 31, 2008 amounted to Rs.30 crore and Rs.33 crore, respectively and is disclosed under "Current Liabilities".

The group expects to contribute approximately Rs.17 crore to the gratuity trusts during fiscal 2009.

24.2.18 Provident Fund

The Guidance on Implementing AS 15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) states benefit 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.

24.2.19.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
	December 31, 2008	March 31, 2008
In Current accounts
Bank of America	-	9
Citibank N.A.,	-	7
Citibank-Unclaimed dividend accounts	1	1
Deustche Bank	55	42
Deustche Bank-EEFC account in Euro	14	31
Deustche Bank-EEFC account in Swiss Franc	1	10
Deustche Bank-EEFC account in United Kingdom Pound Sterling	45	18
Deustche Bank-EEFC account in US dollars	16	129
HDFC Bank-Unclaimed dividend accounts	1	-
ICICI Bank	39	24
ICICI Bank-EEFC account in Euro	1	3
ICICI Bank-EEFC account in United Kingdom Pound Sterling	3	3
ICICI Bank-EEFC account in US Dollars	9	15
ICICI bank-Unclaimed dividend accounts	1	1
	186	293
In Deposit accounts
ABN Amro Bank	125	-
Axis Bank	-	250
Bank of Baroda	520	500
Bank of India	-	500
Bank of Maharashtra	503	387
Barclays Bank	144	300
Canara Bank	553	115
Corporation Bank	437	440
DBS Bank	44	-
HDFC Bank	285	450
HSBC Bank	513	250
ICICI Bank	39	1,025
IDBI Bank	504	500
ING Vysya Bank	50	20
Punjab National Bank	554	25
Standard Chartered Bank	265	-
State Bank of India	2,012	1,001
State Bank of Mysore	500	-
Syndicate Bank	520	-
The Bank of Nova Scotia	150	150
	7,718	5,913

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

in Rs. crore

Balances with non-scheduled banks	As at
	December 31, 2008	March 31, 2008
In Current accounts
ABN Amro Bank, China	11	8
ABN Amro Bank, Taiwan	1	-
Bank of America, Mexico	6	-
Bank of America, USA	180	318
Citibank NA, Australia	23	32
Citibank NA, Czech Republic	2	-
Citibank NA, Japan	1	2
Citibank NA, Thailand	1	-
Deustche Bank, Philiphines	2	1
Deustche Bank, Poland	8	13
Deustche Bank, Thailand	3	6
Deutsche Bank, Belgium	11	5
Deutsche Bank, France	5	2
Deutsche Bank, Germany	2	5
Deutsche Bank, Netherlands	1	3
Deutsche Bank, Spain	2	2
Deutsche Bank, UK	44	76
Deutsche Bank, Zurich, Switzerland	2	1
HSBC Bank, UK	6	2
ICICI Bank, UK	1	-
National Australia Bank Limited, Australia	25	101
Nordbanken, Sweden	-	1
Royal Bank of Canada, Canada	10	12
Svenska Handelsbanken, Sweden	-	1
	347	591
In Deposit accounts
Citibank N.A., Czech Republic	3	-
National Australia Bank Limited, Australia	209	153
	212	153
Total Cash and bank balances as per balance sheet	8,463	6,950

24.2.20 Miscelleneous Income

 Miscellaneous income of Rs. 29 crore during the quarter ended December 31, 2008 includes a net amount of Rs. 18 crore consisting of Rs. 33 crore received from Axon Group Plc, towards the inducement fee offset by Rs. 15 crore towards expenses incurred in relation to this transaction.

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 December 31, 2008 (Rs. 2 crore as at March 31, 2008) set aside for payment of dividends.

24.2.21.b Restricted cash

Deposits with financial institutions and body corporate as at December 31, 2008 include an amount of Rs.234 crore (Rs.161 crore as at March 31, 2008) 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 below:

Balance Sheet Items

in Rs. Crore

		As at
Schedule	Description	December 31, 2008	March 31, 2008
Balance Sheet
3	Fixed assets
	Additions
	Vehicles	-	1.18
	Deductions/retirements
	Vehicles	0.23	0.05
	Depreciation
	Vehicles	0.46	0.55
	Depreciation on assets sold during the period
	Vehicles	0.05	0.03
7	Cash on hand	0.30	0.08
	Scheduled banks-Current Accounts
	Bank of Baroda, Mauritius	0.05	0.02
	Citibank N.A.	0.17	0.32
	State Bank of India	0.05	0.03
	Non-scheduled banks-Current Accounts
	ABN Amro Bank, Denmark	0.01	0.01
	ABN Amro Bank, Taiwan	0.93	0.23
	Banamex, Mexico	0.33	-
	Bank of America, Mexico	5.98	0.15
	China Merchants Bank, China	0.15	0.33
	Citibank N.A., Poland	0.01	-
	Citibank N.A., Singapore	0.46	0.02
	Citibank N.A., Thailand	0.56	0.31
	ICICI Bank, UK	0.74	0.27
	Nordbanken, Sweden	0.21	0.89
	PNC Bank, USA	0.02	0.02
	Shanghai Pudong Development Bank, China	0.01	0.09
	Svenska Handelsbanken, Sweden	0.02	1.23
	The Bank of Tokyo-Mitsubishi UFJ, Ltd., Japan	0.07	-
8	Unsecured, considered doubtful
	Advance to gratuity trust	0.24	12.00
10	Provision
	Gratuity payable	-	0.30

