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, 2007

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

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g 3-2(b) under the Securities Exchange Act of 1934.

Yes o No þ

If "Yes" is marked, indicate below the file number assigned to registrant in connection with Rule 12g 3-2(b).

Not applicable.

TABLE OF CONTENTS

EXHIBIT 99.1

EXHIBIT 99.2

EXHIBIT 99.3

EXHIBIT 99.4

EXHIBIT 99.5

EXHIBIT 99.6

EXHIBIT 99.7

EXHIBIT 99.8

EXHIBIT 99.9

EXHIBIT 99.10

EXHIBIT 99.11

EXHIBIT 99.12

DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

We hereby furnish the United States Securities and Exchange Commission with copies of the following information concerning our public disclosures regarding our results of operations and financial condition for the quarter ended December 31, 2007. 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 11, 2008, we announced our results of operations for the quarter ended December 31, 2007. We issued press releases announcing our results under U.S. Generally Accepted Accounting Principles ("GAAP") and Indian GAAP, copies of which are attached to this Form 6-K as Exhibits 99.1 and 99.2, respectively.

On January 11, 2008, 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, 2007", 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, 2007 and 2006 (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 11, 2008, 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 11, 2008. 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, 2007, 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: U.S. GAAP Unaudited Consolidated Financial Information for the quarter and nine months ended December 31, 2007; 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, 2007; 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, 2007

We have attached these documents to this Form 6-K as Exhibits 99.10, 99.11, and 99.12, respectively.

SIGNATURES

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

	Infosys Technologies Limited
	/s/ S. Gopalakrishnan S. Gopalakrishnan
Date: January 16, 2008	Chief Executive Officer

INDEX TO EXHIBITS

No.	Exhibits
99.1	U.S. GAAP Press Release
99.2	Indian GAAP Press Release
99.3	Transcript of January 11, 2008 Press Conference
99.4	Presentation: Performance of the Infosys group for the Third Quarter ended December 31, 2007
99.5	Fact Sheet regarding Registrant's Profit and Loss Account Summary for the quarter and nine months ended December 31, 2007 and 2006 (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 11, 2008 2:00 p.m. IST Earnings Call
99.7	Transcript of January 11, 2008 6:00 p.m. IST Earnings Call
99.8	Transcript of January 11, 2008 CNBC India Question and Answer session with Company's Officers
99.9	Form of Advertisement placed in Indian Newspapers
99.10	U.S. GAAP Unaudited Consolidated Financial Information for the quarter and nine months ended December 31, 2007
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, 2007
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, 2007

EX-99.1

EXHIBIT 99.1
US GAAP Press Release

Infosys Technologies (NASDAQ: INFY) Announces Results for the Quarter ended December 31, 2007

Infosys crosses US$ 3 billion in revenues in the first nine months

Q3 revenues grew sequentially by 6.1%

Revenues expected to grow 35.0% – 35.2% in Fiscal 2008

Bangalore, India – January 11, 2008

Highlights

Consolidated results for the quarter ended December 31, 2007

• Third quarter revenues at $ 1,084 million, up 32.0% from the corresponding quarter last fiscal
• Earnings per American Depositary Share (ADS) increased to $ 0.54* from $ 0.39 in the corresponding quarter last fiscal
• 47 new clients were added during the quarter
• Gross addition of 11,683 employees (net 8,100) for the quarter
• 88,601 employees as on December 31, 2007

* Excluding tax reversal of US$ 13 million, EPS will be US$ 0.52

California wage settlement

The Company has 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 $ 26 million. The payment pertains to the last three years and such backwages will be paid to employees in due course.

Outlook for the quarter ending March 31, 2008 and the fiscal year ending March 31, 2008

• Consolidated revenues expected to be between $ 1,136 million and $ 1,142 million for the quarter ending March 31, 2008 (YoY growth of 31.6% – 32.3%) and between $ 4.17 billion and $ 4.18 billion for the fiscal year ending March 31, 2008 (YoY growth of 35.0% – 35.2%)
• Consolidated earnings per ADS expected to be $ 0.54 for the quarter ending March 31, 2008; (YoY growth of 17.4%)** and $ 2.02 for the fiscal year ending March 31, 2008; (YoY growth of 32.0%)***

** Including tax reversal of US$ 29 mn for the quarter ended March 31, 2007. Excluding the tax reversal the Earnings per ADS will be US$ 0.54 and US$ 0.41 for quarter ending March 31 2008 and 2007 respectively; YoY growth of 31.7%

*** Including tax reversal of US$ 25 mn in Fiscal 2008 and US$ 29 mn for Fiscal 2007. Excluding the tax reversal the Earnings per share will be US$ 1.98 and US$ 1.48 for Fiscal 2008 and 2007 respectively; YoY growth of 33.8%

Infosys Technologies Limited ("Infosys" or "the company") today announced financial results for its third quarter ended December 31, 2007. Revenues for the quarter aggregated $ 1,084 million, up 6.07% from $ 1,022 million for the quarter ended September 30, 2007.

“We see several opportunities for growth in the marketplace and have concluded several multi-year, multi-million deals during the quarter,” said S. Gopalakrishnan, CEO and Managing Director. “We believe that our ability to handle large, complex programs using the Global Delivery Model provides a compelling value proposition to global customers seeking efficiency in a challenging macro-environment.”

Infosys added 47 clients during the quarter and won repeat business from existing clients.

Infosys entered into a multi-year multimillion-dollar contract with a leading healthcare company to provide application services and testing support for a critical business platform. Besides potential cost savings of over $ 60 million for the client, the engagement offers benefits such as portfolio integration, knowledge management and a scalable support model. Infosys is also partnering with one of the leading providers of specialized, comprehensive Health Care Support solutions as well as another corporation that provides clinical laboratory services.

A leading European bank selected Infosys as a preferred supplier to reduce the cost of ownership of its application portfolio across business lines. A top global brokerage sought to better manage its IT budget with Infosys’ time-tracking database system. One of the world’s largest asset managers sought Infosys’ help to understand and allocate cost for its infrastructure services. A leading global bank used Infosys’ expertise to build an application to mine and assimilate distributed customer data. Infosys conducted an IT Effectiveness study to improve processes and architecture for one of the world’s largest investment banks.

“Cash and cash equivalents crossed US$ 2 billion,” said V. Balakrishnan, Chief Financial Officer. “We also crossed a significant milestone reaching US$ 1 billion in net profits in the last twelve months. The currency environment continues to be challenging.”

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 88,000 employees in over 40 offices worldwide. Infosys is part of the NASDAQ-100 Index. For more information, visit www.infosys.com.

Safe Harbor

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 including on account of the appreciation of the Rupee against the US Dollar, UK Pound and Euro, 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 abi lity 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 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, 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 o ur Annual Report on Form 20-F for the fiscal year ended March 31, 2007 and Quarterly Report on Form 6-K for the quarters ended June 30, 2007, September 30, 2007 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 update any forward-looking statements that may be made from time to time by or on our behalf.

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 AND SUBSIDIARIES

Consolidated Balance Sheets

(Dollars in millions except per share data)

	As of
	March 31, 2007	December 31, 2007
	(1)	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$ 1,403	$ 1,978
Investments in liquid mutual fund units	6	35
Trade accounts receivable, net of allowances	565	662
Unbilled revenue	74	136
Prepaid expenses and other current assets	48	63
Deferred tax assets	2	3
Total current assets	2,098	2,877
Property, plant and equipment, net	738	968
Goodwill	128	151
Intangible assets, net	20	28
Deferred tax assets	19	37
Advance income taxes	33	38
Other assets	37	45
Total Assets	$ 3,073	$ 4,144
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$ 6	$ 8
Income taxes payable	4	76
Client deposits	1	3
Unearned revenue	72	94
Other accrued liabilities	272	326
Total current liabilities	355	507
Non-current liabilities
Other non-current liabilities	1	—
Stockholders’ Equity
Common stock, $ 0.16 par value 600,000,000 equity shares authorized, Issued and outstanding – 571,209,862 and 571,553,937 as of March 31, 2007 and December 31, 2007 respectively	64	64
Additional paid-in capital	692	702
Accumulated other comprehensive income	90	365
Retained earnings	1,871	2,506
Total stockholders’ equity	2,717	3,637
Total Liabilities And Stockholders’ Equity	$ 3,073	$ 4,144

 (1) March 31, 2007 balances were obtained from audited financial statements

INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

Unaudited Consolidated Statements of Income

(Dollars in millions except per share data)

	Three months ended December 31,		Nine months ended December 31
	2007	2006	2007	2006
Revenues	$ 1,084	$ 821	$ 3,034	$ 2,227
Cost of revenues	629	468	1,789	1,280
Gross profit	455	353	1,245	947
Operating Expenses:
Selling and marketing expenses	52	54	174	147
General and administrative expenses	89	64	243	183
Amortization of intangible assets	2	1	6	2
Total operating expenses	143	119	423	332
Operating income	312	234	822	615
Gain on sale of long-term investment	—	—	—	1
Other income, net	40	13	140	55
Income before income taxes and minority interest	352	247	962	671
Provision for income taxes	42	29	118	78
Income before minority interest	310	218	844	593
Minority interest	—	—	—	2
Net income	$ 310	$ 218	$ 844	$ 591
Earnings per equity share
Basic	$ 0.54	$ 0.39	$ 1.49	$ 1.07
Diluted	$ 0.54	$ 0.38	$ 1.48	$ 1.04
Weighted average equity shares used in computing earnings per equity share
Basic	568,512,968	554,200,798	568,421,831	552,043,540
Diluted	570,363,129	566,883,484	570,439,766	564,849,610

EX-99.2

EXHIBIT 99.2
Indian GAAP Press Release

Infosys crosses US$ 3 billion in revenues in the first nine months

Q3 revenues grew sequentially by 4.02%

Revenues expected to grow 20% in Fiscal 2008

Bangalore, India – January 11, 2008

Highlights

Consolidated results for the quarter ended December 31, 2007

• Income was Rs. 4,271 crore for the third quarter ended December 31, 2007; YoY growth was 16.9%
• Net profit after tax* was Rs. 1,231 crore for the quarter ended December 31, 2007; YoY growth was 25.2%
• Earnings per share* increased to Rs. 21.54 from Rs. 17.64 for the corresponding quarter in the previous year; YoY growth was 22.1%

* The net profit for the quarter ended December 31, 2007 includes a reversal of tax provisions amounting to Rs. 50 crore. Excluding this reversal, the earnings per share for the quarter would have been
Rs. 20.66 resulting in a YoY growth of 17.1%.

Others

• 47 new clients were added during the quarter by Infosys and subsidiaries
• Gross addition of 11,683 employees (net 8,100) for the quarter by Infosys and subsidiaries
• 88,601 employees as on December 31, 2007 for Infosys and subsidiaries

“We see several opportunities for growth in the marketplace and have concluded several multi-year, multi-million deals during the quarter,” said S. Gopalakrishnan, CEO and Managing Director. “We believe that our ability to handle large, complex programs using the Global Delivery Model provides a compelling value proposition to global customers seeking efficiency in a challenging macro-environment.”

Business outlook

The company’s outlook (consolidated) for the quarter ending March 31, 2008 and the fiscal year ending March 31, 2008, under Indian GAAP and US GAAP, is as follows:

Outlook under Indian GAAP – consolidated

Quarter ending March 31, 2008*

• Income is expected to be in the range of Rs. 4,477 crore and Rs. 4,501 crore; YoY growth of 18.7% – 19.3%
• Earnings per share** is expected to be Rs. 21.38; YoY growth of 5.3%

Fiscal year ending March 31, 2008*

• Income is expected to be in the range of Rs. 16,627 crore and Rs. 16,651 crore; YoY growth of 19.7% – 19.9%
• Earnings per share*** is expected to be Rs. 81.07; YoY growth of 17.12%

*conversion 1 $ = Rs. 39.41

** Including tax reversal of Rs. 124 crore for the quarter ended March 31, 2007. Excluding the tax reversal the Earnings per share will be Rs. 21.38 and Rs. 18.10 for the  quarter ending March 31, 2008 and 2007 respectively; YoY growth of 18.1%

*** Including tax reversal of Rs. 101 crore and Rs. 125 crore for the year ended March 31, 2008 and 2007 respectively. Excluding the tax reversal the Earnings per share will be Rs. 79.30 and Rs. 66.86 for Fiscal 2008 and 2007 respectively; YoY growth of 18.6%

Outlook under US GAAP

Quarter ending March 31, 2008

• Consolidated revenues are expected to be in the range of $ 1,136 million and $ 1,142 million; YoY growth of 31.6% – 32.3%
• Consolidated earnings per American Depositary Share** are expected to be $ 0.54; YoY growth of 17.4%

Fiscal year ending March 31, 2008

• Consolidated revenues are expected to be in the range of $ 4.17 billion and $ 4.18 billion; YoY growth of 35.0% – 35.2%
• Consolidated earnings per American Depositary Share*** are expected to be $ 2.02; YoY growth of 32.0%

** Including tax reversal of US$ 29 mn for the quarter ended March 31, 2007. Excluding the tax reversal the Earnings per ADS will be US$ 0.54 and US$ 0.41 for the quarter ending March 31, 2008 and 2007 respectively; YoY growth of 31.7%

*** Including tax reversal of US$ 25 mn in Fiscal 2008 and US$ 29 mn for Fiscal 2007. Excluding the tax reversal the Earnings per share will be US$ 1.98 and US$ 1.48 for Fiscal 2008 and 2007 respectively; YoY growth of 33.8%

California wage settlement

The Company has 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 $ 26 million. The payment pertains to the last three years and such backwages will be paid to employees in due course.

Awards and Accolades

Customers, analysts and industry bodies commended Infosys for setting benchmarks in its strategy to enable customers to compete effectively in a dynamic market.

An independent analyst has cited Infosys as a leader in SAP implementation services, noting that “Infosys’ SAP practice is aligned along verticals to ensure that clients get the benefit of its deep vertical process expertise.”

Infosys moved up to No. 14 on FinTech 100, an international annual listing of the top 100 global application and service providers to the financial services industry.

British Telecom and Infosys were awarded the National Outsourcing Association (NOA) award for Innovative Outsourcing Project of the Year 2007.

Infosys entered the Balanced Scorecard Hall of Fame for Executing Strategy on the strength of its innovative strategy planning and execution capabilities.

Infosys was honored with the Sharpening Brand and Competitive Differentiation Marketing Excellence Award from the Information Technology Services Marketing Association (ITSMA) for its success in shifting its perception from a provider of offshoring services to that of a partner that helps companies reshape their businesses in a flattening world.

Expansion of services and significant projects

Infosys added 47 clients during the quarter and won repeat business from existing clients.

Infosys entered into a multi-year multimillion-dollar contract with a leading healthcare company to provide application services and testing support for a critical business platform. Besides potential cost savings of over $ 60 million for the client, the engagement offers benefits such as portfolio integration, knowledge management and a scalable support model. Infosys is also partnering with one of the leading providers of specialized, comprehensive Health Care Support solutions as well as another corporation that provides clinical laboratory services.

A leading European bank selected Infosys as a preferred supplier to reduce the cost of ownership of its application portfolio across business lines.

“We saw strong growth in Europe during the quarter,” said S.D. Shibulal, Chief Operating Officer. “The pricing environment continues to be stable with an upward bias. We increased the depth of client engagements and our top ten customers showed double-digit revenue growth.”

A top global brokerage sought to better manage its IT budget with Infosys’ time-tracking database system. One of the world’s largest asset managers sought Infosys’ help to understand and allocate cost for its infrastructure services. A leading global bank used Infosys’ expertise to build an application to mine and assimilate distributed customer data. Infosys conducted an IT Effectiveness study to improve processes and architecture for one of the world’s largest investment banks.

“We saw strong growth in our financial services vertical during the quarter,” said Ashok Vemuri, Member - Executive Council and Senior Vice President and Head – Banking and Capital Markets. ”We believe that the IT spending environment will be favorable to large offshore players like us, even though the macro-environment is challenging.”

