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Infosys Technologies Limited 2001-2002 Financial Performance Year ended March 31, 2002 Slide 2 June 08, 2002 Infosys Technologies Limited 2001-2002 This presentation may contain certain forward looking statements. The company may not achieve results as expressed or implied by such forward looking statements. Actual results could differ materially from those expressed or implied in such forward looking statements due to a number of factors including those discussed under the head "Risk factors" in the company's filings with the United States Securities and Exchange Commission. Do not place undue reliance on these forward looking statements. This presentation contains references to findings of various reports available in the public domain. The company makes no representation as to their accuracy or that the company subscribes to those findings. They are provided only by way of information. Slide 3 June 08, 2002 Infosys Technologies Limited 2001-2002 Highlights Achieved revenue growth of 32.0% ( in $ terms) as against our guidance of 30% in April 2001 despite a very challenging environment Banking unit revenues grew by over 100% and crossed the Rs.100 crore threshold 116 clients added during the year, of which, 62 were added in the post September 11 period Total dividend of Rs. 20 per share (400% on par value of Rs. 5) taking the payout to 17.0% as compared to 12.0% in the previous year Slide 4 June 08, 2002 Infosys Technologies Limited 2001-2002 Highlights Board approves investment of up to US$ 5 million for foray into Business Process Management (BPM) Separate company Progeon Limited formed for the BPM operations Citigroup to invest US$ 20 million in Progeon Limited Slide 5 June 08, 2002 Infosys Technologies Limited 2001-2002 1,029.73 1,378.77 The year at a glance 1,900.56 2,603.59 20012002 Income (Rs.cr) 37% 1,874.02 2,552.47 20012002 Export Income (Rs.cr) 36% 20012002 Gross Profit (Rs.cr) 34% Slide 6 June 08, 2002 Infosys Technologies Limited 2001-2002 The year at a glance 764.84 1,037.63 20012002 Operating Profit (Rs.cr) 36% 696.03 943.39 20012002 PBT (Rs.cr) 36% 623.32 807.96 20012002 PAT* (Rs.cr) 30% * From ordinary activities Slide 7 June 08, 2002 Infosys Technologies Limited 2001-2002 Drivers of growth FY98FY99FY00FY01FY02 Revenue growth (%)72.677.068.2103.431.7 Of which Volume growth (%)57.050.349.662.034.2 Price growth (%)15.726.718.641.4(2.5) In $ terms Slide 8 June 08, 2002 Infosys Technologies Limited 2001-2002 We experienced intense pricing pressure during the year FY98FY99FY00FY01FY02 Per-capita revenue ($ p.m) Onsite6,6007,9008,50011,00011,400 Offshore3,2003,7004,4005,3004,900 Blended4,0004,8005,7007,3006,900 Change in per-capita revenue (%) Onsite19.77.629.43.6 Offshore15.618.920.5(7.5) Blended20.018.828.1(5.5) Slide 9 June 08, 2002 Infosys Technologies Limited 2001-2002 which was negated by higher volume growth. FY98FY99FY00FY01FY02 Increase in billed person months Onsite1,6382,4505,2447,8424,748 Offshore4,1925,7075,00613,61816,796 Total5,8308,15710,25021,46021,544 Change in billed person months (%) Onsite72.863.082.767.724.4 Offshore45.842.826.356.644.6 Total51.147.340.460.237.7 Slide 10 June 08, 2002 Infosys Technologies Limited 2001-2002 We improved our utilization FY 01Q1 02Q2 02Q3 02Q4 02FY02 Utilization rates Including trainees (%)67.469.568.869.672.470.1 Excluding trainees (%)78.373.272.772.772.972.9 Slide 11 June 08, 2002 Infosys Technologies Limited 2001-2002 and took various cost control measures. Variable compensation Salary hike during the year linked to attainment of company performance targets Recruitment Just in time recruitment Recruitment based on business outlook Non-revenue generating expenses Reduced non-sales support personnel recruitment during the year Offshoring of onsite functions in non-revenue generating activities Slide 12 June 08, 2002 Infosys Technologies Limited 2001-2002 and took various cost control measures. Others Continuous rationalization of internal policies Re-negotiations with vendors Reduction in discretionary spending Vacating leased premises, etc. Cost cuts during the year aggregated 2.4% of revenues (3.5% excluding increase in personnel cost in the US) Slide 13 June 08, 2002 Infosys Technologies Limited 2001-2002 The US personnel costs had increased Unanticipated increase in personnel costs in the US due to significantly higher floor pay imposed upon H1B visa holders Additional cost of US$ 6.2 million (1.1% of revenue) Slide 14 June 08, 2002 Infosys Technologies Limited 2001-2002 but still maintained our margins. 