Profit & Loss Items

in Rs. Crore

		Quarter ended December 31,		Nine months ended December 31,
Schedule	Description	2008	2007	2008	2007
Profit & Loss Provision for investments		-	-	-	0.36
12	Selling and Marketing expenses
	Printing and stationery	0.34	0.34	0.94	0.98
	Advertisements	0.50	0.17	1.46	5.00
	Office maintenance	0.12	0.16	0.35	0.33
	Consumables	-	0.08	0.14	0.20
	Software for own use	0.02	0.01	0.04	0.08
	Computer maintenance	-	0.09	-	0.11
	Insurance charges	0.10	0.05	0.23	0.15
	Miscellaneous expenses	0.03	0.40	3.00	3.36
	Communication Expenses	-	-	-	0.81
	Rates and taxes	0.01	0.01	0.02	0.02
13	General and Administrative expenses
	Provision for doubtful loans and advances	0.07	0.13	1.18	0.32
	Auditor's remuneration :
	Statutory audit fees	0.45	0.29	1.31	0.89
	Out-of-pocket expenses	0.01	0.01	0.03	0.03
	Certification charges	0.01	0.01	0.04	0.09
	Bank charges and commission	0.81	0.35	2.05	1.07
	Freight charges	0.33	0.34	0.80	0.80
	Bad debts written off	-	-	-	0.16
	Research Grants	0.93	0.41	2.99	3.53
	Recruitment and training	1.27	0.21	4.53	3.00
	Books and periodicals	0.43	1.12	2.03	3.07
24.2.1	Aggregate expenses
	Provision for doubtful loans and advances	0.07	0.13	1.18	0.32
	Auditor's remuneration :
	statutory audit fees	0.45	0.29	1.31	0.89
	certification charges	0.01	0.01	0.03	0.03
	out-of-pocket expenses	0.01	0.01	0.03	0.09
	Bank Charges and Commission	0.81	0.35	2.05	1.07
	Freight charges	0.33	0.34	0.80	0.80
	Research Grants	0.93	0.41	2.99	3.53
	Recruitment and training	1.27	0.21	4.53	3.00
24.2.10	Profit on disposal of fixed assets, included in miscellaneous income	0.05	0.01	0.11	0.05
	(Loss) on disposal of fixed assets, included in miscellaneous expenses	-	-	-	(0.01)
	Profit/(loss) on disposal of fixed assets, net	0.05	0.01	0.11	0.04
	Minority Interest	0.09	0.34	0.09	1.21
	Provision for investments	1.95	-	1.84	0.36

Cash Flow Statement Items

in Rs. Crore

		Nine months ended December 31,
Schedule	Description	2008	2007
Cash Flow	Profit/ loss on sale of fixed assets	0.11	0.04
Statement	Provisions for investments	1.84	0.36
	Proceeds on disposal of fixed assets	0.16	0.04

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 nine months ended December 31, 2008 and 2007 are as follows:

in Rs. crore

Name	Salary	Contributions to provident and other funds	Perquisites and incentives	Total Remuneration
Co-Chairman
Nandan M Nilekani	0.08	0.01	0.19	0.28
	0.06	0.01	0.22	0.29
	0.22	0.05	0.41	0.68
	0.15	0.04	0.38	0.57
Chief Executive Officer and Managing Director
S Gopalakrishnan	0.08	0.01	0.19	0.28
	0.06	0.01	0.22	0.29
	0.22	0.05	0.42	0.69
	0.15	0.04	0.38	0.57
Chief Operating Officer
S D Shibulal	0.09	0.02	0.18	0.29
	0.05	0.01	0.22	0.28
	0.22	0.05	0.40	0.67
	0.14	0.04	0.36	0.54
Whole-time Directors
K Dinesh	0.08	0.02	0.20	0.30
	0.06	0.01	0.22	0.29
	0.22	0.05	0.42	0.69
	0.15	0.04	0.38	0.57
T V Mohandas Pai	0.09	0.03	0.49	0.61
	0.09	0.03	0.51	0.63
	0.27	0.07	1.72	2.06
	0.24	0.07	0.93	1.24
Srinath Batni	0.09	0.02	0.31	0.42
	0.08	0.02	0.33	0.43
	0.26	0.06	1.18	1.50
	0.22	0.06	0.61	0.89
Chief Financial Officer
V Balakrishnan	0.07	0.02	0.44	0.53
	0.07	0.02	0.45	0.54
	0.21	0.05	1.94	2.20
	0.20	0.06	0.64	0.90
Executive Council Members
Ashok Vemuri	0.54	-	0.49	1.03
	0.40	-	0.80	1.20
	1.44	-	2.04	3.48
	1.17	-	1.23	2.40
Chandra Shekar Kakal	0.06	0.01	0.31	0.38
	0.06	0.01	0.25	0.32
	0.19	0.04	1.21	1.44
	0.18	0.04	0.44	0.66
B.G. Srinivas	0.45	-	0.97	1.42
	0.44	-	0.71	1.15
	1.40	-	2.79	4.19
	1.23	-	1.34	2.57
Subhash B. Dhar	0.06	0.01	0.16	0.23
	0.05	0.01	0.22	0.28
	0.17	0.04	0.93	1.14
	0.13	0.03	0.28	0.44