Industry leaders placed their trust in Infosys as a transformation partner. A corporation that designs, manufactures, distributes and services engines and related technologies selected Infosys as its Global Preferred Supplier for applications outsourcing. Infosys was selected for its “ability to act as a change agent to move to a value-based relationship.”

One of the world’s largest automotive suppliers has selected Infosys to head a technology-led business transformation to develop common global business processes and modernize its fragmented legacy IT environment. Infosys has been selected by the world’s leading global logistics provider to maintain its US freight forwarding application portfolio.

An IT/communications service provider and a leading pan-European provider of business communications services have chosen Infosys as a Strategic Partner to deliver managed services to its customers in Asia and Europe. Infosys has developed a 5-year business application strategy to help a leading global telecommunications manufacturer dramatically reduce total cost of ownership and streamline business processes.

A UK telecom leader is working with Infosys to roll out IPTV-based value-added services swiftly through collaborative product development. Infosys is managing the development of a new wireless application platform for a leading US Internet services and online application provider.

A leading intimate and fashion apparel retailer in the US partnered with Infosys to develop and deploy a performance-critical application for merchandise and inventory management. A multi-brand US retailing leader is benefiting from Infosys’ IT infrastructure managed services. A leading consumer product goods company has signed up Infosys for SAP integration and rollout in addition to a suite of application services.

Infosys defined the Enterprise Architecture framework and Enterprise Architecture operating model for one of the world’s largest engineering companies. A leading French energy and utility company with operations across Europe and North America is benefiting from Infosys’ sales force automation and customer service solutions. Infosys built a critical application to manage and maintain audit records for a world leader in product safety testing. In China, a leading capital project lifecycle management consultant has signed up Infosys to build a Microsoft technology-based product for managing projects in the construction industry.

Infosys BPO Limited

FAO Today magazine recognized Infosys BPO with its Provider of the Year award.

Infosys BPO is providing knowledge services and financial accounting services to a leading UK private equity company. A leading US Fortune 100 diversified healthcare benefits company is also partnering with Infosys BPO.

Finacle^®

Finacle^®, the universal banking solution from Infosys, won five new clients – three from Asia Pacific, one from Europe and one from the Americas.

Process Innovation

During the quarter, Infosys applied for an aggregate of 16 patents in the US and India. With this, Infosys has filed an aggregate of 109 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, as on December 31, 2007 was Rs. 7,933 crore (Rs. 4,791 crore as on December 31, 2006). During the quarter, Infosys incurred capital expenditure of Rs. 325 crore. Operating cash flows during the quarter ended December 31, 2007 were Rs. 1,266 crore (Rs. 981 crore for the quarter ended December 31, 2006).

“Cash and cash equivalents crossed US$ 2 billion,” said V. Balakrishnan, Chief Financial Officer. “We also crossed a significant milestone reaching US$ 1 billion in net profits in the last twelve months. The currency environment continues to be challenging.”

Human resources

Infosys added 11,683 (gross) employees during the quarter and continues to invest in creating a strong training and recruitment engine to meet its growth objectives.

“We are encouraged that the recruitment pool for the IT Industry has widened and fears of a large talent shortfall appear to be misplaced,” said T.V. Mohandas Pai, Member of the Board and Head – HRD and Education & Research. “Collective efforts in the last few years have resulted in better depth and breadth of talent availability in the market.”

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 88,000 employees in over 40 offices worldwide. Infosys is part of the NASDAQ-100 Index. For more information, visit www.infosys.com

Safe Harbor

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 including on account of the appreciation of the Rupee against the US Dollar, UK Pound and Euro, 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 abi lity 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 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, 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 o ur Annual Report on Form 20-F for the fiscal year ended March 31, 2007 and Quarterly Report on Form 6-K for the quarters ended June 30, 2007, September 30, 2007 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 update any forward-looking statements that may be made from time to time by or on our behalf.

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, 2007	March 31, 2007
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	286	286
Reserves and surplus	13,788	10,876
	14,074	11,162
APPLICATION OF FUNDS
FIXED ASSETS
Original cost	4,559	3,889
Less: Accumulated Depreciation	2,139	1,739
Net book value	2,420	2,150
Add: Capital work-in-progress	1,253	957
	3,673	3,107
INVESTMENTS	942	839
DEFERRED TAX ASSETS	97	79
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	2,421	2,292
Cash and bank balances	6,334	5,507
Loans and advances	2,221	1,162
	10,976	8,961
LESS: CURRENT LIABILITIES AND PROVISIONS
Current liabilities	1,287	1,162
Provisions	327	662
NET CURRENT ASSETS	9,362	7,137
	14,074	11,162

NOTE:
The audited Balance Sheet as at December 31, 2007 has been taken on record at the board meeting held on January 11, 2008

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,
	2007	2006	2007	2006
INCOME
Software services and products	3,999	3,454	11,413	9,594
Software development expenses	2,219	1,888	6,504	5,299
GROSS PROFIT	1,780	1,566	4,909	4,295
Selling and marketing expenses	172	182	541	530
General and administration expenses	281	235	790	688
	453	417	1,331	1,218
OPERATING PROFIT BEFORE INTEREST AND DEPRECIATION	1,327	1,149	3,578	3,077
Interest		-		-
Depreciation	138	129	404	336
OPERATING PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS	1,189	1,020	3,174	2,741
Other income	152	60	550	255
Provision for investments		-		3
NET PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS	1,341	1,080	3,724	2,993
Provision for taxation	155	122	436	340
NET PROFIT AFTER TAX AND BEFORE EXCEPTIONAL ITEMS	1,186	958	3,288	2,653
Income from sale of investments, net of taxes		-		6
Net Profit after Tax and Exceptional Items	1,186	958	3,288	2,659
Balance Brought Forward	6,545	3,574	4,844	2,195
Less: Residual dividend paid		-		4
Additional dividend tax		-		1
	6,545	3,574	4,844	2,190
AMOUNT AVAILABLE FOR APPROPRIATION	7,731	4,532	8,132	4,849
DIVIDEND
Interim	-	-	343	278
Final	-	-		-
Total dividend	-	-	343	278
Dividend tax	-	-	58	39
Balance in Profit and Loss Account	7,731	4,532	7,731	4,532
	7,731	4,532	8,132	4,849
EARNINGS PER SHARE*(Equity shares, par value Rs. 5/- each)
Before Exceptional Items Basic	20.77	17.20	57.58	47.82
Diluted	20.70	16.82	57.38	46.70
After Exceptional Items
Basic	20.77	17.20	57.58	47.93
Diluted	20.70	16.82	57.38	46.81
Number of shares used in computing earnings per share
Basic	57,13,46,568	55,70,34,398	57,12,55,430	55,48,77,140
Diluted	57,32,85,874	56,97,17,084	57,32,10,538	56,81,73,059

* Adjusted for the issue of bonus shares in the ratio of 1:1 allotted on July 15, 2006

NOTE:

1. The audited Profit & Loss Account for the quarter and nine months ended December 31, 2007 has been taken on record at the board meeting held on January 11, 2008
2. A Fact Sheet providing the operating metrics of the company can be downloaded from www.infosys.com

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES

in Rs. crore

Consolidated Balance Sheet as at	December 31, 2007	March 31, 2007
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	286	286
Reserves and surplus	14,018	10,969
	14,304	11,255
MINORITY INTEREST	5	4
	14,309	11,259
APPLICATION OF FUNDS
FIXED ASSETS
Original cost	5,453	4,642
Less: Accumulated Depreciation	2,272	1,836
Net book value	3,181	2,806
Add: Capital work-in-progress	1,305	965
	4,486	3,771
INVESTMENTS	136	25
DEFERRED TAX ASSETS	115	92
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	2,608	2,436
Cash and bank balances	6,679	5,871
Loans and advances	2,299	1,214
	11,586	9,521
LESS: CURRENT LIABILITIES AND PROVISIONS
Current liabilities	1,666	1,469
Provisions	348	681
NET CURRENT ASSETS	9,572	7,371
	14,309	11,259

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, 2007 has been taken on record at the board meeting held on January 11, 2008

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,
	2007	2006	2007	2006
INCOME – Software services, products and business process management	4,271	3,655	12,150	10,121
Software development and business process management expenses	2,325	1,938	6,725	5,437
GROSS PROFIT	1,946	1,717	5,425	4,684
Selling and marketing expenses	205	236	693	661
General and administration expenses	349	285	972	829
	554	521	1,665	1,490
OPERATING PROFIT BEFORE INTEREST, DEPRECIATION AND MINORITY INTEREST	1,392	1,196	3,760	3,194
Interest		-		-
Depreciation	153	141	441	369
OPERATING PROFIT BEFORE TAX, MINORITY INTEREST AND EXCEPTIONAL ITEMS	1,239	1,055	3,319	2,825
Other income, net	158	59	565	253
Provision for investments		-		3
NET PROFIT BEFORE TAX, MINORITY INTEREST AND EXCEPTIONAL ITEMS	1,397	1,114	3,884	3,075
Provision for taxation	166	130	474	359
NET PROFIT AFTER TAX AND BEFORE MINORITY INTEREST	1,231	984	3,410	2,716
Income from sale of investments		-		6
NET PROFIT AFTER TAX AND BEFORE MINORITY INTEREST AND EXCEPTIONAL ITEMS	1,231	984	3,410	2,722
Minority Interest		1		10
NET PROFIT AFTER TAX, EXCEPTIONAL ITEMS AND MINORITY INTEREST	1,231	983	3,410	2,712
Balance brought forward	6,719	3,626	4,941	2,219
Less: Residual dividend paid		-		4
Additional dividend tax		-		1
	6,719	3,626	4,941	2,214
AMOUNT AVAILABLE FOR APPROPRIATION	7,950	4,609	8,351	4,926
DIVIDEND
Interim		-	343	278
Final		-		-
Total dividend		-	343	278
Dividend tax		-	58	39
Balance in Profit and Loss Account	7,950	4,609	7,950	4,609
	7,950	4,609	8,351	4,926
EARNINGS PER SHARE*(Equity shares, par value Rs. 5/- each)
Before Exceptional Items Basic	21.54	17.64	59.70	48.75
Diluted	21.47	17.24	59.49	47.61
After Exceptional Items
Basic	21.54	17.64	59.70	48.88
Diluted	21.47	17.24	59.49	47.73
Number of shares used in computing earnings per share
Basic	57,13,46,568	55,70,34,398	57,12,55,430	55,48,77,140
Diluted	57,32,85,874	56,97,17,084	57,32,10,538	56,81,73,059

* Adjusted for the issue of bonus shares in the ratio of 1:1 allotted on July 15, 2006

NOTE:
The audited Profit & Loss Account for the quarter and nine months ended December 31, 2007 has been taken on record at the board meeting held on January 11, 2008

EX-99.3

EXHIBIT 99.3
Press Conference

INFOSYS TECHNOLOGIES LIMITED
PRESS CONFERENCE
Q3 FY 08 RESULTS
JANUARY 11, 2008

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

Amitabh Chaudhry
Infosys BPO – CEO

Ashok Vemuri
Infosys Technologies – Head – Banking & Capital Markets

PRESS CONFERENCE PARTICIPANTS

Sumeet
Reuters

Romit
Dow Jones

Balaji
Reuters

Anjali
Business Line 

Kaavya

Good afternoon ladies and gentlemen. A very warm welcome. Kris is slightly delayed in another media interview. So, I am going to ask Shibu to begin this quarter’s presentation.

S. D. Shibulal

Good afternoon ladies and gentlemen. It is a pleasure to be here to announce this quarter’s results. We have seen strong growth from existing clients, overall growth 6.1%. The top 5 clients have grown by 19%, top 25 by 9.3% and top 10 by 16%. Before I start, let me just take you through the Safe Harbor clause, all of you have seen this. I will take you through the following agenda - financial performance, operational performance, client acquisition, human resources, capex and infrastructure outlook and summary for the quarter.

We have crossed $3 billion in revenues in the last 9 months. Income was Rs. 4,271 crores for the third quarter ended December 31, 2007. Net profit after tax was Rs. 1,231 crores. We crossed a billion dollars in profit over the last 9 months. Earning per share had increased to Rs. 21.54 from Rs. 17.64 for the corresponding quarter from the previous year. We added 47 new clients in this quarter, 4 of those clients are Fortune 500 clients. We have today 110 Fortune 500 clients. Gross addition 11,683, net 8,100 for the quarter. Total addition for the year is projected to be 31,000 employees. Today, we have 88,600 employees at Infosys and subsidiaries together.

Here is the financial performance: Income Rs. 4,271 crores.

I will now take you through the operational performance. As I said, we have seen overall growth. North America is 62.3%. Europe has grown ahead of company average to reach 28.6%. India has grown to 1.2%. During our reorganization last quarter, we have created a separate unit focused on India. We are seeing a good pipeline in India as of right now. Utilization rates have marginally come down, excluding trainees, 76.3%. Our utilization target is high 70’s low 80’s. Fixed price has gone up marginally to 32.8%. Onsite has come down to 47.8% in revenue terms.

Client additions, as I said we have added 47 clients this quarter, 4 of those are in Fortune 500. Number of million-dollar clients has gone up from 295 to 305 this quarter. Number of 50-million dollar clients have reached 17 and number of 100-million dollar clients is 4. The top client give us 9.5% of our revenue this quarter, top 5 clients give us 21.6%, and top 10 clients 32.5%. Top 10 clients grew by 16% quarter-on-quarter this quarter. As I said 47 clients added.

We have got a number of awards this quarter for setting benchmark in strategy to enable clients to compete effectively in the dynamic markets. The second one is an interesting thing, Infosys SAP practice is aligned along verticals to ensure that clients are getting the benefit for its deep vertical process expertise. In this regard, I just want to point out that this quarter we have declared 24% of our revenue from consulting and enterprise solutions. We have moved up to #14 in FinTech 100.

These are some of the large and some of the major deals we have won. This quarter we have multiple multi-million dollar deals i.e. deals which are $50 to $100 million; if I remember right about nine of them this quarter. We are focusing on winning large deals. We have a good pipeline. These are deals with long incubation period, anywhere from two to three quarters and we will continue to focus on them. Finacle has won five new clients, three in Asia-Pacific, one in Europe and one in US.

We have applied for 16 new patents this quarter. The total number of patents that we have applied is 109. Total employee strength to 88,601, software professionals 83,000. As I said, the gross addition was 11,600, net addition 8,100. We have also added 2,500 laterals this quarter. We have spent Rs. 325 crores in capex expenditure this quarter. As of December 31st, we have 148,41,701 square feet space to accommodate 70,000 employees.

Outlook for the next quarter - We have revised the guidance marginally from 35%-35.2% but if you consider the Q3 numbers, it is almost flat. Income is expected to be in the range of Rs. 4,477 crores to Rs. 4,501 crores. It is a year-on-year growth of 18.7%-19.3%. Earnings per share is expected to be Rs. 21.38 which is an year-on-year growth of 5.3%. Financial year ending March 31, 2008, you have the numbers here. Earnings per share is expected to be Rs. 81.07 which is an year-on-year expected growth of 17.21%.

To summarize, as I said, we have crossed multiple milestones this quarter. For the last three quarters, nine months, we have billed $3 billion which is a milestone for us. Another major milestone is a billion dollars in net profit over the last 12 months. We believe we have a unique business model which combined with our value proposition is able to help us grow our clients profitably. You can see that we have improved our margins by 120 basis points this quarter. Operation margin has improved in spite of the rupee appreciation. Rupee has appreciated this quarter; even then we have improved our margin by 1.2%. We are focused on consulting and solutions. We have multiple wins in the solution space. Our multi-channel commerce solution is getting good traction in retail. We have also launched two new services, one is Software as a Service (SAAS). We have the first platform being built for social computing. We have one deal which is signed up and a number of deals in the pipeline. We have launc hed another new service called learning service. We have no deal signed up as of right now but it has a good pipeline. Our talent availability in the market has improved. There are multiple reasons for it but it seems to have improved and we have given 18,000 offers in the campus for the next year. We give offers for the next year now in campuses and we have already given 18,000 offers for the next year i.e. FY09 joinees. Thank you very much.