54.2%53.0% 20012002 Gross Profit (%) 20012002 Operating Profit (%) 20012002 PAT* (%) 40.2%39.9% 32.8%31.0% * From ordinary activities Slide 15 Infosys Technologies Limited 2001-2002 Our revenues are well-segmented Slide 16 June 08, 2002 Infosys Technologies Limited 2001-2002 Geographic segments 2000-2001 2001-2002 Slide 17 June 08, 2002 Infosys Technologies Limited 2001-2002 Business segments 2000-2001 2001-2002 Slide 18 June 08, 2002 Infosys Technologies Limited 2001-2002 Vertical domains 2000-2001 2001-2002 Slide 19 June 08, 2002 Infosys Technologies Limited 2001-2002 Technology segments 2000-2001 2001-2002 Slide 20 June 08, 2002 Infosys Technologies Limited 2001-2002 Project segmentation 2000-2001 2001-2002 Slide 21 June 08, 2002 Infosys Technologies Limited 2001-2002 Onsite - offshore segmentation 2000-20012001-2002 Slide 22 Infosys Technologies Limited 2001-2002 We continue to de-risk our business Slide 23 June 08, 2002 Infosys Technologies Limited 2001-2002 Client concentration FY 2002FY 2001FY 2000 Active clients293273194 Clients added 11612299 % of revenue from top client6.1%7.3%7.2% % of revenue from top 5 clients24.1%26.0%30.2% % of revenue from top 10 clients39.4%39.2%45.7% Clients accounting for >5% of revenue234 Million dollar clients838042 5-million dollar clients251910 10-million dollar clients16114 20-million dollar clients63- Million dollar clients/ total clients 28.3%29.3%21.6% Slide 24 June 08, 2002 Infosys Technologies Limited 2001-2002 Exposure to telecom Category % of telecom revenue % of total revenue FY 02FY 01FY 02FY 01 Service providers31.420.84.93.8 Product companies2.97.50.41.4 Equipment manufacturers65.168.010.212.6 Others0.63.70.10.6 Total100.0100.015.618.4 Slide 25 June 08, 2002 Infosys Technologies Limited 2001-2002 We have a strong and liquid balance sheet (Rs. crore) Mar 31, 2002%Mar 31, 2001% SOURCES OF FUNDS Share capital33.09233.082 Reserves and surplus2,047.22981,356.5698 Total2,080.311001,389.64100 APPLICATION OF FUNDS Fixed assets718.2435557.6640 Investments44.44234.122 Deferred tax assets24.221-- Sundry debtors336.7316302.3722 Cash and equivalents1,026.9649577.7442 Other current assets389.1319237.6017 Current liabilities & provisions(459.41)(22)(319.85)(23) Total2,080.311001,389.64100 Continued to be a zero-debt company Slide 26 June 08, 2002 Infosys Technologies Limited 2001-2002 Our receivables are under control 2001-20022000-2001 Days of sales receivable - 47 daysDays of sales receivable 58 days Age profile of accounts receivable Slide 27 June 08, 2002 Infosys Technologies Limited 2001-2002 We continue to invest for the future Hired 1,548 people with a net addition of 907 for the year Sales force strengthened with an addition of 39 people during the year New sales offices opened in Netherlands, Singapore and Switzerland Capex of Rs. 322.74 crore during the year of which Rs. 67.40 crore was spent on technological infrastructure Slide 28 June 08, 2002 Infosys Technologies Limited 2001-2002 Our cash flows are strong (Rs. crore) FY 2002FY 2001 Operating cash flows820.96540.32 Financing cash flows(104.77)(39.82) Proceeds on exercise of stock options4.602.38 Dividends paid(109.37)(42.20) Investing cash flows(280.23)(451.30) Purchases of fixed assets(322.74)(463.35) Proceeds on sale of fixed assets1.600.23 Long-term investments(10.32)(26.65) Interest income51.2338.47 Effect of exchange differences13.2620.17 Net increase in cash and cash equivalents449.2269.37 Cash and cash equivalents, beginning of year577.74508.37 Cash and cash equivalents, end of year1,026.96577.74 Slide 29 June 08, 2002 Infosys Technologies Limited 2001-2002 despite heavy investment in capex. 