Particulars of remuneration and other benefits of non-executive/ independent directors for the quarter and nine months ended December 31, 2008 and 2007:

Name	Commission	Sitting fees	Reimbursement of expenses	Total Remuneration
Non-Whole time Directors
Deepak M Satwalekar	0.18	-	-	0.18
	0.14	-	-	0.14
	0.51	-	-	0.51
	0.41	-	0.01	0.42
Prof.Marti G. Subrahmanyam	0.19	-	0.09	0.28
	0.11	-	0.02	0.13
	0.52	-	0.24	0.76
	0.35	-	0.11	0.46
Dr.Omkar Goswami	0.15	-	-	0.15
	0.11	-	-	0.11
	0.42	-	0.02	0.44
	0.34	-	0.01	0.35
Claude Smadja	0.17	-	0.05	0.22
	0.11	-	-	0.11
	0.49	-	0.20	0.69
	0.32	-	0.12	0.44
Rama Bijapurkar	0.14	-	-	0.14
	0.11	-	-	0.11
	0.40	-	0.01	0.41
	0.34	-	-	0.34
Sridar A. Iyengar	0.21	-	-	0.21
	0.14	-	0.03	0.17
	0.60	-	0.14	0.74
	0.40	-	0.09	0.49
David L. Boyles	0.17	-	0.05	0.22
	0.11	-	-	0.11
	0.49	-	0.18	0.67
	0.35	-	-	0.35
Jeffrey S. Lehman	0.18	-	-	0.18
	0.10	-	-	0.10
	0.49	-	0.17	0.66
	0.32	-	-	0.32
N. R. Narayana Murthy*	0.17	-	-	0.17
	0.12	-	-	0.12
	0.46	-	-	0.46
	0.37	-	-	0.37

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

EX-99.13

EXHIBIT 99.13
U.S.GAAP Earnings Release

Unaudited U.S.GAAP Financial Statements for the nine months ended December 31, 2008

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Balance Sheets

 (Dollars in millions except share data)

	As of
	March 31, 2008	December 31, 2008
	(1)
ASSETS
Current assets
Cash and cash equivalents	$2,058	$1,948
Investments in liquid mutual fund units	18	—
Investments in certificates of deposit	—	41
Trade accounts receivable, net of allowances	824	721
Unbilled revenue	120	164
Prepaid expenses and other current assets	107	77
Deferred tax assets	2	5
Total current assets	3,129	2,956
Property, plant and equipment, net	1,022	938
Goodwill	150	122
Intangible assets, net	25	17
Deferred tax assets	66	79
Advance income taxes	55	38
Other assets	45	49
Total assets	$4,492	$4,199
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$12	$3
Income taxes payable	101	117
Client deposits	1	5
Unearned revenue	71	87
Other current liabilities	386	383
Total current liabilities	571	595
Non-current liabilities
Other non-current liabilities	11	11
Stockholders’ equity
Common stock, Rs. 5 ($0.16) par value 600,000,000 equity shares authorized, issued and outstanding 571,995,758 and 572,641,503 as of March 31, 2008 and December 31, 2008, respectively	64	64
Additional paid-in capital	718	730
Accumulated other comprehensive income	311	(413)
Retained earnings	2,817	3,212
Total stockholders’ equity	3,910	3,593
Total liabilities and stockholders’ equity	$4,492	$4,199

(1) March 31, 2008 balances were obtained from the audited financial statements

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Statements of Income 

(Dollars in millions except share data)

	Three months ended December 31,		Nine months ended December 31,
	2007	2008	2007	2008
Revenues	$1,084	$1,171	$3,034	$3,542
Cost of revenues	629	661	1,789	2,048
Gross profit	455	510	1,245	1,494
Operating expenses:
Selling and marketing expenses	52	55	174	184
General and administrative expenses	89	82	243	265
Amortization of intangible assets	2	2	6	7
Total operating expenses	143	139	423	456
Operating income	312	371	822	1,038
Other income, net	40	7	140	50
Income before income taxes	352	378	962	1,088
Provision for income taxes	42	48	118	134
Net income	$310	$330	$ 844	$954
Earnings per equity share
Basic	$0.54	$0.58	$1.49	$1.68
Diluted	$0.54	$0.58	$1.48	$1.67
Weighted average equity shares used in computing earnings per equity share
Basic	568,512,968	569,755,757	568,421,831	569,571,267
Diluted	570,363,129	570,082,857	570,439,766	570,341,551

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Statements of Stockholders’ Equity and Comprehensive Income

(Dollars in millions)

	Common stock Shares	Common stock Par value	Additional paid-in capital	Comprehensive income	Accumulated other comprehensive income	Retained earnings	Total stockholders’ equity
Balance as of  April 1, 2007	571,209,862	$64	$692		$90	$1,871	$2,717
Common stock issued	344,075	—	8	—	—	—	8
Cash dividends	—	—	—	—	—	(209)	(209)
Stock compensation expense	—	—	2	—	—	—	2
Comprehensive income
Net income	—	—	—	$844	—	844	844
Other comprehensive income
Defined benefit plan amendment, net of tax effect of $3 million	—	—	—	6	6	—	6
Translation adjustment	—	—	—	269	269	—	269
Comprehensive income				$1,119
Balance as of  December 31, 2007	571,553,937	$64	$702		$365	$2,506	$3,637
Balance as of April 1, 2008	571,995,758	$64	$718		$311	$2,817	$3,910
Common stock issued	645,745	—	11	—	—	—	11
Cash dividends	—	—	—	—	—	(559)	(559)
Stock compensation expense	—	—	1	—	—	—	1
Comprehensive income
Net income	—	—	—	$954	—	954	954
Other comprehensive income
Translation adjustment	—	—	—	(724)	(724)	—	(724)
Comprehensive income				$230
Balance as of  December 31, 2008	572,641,503	$64	$730		$(413)	$3,212	$3,593