S. Gopalakrishnan

I apologize for the delay. I got delayed with all the interviews in the morning but now we can have the question and answer session.

I think we will have the question and answer session. You saw the financials. You have the financials with you. You saw the press release also. So, please press red button for asking the question and please release the microphone immediately by pressing it again. Thanks.

Sumeet

Hi, this is Sumeet here from Reuters. Just wanted to get an overview of the business as you see it now and the profit growth in the last quarter, what are the main factors you saw in the last quarter? And going ahead against the background of these talks of recession in the US, what kind of a challenging environment you see out there in the market? Thanks.

S. Gopalakrishnan

If you look at where we are today, we had nine significant wins this quarter. We added four Fortune 500 clients and 47 new clients. We saw growth in BFSI space; BFSI space grew about 8.6%, manufacturing 10.7%, telecom by 9%, higher than company growth rate. Those are the large three industry verticals for the company. We saw the pricing environment to be positive. We saw rate increases still continuing. Our revenue per employee has continued to grow for the past seven quarters and this quarter it went up by 0.8%. Top 10 clients grew by about 16.5%, top 25 clients by 9.3%. So when you look at the customer environment and the industries in which we are operating, we are seeing robust growth. Counter to that, on probably the slightly negative side, typically we would have got visibility into the budget in early January, we are going to get visibility probably late January or early February. Other than that, the environment is actually as expected or positive. Many of the parameters are all act ually favorable to the company and we have managed to increase the operating margin by 1.2%. Now, to give a breakup of that, let me ask Bala to share that data with you?

V. Balakrishnan

We had impact due to rupee of around 0.8% on the margins because rupee appreciated by 1.8% during this quarter. That was more than offset by the productivity increase we saw. The billing rates went up by 0.8%. We had a one time payment due to settlement in California for overtime wages that was around $26 million which was offset by a reversal in a group insurance scheme provisions made for last previous years. Overall net-net, the operating margin improvement has mainly come because of the scale benefits we got for the SG&A expenses as a percentage to revenue came down this quarter. That has flown down to the operating income; so basically it is the effect of scale benefits.

S. Gopalakrishnan

When you look at the macro environment, but when a company looks at its own revenue etc., it looks at its customers and that is why I gave you data based on our customers. Ashok is here, he handles the largest industrial vertical for us, banking and capital markets and I am asking him to talk about BCM itself.

Lady participant

Mohan, in this handout you have said that any anticipated shortfall in the talent pool appears to be misplaced. What gives you the confidence now?

Mohandas Pai

Well, NASSCOM had said that there will be the shortfall of 500,000 by 2010. We finished 2008 because hiring is now for one more year. For 2009, offers have been made in the campuses and offers in the campus are typically about 60%-70% of the total hiring for any company, at least 2010. So, if you hire 420,000-430,000 people a year and assume for 2009 and 2010 you hire 900,000 people over two years, there cannot be a shortfall of 500,000 people. So, that is the reason why we say that expectation of a massive shortfall has proved to be not true. But having said that, very clearly on the HR front there is a major trend that is happening and the trend is what is called right-skilling. Companies are now going in to match the skills required with the requirements of the job rather than get people over-skilled to do a particular job. To give you an example, we had IIT graduates who are in shop floors in automobile companies. Now they are not there any more. Typically, in the software industry, the pool of people required to do work in let us say areas like testing, in areas like production support, in areas like infrastructure management services, is largely being sought from the pool of people in the B.Sc. and other graduate pools and this is expanding the labor pool. So, the job is getting segmented, you are finding people with the right skills for the right job and to the extent the pool has widened in depth and width and that is alleviating the shortage that people thought they would. So, I think this will have a positive impact on wage inflation in future years.

Male participant

So, if Ashok could give us an overview of the BFSI segment and the environment if he is there. Thanks

Ashok Vemuri

Clearly, if you look at this particular quarter, the financial services segment has grown at about 7%. There is enough commentary and there is enough macro-economic data to indicate that there seems to be certain amount of an uncertainty. But in our conversations with our clients, if you look at the deal flow that we have seen and the kind of conversations that we are having which indicate the kind of flow through that we will get in the next year, we are not in a position where we are worrying. Obviously, the challenges that our clients are facing are going to throw up new opportunities for us and given the investments that we have made in the past couple of years in terms of building our domain competency and bringing more focused solutions to the table and these investments we continue to make and we believe that we are in a position given our breadth of coverage and depth of service, that we will continue to be able to leverage the opportunities that the current market challenges are th rowing up.

Male participant

_____.

Ashok Vemuri

We have seen a price increase of about 3%-4%. We have added new clients also which have come at a higher price point especially for some of the newer services that we have brought to the table. Our contract renegotiations not only from a price perspective but also from contractual terms perspective are increasingly turning in our favor. The coverage in these Master Service Agreements or the contracts now is across a wider range of services and solutions that we have. So, I would say that the pricing trend is positive as well as the acceptance of our newer services as well as the existing services is also much higher.

Male participant

_____.

S. Gopalakrishnan

Across verticals. We have seen, for example as I said, in the last seven quarters we have seen revenue per employee increasing and this quarter by 0.8%. Part of that is due to the rate increases which we have had over the past several quarters.

Male participant

I just have a clarification I need. Kris, you said banking sector grew at 8.6%, earlier Mr. Vemuri had said 7% sequentially. What is the number? Are they two different numbers? Banking and financial services grew sequentially 8.6% or 7%?

S. Gopalakrishnan

BFSI including insurance is 7% and banking and capital market is 8.6%.

Male participant

_____.

V. Balakrishnan

If the rupee appreciate by 9 paise, the impact will be 4.5 paise on the operating margin. It is not material.

Male participant

_____.

V. Balakrishnan

Let me explain. The rupee was at 43.10 in the beginning of the year. Today it is around 39.41. If you look at the year-on-year, the rupee appreciated by something around 14%. It could have impacted the margin by around 7% because every one percentage change in the rupee-dollar rate will have around 45-50 basis points impact on our margins. If you take on the revenue side, we would have lost around Rs. 2,100 crores for the full year because of rupee appreciation as compared to last year.

Male participant

________.

V. Balakrishnan

Yes, rupee is going to be challenging because the long-term trend is very clear, rupee could appreciate. It is a pace of appreciation which we are worried about. If the pace is gradual like what we have seen in the last quarter, then we should be able to manage. If it is too sharp like what we saw in the first quarter, that is going to impact us.

Male participant

Mr. Pai, one question on the employee addition in Q3. You have added over 11,000 employees in Q3, which is sharply higher than Q2 and a year ago period as well. I just wanted to understand whether there was any kind of a lag effect which got reflected in the employee addition and this is probably a one-quarter phenomenon?

Mohandas Pai

We had about 2,000 employees which is the spill over impact of the second quarter because remember we told you that we have no space to train them because of the cement shortages and of course we took over the Phillips F&A unit and bought along with it 1,400 employees. So, if you net off that we are normal, there is no sudden increase in this quarter compared to what would we have, but we increased the hiring for the full year from 30,000 to 31,000.

Male participant

Year-on-year, cash equivalent is going up by Rs. 3,142 crores or Rs. 31.4 billion. Could you tell us where it has come from and how much from the investments you made?

V. Balakrishnan

Cash and cash equivalents went up basically because of the increase in operating cash flow. Today, our revenues are a billion dollar per quarter, our net cash addition every quarter could be around $260 to $270 million after the capex. So, most of the capex addition has come mainly because of increase in operating cash flows, it is not because of investments.

Romit

Hi, sir. This Romit from Dow Jones. Just wanted to ask Bala, what is the reason for near tripling of other income from Rs. 590 million to about Rs. 1.58 billion?

V. Balakrishnan

It is basically because of the investible surplus has gone up, it is $2 billion today. Our interest income is around Rs. 50 crores a month, it is around Rs. 150 crores. So, if you look at quarter to quarter, the increase is not that much. The increase is basically because the investible surplus has gone up and the yield to some extent has slightly gone up, nothing else.

Male participant

_____

V. Balakrishnan

We have a mix of investment in liquid mutual funds and bank deposits. We have not invested in any other mutual funds. As of December end, close to around 60%-70% of the investments are in bank deposits.

Male participant

Do you have any indication now of what the government might be thinking about in terms of continuing the tax breaks beyond 2009?

V. Balakrishnan

As of today, the law is very clear. By 2010, the tax holiday goes off. The Finance Minister has clearly said in all his interactions that he is not going to extend that. So, that is what the status is.

Male participant

Amitabh, if you could tell us about the margins in Infosys BPO in Q3 and going ahead with the turmoil in the financial services industry in the US, do you see any kind of impact in the kind of work you do in the BFSI segment? Thanks.

Amitabh Chaudhry

If you look at our performance and just take Phillips out for a moment, our margins in the kind of standalone business excluding Phillips have been in the 21% range this quarter. So we have maintained the margins in spite of some of the challenges that Bala and everyone has talked about. If you look at the Phillips deal, we have recorded revenues of $8.6 million and taken a loss of approximately $ 2.5 million. The reason for the loss is that obviously we have written off all the cost related to the transaction itself. There have been some accelerated depreciation costs because of the policies we follow. There is a diminution, we have written off something related to the customer contract value and there were also as part of the plan, certain retention payments which were made to some employees. Overall, the losses that which we have taken are lower than what we expected and obviously we have always stated that as far as this deal is concerned, we would expect to make similar margins as any other business. So, over a period of time obviously we are hoping that this part of the business will start improving on its profitability. As far as our overall business looks like, right now the pipeline looks good. We are not seeing any slowdown. We are continuing to look at large deals, the Phillips acquisition has helped us in being considered as a very very strong F&A player and we are already seeing advantages of that. We have already started seeing incremental business from Phillips. As far as the US crisis goes on sub-prime and stuff like that, Ashok mentioned the fact that the BCM business continues to grow and we are seeing similar signs. We have signed and working with number of customers on the BCM side and seeing expansion in business there. So, I have not seen the slowdown as yet in terms of lower business.

Male participant

Have you already started exploring contracts for the Phillips unit from other customers? When is it likely to happen?

Amitabh Chaudhry

Yes, I mean that was one of the stated intentions that as we acquire the employees, we will have better domain expertise. We will be able to obviously offer global customers. With 5,000 people doing finance and accounting services, we are one of the top five players globally. FAO recently recognized us as one of the top service providers in the finance and accounting domain globally. So, obviously, we are seeing more traction in our pipeline and our intention is to take more customers to Chennai, Bangkok and Lodz over a period of time.

Male participant

_____.

Amitabh Chaudhry

Well, we are hoping to do it as fast as possible because it is a great message to the people who work in those centers that not only they will work on Philips but some of the other customers but to commit on a timeframe is committing hara-kiri which I will not do.

Male participant

Mr. Shibulal, you earlier said that you are seeing a good pipeline in India right now. I wonder if you could explain that? What are the verticals that you are targeting at this point in time and how do you see the revenue contribution for India going up?

S. D. Shibulal

During the last reorganization which happened this quarter, we have created a separate unit for India. It is headed by a person who is a senior member of our management team. He is building a team to look at India. We understand that India requires specific solutions and services, not our traditional application development and maintenance. We need to look at India from a solution perspective, from a system integration perspective. So, the pipeline which we are looking at today is mostly those kinds of deals. We have actually a couple of wins in India which are small in nature and we do not want to disclose exactly what those are, but we are seeing a good pipeline.

Male participant

Just a followup sir. Is it a strategy to focus on the Indian market? Is this part of a wider strategy to reduce our over-dependence on the US or you have just simply realized the potential in India market now?

S. Gopalakrishnan

It is part of our strategy of growth, it is part of our strategy of reducing dependence on the US. So it addresses both these needs. We have been investing in Europe and you saw Europe growing. We are investing in Australia, we are investing in Japan, we are investing in China, as well as India, larger markets and things like that. We are also as part of the reorg looking at South and Latin America, Middle East and things like that. So, that is on the geography side. From a services perspective, now we have learning services, we have SAAS as an offering today from Infosys, we have platform based BPO as an offering from Infosys and solutions and things like that. Again, we are seeing possibilities of growth from these things. From a product perspective, in Finacle itself we are seeing significant growth opportunities around the world, Australia, Middle East continues to be strong for us, India always has been a traditional market where we saw significant growth and we continue to see growth a nd we are also now seeing that Finacle in Europe, in North America interest and things like that. There are multiple growth engines working parallely and then we will be looking at what other possibilities exist. For the first time, our revenues from non-application development and maintenance have gone above application development maintenance revenues. So that itself shows that the company has changed over the last several years.

Romit

Sir can you elaborate on your expansion plans in South America, Latin America, or in other parts of the globe. Do you plan to set up any more offshore or near-shore delivery centers and development centers?

S. Gopalakrishnan

We have a center in Mexico. We plan to expand on that. I will ask Ashok to talk about it. Right now we want to leverage that for North America. We have actually some Finacle wins in South and Latin America already. We have some clients and we will use Finacle as well as our services business to expand. Ashok, you want to talk about the Mexico Center?

Ashok Vemuri

We have set up a Mexico Development Center about four months ago. Essentially, the idea is to provide Spanish-speaking skills on one end as well as development as well as the entire software services suite of services to North America. We are also doing business from there for some of our Spanish-speaking clients. We think Latin America is definitely a market whose time has come and we think there are significant opportunities that will be there; obviously, there is a de-risking angle to it as well as growing business in that part of the world and we will be using our Mexico center as a first step into our foray into Latin America.

Male participant

It is a question to Mr. Bala and Mr. Kris. What percentage of your revenue comes from work that clients cannot afford to stop?

V. Balakrishnan

Maintenance is around 30% of our revenue. ADM work totally is around 46% of our revenues. So, we believe these are all sticky businesses. There are revenues, infrastructure management is there, testing is there, BPO is there. So most of our revenues are sticky business, we have long-term relationship. If you look at our revenues, 96% of our revenue comes from repeat business. So stickiness is a relativity story. So, looking at our customer profile, looking at our business, we believe that repeat business is very strong and we are a large part of the customers’ portfolio. To that extent the visibility and stickiness is very high.

Male participant

The point I am trying to make is I mean you know this better than me but people are talking about $400 to $500 billion of losses from subprime and so on. Now, that would surely impact the stickiness that you are talking about. So, 46% is ADM; can we interpret this as 46% of your revenues potentially being under threat? Is this work that your customers can afford to say defer by 2 quarters or 3 quarters?

S. D. Shibulal

First of all on this stickiness angle, there are multiple lines which are sticky but the argument which we hear on this line is probably more about discretionary spend. So, if you look at the discretionary spend, the overall BFSI revenue is about 37%. After that the insurance segment is about 10% which is 27% left. Out of that about 7% is Europe. So, the US banking and capital market revenue for us is about 20%. Our discretionary versus non-discretionary breakup is approximately 40%-60%, that means 40% of the revenue coming from discretionary spend. So, it will be 40% of 20%, which is approximately 8%. As Kris was saying, many of these projects are critical to the clients.

Male participant

_____.

Ashok Vemuri

When you talk about the subprime issue, you have to understand that this more of a capital structure issue as well that banks are facing. They are beefing up their capital structure from an investment from the outsiders they have as shareholders. These are going concerns, sustainable businesses, extremely large corporations who typically spend $6-$8 billion on IT. They are not going to wake up one fine morning and switch off that tap. As I said earlier, the challenges that they are facing are creating more and more opportunities and I really believe that and that is the commentary we hear from our clients as well that they are going to increasingly use technology to dig themselves out of where they find themselves today. So I think, you will actually see an increase in the overall spend, you will definitely see as a percentage of that an increase in the offshoring.