20012002 Capital Investment (Rs.cr) 112.89 160.65 Depreciation (Rs.cr) 2001 2002 Depreciation / Revenues (%) 2002 2001 6.2 5.9 42% 463.35 322.74 Slide 30 Infosys Technologies Limited 2001-2002 Cash Management Slide 31 June 08, 2002 Infosys Technologies Limited 2001-2002 Our cash management policies Financial policies Maintain liquid assets at 25% of revenue and 40% of total assets Earn Return on capital - 2x cost of capital Return on average invested capital 3x cost of capital Our current cost of capital is estimated to be 17.17% Maintain sufficient cash in the balance sheet To fund ongoing capex requirements to meet growth objectives To fund operational expenses and other strategic initiatives for the next one year To maintain business continuance in case of exigencies Slide 32 June 08, 2002 Infosys Technologies Limited 2001-2002 Cash management How we performed TargetFY 2002FY 2001FY 2000 ROCE (%)54.4%62.6%46.3% Times cost of capital2.03.22.92.0 ROIC (%)83.1%105.4%111.6% Times cost of capital3.04.85.05.0 Operating cash flows / revenues30.0%31.5%28.4%28.3% Days sales outstanding60475856 Cash & equivalents / total assets40.0%49.4%41.6%61.0% Cash & equivalents / revenue 25.0%39.4%30.4%57.6% Slide 33 Infosys Technologies Limited 2001-2002 Other Performance Indicators Slide 34 June 08, 2002 Infosys Technologies Limited 2001-2002 Other performance indicators 56.1% 46.6% 40.6% 200120022000 Return on Average Net Worth (RONW) (%) 62.6% 54.4% 46.3% 200120022000 Return on Capital Employed (ROCE) (%) 105.4% 83.1% 111.6% 200120022000 Return on Invested Capital (ROIC) (%) Slide 35 June 08, 2002 Infosys Technologies Limited 2001-2002 Other performance indicators 1.71 1.50 1.25 200120022000 Capital Output Ratio 3.34 2.79 3.66 200120022000 Invested Capital Output Ratio 200120022000 Value Added / Total Revenue (%) 79.8%83.9%78.5% Slide 36 June 08, 2002 Infosys Technologies Limited 2001-2002 Other performance indicators 200120022000 EPS from Ordinary Activities (Rs.) 111.29 146.4 51.28 200120022000 Cash EPS* (Rs.) 200120022000 Dividend Payout (%) 94.23 122.12 43.23 12.0% 17.0% 11.6% Slide 37 June 08, 2002 Infosys Technologies Limited 2001-2002 Other performance indicators 210.05 314.31 125.97 200120022000 Book Value (Rs.) 43.19 30.50 207.48 200120022000 Price Earnings (x) 68,547 62,737 151,076 200120022000 Market Price / Adjusted IPO Price (%) Slide 38 June 08, 2002 Infosys Technologies Limited 2001-2002 Strength of the invisibles FY 2002FY 2001FY 2000 Brand value (Rs.cr)7,2565,3765,246 EVA (Rs.cr)510389129 Value added (Rs.cr)2,2391,563723 HR value (Rs.cr)9,5395,1232,237 Education index31,38528,72515,544 Average age of employees 26.6025.6726.14 Revenue from image enhancing clients (%)56%52%47% Slide 39 Infosys Technologies Limited 2001-2002 Financial Highlights US GAAP Slide 40 June 08, 2002 Infosys Technologies Limited 2001-2002 413.85 545.05 20012002 Revenues (US$ million) 200.24 255.02 137.51 178.55 Gross Profit (US$ million) 20012002 Operating Income (US$ million) 2002 2001 32% 27% 30% Slide 41 June 08, 2002 Infosys Technologies Limited 2001-2002 142.59 183.55 20012002 Operating Income (excl. stock comp) 131.95 164.4 7 137.0 3 169.47 Net Income 20012002 Net Income (excl. stock comp) 2002 2001 (US$ million) 29% 25% 24% Slide 42 June 08, 2002 Infosys Technologies Limited 2001-2002 Investor services Share transfers in physical form completed within 15 days Investor grievances / correspondence attended to within a period of 10 days (Except in cases constrained by disputes or legal impediments) 99.05% of the companys shares are now held in electronic form Pending share transfer related litigation - 18 cases Slide 43 June 08, 2002 Infosys Technologies Limited 2001-2002 Community services Grants of Rs.3.75 crore during the year to Infosys Foundation, a not-for-profit trust to support initiatives that benefit society at large Continued the social programs initiated in 1999 Catch Them Young, Rural Reach and Train The Trainer Infosys has donated 1,185 computers to 435 institutions across India through its Computers @ Classrooms initiative launched in January 1999 Slide 44 June 08, 2002 Infosys Technologies Limited 2001-2002 Awards won during the year The Institute of Chartered Accountants of India award for best presented annual report in 2001 for the seventh successive year The Institute of Company Secretaries of India National Award for excellence in corporate governance Asiamoney award for best investor relations in India for 2001 Corporate Citizenship Award by The Economics Times of India Ranked No.1 in the CG Watch 2002, the CLSA study on corporate governance practices in emerging markets Slide 45 Infosys Technologies Limited 2001-2002 Thank You w w w. i n f o s y s. c o m