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Statements of Cash Flows 

(Dollars in millions)

	Nine months ended December 31,
	2007	2008
Operating activities:
Net income	$844	$954
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	116	125
Stock compensation expense	2	1
Deferred taxes	(21)	(32)
Changes in assets and liabilities, net of acquisition
Trade accounts receivable	(35)	(47)
Prepaid expenses and other current assets	(15)	17
Unbilled revenue	(54)	(70)
Accounts payable	1	(9)
Income taxes	70	44
Client deposits	2	4
Unearned revenue	15	32
Other liabilities	34	74
Net cash provided by operating activities	959	1,093
Investing activities:
Expenditure on property, plant and equipment	(265)	(223)
Payment for acquisition of business, net of cash acquired	(27)	(3)
Loans to employees	3	(2)
Non-current deposits placed with corporations	(4)	(16)
Investment in liquid mutual fund units	(489)	(57)
Redemption of liquid mutual fund units	462	73
Investment in certificates of deposit	—	(42)
Net cash used in investing activities	(320)	(270)
Financing activities:
Proceeds from issuance of common stock on exercise of employee stock options	8	11
Payment of dividends	(209)	(559)
Net cash used in financing activities	(201)	(548)
Effect of exchange rate changes on cash and cash equivalents	137	(385)
Net  increase / (decrease) in cash and cash equivalents during the period	438	275
Cash and cash equivalents at the beginning of the period	1,403	2,058
Cash and cash equivalents at the end of the period	$1,978	$1,948
Supplementary information:
Income taxes paid	$70	$123

Notes to the Consolidated Financial Statements

1 Company overview and significant accounting policies

1.1 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 subsidiaries, Infosys Technologies (Australia) Pty. Limited (Infosys Australia), Infosys Technologies (China) Co. Limited (Infosys China), Infosys Consulting, Inc. (Infosys Consulting) and Infosys Technologies S. DE R.L. de C.V. (Infosys Mexico) is a leading global technology services organization. The 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 and infrastructure management services. In addition, the Group offers software products for the banking industry and business process managem ent services.

1.2 Basis of preparation of financial statements and consolidation

The consolidated financial statements include Infosys and its subsidiaries (collectively, the company) and are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Infosys consolidates entities in which it owns or controls more than 50% of the voting shares. The results of acquired businesses are included in the consolidated financial statements from the date of acquisition. Inter-company balances and transactions are eliminated on consolidation.

Unaudited interim information presented in the consolidated financial statements has been prepared by the management and, in the opinion of management, includes all adjustments of a normal and recurring nature that are necessary for the fair presentation of the financial position, results of operations and cash flows for the periods shown, and is in accordance with U.S. GAAP. These financial statements 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, 2008.

1.3 Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are used for, but not limited to, accounting for costs and efforts expected to be incurred to complete performance under software development arrangements, allowance for uncollectible accounts receivable, future obligations under employee benefit plans, provisions for post-sales customer support, the useful lives of property, plant, equipment and intangible assets and income tax valuation allowances. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the est imates. 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.

1.4 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 is 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. Guidance has been drawn from paragraph 95 of Statement of Position (SOP) 97-2, Software Revenue Recognition, to account for revenue from fixed price arrangements for software development and related services in conformity with SOP 81-1. The input (efforts expended) method has 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 classif ied as unearned revenue. Maintenance revenue is recognized ratably over the term of the underlying maintenance agreement.

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 related revenues are recorded and included in cost of revenues. 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.

In arrangements with software development and related services and maintenance services, the company has specifically applied the guidance in paragraph 9 of EITF Issue 00-21 to determine whether the software development and related services can be considered a separate unit of accounting. The arrangements generally meet the criteria for software development and related services to be considered a separate unit of accounting. The company uses the relative fair value method to allocate revenue to maintenance services and the software development and related services. 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 the residual method to allocate the arrangement consideration. Maintenance revenues are recognized ratably over the term of the underlying maintenance arrangement while software development and related services revenues are recognized using the percentage-of-comple tion method.

In accordance with SOP 97-2, license fee revenues are recognized when persuasive evidence of an arrangement exists, delivery has occurred, the license fee is fixed and determinable, and the collection of the fee is probable. Arrangements to deliver software products generally have three elements: license, implementation and Annual Technical Services (ATS). The company has applied the principles in SOP 97-2 to account for revenue from these multiple element arrangements. Vendor specific objective evidence (VSOE) of fair value has been established for ATS. VSOE of fair value is the price charged when the element is sold separately. When other services are provided in conjunction with the licensing arrangement, the revenue from such contracts are allocated to each component of the contract using the residual method, whereby revenue is deferred for the undelivered services and the residual amounts are recognized as revenue for delivered elements. In the absence of an established VSOE of fair va lue 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.