S. Gopalakrishnan

Some of the drivers today are very very important drivers. The first and foremost is there is a need to reduce power consumption, concern about carbon footprint and things like that and in many many large corporations today there is a consolidation on the server side, virtualization and things like that; so that is one big driver. The second driver is many corporations today are looking at increasing their revenue from emerging markets. Traditionally they would have got most of their revenues from developing markets which requires them to invest in product, services, new technology, new IT infrastructure and things like that. The third driver is technology per se itself. The technology evolution is continuing with mobile and convergence. Many customers are doing projects on unified communication and things like that. So, there are many many drivers which sustain IT investment and IT budgets. Some other surveys say that the IT budgets would go up by 6%-7%, last year it was 8%. So, the decrea se in IT budget seems to be actually marginal rather than a significant decrease and within the IT budget, offshore will continue to get a disproportionate share. We have seen that in the past and that is again why the offshore IT services industry grows much faster than IT services itself, estimates of 25%-30% which NASSCOM has given for the next few years, I think it seems to be happening. Whatever NASSCOM has said from 90 onwards they have been saying and actually they have been proved right in terms of growth of the offshore IT services industry.

Male participant

Just going by Mr. Shibulal’s number, in the BFSI sector alone, is 8% of your revenue under threat, that is one part. Second part is you are only talking about BFSI; I mean the retail sector for instance, Marks & Spencer has not done well, American consumer spending numbers are not good and retail also contributes to your revenues quite a bit. So, there are other sectors where there is disposable spending which might be cut. Can you give us a number a portion of your revenue that might be under threat for the next two quarters? I agree with you that companies will eventually spend on technology. All I am saying is there might be a deferment over the next two quarters. So, what is the share of your revenue that might be under threat over the next two quarters?

S. D. Shibulal

Even the numbers which I have given you, we have not seen. Please understand, the number I gave you was analysis of the revenue portfolio which we have. As of right now, we have not seen any change in the IT spending environment. We have had no project cancellations. Even in the BFSI segments, we have added new clients, we have got new projects, we have increased the revenue as a percentage of our revenue, we have even got pricing increase in a couple of the BFSI clients. That is what we are seeing at this point. We have signed several multi-million dollar deals this quarter. We have seen that the clients are bullish about increasing the offshore spend within their overall IT budget. That is what we are seeing as of right now. As far as retail is concerned, actually there was a slight concern may be about 3 months back or about a quarter back and we are not seeing it at this point.

Male participant

_____.

S. Gopalakrishnan

For this Q4, we have given you guidance and in April we will give you guidance for next fiscal year. As I said, the budgets would get finalized and we will get visibility in end January or early February and so we will be in a much better position in April to give you guidance for next fiscal year.

Male participant

Do you think Indian companies or the Indian market would spend more on IT to optimize and do you think that could help you with your India plan. You are talking about a specific India plan. Do you think Indian companies would spend more on IT and would that add to your revenues or would that help you in growth?

S. Gopalakrishnan

Indian companies are under-invested in IT. If you look at the IT investment, overall IT spending is about $5 billion or something in IT services. It is actually very very very small from a global perspective. So, we expect the IT investment by Indian companies to grow significantly, again and I will go back to NASSCOM, NASSCOM projects that domestic IT spending will grow at least by 30%. Hence, we see an opportunity for companies like Infosys to create a business out of India. Given our size today, the impact of that to start with will be small and overtime we hope that India will be a significant market for us also.

Male participant

How important would the European operations be for you?

S. Gopalakrishnan

Very important, 28% of our revenues come from Europe. We have centers now in Brno, in Poland. We have significant presence in Germany and many countries, UK, Germany, Switzerland, France, Belgium and we are constantly expanding our presence in Europe. Finacle, our product, is also winning more deals in Europe. So, it is a very very important market for us. As a region, Europe is the second largest IT spending region. As a country, Japan is the second largest IT spending country but as a region Europe is the second largest region in terms of IT spend. And in Europe, UK, Germany and France are the largest IT spending markets actually.

Male participant

You have a separate business, but what about the pricing in so far as Indian customers are concerned. How differential it is?

S. Gopalakrishnan

There are two aspects to pricing. First is the rates you charge for development and maintenance. We believe that if we look at the model differently, then you look at operational pricing and things like that and that is where India is different. We are approaching the market through system integration, through platform based services and things like that where we can charge by volume or transactions and things like that and still make good margins in India. We are positive about the ability to get good margins from Indian market.

Male participant

Just wanted to check up with you. Is there in your Global Delivery Model a de-risking strategy in so far as the US market is concerned and spread to the Europe?

S. Gopalakrishnan

Yes, clearly we want to grow the non-US market. Initially, the focus has been Europe. With this reorganization, we are also now starting to look at other geographies like Australia, Japan, India, China, Middle East, Latin and South America. So, we are actually casting our net far and wide so that there is much more balance in the currencies through which we get the revenue. Hopefully, the rupee will not appreciate against all currencies in the world and so that gives us some hedge against the appreciating rupee.

Male participant

Mr. Pai, I just want to know in the light of the favorable Supreme Court ruling about the ESOP, will more employees be getting it?

Mohandas Pai

At this point, no.

Male participant

I did not say, at this point. Then what is the prospect of retaining more, though marginally your attrition has come down quarter to quarter?

Mohandas Pai

Reviving the options program is right now not on the agenda because it has different implications at this point of time. What this judgment does is to set at rest the taxability of our 1994 stock option scheme because at that point of time the law was very uncertain and we designed a scheme which was not taxable and the Supreme Court upheld our view.

K. Dinesh

Still we do not have the formal judgment; so, we are waiting for it.

Anjali

Mr. Pai, this is Anjali from Business Line. You said your overall net addition of employees would be 31,000 for the year. How many of them would be from lateral and how many non-Indians?

Mohandas Pai

Well, 31,000 is the gross number and out of 31,000 we have some for the BPO and for Infosys Technologies, the parent company, typically, about 30%-35% of people will be laterals and the balance will be freshers. Overall, out of that 31,000, the number of people who are of non-Indian nationality would be 1,200 to 1,300 (plus Philips people).

Male participant

Just to have final analysis, how do you infer the wide gap in the US GAAP and the Indian GAAP, whether it is 9 months net profit or 43% and then 25%, and then on the top line growth 20% and 35%, how much is attributed to the currency volatility?

V. Balakrishnan

Today if you look at Indian GAAP and US GAAP, there is no gap because the process is almost same. The main difference is only because of currency. There is a 35% growth in top line in US dollar terms which translates to 20% growth in rupee terms because rupee appreciated by 14% to 15%. Same thing on the bottom line. If you look at the margin, it is same. So, there is no gap between the US GAAP and Indian GAAP.

Male participant

_____.

V. Balakrishnan

Well, they look at the dollar numbers because that is the reporting currency for them but most of our stocks are listed and traded in India, that is also a base. So, they take a view in between somewhere.

S. Gopalakrishnan

Thank you all very much. This concludes the formal press interview. I hope to see you all next quarter. Thank you again for taking the time and coming.

EX-99.4

EXHIBIT 99.4
Presentation

EX-99.5

Q3 Fact Sheet

EX-99.6

Q3 Afternoon Earnings Call

EX-99.7

EXHIBIT 99.7
Evening Earnings Call

INFOSYS TECHNOLOGIES LIMITED
EVENING EARNINGS CALL
Q3 FY 08 RESULTS
JAN 11, 2008

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

Amitabh Chaudhry
Infosys BPO – CEO

CONFERENCE CALL PARTICIPANTS

Joe Foresi
Janney Montgomery

Moshe Katri
SG Cowen

Trip Chowdhry
Global Equities Research

Karl Keirstead
Kaufman Brothers

Julie Santoriello
Morgan Stanley

Ed Caso
Wachovia

Julio Quinteros
Goldman Sachs

Andrew Steinerman
Bear Stearns

David Grossman
Thomas Weisel

Mark Zgutowicz
Piper Jaffray

Abhi Gami
Bank of America Securities

Operator

Good morning and good afternoon, ladies and gentlemen and welcome to the Q3 2007-2008 Infosys Technologies Limited Conference Call. [Operator Instructions]. I would now like to hand over to today’s Chairperson, Mr. Sandeep Mahindroo. Please begin your meeting and I will be standing by.

Sandeep Mahindroo

Thanks, Pravin. Good morning, everyone, and welcome to this call to discuss Infosys financial results for the quarter ending December 31st, 2007. I am Sandeep from the Investor Relations team in New York. Joining us today on this conference call is CEO and MD, Mr. Kris Gopalakrishnan; COO, Mr. S.D. Shibulal and CFO, Mr. V. Balakrishnan along with other members of the senior management. We will start the proceedings with a brief statement on the performance of the company for the recently concluded quarter, followed by the outlook for the quarter and year ending March 31st, 2008. Subsequently, we will open up the discussion for Q&A. Before I pass on to 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 risks that the company faces. A full statement and explanation of these risks is available at our filings with the SEC, which can be found on www.sec.gov .. I will now pass it on to Mr. S. Gopalakrishnan.

S. Gopalakrishnan

Thanks, Sandeep, and good morning, good afternoon, good evening to everyone wherever you are. Let me also wish you a happy new year. This quarter, we saw our revenues cross $3 billion for the nine-month period ended December 31. So, we have completed the full, last year’s full year revenue in nine months. We also saw that our net income over the last four quarters has crossed $1 billion, and also last 12-months basis, net income is over $1 billion and Europe also has crossed $1 billion on a last 12-month basis. We saw significant customer additions. We saw significant wins, about nine large multi-year, multi-service projects.

And then if you look at the various industry verticals, we saw growth in BCM - Banking and Capital Markets, Telecom, Manufacturing. All our parameters regarding customers saw growth in terms of $1 million customers, $ 10 million, $ 50 million, $ 100 million. And overall, we’ve not seen any cancellations of projects, slowdown. We have seen rate increases, seven quarters of consistent improvement in revenue per employee of about on an average a percentage point, this quarter it was 0.8%. So all in all, the environment seems to be positive. We have also polled our clients. They have been telling us that offshore would continue to increase. They will invest in moving projects to offshore and things like that. The trend seems to continue. The only concern or maybe area where we are watching is how do the budgets for next year look like? Most of the budgets should have been typically completed by now but we are seeing some customers at least delaying it to the end of the month or early part o f February when they will share it with us. So, that’s the only data point which we are waiting for. Even where the budgets have been closed or completed, on an average we are seeing 6% increase in IT budgets for calendar year 2008 and offshore continuing to get a higher proportion of this growth. So, that trend continues.

So all-in-all, a good quarter - improvement in operating margin, growth in customers, growth in the various industry verticals, growth in various geographies and a quarter which was as expected. Q3 and Q4 are slow quarters and so we had expected this and we’ve done slightly better than what we expected.

Now, I am going to pass it on to my colleague, Shibulal, to talk more about the industry verticals and things like that.

S. D. Shibulal

Good morning. This is Shibulal. As Kris said, we have seen strong growth all around. Our top five customers have grown by 19%, top 10 by 16% and top 25 by 9.3% sequentially. More importantly, the BFSI segment has grown ahead of the company average. Also, the telecom segment has grown ahead of the company average. As far as the demand environment is concerned, we are not seeing any change at this point in the IT spending environment as of right now. Most of the clients whom we talk to continue to be bullish about increasing their offshore IT spend within their overall IT budget.

This quarter, we have signed a multiple multi-million dollar multi-year contracts. If I am right, I believe we have signed nine such contracts this quarter, most of them between $ 50 to $100 million range. The pricing environment continues to be stable with an upward bias. Our new clients are coming at around 3-4% above company average pricing and existing client contracts, where renegotiated for most part are coming around 2 to 3% above company average. This has resulted in constant increase in the revenue productivity. As Kris said, the revenue productivity has gone up quarter-on-quarter for the last seven quarters, almost an average of 1%. This quarter, it has moved up by another 0.8%. Europe is growing ahead of the company average. This quarter, it is 28.6% of our revenues. Even in the BFSI segment, we have seen pricing increase with couple of our clients when we renegotiated. We have a good pipeline of large deals. At any point in time, we track about 12 to 18 deals and these deals are l ong-term, long incubation deals. They take anywhere between three to four quarters to close, and we have a good pipeline. As Kris said, we are seeing delays in closing of the client budgets in some of our clients and we expect them to close in Feb. We would get a clearer picture once all the budgets are closed.

From a geographical expansion perspective, we are investing in Australia and Japan. Interestingly, in Japan this quarter, we signed a infrastructure management deal, multi-million, multi-year deal. Australia is a good market for us. And from a vertical perspective, we are investing more into verticals like life sciences, pharma, services which are yielding results. From a client perspective, we have added 47 new clients this quarter. Four of them are Fortune 500. The number of million dollar clients have gone up from 295 to 305. Our repeat business is 96%, so there is enough potential in our client base to mine the existing relationships.

From a service perspective, we have added a couple of services in the last few months. First one is Software as a Service. We have a platform for social computing which we are taking to market. There is a pipeline and we have closed one deal. Second one is learning service which is just out in the market. We have a pipeline but no deals have been closed. So overall, we have seen strong growth in our existing clients. The demand continues to be robust and the pricing at this point is stable with an upward bias.

Thank you very much, and let me now hand it over to Bala.

V. Balakrishnan

Good morning. It’s great talking to you again. We had a great quarter. Our revenues were $1.084 billion, it increased by 6.1% sequentially. Gross margin was at 42%. Operating margin slightly increased, it was 27.5% last quarter, this quarter it went up to 28.7%. We had 3 one-off events during this quarter. The first one was the settlement we made in California. We did a one-time voluntary settlement with the statutory authorities there for around $26 million. That impacted the margin by around 2.4%. This is relating to the past three years and the wages could be paid to the employees in due course. The second one was the reversal of insurance costs. We’ve been providing in our books on a gross liability basis and when reconciled for the last three years, we found some excess provision of around $18 million which we reversed during the quarter. That positively impacted the margin by around 1.7%. Then we had tax reversals which relates to the earlier years where the assessments got over or the statutory limitation period got lower. That was around $13 million.

On the operating margin side, there is the California settlement which impacted 2.4% and there was the reversal of insurance of around $ 18 million which positively impacted 1.7%. There was an impact due to rupee of around 0.8%, because the rupee appreciated by 1.9% during this quarter. And we had the benefit of the increase in per capita revenue which offsett the impact due to rupee.

We had scale benefit coming on the SG&A side. Last quarter, we had the earn out payment for the partners in Infosys Consulting of $11-12 million that was not there this quarter. So, the SG&A cost came down. It positively impacted the margin by around 1.4% which flowed to the operating margin of around 1.2%. We gave a guidance of $0.51. We ended up at $0.54. The $0.02 came because of tax reversal and we have seen upside of $0.01 because of growth in revenues.

Our effective tax rate is almost at 15.4%. It was 15.1% last quarter. If we exclude the tax reversal during the quarter, it is at 15.6%. Net-net, we have increased our guidance slightly for the whole year. For the full year, our revenues are expected to grow somewhere between 35.0-35.2%. And our EPS is expected to grow by 34%. For the full year, we expect the margins to remain, say at the same level as it was last year. For the next three months, we are assuming the currency to be at 39.4, which is a closing rate for December. And we assume that we will add 31,000 employees on a gross basis for the full year. Last quarter, we said 30,000. We increased the guidance by 1,000 more people. And we assume the pricing to remain flat at the same level as it was in December for the next three months. So assuming all this, we believe that the margins could be stable for the full year as compared to last year.

With this, I conclude my presentation. We can take the Q&A now.

Operator

Thank you very much. [Operator Instructions]. Our first question comes from Joseph Foresi from Janney Montgomery Scott. Please announce your company name and location and go ahead.

Joseph Foresi

Hi, Joseph Foresi from Boston. I know you guys talked about the budget process taking a little longer. I wonder if you could give us some color on why, any specific reasons that you are hearing from clients for the delay of committing to the budget.

S. Gopalakrishnan

This is Kris here. Obviously, the concerns about the economy, the macro economic conditions are the reasons for the delay. There is another reason also, we are also seeing that this time around, there is lot more involvement from the leadership of the company in deciding on the budgets and the plans for the year and things like that. Maybe that’s another reason why there is some delay. Where the budgets have been closed, where we have visibility etc, we are seeing that the proportion of budget allocation to offshore continues to be robust and that’s the strategy companies are adopting even in this period when they look at optimizing their expenditure.

Joseph Foresi

Okay. Thanks. And I was wondering if you could give us some rough idea of what maybe what percentage of those budget processes are still open and you are waiting to close? I mean, how much visibility do you think you have heading into next year?

S. Gopalakrishnan

No, I don’t have a percentage, because we only look at some of our customers. We don’t look at all our customers when we look at being part of the budget, especially the larger customers. So it’s difficult for me to give you a percentage and things like that at this point. We also look at other data points like industry analysts etc. Most of the analysts, at least whatever reports I have seen, project that IT spending will be about 4%-6% or maybe even 7%. Last year, it was estimated to be 8%. So it’s still not too much lower than last year, and that is also a positive data point.

Joseph Foresi

Okay. And just lastly here, in the budgets that have closed, have you seen a push to increase outsourcing as a cost-saving method or is there any impetus for the push? And thanks, guys.

S. Gopalakrishnan

Yes, as I said, offshore is getting a higher allocation in the budgets that are closed. The budgets that are closed, approximately 6% is increase in IT spending, and offshore gets a higher proportion.

Joseph Foresi

Okay. Thank you.

Operator

Our next question comes from Moshe Katri. Please announce your company name and location, and go ahead.

Moshe Katri

Thanks. Cowen in New York, New York. Again, not to beat a dead horse here. Since we are talking about delays in budgeting and the budget cycle, can you talk to us a bit more about why are you so comfortable with your expectations for the March quarter? I think that will be helpful. And then also, can you provide an update on what some of your investment banking clients are actually doing in this environment?

S. Gopalakrishnan

So we look at data points which we have. We have seen increase in banking and capital markets business. That business has grown by 8.6%. Overall, BFSI space has grown by 7%. The company growth was 6.1%. So it’s growing faster than company average. We had new customer additions and new project wins in the BCM space. We had rate increases in the BCM space. We did not see any cancellations in the BCM space. So these are the data points which give us comfort in saying that we will be able to meet the Q4 numbers. Now of course, Q4 is only just one more quarter. And overall for the year, when you look at fiscal 2008, this is the last quarter. And in the beginning itself, we had projected certain revenues for Q4. And it’s gone up slightly but by and large, it’s almost flat. And the reason why we were cautious is because of the budget cycle and things like that. So we have factored all the data points we have when giving the guidance at this point.

Moshe Katri

Okay. That’s fair enough. And then, Bala, can you comment on volume growth during the quarter would seem a bit weak and then EBIT margin during the quarter was exceptionally strong. That was pretty impressive. Can you again go through the list of the pluses and minuses impacting the margin?

V. Balakrishnan

Well, the volume growth was 4.5%. There was a price increase of 0.8% resulting in 6.1% growth in revenues. The volume growth has been exceptionally good. When we gave the guidance in October, we factored in the holidays during the quarter. Normally, the third and fourth quarters for us are soft quarters because the number of holidays and client’s budget period in December, they conclude the earlier budget, and in January to March, they have to come up with a new budget. So normally, they are soft quarters. Considering that background, the volume growth has been extremely good during the current quarter. The operating margin improvement mainly came about because of the scale benefits we got on SG&A. As I said earlier, last quarter, we had earn out payment for Infosys Consulting, that had increased the sales and marketing costs. That has come down this quarter because that was a one-off event last quarter. So the scale benefits have flown to the operating margins. We got a scale benef it of 1.4%, the improvement in operating margin was 1.2%. We had a currency impact of 0.8% which was offset by the productivity increase of 0.8% we saw during the quarter. We had an impact of 2.4% because of the California settlement, which got offset by the reversal we made on insurance of 1.7% of revenues. So net-net, the improvement in operating margins is mainly a result of the benefit we saw on the SG&A, due to the scale.

Moshe Katri

Okay. And then finally, can you give us an update on where we are in the profitability of some of the subsidiaries that we spoke about in the past, whether it’s China, Australia or North America Consulting. Maybe you can talk about who is close to breakeven, and who is still kind of still losing money?

V. Balakrishnan

Well, all the subsidiaries are doing well. Some of them like Consulting and China are still in the investment phase. Consulting, the losses had been more or less negligible during the quarter. They are still in the investment phase. They could be making a couple of million dollars of losses in the next two, three quarters. After that, they could breakeven. China is still in the investment phase. It will take some more time because we have some 690 employees in China. Our revenue there is around $5 million a quarter. It will take some more time for it to breakeven but other subsidiaries are doing well. Australia has done well. They had 14% net margin. IBPO has done well. They are growing fast. So Consulting and China will take some more time. They are still in the investment phase.

Moshe Katri

Thank you.

Operator

Our next question comes from Trip Chowdhry. Please announce your company name and location and go ahead.

Trip Chowdhry

Definitely. Trip Chowdhry, Global Equities Research. A question for Shibu. You did mention that the customers you spoke to had a budget increase of 6%. Could you provide some color on it, like what specific areas are you seeing the budget increase, and the budget increase is it more on the ADM side or new projects, and what is driving that?

S. Gopalakrishnan

See what is driving is offshore. And depending on the clients, the services are different. We are still seeing uptick on infrastructure management. We are seeing uptick on the traditional application development and maintenance, especially on the maintenance side and we are seeing uptick on package implementation, maintenance of the package. So it is actually broad. Even we are seeing discretionary spends and development projects. There are some datacenter consolidations which are going on, virtualization and things like that. So it’s a very broad set of offerings and services and it’s really dependent on specific clients. So it’s very broad.

Trip Chowdhry

And looking at your segments, it seems like banking and financial and telecom did well, while the services was a little weak. Can you provide some color around these various segments?

S. Gopalakrishnan

Yes, banking and capital markets, telco, manufacturing, all the top industry verticals grew faster than the company average. And we got some big deals also in these industries. So that is helping us. If you look at actually, Shibu talked about it, top 25 clients grew 9.3% this quarter. So that’s helping us in some of these sectors. And other sectors, for example, in fact retail probably is one sector where before Thanksgiving maybe there was some concern and slowdown was seen but now it’s disappeared. But if you look at the performance this quarter, it’s muted. But overall, I am glad to say that the top three sectors for us are showing growth.

Trip Chowdhry

Thank you.

Operator

The next question comes from Karl Keirstead. Please announce the company name and location and go ahead please.

Karl Keirstead

Hi. Good morning. Karl Keirstead with Kaufman Brothers in New York. A question about the revenues you generated from your largest client in the December quarter. It went up significantly and was a big contributor to your revenue growth. Perhaps you can’t name the client, but can you give us a little bit of color in terms of the industry or the type of project and let us know whether there were any one-time revenue boosts from that client that we may not see in the next few quarters? Thanks.

S. Gopalakrishnan

See, I cannot give you too much detail because this will be specific to a particular customer. We are doing many, many projects for that customer, all the way from consulting to infrastructure management, BPO. Probably, that’s one customer which is using all the services Infosys provides. And we are also doing some very large projects for this customer, transformation projects and things like that. Now when some of those transformation projects come to an end, you may see a decrease in revenues but it picks up because this customer is really focused on increasing offshore. They do work with multiple Indian service providers, not just Infosys. And they have a fairly large program focused on India. This customer has been growing for many quarters, not just in the last quarter. And that’s all I can at this point give you in terms of details for this customer.

Karl Keirstead

Okay. Thanks. And secondly, this release you didn’t give any color on the wage increase environment in India, could you add a few comments there? Thank you.

Mohandas Pai

We believe that the wage increase will remain at 12-15% for next year at this point of time. But we are seeing some very interesting phenomena in India. We are seeing a mega trend of right skilling, that is, companies working out the skill requirement for a particular job and matching skills with the capability needed for the job. For instance, over the last three years, we have hired 3,000 people who are undergrads and not engineers, using them for testing, using them for infrastructure management services and part of production support and we are going to accelerate that hiring. They will have a separate career path. So the pool of talent will expand and that will have a moderating influence on wage growth as we go along. And because of right skilling, companies, I believe, in the next two years will hire people depending upon the kind of talent they need, and therefore that will help them to moderate wages and also go deeper into the talent pool. People like us want to hire top quality ta lent and the top 20% always. So we will pay a higher price. And we do believe that we get a premium pricing from the client and that is the right strategy for us. But overall, the supply situation is very much better now compared to earlier. Right skilling will moderate wages as we go along and each company decides its wage policy based upon the segment in which they will hire. So we think that this is what is going to drive the wage increases in the next couple of years.

Karl Keirstead

Terrific. Thank you.

Operator

Our next question comes from Julie Santoriello. Please announce your company name and location, go ahead.

Julie Santoriello

Thank you. Morgan Stanley in New York. Just wanted to make sure I understand the potential ramifications of customers pushing out their budgets into February. How do you see customer behavior in that regard? If you have a certain portion of customers who are not pushing through their budgets just yet, do you have certain projects that are on hold right now?

S. Gopalakrishnan

No. We did not see any cancellations or projects put on hold. That’s why we have grown as expected, right, so we are not seeing anything at this point.

Julie Santoriello

Okay. And the employee utilization, I think, there was a downtick there by about 150 bps. Can you address that, was it just seasonality or was there more going on either planned or unplanned?

S. Gopalakrishnan

Can you just repeat that please, which line item?

Julie Santoriello

The utilization, employee utilization?

S. Gopalakrishnan

So the employee utilization came down from 79.5% to 77.4%. See, Q2 is the quarter in which we bring in the largest number of employees. Now there is a seasonality to the employees joining the company and typically Q3 and sometimes maybe Q4, the utilization comes down slightly. We are very comfortable with the utilization somewhere between 77 and 80, 81 and that’s fine. See, in any quarter, we don’t want to optimize all the levers we have in terms of margin. This quarter for example, the offshore increased whereas the utilization came down. And this is the cushion we have when it comes to a new quarter and we need to pull some levers to increase margins and things like that. That gives us the flexibility to manage our business better. We have multiple levers, which we can use to optimize the business in any quarter and things like that. All levers are not optimized in a quarter and this is an example of a lever, which was not optimized this quarter.

Julie Santoriello

Okay. Thank you very much.

Operator

Next question comes from Ed Caso. Please announce the company name and location, and go ahead.

Ed Caso

Hi. Ed Caso, Wachovia, United States. My question is around the BPO business. Can you give us a sense for size, growth, what the clients are asking for? Is there a change in mix and so forth?

S. Gopalakrishnan

Ed, good to hear from you. I am going to ask my colleague, Amitabh, CEO of BPO to answer the question.

Amitabh Chaudhry

Hi, everyone. BPO saw a growth of 23% quarter-on-quarter, partly helped by the Philips acquisition, the acquisition of the Philips’ captive centers in Lodz, Chennai and Bangkok. Philips acquisition gave us revenues of $8.7 billion this quarter. If we exclude that, the BPO business grew by close to 10% quarter-on-quarter. So this quarter, we have done $63.8 million of revenue. Our standalone business continues to maintain the margins at 22%. The Philips part of the revenues were obviously at a loss because in this quarter, we had charge-off expenses related to the acquisitions, some retention money which was part of the planned expense. We have also had some accelerated depreciation and there has also been a charge-off on a write-off of customer contract value. But, the overall loss in Philips about $2.5 million is less than what we had budgeted for. So from that perspective, it is going well. Integration of the 1,400 people is complete. The entire senior management has joined us. The a ttrition levels have remained low and the execution on the Philips contract is going well.

If you look at the mix of the business, mix has remained the same. Our voice business continues to account for about 20% of overall revenues. The largest verticals are telecom, hi-technology discrete manufacturing and BCM in that order. Our pipeline remains quite strong. We are quite excited about some of the positives we are looking at. After the Philips acquisition, we have more than 5,000 employees in the finance and accounting space which makes us one of the top five players globally and we are already seeing the impact of that in the kind of deals we are getting invited to, the kind of conversations we are having and obviously it is giving us confidence about the future.

With this kind of revenue profile, we are pretty much caught up with all the BPO players in India who were four or five years ahead of us and obviously our margins remain much, much greater than them. So, overall the traction is good, pipeline is looking strong and the Philips acquisition till date has gone very, very well. Thanks.

Ed Caso

Thank you. Last question. Any concern from clients and this is sort of an industry wide question about quality, particularly as you move towards right-skilling, and maybe there is a little less sort of over-staffing from a quality perspective, I mean, are you getting any concerns among your clients about quality?

Amitabh Chaudhry

This question is for BPO, or this question is to overall Infosys?

Ed Caso

No, I am sorry, more just generally.

Mohandas Pai

Ed, there is no concern from the clients because we’ve done a very good mapping. For example, in the testing area, the work is very repetitive and the quality is of extremely high order. In infrastructure management services, the work is repetitive and quality is very high, we met all SLAs. In part of the production support, we find that the same situation is coming. So we are not seeing any challenges, but remember the numbers are small. Out of 31,000 people that we’re going to hire this year, about 9,000 are for the BPO and 22,000 is for the services. Out of 22,000 we probably would hire about 2,000 people from this profile. So, the numbers are small and the numbers are very specific. So, there are no quality issues.

Ed Caso

Thank you.

Operator

Our next question comes from Julio Quinteros. Please announce your company and location, go ahead.

Julio Quinteros

Goldman Sachs, San Francisco, California. Real quickly, Bala, can you just walk us through kind of a slowdown scenario, I guess, if you were to sort of look back at the dotcom day, sort of meltdown, and look at the potential for a recession in the United States going forward, what levers would you have left if revenue growth materially decelerated from herein? And maybe in order of priority, what would be the top two or three things that you would be able to do to preserve margins in a slowing scenario?

V. Balakrishnan

Well, if I look at what happened in 2001, 2001 when there was a sharp slowdown, it impacted both our billing rates and our volume growth. That time the billing rates were at unrealistic level because we had a dotcom boom between 2001 and 2002, the prices went up by something around 25%. Those unrealistic prices got corrected when the economy went into a downturn. I think we are today at a much reasonable pricing levels. Only in the last five, six quarters, we are seeing the billing rates going up. So the pricing levels are at a much more reasonable level today. So the sharp deceleration we saw after 2001 is slightly unrealistic now.

Number two, the volume growth could come down but in 2001 offshore was not a mega-trend. Most of the customers were not looking at offshore as a top priority but today offshore is a mega-trend. That is the only trend in the whole industry. If you talk to any CXO, they are very clear about the benefit offshore brings in. So, I think to that extent, the ability of customers to improve the offshore spending within the overall IT spending is very high and it could happen very quickly, than what happened in 2001. That’s why we keep saying that even if there is a downturn in the US, the offshore IT spending could go up within the overall IT spending.

On the cost side, we have built a much more flexible cost structure today. We are getting the scale benefits, we are leveraging offshore for all our support work. We are sitting tight on the costs. We have several levers on the cost side, like the utilization rate, the onsite offshore mix and we are moving up the value chain. Today more than 50% of the revenue comes from new services which we started in the recent past. And we also have the utilization rate. And our wages also we made it more variable, 30% of offshore wages is variable, linked to company’s performance in terms of top line and bottom line. So over the years, we had made our cost structure much more variable and that will help us to reduce the impact on the margin, even if there is a downturn. Of course there are issues like currency which is external to us, which we can’t do much. As long as it moves gradually, we can manage some of it but if there is a sharp movement, it will hit us. Excluding currency, we have cr eated a flexible cost structure which will allow us to reduce the impact on margins, even if there is a downturn.

Julio Quinteros

Got it. That’s very helpful. And just on the one point, I know that there was a one-time hit to the SG&A last quarter with the pay-out for the ICI for the consulting part. But even if you look at the number sort of in aggregate, the level on a percentage of revenue basis for SG&A is at really, really low levels. Is that just a variability component sort of kicking in because the revenue growth or the magnitude of the upside for revenue growth just didn’t materialize this quarter? Is that the way to think about why that dropped by so much other than the one-time payment not being there?

V. Balakrishnan

No, if you look at our cost, our G&A is normally around 8% and S&M is somewhere between 6 and 7%. And that trend is there for some time. And this quarter, one, because the earn-out was not there, which was there last quarter. And number two, we got a credit for the insurance, which I spoke earlier, that is allocation between direct cost and SG&A cost; that also played a role. But on a steady-state basis, G&A could be somewhere around 8%. We could get some scale benefits there, and S&M could be somewhere between 6-7%.