Revenues from business process management and other services are derived from both, time-and-material and fixed-price contracts. Revenue on time-and-material contracts is recognized as the related services are rendered. Revenue from fixed-price contracts is recognized as per the proportional performance method using an output measure of performance.

When the company receives advances for services and products, such amounts are reported as client deposits until all conditions for revenue recognition are met.

The company accounts for volume discounts and pricing incentives to customers using the guidance in EITF Issue 01-09, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products). The discount terms in the company's arrangements with customers generally entitle the customer to discounts if the customer completes a specified cumulative level of revenue transactions.

In some arrangements, the level of discount varies with increases in the levels of revenue transactions. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer. The company recognizes discount obligations as a reduction of revenue based on the ratable allocation of the discount to each of the underlying revenue transactions that result in progress by the customer toward earning the discount. The company recognizes the liability based on its estimate of the customer's future purchases. 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 the company cannot reasonably estimate the customer's future purchases, then the liability is recorded based on the maximum potential level of discount. The company recognizes changes in the estimated amount of obligations for discounts in the period in which the change occurs. Furthermore, the company does not recognize any revenue up front for breakages immediately on the inception of an arrangement.

Consistent with the guidance in EITF Issue 06-03, How taxes collected From Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation), which became applicable to the company on April 1, 2007, the company continues to present revenues net of sales and value-added taxes in its consolidated statements of income.

1.5 Cash and cash equivalents

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. Cash and cash equivalents comprise cash and cash on deposit with banks, and corporations.

1.6 Investments

Investments in non-readily marketable equity securities of other entities where the company is unable to exercise significant influence and for which there are no readily determinable fair values are recorded at cost. Any decline in value that is judged to be other than temporary is included in earnings.

Investment securities designated as 'available for sale' are carried at their fair value. Fair value is based on quoted market prices. Temporary unrealized gains and losses, net of the related tax effect are reported as a separate component of stockholders' equity until realized. Realized gains and losses and declines in value judged to be other than temporary on available for sale securities are included in earnings.

The cost of securities sold is based on the specific identification method. Interest and dividend income are recognized when earned.

1.7 Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation. 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	Vehicles	5 years
Plant and equipment	5 years	Computer equipment	2-5 years
Furniture and fixtures	5 years

The cost of software purchased for internal use is accounted under SOP 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. Deposits paid towards the acquisition of these long lived assets 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”. Costs of improvements that substantially extend the useful life of particular assets are capitalized. Repairs and maintenance cost are charged to earnings when incurred. The cost and related accumulated depreciation are removed from the consolidated financial statements upon sale or disposition of the asset.

The company evaluates the recoverability of these assets whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds the fair value. Assets to be disposed are reported at the lower of the carrying value or the fair value less the cost to sell.

1.8 Business combinations

Business combinations have been accounted using the purchase method under the provisions of Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standard (SFAS) No. 141, 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.

1.9 Goodwill

Goodwill represents the cost of the acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased. Goodwill is tested for impairment on an annual basis, relying on a number of factors including operating results, business plans and future cash flows. Recoverability of goodwill is evaluated using a two-step process. The first step involves a comparison of the fair value of a reporting unit with its carrying value. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process involves a comparison of the fair value and carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. Goodwill of a reporting unit is tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of t he reporting unit below its carrying amount.

1.10 Intangible assets

Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis. 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.

Intangible assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds the fair value of the assets.

1.11 Research and development

Research and development costs are expensed as incurred. Software product development costs are expensed as incurred until technological feasibility is achieved. Research and development costs and software development costs incurred under contractual arrangements with customers are accounted as cost of revenues.

1.12 Foreign currency

The functional currency of Infosys and Infosys BPO is the Indian Rupee. The functional currencies for Infosys Australia, Infosys China, Infosys Consulting and Infosys Mexico are the respective local currencies. The consolidated financial statements are reported in U.S. dollars. The translation of functional currencies to U.S. dollars 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. The gains or losses resulting from such translation are included in ‘other comprehensive income’, a separate component of stockholders’ equity.

Foreign-currency denominated 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 earnings. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net income 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.

1.13 Earnings per share

Basic earnings per share is computed by dividing net income for the period by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the diluted weighted average number of equity shares outstanding during the period. Diluted earnings per share reflect the potential dilution from equity shares issuable through employee stock options. The dilutive effect of employee stock options is reflected in diluted earnings per share by application of the treasury stock method. The dilutive effect of convertible securities is reflected in diluted earnings per share by application of the if-converted method. If securities have been issued by a subsidiary that enable their holders to obtain the subsidiary’s common stock, the earnings of the subsidiary shall be included in the consolidated diluted earnings per share computations based on the company’s holding of the subsidiary’s securities.

If the number of equity shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations of basic and diluted earnings per share are adjusted retroactively for all periods presented to reflect that change in capital structure. If such changes occur after the close of the reporting period but before issuance of the financial statements, the per-share computations for that period and any prior-period financial statements presented are based on the new number of shares.

1.14 Income taxes

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates 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 tax assets and liabilities is recognized as income or expense in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits of which future realization is not more likely than not. Changes in valuation allowance from period to period are reflected in the income statement of the period of change. Deferred taxes are not provided on the undistributed earnings of su bsidiaries outside India where it is expected that the earnings of the foreign subsidiary will be indefinitely reinvested. Tax benefits of deductions earned on exercise of employee stock options in excess of compensation charged to earnings are credited to additional paid in capital. The company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. The income tax provision for the interim period is based on the best estimate of the effective tax rate expected to be applicable for the full fiscal year.