Julio Quinteros

Okay. Got it. And then just finally, when we look at the pace of growth in North America from the beginning of the year to the end of the year, obviously, a deceleration from about 38% growth to 30% growth on a year-over-year basis. Can you talk a little bit about what is or what factors are driving that? Is that just sort of a shift in emphasis from North America to Europe, or are you seeing something else that is sort of weighing the performance of North American growth?

S. Gopalakrishnan

So, Europe has grown. If you look at year-to-date, Europe has grown 43%, whereas North America has grown 33.8%. So obviously, we are shifting the growth away from North America to other geographies, Rest of the World grew 37.5%, Europe 43%. This is a proactive strategy. For some time, we have been trying to grow non-US revenues. So, we are investing in newer geographies as part of this reorg also, India, China. We will be setting up sales and marketing for South and Latin America, Middle East. We want to grow Australia. So definitely, you will see as a percentage, in absolute terms all these geographies are growing, as a percentage, North America coming down.

Julio Quinteros

Okay. Great. Thank you.

Operator

Next question comes from Andrew Steinerman. Please announce your company name and location, and go ahead.

Andrew Steinerman

Hi. It’s Andrew Steinerman, Bear Stearns. In the press release, you used the line in the midst of your comments, we have concluded several multi-million dollar deals meaning the programs work for clients during the quarter. Was this expected kind of program ends, would you say that it was a natural number of program ends of kind of multi-million dollar projects? And do you expect and how do you expect sort of the balance for the fourth quarter between multi-million dollar project starts versus multi-million dollar project ends?

S. Gopalakrishnan

Okay. I don’t have the data on number of projects, large programs which ended in Q3. So I can’t immediately answer that. But if we look at our pipeline today for large deals and we have about 15, 16 deals we are still pursuing and that’s the number we look at. These are programs which are in our case $ 50 to $ 100 million and above. So that’s the kind of programs we are going after. And that pipeline has been growing slowly and we track that. The nine deals which we talk about are in the range of about $ 30 million plus, multi-year, multi-services deals. And these are ones which are from existing clients as well as new clients and are not just new clients as existing and new clients. And these are some of the things which we have been pursuing for maybe sometimes, three months, six months etc. And this trend we just highlighted, so that people can see that we have had wins in Q3 also in spite of the concern of slowdown and things like that.

Andrew Steinerman

Right. So, I mean, I think that sort of addresses half the question well. The fact that you highlighted, concluded several multi-million dollar programs in the quarter, did you know three months ago that those would conclude in December quarter and if there are an unusual number of program ends in the March quarter to be expected?

S. Gopalakrishnan

No. We do not know exactly when a program will close because that depends on the customer. It’s very difficult for us to say precisely, on which month it will close and things like that. We have some indication, the client would give an indication saying that we want to close on particular month and start, but sometimes, they slip and things like that. From the March quarter, there isn’t any unusual change or anything like that from previous quarter in terms of number of project closures and things like that. See, 96% of our business is repeat business and even though our contracts are long-term, the work orders are for the project duration, these are ongoing things. We occasionally see a client coming down and then pick up later. There are some seasonality and things like that, but by and large, with 96% repeat business, we have a comfortable track record in terms of growing accounts and handling long-term relationships and things like that. There is nothing special about project closures in Q4, we can say at this point.

Andrew Steinerman

Thank you for spending so much time with my question.

Operator

Next question comes from David Grossman. Please announce company name and location, and go ahead.

David Grossman

Thomas Weisel Partners in San Francisco. Kris, on one hand, I hear you saying you are pretty comfortable with the current kind of environment and you are pretty comfortable with your kind of business, kind of prospects. Yet when I look at the volume growth over the fiscal year, it has been decelerating each quarter on a year-over-year basis. So can you help kind of reconcile kind of your point of view with what looks like at least decelerating volume growth on a year-over-year basis throughout the year?

S. Gopalakrishnan

So, David, good to hear from you. Normally, Q3 and Q4 are slower quarters for us. Q3 is slower because of reduced number of working days. Q4 typically, we are cautious because if the budgets get delayed etc, we may see some slow growth and things like that. So normally, we are cautious about Q3 and Q4. And it is not unexpected and we had expected this and we had guided for 30% growth at the beginning of the year. We are ending with 35% growth. Our guidance is 35%-35.2% for the year. So, in that sense, this is something which we had projected and things like that. Nothing different from what we have projected.

David Grossman

Right. So, I guess, I am looking at the volume growth on a year-over-year, not on a sequential basis. And are there fewer workdays in the second, third and fourth quarter this year than they were last year? I guess again I am just looking at the volume growth year-over-year and it just appears that it’s been decelerating throughout the year?

S. Gopalakrishnan

I am just looking at Q3 in ‘06, Q3 in ‘07, and Q3 in ‘08, 6.7% sequential growth in ‘06, 10.1% last year and 6.1% this year. So, it’s kind of mirroring ‘06 actually this time.

David Grossman

Okay. We can perhaps pursue that offline. I guess, moving on to just the subsidiaries, in terms of the profitability, it looks like consulting went positive or breakeven and I assume that had to do with this one-time payment last quarter. Was there anything else, some of the other subs kind of bounced around a little bit, is there anything other than typical, kind of lot small numbers or just seasonality that impacted the profitability of the subs during the quarter?

V. Balakrishnan

Well, David, Bala here. I think other subsidiaries are doing well. IBPO, the margin has come down this quarter mainly because they had the Philips acquisition, they have to take the cost. Infosys Australia is still doing well, their net margin is close to 14. Consulting and China have done well this quarter. Consulting the impact on the overall profit is very less. They neither made a profit nor a loss. China made a small loss of $400,000. So, overall Consulting and China have pulled up and they have done well, both are in the investment phase. Consulting could be making losses for a couple of quarters before they become breakeven. China will take some more time, they are still in the investment phase. Mexico subsidiary is making a loss. They made a loss of $1 million this quarter. So, this is the second quarter of the operation, they will take some more time to breakeven. Otherwise rest of the subsidiaries are doing well.

David Grossman

Okay. And then just looking at the verticals, it looks like the insurance vertical weakened a bit during the quarter again, is that just time and place, client specific or is there something else specific to the insurance industry?

S. Gopalakrishnan

Yeah. It’s just one-off, David. In fact one of the big deals we won is in the insurance sector and that should pick up the growth going forward.

David Grossman

Okay. And just one last thing. If you think about where you are today versus prior years, is your visibility into next year, at this point in time, from your perspective, any different now than it has been in prior years?

S. Gopalakrishnan

See, there is no change except for typically, we would have got the visibility of the budget early Jan, now we see that it will come completely by end of Jan, first week of February. Other than that, there is no change. And having said that, from the discussions we are having with our clients etc, there is no change. And in fact they are saying offshore should continue to see disproportionate growth and things like that. So in that sense, there is no change.

David Grossman

I see. Great. Thanks very much.

Operator

Next question comes from Mark Marostica. Please announce the company name and location, and go ahead.

Mark Zgutowicz

Hi. It’s actually Mark Zgutowicz, Piper Jaffray, Minneapolis, Minnesota. I was just curious, maybe one last budget question, curious what concentration of your client base has indicated a flat to down ‘08 budgets and how will that compare to those indicating the up 6% that you mentioned?

S. Gopalakrishnan

It’s a broad comment rather than any particular sector. We only look at some of the larger customers closely and track their budgets and things like that. We have about 305 million dollar relationships. All those budgets we don’t track. When it comes to $ 10 million and above, or closer to $ 15 million, we start tracking their budgets and getting visibility of their budgets and things like that. And so this commentary is based on that and that is across multiple industry verticals, not restricted to any particular industry vertical.

Mark Zgutowicz

Okay. And just curious, can you give me a rough mix of your headcount within the testing and infrastructure management? And then, what was your lateral hire mix overall in the quarter?

S. Gopalakrishnan

The lateral hires this quarter were about 2,600. Now, the number of people in testing, I don’t have actually the data of number of people, but we can send you. If you please send us an email, we can send you the data of people in testing and things like that. BPO is about 16,000 people. That is separate because it’s a separate business line for us and things like that. But, testing I don’t have the number with me at this point.

Mark Zgutowicz

Okay. Great. And just one final question, I think, you mentioned your China head count is still around 700, is that correct?

S. Gopalakrishnan

Yes, it is correct.

Mark Zgutowicz

Okay. And where do you see that a year from now? And if also you could comment on your current head count in Central and South America, sort of what that’s growing year-over-year and then what your expectations are there for next year as well?

S. Gopalakrishnan

China is growing. We are looking at about 200 more people to be added now and then as the business picks up, we will keep adding. But right now, the plans are to add another 200 people to China. In Mexico, it just started, it’s in fact the fourth month of operation, and we have about 50 people in Mexico. Again, we will wait for business to pick up rather than recruit significantly ahead of business. Since the numbers are small, we are confident that we can recruit from the market. So, we are not making large plans from campuses and things like that. It’s not along the same lines as in India. For example in India, 18,000 offers have been made at the campuses already and these people will be joining from July through October next year. But, we don’t have to make that kind of advance plans for Mexico or China yet at this point.

Mark Zgutowicz

Okay. And in South America, can you just remind me of your head count there and where you see that next year?

S. Gopalakrishnan

It’s about 50 people. And as I said, as business picks up, we will start hiring there. Right now, it’s about 50 people.

Mark Zgutowicz

There as well. Okay. Great. Thank you.

Operator

Our next question comes from Abhi Gami. Please go ahead with your questions, announcing your company and location.

Abhi Gami

Great. Thank you. Banc of America, New York. In this environment, it’s reasonable to think that clients are going to come back looking for pricing concessions. Are you seeing an increased level of interest in discounting or more accretive pricing? And in this situation, how are you handling those requests?

S. Gopalakrishnan

See, there are not many cases of any discount across the board or anything like that. Based on volume, there are some discounts which are there in the contract or sometimes when the contract comes up for renewal because they are promising higher volumes etc, some clients have asked for further discounts. So the discount is separate from rates. Rates typically, we are able to get about 2 -3% higher on contract renewals. Some times, additional clauses for discounts get added on account of higher volumes and things like that.

Abhi Gami

So, just to be clear. You are not seeing clients come back looking for just straight rate cut or straight rate discounting?

S. Gopalakrishnan

Not across the board and things like that. There may be one or two instances, but it’s not across, all the customers, and its impact is limited.

Abhi Gami

Okay. Also going back a little bit to the commentary regarding the budgets. What was the average IT budget increase this time last year based on your survey of your clients? And also how many clients have you already heard back from?

S. Gopalakrishnan

Last year, it was about 8%. This year, right now, we are seeing 6% increase in IT budget from our survey. And we also do a survey to look at their attitude towards offshore or where the offshore should go. And we are seeing increased proportion of revenues coming to offshore. Now, I don’t have a breakup of the percentage of customers with whom we have budget visibility because we only look at the top few customers when it comes to budget, $ 50 million and above, sometimes maybe $ 30 million and above and things like that. Below that the numbers are so high, that we don’t go after them to give us a share of the budget. And from that number, I don’t have the percentage who have given us budgets. In fact all most all customers share at some point budgets. But, I don’t have the breakup, right now.

Abhi Gami

Okay. I just wanted to get sense of whether the data you have received back so far from those large clients, is good enough for you to be able to get visibility into your next 12 months or do you still require the remaining large customers to come back and give you that information before you can get comfortable internally with the forward trend?

S. Gopalakrishnan

Fortunately, for me the full fiscal year guidance we will only be giving it in April. So, we can get this data and then be better prepared in April to give you full year guidance. So we can wait for that data at this point.

Let me thank you all. We have run out of time. I know that many of your questions have not been answered or some of you did not get a chance to ask a question. If you can contact our Investor Relationship Manager, Sandeep Mahindroo or Shekar Narayanan or send us an e-mail, we will definitely respond to you or if needed, we can set up a call to discuss these with you. We thank you for taking time to participate in this call and looking forward to talking to you or meeting you during the quarter or at the beginning of next fiscal. Thank you again.

Operator

Ladies and gentlemen, thank you for your participation. This concludes today’s conference. You may now disconnect your lines. Thank you.

EX-99.8

EXHIBIT 99.8
CNBC India Question and Answer session

INFOSYS TECHNOLOGIES LIMITED
CNBC BOARDROOM
Q3 FY 08 RESULTS
JAN 11, 2008

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 & Capital Markets

Subhash Dhar
Infosys Technologies – Head – Communication, Media and Entertainment

Udayan Mukherjee

…… see it in the red again. The mid-cap index is down 1.2%. Infosys has slipped into the red and look at the pain in many of those small caps and mid caps. It is some serious unwinding there. RNRL tops the volume chart with a 5% slide. Hindustan Motors is down 5%. Balrampur Chini is down 6.25%. Bajaj Hindustan 8%. Some of the smaller banks are selling off. UCO Bank 4%, that has also come off. Essar Oil 2.25%. Nagarjuna Fertilizer 5.5%. Not too much is up. GTNL, which has come out of F&O curve today, is in the green, as you would expect, and Aries Agro today’s listing is not doing too badly, but that is small set. Most mid caps and small caps are grinding down and the small cap index is in trouble as we speak.

Sangeeta Puroshottam of Religare has been talking to us. Apoorva Shah also joins in from Prabhudas Lilladher with his thoughts on Infosys.

Apoorva, not a great response from the market. What have you made of the results for Infosys?

Apoorva Shah

Actually the results in terms of revenues are below expectation, at least our expectations, but I am very impressed with them on the margin front, the margin performance is very very surprising, they have increased the margins almost 130 basis points quarter-on-quarter, this is despite a $26 million charge which they have taken because of some overtime settlement that they have to do with the US. So, in the face of all of the trouble that they are facing because of the currency, I think the performance like this on the margin front is really impressive. They have gained everything they had lost in margins in Q1. They had lost about 300 basis points in Q1, almost all of that in fact more has been recovered in Q2 and Q3. So, no issues on the margins front. But on the whole I think in revenues it is still disappointing, just 4% quarter-on-quarter.

Mitali

Apoorva morning. What are your pen still in now as a price target to work with and an EPS that you would put out for FY09?

Apoorva Shah

It is comfortably heading for 95 to 100 rupees EPS. You know at least at this point, this is what we estimate. But of course the worry is on the currency front as well as on a potentially slowing US economy and its impact on IT budgets, you know that risk remains on the company and the sector as a whole. So, on the whole I think it can still deliver a 15-20% return this year, which is pretty decent considering that it has not done so well in the past. 2009 should not be as bad a year as 2007 was for the company.

Mitali

Right for the market, everyday you start off with a little bit more weakness and a little bit earlier in the trading session the mid cap index is now down close to 2%, the breath has collapsed and keep an eye on the small cap index that has been showing up the most shine even now, that one is down about 2%.

Sangeeta, for many people, as we stepped into January the expectation was that with the money flows it was going to be a large cap and mid cap space performing. How do you see things running up now as we go through earnings and get into the big budget phase as well?

Sangeeta Puroshottam

I think that if you look at the foreign flows they have clearly been what a lot of people expected, in fact even now if you talk to people on the street many people do expect funds to flow in, so really the issue is one of timing and when that would be. So, what has really happened is that the move in the market has been largely on the back of domestic liquidity and which is partly why we have seen the small and the mid cap space move up also, so I think there has been a fair amount of retail money which has come into the market, and when that goes through a bout of profit taking you are bound to see an element of correction. So, I think we could see this correction like I said earlier, continue for sometime and then valuations become attractive again and then you have the results season where you see fundamental news flow coming and then the up move really starts. I think when we do see the foreign money flow in my sense that is really the time where we see a big move in the large cap, becau se as we have seen in the past that tends to move first into the large caps and then the mid cap follows.

Udayan Mukherjee

Thanks Sangeeta, we will let you go there. Thanks very much for joining in today. Meanwhile mid caps are in trouble again, 1.6% down the mid cap index. The NIFTY is marginally into red but the Sensex is holding out and the market breath is not good. Infosys is flattish. It started the day about 1 and 1.25% up, now seems to have flattened out after the initial start. It will come up on your screen now. Reaction is nowhere as bad as what it was last time around. Last time the stock actually sold off a bit, now it is up seven rupees as we speak. The top brass is here to talk to us – Kris, Shibu and Bala. They have long designations, you know them by now, so let me just introduce them by the name that we are going to call them. Gentlemen, thanks for joining in, and a Happy New Year to all of you.

First the volumes Kris, they seem a little lower than our expectations, any reason why the volume growth is a moderate 4-5% for this quarter sequentially?

S. Gopalakrishnan

See typically Q3-Q4 are kind of slow quarters for us and we had factored that in our guidance and it is in line with what we expected but if you look at from a customer perspective, we have had several multiyear multi-million dollar orders close in this quarter, almost nine actually and we have done $ 3 billion in the first 9 months of this year. so it is pretty good till now.

Udayan Mukherjee

Bala, good job on margins, 32.6%, unexpectedly high, what worked for you on the operating margin front this quarter?

V. Balakrishnan

Basically, the scale benefit we got because the revenues grew, but the SG&A cost was under control. That was a basic thing. Three things happened this quarter. One, we did a one time settlement in state of California for the over time wages for our employees, that was around $26 million which impacted on the margins but we had some group insurance reversal of something around $18 million, that almost offsets that. Currency again went against us, it appreciated by 1.9%, but that was more than offset by the realization increase we saw in the business of 0.8%. So the scale benefit of 1.4% flowed into the margins and margins have been maintained inspite of the currency against us. If you look at the whole year of last year compared to the guidance we have given for the whole year this year, we have lost around Rs. 2,100 crores in revenues because of currency appreciation and we are still able to maintain the margins. That shows how robust our financial model is, how robust our business model is.

Mitali

Shibu, I just want to talk a little bit about what sense you are getting by way of an IT spend stepping into this year because some kind of reports and noises have already been coming out. Do you expect to see it plateauing out a little bit by way of spends?

S. D. Shibulal

As of now we are not seeing any change in the IT spend environment. Our clients continue to be bullish on offshore spend within their IT budgets. We have not seen any project cancellations. As Kris said we have seen overall growth. The top 5 clients have grown by 19% this quarter, the top 25 by 9.6%. We added 47 clients this quarter. Out of these 47 clients, 4 of them are in Fortune 500. Our number of clients in the Fortune 500 is about 110 at this point and we have had multiple multi-million dollar deals closing this quarter as Kris said, 9 comes to my mind.

Mitali

Kris, even so, the volume growth has been a bit disappointing for the market at any rate, what is it that you foresee in the next few quarters, do you see the spend remaining static at where it was last year, do you actually see it depreciating along with the pricing?

S. Gopalakrishnan

If you look at IT budgets per se, some of the analysts are saying that it will be around 7%, last year full year was about 8%. So it is almost the same and within that we expect offshore to continue to be robust, offshore continues to be growing. Typically the budgets gets frozen by mid Jan, we expect slight delay this quarter, may be towards the end of the month we will get visibility into the budgets and that will give us a better picture but all the signs till now in terms of new customer additions, in terms of project wins, in terms of what they tell us from offshore perspective, it is all positive and in BFSI we have seen growth this quarter. In BFSI we have had rate increases, in BFSI we have had client additions because that is the sector which is of concern and we have seen client additions also. BFSI grew actually faster than company this quarter.

Udayan Mukherjee

Shibu, how sanguine is the picture that you get in January every year? Is it a good thing to bank on for the rest of the year, what you start off the year with in terms of IT budget indications or can it change around during the course of the year?

S. D. Shibulal

Actually in many of these large clients, we are very much part of their budgeting cycle. We are part of their budgets. So, at the eve of the budgets when we have the conversations with them, we get a very good picture on what they are planning for the next year, what they are planning to spend in their offshore, what they are planning to spend with us. As you can see, 96% of our revenue is coming from repeat business, which means that we are getting a large portion of our revenue from existing clients. So, in a normal environment, what we see at the end of budget cycles when we have these conversations with our large clients, is fairly accurate for the rest of the year.

Udayan Mukherjee

That has been the historical procedure?

S. D. Shibulal

That has been the historical trend.

Udayan Mukherjee

Bala, are you confident as you look forward, I mean without the rupee, which none of us can predict, in your internal metrics you are confident of holding that 30-32% kind of operating margin?

V. Balakrishnan

Let me say this, our aspiration is to get the best margins. So we will try to do whatever we can to make sure the margins are not impacted. We have done that in the past and we will continue to do now. Even inspite of the rupee appreciating by 14-15% in one year, we are maintaining our margins this year. So I think we have a great model, both business and financial and we are able to maintain the margins and we will continue to do this.

Mitali

What are you penciling in Bala, by way of a pricing appreciation over the next few quarters because some analysts have indicated that pricing might actually see some pressure because of what is happening with the US.

V. Balakrishnan

Pricing is a function of lot of things. One is a function of business mix, one is a function of customer mix, one is a function of what kind of services we do and we are seeing some pricing increases from existing customers even this quarter. New customers are still coming at higher price points. For us pricing environment is stable today with an upward bias. In the last 6-7 quarters, pricing has gone up. So, we are not seeing any concerns on the ground right now on the pricing front.

S. Gopalakrishnan

When we look at guidance we actually assume flat pricing because we want to see that as an upside. So in the guidance, it is assumed to be flat, but we have seen increases. This quarter revenue per employee went up by 0.8%.

Mitali

But do you think it can be as strong as 2007 Bala, you had almost 4-6% appreciation then, can that be achieved?

V. Balakrishnan

It is a little forward-looking information.

Mitali

Of course it is.

V. Balakrishnan

See on the ground we are not seeing any concern on the pricing front as of today, tomorrow things could change, I don’t know but on the ground we are not seeing anything and I think it is a function of lot of things. As I told you, if we are able to move up the value chain, if we are able to do more of consulting, package implementation, that itself will improve the revenue productivity.

Udayan Mukherjee

Shibu, what is your sense, I mean talking to your clients are you confident that you can strike out 8-10% kind of sequential volume growth for the foreseeable future?

S. D. Shibulal

As Bala said, right now what we are seeing is that we are continuing to see stable pricing with an upward bias. We are getting 3-4% above average for new clients. We are getting 2-3% above average for client renegotiations. I have said in the past that there is discounting which will happen as the clients become larger and larger, but the net impact is being seen on the revenue productivity. Our revenue productivity has gone up on an average 1% over the last many quarters, this quarter 0.8%. So, in my mind it continues to be stable with an upward bias as of right now.

Udayan Mukherjee

Kris, talking to your BFSI clients, large top 5 BFSI clients, are you getting any sense that in 2008 they might want to tighten their belts a little bit? I know it has grown in this quarter but if you look forward in 2008 are you getting any hint from them that they might be in a spot of bother?

S. Gopalakrishnan

They may look at their IT budgets per se but at least at this point indications are that they would want to increase offshore and we have to then wait and see at this point.

Udayan Mukherjee

If there is tightening, do you think there will be less work or there will be constraints on pricing, which do you think which way will it play out?

S. Gopalakrishnan

I don’t think pricing will be affected immediately because they also realize that the costs are going up, so I don’t think the impact will be immediately on pricing. If at all, it probably be in volumes, but having said that what we are realizing and what is on the ground is, they spend much more locally than with offshore players. So they stand to benefit actually reducing their onshore spending and increasing their offshore spending. They stand to benefit from that and I see that is what is happening. It is what normally, I would expect and normally what they want to do also, now we have to wait and see.

Mitali

Shibu, are you sensing any spill over though to other sectors as well because people have been talking a lot about BFSI while recently there are concerning voices coming out from other sectors likes telecom as well. Do you expect there to be any kind of spending changes in other verticals?

S. D. Shibulal

Actually we are not seeing, even telecom this quarter has grown above company average. In between there were some concern about retail. I don’t see it now, there was a little bit of concern about retail but the numbers seems to have changed and I am not seeing it at this point.

Mitali

Bala, you must be working with some assumption for the rupee, I am not asking you to give us a target, but what are expecting to see this year?

V. Balakrishnan

I think rupee is going to remain volatile like any other global currency. It is not going to be a one way move. That is why we have always said we will cover our next two quarters’ exposure at any point of time but long term rupee could appreciate if the inflows continue to be strong. We saw that in the past and if it continues in the future, it could put pressure on rupee to appreciate and as I said earlier, if there is a marginal movement, like 3-5%, we should be able to absorb that by doing something different, trying to get all the levers out and try to manage it but if is too sharp like what happened in the first quarter of this year, then it will impact us. So, we have to keep a watch, but I don’t think it is going to be one way, it is going to move both ways in the near future.

Udayan Mukherjee

Kris, as you look forward into 2008, since the market has worries about the US environment, for right or wrong, we will find out. As the CEO what is the bigger risk for you, is it margin risk for Infosys or is it volume growth risk for Infosys or revenue growth risk for Infosys?

S. Gopalakrishnan

We have shown that we are able to sustain margins, improve margins in different environments, different exchange rates and things like that. I have always believed that margins are impacted by how efficiently you run the business, how you control costs which is all in your controlling most cases. Market decides on growth and volumes etc. So, if I want to pick one which could be affected, it is really growth or volume.

Udayan Mukherjee

Bala, you have done a spectacular job of holding margins there, all analysts will concede that this year. But are you slowly exhausting the levers that you can use to protect margins as you go into the new year because you have done quite a bit of that I imagine over the last four quarters?

V. Balakrishnan

No I don’t think so, because we have several levers on the cost side. Shibu talked about nine levers. We have a variable cost structure, 30% of the employees salaries in India is variable, we have the utilization, we have the scale benefits, I don’t think we have exhausted all that. We will use some part of it at some point of time, we will not use everything at some part of time. And again growth is everything. If we are able to grow 30-35%, that will take care of all this risks we are talking about currency and other stuff and we will still be able to maintain margins

Udayan Mukherjee

30-35 in dollar terms?

V. Balakrishnan

Yeah, revenue growth.

S. D. Shibulal

For example actually if you look at this quarter utilization is only 77.4%. So all the levers are never optimized at the same time. We have client mix, we have services which we can improve, we can do more on consulting and solutions which will give us better margins, we have clients who give us better margins, we have onsite offshore ratio which is actually improving, it is at 31% plus at this point, utilization is at 77.4%, we have scale benefits and productivity improvements, which we are very much focused on, we have the subsidiaries coming off the investment mode and that will give us some benefits. SG&A expense remains stable. Bala was telling me SG&A expense remains stable, so anything on scale benefit really go to the bottom line. So, we have multiple levers which allow us to manage margin over a period of time.

Mitali

Kris, you have upped your full year guidance a little bit for FY08, when we speak again in April do you think at this point you can see a clean stretch of what is going to unfold over the next 6-12 months because we still don’t know what is happening with the US economy, we are talking about fed rate cuts.

S. Gopalakrishnan

Of course we have 3 year models, 5 year scenario plans and things like that. Unfortunately or fortunately, depending on which side of the table you are, we will give the guidance for next year in April and at that point, we will actually be able to give you a better picture of how it looks like next year.

Mitali

Shibu, one more on project sizes because some reports are indicating that perhaps some of your clients are breaking up the project sizes to make them smaller, go to a best of breed provider, are you seeing that as well that it is becoming a smaller piecemeal kind of approach.

S. D. Shibulal

If you look at our view on mega deals, we clearly believe that the age of the mega deals are over and those deals are now being broken up into smaller deals. So, historically you have seen billion dollar deals or more than billion dollar deals. This is our point of view which we took to the markets saying that this doesn’t make sense for the client, the client loses control over the entire deal and it should be broken up and taken to the best of breed partners. We are seeing that in the market and our view is now being accepted and people are actually breaking down those deals into $ 100 to $ 250 million and taking it to market. So, in that sense what you are saying is right. We today run about 5,000-6,000 projects worth approximately $4 billion of revenue for the year. So from our deal size perspective, I can only believe that our average deal size as well as our revenue per client has only gone up over a period of time but the industry as I said is breaking down the mega deal to manag eable large deals.

Udayan Mukherjee

Kris, there is a big disconnect, I mean, from external observers like us I mean when we talk to people in the market, they have a set of apprehensions, when we talk to the management you sound far more confident, how do you explain this disconnect because you are talking to the same set of people I imagine?

S. Gopalakrishnan

Definitely there are concerns about the US economy but on the ground when you talk to customers, even when you talk to each individual customer, it is still not panic or still not cutting projects left right etc. They are looking at how can they manage these things properly, they are looking at the future and when they look at the future, may be one of the reasons would be where do they see growth, they see growth in emerging markets and things that, they have to continue to invest. There is a significant investment which is happening around data center consolidation, virtualization, there are concerns about climate change which again requires investment in technology. So there are various drivers which are making sure that the IT budgets would continue or money will be spend on technology and I think that is what is happening. Then on top of this, offshore is seen as a benefit, this is a proven model, companies are comfortable with this and then you have all the players here and it is just Infosys, even multinational companies like here and offshore is seeing an increase. That is what I think is happening.

Udayan Mukherjee

I think most of the market also fear that when you look forward into the next 2 or 3 years, you might be indicating that the growth trajectory has dipped somewhat. Five years back when you moved from that 100% to 30% guidance, the re-rating of the sector, de-rating of the setor happened. Do you think in the next 2, 3, 4 years, you could have a situation where you move from that 30-35% growth to a lower 15-20% kind of growth trajectory. Is that possible in your eyes?

S. Gopalakrishnan

Anything is possible but I think it will be company specific. What happened in 2001 was a correction from the dot com boom, I am not seeing anything of that nature at this point. I am not seeing at this point. So it will be company specific is what I think.

Mitali

Bala, as the CFO for the next few quarters what do you think will be the key challenge for you?

V. Balakrishnan

The key challenges are similar. We have the macro environment against us but we are not seeing at the micro level with the clients. The challenge is going to be how we grow faster and still able to maintain the margins, that is going to be the biggest challenge because our focus always had been - a great revenue growth with great margins. So balancing both is going to be the challenge. I am not saying it is impossible. We can do it. We are seeing lot of opportunities. To answer Udayan’s question, see India this year could export around $41 billion, it is just 5% of the global market. So lot of opportunity is there for us to grow. So we have to go and pick the right out of the market and grow and there are lot of opportunities. Like Kris said we had signed 8 to 9 large deals this quarter. There are several deals out in the market similar to that and this year we increased the guidance in number of employee addition from 30,000 to 31,000, our utilization is low and to that extent we have lot flexibility to grow next year and next year in the campus we already gave around 18,000 offers. So all this clearly says that we are seeing good momentum in the business. Of course there is a macro challenge which we have to face. The budgets are getting postponed. We will get a clear picture in February but if you look at the current momentum currently what you are seeing in the market, there is a great momentum in the market place.

Mitali

Shibu, along with that can you just talk a little bit about the projects pipeline you have going in, have some projects been postponed to Feb-March?

S. D. Shibulal

As of right now, we are not seeing any project postponement. I have not seen any change in the pipeline as of this point. As Bala said, usually the budgets do get closed by the end of December and our conversation with the client happens in the beginning of January. This year what we are finding is that the budgets are getting delayed and we are expecting it to get closed by the end of January or beginning of February. So our conversation with the clients will only happen by February and we will get a much clear picture at that point.

Udayan Mukherjee

A lot of your sector analysts have remarked that you will probably make a much bigger strategic shift now that the environment has become slightly less conducive. Of course you are doing it but do you see a greater focus on something strategic in terms of either innovative pricing, different verticals to counter the macro forces that you are facing?