1.15 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 balance sheet date. The methods used to determine fair value include discounted cash flow analysis 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 financial instruments including cash and cash equivalents, investments in liquid mutual fund units, trade accounts receivables, prepaid expenses and other current assets, accounts payable, client deposits and other current liabilities, 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, is not reasonably estimable.

1.16 Concentration of risk

Financial instruments that potentially subject the company to concentrations of credit risk consist principally of cash equivalents, trade accounts receivable, investment securities and hedging instruments. By nature, all such financial instruments involve risk, including the credit risk of non-performance by counterparties. In management’s opinion, as of March 31, 2008 and December 31, 2008 there was no significant risk of loss in the event of non-performance of the counterparties to these financial instruments, other than the amounts already provided for in the financial statements, if any. Exposure to credit risk is managed through credit approvals, establishing credit limits and monitoring procedures. The factors which affect the fluctuations in the company's provisions for bad debts and write offs of uncollectible accounts include the financial health and economic environment of the clients. The company specifically identifies the credit loss and then makes the provision. The com pany’s cash resources are invested with corporations, financial institutions and banks with high investment grade credit ratings. Limits are established by the company as to the maximum amount of cash that may be invested with any such single entity.

1.17 Derivative financial instruments

The company uses derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in foreign exchange rates on accounts receivable and forecasted cash flows denominated in certain foreign currencies. The counterparty for these contracts is generally a bank. Although the company believes that these financial instruments constitute hedges from an economic perspective, they do not qualify for hedge accounting under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended. Any derivative that is either not designated a hedge, or is so designated but is ineffective per SFAS No. 133, is marked to market and recognized in earnings immediately and included in other income, net.

1.18 Retirement benefits to employees

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. 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 company recognizes the funded status of a defined benefit plan in the statement of financial position as an asset or liability if the plan is overfunded or underfunded, respectively in accordance with SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans - An Amendment of FASB Statements No. 87, 88, 106, and 132R. Changes in the funded status of a plan are recognized in the year in which the changes occur, and reported in comprehensive income as a separate component of stockholders' equity.

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. Certain employees of Infosys BPO were also eligible for superannuation benefit. Upto March 31, 2005, Infosys BPO made monthly contributions under the superannuation plan based on a specified percentage of each covered employee’s salary. Infosys BPO has no further obligations to the superannuation plan beyond its monthly contribution which were 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 was paid directly to the employees as an allowance and the balance amount was contributed to the Infosys Superannuation Trust.

1.18.3   Provident fund

Eligible employees of Infosys receive benefits from a provident fund, which is a defined contribution 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 fund any shortfall on the yield of the trust’s investments over the administered interest rates.

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.

1.19 Stock-based compensation

The company recognizes compensation expense relating to share-based payments in net income using a fair-value measurement method in accordance with SFAS No.123 (revised 2004), Share-Based Payment (SFAS 123R). 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 company 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 common stock are recorded as a liability on the date of approval by the stockholders and interim dividends are recorded as a liability on the date of declaration by the Board of Directors.

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
	March 31, 2008	December 31, 2008
Cash and bank deposits	$1,737	$1,738
Deposits with corporations	321	210
	$2,058	$1,948

Cash and cash equivalents as of March 31, 2008 and December 31, 2008 include restricted cash balances of $1 million and $1 million, respectively. The restrictions are primarily on account of unclaimed dividends.

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
	March 31, 2008	December 31, 2008
Current Accounts
ABN Amro Bank, China	$2	$3
Bank of America, Mexico	2	1
Bank of America, USA	81	37
Citibank N.A., Australia	8	5
Citibank N.A., Czech Republic	2	—
Citibank NA, Japan	1	—
Deutsche Bank, India	10	11
Deutsche Bank, Poland	3	2
Deutsche Bank, Thailand	1	1
Deutsche Bank-EEFC account in Euro, India	8	3
Deutsche Bank-EEFC account in Swiss Franc, India	3	—
Deutsche Bank-EEFC account in United Kingdom Pound Sterling, India	4	9
Deutsche Bank-EEFC account in US dollars, India	32	3
Deutsche Bank, Belgium	1	2
Deutsche Bank, France	—	1
Deutsche Bank, Germany	1	1
Deutsche Bank, Netherlands	1	—
Deutsche Bank, Spain	1	—
Deutsche Bank, UK	19	9
Deutsche Bank, Zurich, Switzerland	—	1
HSBC Bank, UK	1	1
ICICI Bank, India	6	8
ICICI Bank-EEFC account in Euro, India	1	—
ICICI Bank-EEFC account in United Kingdom Pound Sterling, India	1	1
ICICI Bank-EEFC account in US dollars, India	4	2
National Australia Bank Limited, Australia	25	5
Royal Bank of Canada, Canada	3	2
	$221	$108
Deposit Accounts
ABN Amro Bank, India	—	26
Axis Bank, India	63	—
Bank of Baroda, India	125	107
Bank of India, India	125	—
Bank of Maharashtra, India	97	103
Barclays Bank, India	75	30
Canara Bank, India	29	114
Citibank N.A., Czech Republic	—	1
Corporation Bank, India	110	90
DBS Bank, India	—	9
HDFC Bank, India	112	59
HSBC Bank, India	63	105
ICICI Bank, India	256	8
IDBI Bank, India	125	103
ING Vysya Bank, India	5	10
National Australia Bank Limited, Australia	38	43
Punjab National Bank, India	6	114
Standard Chartered Bank, India	—	54
State Bank of India, India	250	413
State Bank of Mysore, India	—	103
Syndicate Bank, India	—	107
The Bank of Nova Scotia, India	37	31
	$1,516	$1,630
Deposits with corporations
HDFC	$250	$210
GE Capital Services India Ltd.	71	-
	321	210
Total	$2,058	$1,948

2.2 Certificates of deposit

(Dollars in millions)

	As of
	March 31, 2008	December 31, 2008
ICICI Bank	—	$21
Punjab National Bank	—	20
Total	—	$41

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.

2.3 Trade accounts receivable

Trade accounts receivable as of March 31, 2008 and December 31, 2008, net of allowance for doubtful accounts of $10 million and $19 million, amounted to $824 million and $721 million. The age profile of trade accounts receivable, net of allowances, is given below. 

In %

	As of
	March 31, 2008	December 31, 2008
Period (in days)
0 – 30	58.1	56.4
31 – 60	30.0	30.4
61 – 90	3.7	9.2
More than 90	8.2	4.0
	100.0	100.0

2.4 Loans to employees

The company provides loans to eligible employees in accordance with policy. The employee loans are repayable over fixed periods ranging from 1 to 100 months. The annual rates of interest at which the loans have been made to employees vary between 0% through 4%. Loans aggregating $29 million and $25 million were outstanding as of March 31, 2008 and December 31, 2008. No loans have been made to employees in connection with purchase of the company’s equity securities by employees.

The required repayments of employee loans outstanding as of December 31, 2008 are as detailed below.

(Dollars in millions)

12 months ending December 31,	Repayment
2009	$24
2010	1
	$25

The estimated fair value of loans to employees amounted to $28 million as of March 31, 2008 and $24 million as of December 31, 2008. These amounts have been determined using available market information and appropriate valuation methodologies. Considerable judgment is required to develop these estimates of fair value. Consequently, these estimates are not necessarily indicative of the amounts that the company could realize in the market.

2.5 Business Combinations

During the nine months ended December 31, 2008, Infosys Australia acquired 100% of the equity shares of Mainstream Software Pty Limited for a consideration of $3 million, of which $1 million is yet to be paid. Consequent to this acquisition, intellectual property rights amounting to $3 million have been recorded and are being amortized over a period of two years, being management’s estimate of the useful life of the asset.

During fiscal 2008, Infosys BPO acquired 100% of the equity shares of P-Financial Services Holding B.V. This business acquisition was conducted by entering into a Sale and Purchase Agreement with Koninklijke Philips Electronics N.V. (Philips), a company incorporated under the laws of the Netherlands, for acquiring the shared service centres of Philips for finance, accounting and procurement business in Poland, Thailand and India for a consideration of $27 million. The acquisition of Poland and India centers were consummated on October 1, 2007 and Thailand center on December 3, 2007.

The purchase price has been allocated based on management’s estimates and independent appraisals of fair values as follows:

(Dollars in millions)

Component	Purchase price allocated
Property, plant and equipment	$3
Net current assets	4
Deferred tax liabilities	(1)
Intangible assets-customer contracts	11
Goodwill	10
Total purchase price	$27

The indentified intangible customer contracts are being amortized over a period of seven years, being management’s estimate of the useful life of the asset.

Further, during the three months ended December 31, 2008, the investments held by P-Financial Services Holding B.V in its wholly owned subsidiaries Pan-Financial Shared Services India Private Limited, Infosys BPO (Poland) Sp. Z.o.o., and Infosys BPO (Thailand) Limited were transferred to Infosys BPO, consequent to which P-Financial Services Holding B.V was liquidated.

2.6 Non-operating income

Other income, net, consists of the following:

(Dollars in millions)

	Nine months ended December 31,
	2007	2008
Interest income	$124	$135
Foreign exchange gains/(losses), net	13	(91)
Income from mutual fund investments	1	—
Others*	2	6
	$140	$50

* Other income for the nine months ended December 31, 2008 includes a net amount of $4 million, consisting of $7 million received from Axon Group Plc as inducement fees offset by $3 million of expenses incurred towards the transaction.

2.7 Income taxes

The provision for income taxes in the income statement comprises:

(Dollars in millions)

	Nine months ended December 31,
	2007	2008
Current taxes
Domestic taxes	$85	$116
Foreign taxes	54	50
	139	166
Deferred taxes
Domestic taxes	(19)	(30)
Foreign taxes	(2)	(2)
	(21)	(32)
Aggregate taxes	$118	$134

Current tax expense for the nine months ended December 31, 2008, December 31, 2007 and year ended March 31, 2008 include a net tax benefit of $19 million, $26 million and $30 million, respectively. The tax benefit of $19 million for the nine months ended December 31, 2008 comprises of $39 million for provisions no longer required which is offset by a charge of $20 million due to re-assessment of an uncertain tax position.  

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

(Dollars in millions)

	As of
	March 31, 2008	December 31, 2008
Deferred tax assets
Property, plant and equipment	$23	$24
Loss carry-forwards in subsidiary	14	16
Incentive accruals in subsidiary	6	4
Minimum alternate tax credit entitlement	44	61
Investments	1	1
Others	7	5
Total gross deferred tax assets	95	111
Less: Valuation allowance	(21)	(22)
	74	89
Deferred tax liabilities
Intangible asset	(3)	(3)
Others	(3)	(2)
Total gross deferred tax liabilities	(6)	(5)
Net deferred tax assets	$68	$84

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred 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 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 tax assets are deductible, management believes that it is more likely than not the company will realize the benefits of those deductible differences, net of the existing valuation allowance at December 31, 2008. The valuation allowance primarily relates to loss carry-forwards and incentive accruals in a foreign subsidiary. The amount of the deferr ed 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 10B 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 tax asset of $61 million has been recognized on the balance sheet as of December 31, 2008, which can be carried forward for a period of 7 years from the year of recognition.

The provision for foreign taxes 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 Government of India has amended the tax incentives available to companies set up in designated STPs. The period of the STP Tax Holiday available to such companies is restricted to ten consecutive years, beginning from the financial year when the unit started producing computer software or April 1, 1999, whichever is earlier.

The STP Tax Holiday is available for ten consecutive years, beginning from the financial year when the unit started producing computer software or April 1, 1999, whichever is earlier. The tax holidays on all facilities under STPs expire in stages by fiscal year 2010. 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 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, 2008, Infosys’ US branch net assets amounted to approximately $471 million. As of December 31, 2008, the company has not triggered the BPT and intends to maintain the current level of its net assets in the US, as it is consistent with its business plan. Accordingly, a BPT provision has not been recorded.

2.8 Earnings per share

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

	Nine months ended December 31,
	2007	2008
Basic earnings per equity share - weighted average number of common shares outstanding	568,421,831	569,571,267
Effect of dilutive common equivalent shares – stock options outstanding	2,017,935	770,284
Diluted earnings per equity share – weighted average number of common shares and common equivalent shares outstanding	570,439,766	570,341,551

2.9 Derivative financial instruments

The company uses derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in foreign exchange rates on accounts receivable and forecasted cash flows denominated in certain foreign currencies. The counterparty for these contracts is generally a bank.  Infosys held foreign exchange forward contracts of $586 million, Euro 15 million and United Kingdom Pound Sterling 3 million as of March 31, 2008 and $255 million, Euro 20 million, United Kingdom Pound Sterling 14 million and Australian Dollar 3 million as of December 31, 2008. The foreign exchange forward contracts mature between 1 to 12 months. As of March 31, 2008, the company held range barrier options of $100 million and United Kingdom Pound Sterling 8 million, Euro Accelerator of Euro 12 million and Euro Forward Extra of Euro 5 million. As of December 31, 2008, the company held range barrier options of $270 million.  

2.10 Segment reporting

SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, 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, revenues represented along industry classes comprise the principal 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 used in the preparation of the financial statements are consistently applied t o record revenue and expenditure in individual segments, and are as set out in 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 only 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.

2.10.1 Industry segments

Nine months ended December 31, 2007

(Dollars in millions)

	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	$1,107	$427	$643	$357	$500	$3,034
Identifiable operating expenses	455	189	238	149	208	1,239
Allocated expenses	312	120	181	101	141	855
Segmental operating income	340	118	224	107	151	940
Unallocable expenses						118
Operating income						822
Other income, net						140
Income before income taxes						962
Provision for income taxes						118
Net income						$844

Nine months ended December 31, 2008

	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	$1,212	$687	$656	$434	$553	$3,542
Identifiable operating expenses	506	293	238	182	222	1,441
Allocated expenses	320	181	172	114	148	935
Segmental operating income	386	213	246	138	183	1,166
Unallocable expenses						128
Operating income						1,038
Other income, net						50
Income before income taxes						1,088
Provision for income taxes						134
Net income						$954

2.10.2 Geographic segments

Nine months ended December 31, 2007 (Dollars in millions)
	North America	Europe	India	Rest of the World	Total
Revenues	$1,895	$838	$40	$261	$3,034
Identifiable operating expenses	804	326	10	99	1,239
Allocated expenses	533	236	12	74	855
Segmental operating income	558	276	18	88	940
Unallocable expenses					118
Operating income					822
Other income, net					140
Income before income taxes					962
Provision for income taxes					118
Net income					$844

Nine months ended December 31, 2008

	North America	Europe	India	Rest of the World	Total
Revenues	$2,225	$957	$43	$317	$3,542
Identifiable operating expenses	936	380	10	115	1,441
Allocated expenses	587	253	11	84	935
Segmental operating income	702	324	22	118	1,166
Unallocable expenses					128
Operating income					1,038
Other income, net					50
Income before income taxes					1,088
Provision for income taxes					134
Net income					$954

2.10.3 Significant clients

No client individually accounted for more than 10% of the revenues in the nine months ended December 31, 2007 and 2008, respectively.

2.11 Litigation

The company is subject to legal proceedings and claims which have arisen in the ordinary course of its business. Legal actions, when ultimately concluded and determined, will not, in the reasonable opinion of management, have a material effect on the results of operations or the financial position of the company.

2.12 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 the 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 demand 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 is pending before the Commissioner of Income tax (Appeals), Bangalore. The Company is in the process of filing an appeal before the Commissioner of Income Tax (Appeals), Bangalore for the tax demand related to fiscal 2005.