S. D. Shibulal

Actually, if you look at our strategies, we have 4 or 5 strategies in place which are continuing. One is to become a trusted transformational partner with our clients. The idea is to win large deals, transformational in nature and large system integration deals. We are investing into those. We are trying to win more and more larger deals, outsourcing kind of deals. As Kris said in this quarter, we have done 9 of them which is a good number to have. We will focus on what we call non-linear growth which is based on new service lines which we are bringing to the market, two of them are already announced to the market, the first one is a service on SAAS based platform for social computing. We have a good pipeline; we have one win in that segment. We have announced a new service called learning service to the market; we have a good pipeline, no wins yet. So we are expanding our service footprint. On the geographical perspective, Japan and Australia are looking good for us. Australia we believe w ill be good for us next year. Europe is growing faster than the rest of the world. It was at 28.6% this quarter. Clients we are able to add, 47 clients this quarter. So if you look at from a perspective of service, from a geo perspective, from a client perspective, we are expanding and we are also increasing the addressable market size by adding new service lines.

Mitali

Bala, where is most of the employee addition going to be taking place, is this entry level addition that you are doing or will there be higher levels as well in which you will be employing?

V. Balakrishnan

Both, even if you look at the guidance what we have given for next quarter, 3800, most of them are laterals.

S. D. Shibulal

This quarter the number of laterals we added was 2,500. Generally, we add 70:30, 70% entry level and 30% laterals.

Udayan Mukherjee

Let us take a break at this point. Much more to talk to with the Infosys management. Market is okay. At least the large cap end of the market is okay. NIFTY is flat. Sensex is up 125 points. Mid cap still under pressure. Many stocks in the mid cap liquid, mid cap space is down and down quite sharply. Infosys is flattish. Is up Rs. 17 as we speak, 1% up at Rs. 1,620. We will take a break and come back with more from the Infy top management.

Welcome back. Sensex up 100 points. NIFTY is absolutely flat and as we have been telling you repeatedly, mid caps and small caps are in a spot of bother. Some stocks are up though in that space. RPL had got back into the green at Rs. 221, had slipped quite alarmingly in early part but has bounced back. Aries Agro, this morning’s listing is up Rs. 54 at Rs. 200, that is looking pretty smart. We have got Gujarat NRE Coke which had a good day yesterday, is doing well. Reliance Industries among the large cap stand out, that is up 1.2% as indeed is Infosys this morning. On the way down it is a long list, Hindustan Motors, today’s listing Precision Pipes, Balrampur Chini, Nagarjuna Fertilizers, Bajaj Hindustan, and Burnpur Cement has come down in rather quick time from Rs. 55 to Rs. 34 after a glorious listing, last few days have been slightly more inglorious, but the market is quite flat.

More members from the Infosys management have joined in. Mohandas Pai is with us now as is Ashok Vemuri who will talk about the US market and BFSI, the important segment and Subhash Dhar who talks about telecom. Gentlemen, good morning and Happy New Year to all of you. Mohan, this California settlement is a one-off or do you expect more such things to crop up in the future?

Mohandas Pai

No, it is a one off. It just so happened that California has very complex labor laws and we needed to go through a classification to classify people as exempt and nonexempt. Certain categories of people were deemed to be exempt. So when we had a overall review, we discovered that certain categories of people under US law and the California law particularly were to be treated as non-exempt and they are entitle to something more. So when we discovered this we went back to the California Department of Labor and told them about it and worked out a settlement so that we will always be compliant. So, we have done something which is very voluntary, out of our own volition, just to make sure and I think in an overall review, when the law changes sometime these things happen.

Udayan Mukherjee

Utilization ratios as they have been pretty low this quarter, do you see them moving up easing margins for Bala in subsequent quarters?

Mohandas Pai

I think utilization is low this quarter because we had a large number of trainees who joined us in the second quarter, come off training and get into delivery. If you look at the total person months billed they have gone up. So we will always have this at this point of time because of the trainee movement and we also want to make sure that we are ready for growth at all points of time. We want to have a very tight ship all times, it normally happens in second quarter just to ensure that we have the flexibility.

Mitali

There has been some kind of amended bonus provision as well this time Mohan, how much does it impact Infosys and your SG&A cost?

Mohandas Pai

It doesn’t impact Infosys the parent company at all, the primary reason is that the 20% bonus has been paid on the base for everybody throughout the history, we did not have a cap. It does impact the BPO slightly because they did have this bonus provision with them but they had to pay this for people who have left the organization and I think it is about $500,000. So it is a very immaterial impact.

Mitali

Ashok, all the concerns are emanating from your market and what is happening there. Give us a sense of what you see happening over the next few quarters and also whether it is all clear right now?

Ashok Vemuri

There have been concerns for a while now in the BFSI segment especially in the US and European market but what I think if you look at the numbers that we have posted at this quarter at 7% growth on the overall BFSI segment, I think some of those concerns have been allayed to an extent for this particular quarter. Obviously going forward there is a lot of commentary and macro economic data that is flowing in still. We are trying to analyze that but in our conversation with our clients from the commentary that we are hearing from them, it is clearly they continue to spend with us, they are continuing to show interest in our services, our coverage continues to expand, these challenges that they facing up throwing up newer opportunities for us and so we are moving beyond just a traditional footprint to also being able to provide newer services to them. We have seen increase in price points to certain extent. We are seeing increase in the number of new clients added. We have seen an increase in ov erall volume. So far as we are seeing it seems okay, but obviously this is a sector that we are watching very very carefully and in the certain sub segment and we are watching obviously much more carefully because those will be the bell weathers in terms of telling us where actually things begin to unravel if they do.

Udayan Mukherjee

At this point sitting in January do you have a proper sense of what BFSI budgets would be for the rest of the year or is that process not completed?

Ashok Vemuri

Typically Udayan they would have involve us in the budgeting cycle by mid October to mid November timeframe, we participate in the budgeting cycles with them because we are such a large portion of their spend. This time, it has taken a little longer. Typically by January middle you would have a sense as to where the money were going, in which direction, which geographies, which technology, and which project to a great extent but this time I think they are going to come back by the end of January to early February and probably that is when we will have a lot more comprehensive picture in terms of where the spends are going to be. Indicators, again commentary, when we speak to our clients, what the industry analysts are saying is about 6% odd growth in IT budgets. For now we have to wait and see which way that has been and in which direction that is going to go.

Udayan Mukherjee

Subhash, some warning bells a couple of days back from companies like AT&T etc., do you see telecom going through a rough patch in 2008 as well in terms of spending?

Subhash Dhar

Well actually there are couple of reports which came out and they do not actually corroborate. So that is interesting how AT&T mentioned that the consumer spend might be affected because of some nonpayment of bills, but they also said in that press release and this is a fact that this is a small part of their revenues and very often this is a declining part of the revenues, the fixed line consumer part. The bigger part and the growing part of the revenues is the business customers and the business customers are seeing use of telecom as a positive in a cost cutting kind of a culture and they mentioned that it will be more stable and actually growing. Today you saw the press release from Verizon actually negating that, even the consumer spend would change for them. So, I do not see, and based on our conversation with our customers on the ground, we do not see a major change in their outlook of their own business.

Mitali

Subhash, Shibu was talking about 9 large deal wins they had this quarter. Was some of that from telecom and given what you are indicating now what kind of deal pipeline outlook do you see over the next few quarters?

Subhash Dhar

The deal pipeline is absolutely solid. In fact, there are several deals I would say even totalling up to somewhere close to a billion dollars that we are discussing over the next several quarters. On the deals that we closed, I do not think we are disclosing the specifics of the deals on which customers and which segments these deals are, but the deal pipeline is very solid.

Udayan Mukherjee

Bala, just to get back to you on the rupee, a mid cap technology company Hexaware actually had a big loss because of some exotic products they were doing on forex and there are unconfirmed reports that large IT companies may also have been dabbling in these kind of products. At Infosys should one have any such concerns?

V. Balakrishnan

No we are not a currency trader, we are supposed to hedge our risk, that is what they do. Because of the environment, some of the smaller companies try to become currency traders and they lost money. Before you take the risk, you should understand the risk. We do some options but we do not take any complex options which are leveraged. We try to hedge our receivables, try to maximize the yield on rupee. So we do not do any exotic stuff like the market did.

Udayan Mukherjee

Do you think banks have been offering these kind of products, have you been offered to indulge or play in this kind of exotic product?

V. Balakrishnan

It is the job of the bank. Bank will try to sell all products. We have to understand the risk and use some of the products and your ability to understand the risk is very important. That is the job of the bank. They will come and sell all the products which they have in the portfolio. We have to pick and choose what is good for you and do it.

Mitali

Bala has been cautious. Bala, just one word on the space that people are most concerned about in the IT industry, the BPO, what has been your own experience with Infosys BPO, how the things are shaping up at the Phillips BPO side right now?

V. Balakrishnan

Phillips we just completed the acquisition this quarter, the integration is happening. There is some impact on the margins because of the Phillips acquisition. Of course they have the higher offshore component. So any moment the rupee will impact the BPO industry more but they have been able to hold onto the margins despite that because we have focussed on value added services even in the BPO space, we are not in a call business. To that extent, we are okay. Only we are a pure BPO player and do not have the integrated services and are not able to move up the value chain, the impact due to all this could be much much higher.

Mitali

Ashok, what is your own sense of how things translate usually when there is so much concern on the onshore side, do spend usually translate into leaning more towards offshore or ramp up in the deals, how does it work?

Ashok Vemuri

The concerns are essentially in the fact that you have to be in front of the client much more often to extract the kind of deals that you want to actually do with them. Clearly when there are so many concerns, pricing becomes an element that needs to be looked at, volume needs to be looked at, you have to be much more flexible and the velocity of your response also has to be that much higher. So, overall I mean I am keeping the airlines busy, I am in front of the clients all the time and all the investments that we have made in the past are beginning to bear fruit and we continue to make those investments so that we can leverage the opportunities that arise of a consequence of all that is happening in the market place today and given our breadth of coverage and the depth of services that we provide, we are definitely a partner of choice for our clients for doing not only the traditional stuff which is may be on the cost side of the balance sheet but also increasingly on the revenue side of it . When you look at the banks, they are having capital structure issues, they are having investments, they have shareholders, they have to be in business these are large sustainable organizations and going concerns. So they will be investing to look at new products and new markets and if we are partnering along with them as we have in the past, we think we are in good shape.

Udayan Mukherjee

Mohan, from a HR perspective are you exhorting your top managers now to focus more on productivity, are you even thinking of linking their increments or bonuses to more productivity linked performance?

Mohandas Pai

We have restructured the work that the board members do. For example, Srinath now handles delivery productivity excellence. It means that we are very focused on productivity because we do believe that productivity is the only differentiator as organizations grow. So we have a board member looking at productivity measures and we do believe that going forward, we have to take many more measures. In the last 3 years we have seen productivity increase of 15% and that has been quite significant but a greater part of this has gone to the client. The client is benefiting because the challenge we see is that clients want higher quality, better services at the same price points, the market is getting competitive and we can counter that only by increasing productivity. We also have a variable compensation plan for senior managers which is focused on two things; one is the top line and other is the bottom line. So if the bottom line does not grow in tandem with the top line and does not expand faster, t he variable compensation diminishes. So focusing on the top line and the bottom line, we created an incentive for senior managers to increase productivity and also make sure that the margins keep increasing or remain in the same place.

Udayan Mukherjee

Subhash, talk a little bit more about that, are you trying to wear away consciously from a number of heads into a billing rate kind of format to more in terms of, we wouldn’t add so many number of heads but try and extract more from productivity?

Subhash Dhar

I think it is not the question of choosing one over the other. We clearly cannot stop the train on volume. We have to catch up that train with the productivity train. I think that we have to grow faster on our nonlinear business. So absolutely, areas like solutions, areas of pricing that are outcome based, we are restructuring some of our existing projects in a more outcome-based pricing model and that has paid off for us. We are moving to more fixed price deliveries from time and materials, we are doing that. So I think it is a question of really straddling both these trains and not leaving one at the expense of the other.

Mitali

Mohan, you have been a voracious speaker on the currency, from what you see and heard as we step into this year do you think it is more likely we end up with a stronger rupee by the time we are done with 2008?

Mohandas Pai

I think Bala has answered that question and I would thoroughly support that because the long-term trend for the rupee is that rupee may strengthen. We have a surplus in the invisibles account of a large quantum and the success of software itself, success of remittance itself, India’s growth itself will pull in more capital. Reserve Bank possibly doesn’t have a balance sheet large enough like the Chinese Central Bank to go on having dollars in its balance sheet and you would have seen the Reserves Bank’s balance sheet, that they took a hit of Rs. 60,000 crores because the rupee appreciated. So, I think if you look at that the chances are that the rupee would appreciate in future unless the economy grows faster, unless import surge at a much faster pace then what it is today and unless we see industry being able to absorb because the challenges for India is for the flows of money that are coming in the economy is too small. The economy is not large enough to absorb all that, s o we have a challenge but the fact that we are open, the fact there is capital convertibility to great extent, the fact that there is capital account convertibility mitigates this, so we are not going to have a sudden rush of appreciation like possibly China could have when they suddenly open up but I think it will be slow and steady but the odds are that the rupee will appreciate, but I do not think it will appreciate 12% like it did this year

Mitali

How strong do you think the quantum will be, because now people are talking about 35 being a real possibility as well?

Mohandas Pai

Well, there is a herd mentality, when you come to 39 you say 35, if you come to 35 you say 28, it goes on either way but today if you look at all the opinions given, you will find the 50% of people say the rupee could depreciate. Last quarter I do not think anybody said the rupee could depreciate but the focus is clearly shifting to stability of the rupee and you are seeing great pain in India. While people like us because we are great managers have been able to manage, I do not think the textile sector, the garment sector or the leather sector is able to manage and the pain is too deep and the pain is just coming out, the impact is being felt here because structurally this economy is not efficient. It is not a productive economy, it is not efficient, there are too many things weighing you down. So you cannot afford to do this at the country level.

Udayan Mukherjee

Ashok, how many of your top 5 or top 10 BFSI clients have seen pain from the sub prime mortgage situation? All of them, some of them, many of them, none of them?

Ashok Vemuri

That’s an easy one, all you need to do is to take the morning newspaper. All of them to a great extent, but it is a question of degree, it is a question of how quickly they have responded and what they have done with it, how open they have been, how transparent they have been, how they have recognized that and what they have done to mitigate that and a lot of them have whether it is infusion of capital from other parts of the world or whether by self correction. But I think the key thing is that all these financial institutions have proactively fairly aggressively come out in the open with what is the pain that they have and we have seen regulatory intervention as well. Obviously the debate is between growth and managing growth for the Fed and managing inflation on the other side and they have actually given the kind of signals that make our clients be little more comfortable and make ourselves also a little more comfortable. The other thing is that I mean this has not only been a US ph enomena, it has gone over to the other parts of world as well, Western Europe, and obviously if the US economy gets a cold and everybody begins to sneeze but we are beginning to see a lot more engagement with clients in other parts of the world, Asia Pacific for one, we are actually seeing deals from Africa, our products Finacle has found increasing traction in Europe and in fact it is now recognized as the leader in this particular space and our solutions and Finacle which is our product, we are able to combine them in a modular fashion and provide services to our client. So yes there is a lot of pain, there is lot of concern, lot of discussion that happens but on the ground when we engage with our clients and the commentary that we get from them does not leave us with any sense of any panic or any worry that we have. So we are as of today quite comfortable.

Udayan Mukherjee

The delays in communicating the IT budgets is largely a function of them having other priorities to deal with or do you think that is in any way indicative of some slow down which they will communicate later to you?

Ashok Vemuri

No I do not think it is an indication of a slow down. I think their management has other priorities obviously and also I think there is a lot more due diligence that is being done, which is again something that is obvious and I think they are looking at their service providers in order to try and streamline them and this is a fairly sophisticated industry, financial services and their use of service provider such as us and they are picking the winners in order to partner with them. So discussions are taking a little longer and I think internal due diligence is obviously also taking a little longer but I think a delay of about 2-3 weeks given what is happening in the macro environment, I think it is nothing to worry about.

Mitali

Bala, what about the other pieces of the puzzle, how are things shaping up in your China operations as well?

V. Balakrishnan

China and Consulting are still in the investment phase. China is still making losses. Consulting is still making marginal losses. I think all the subsidiaries are doing well. Consulting, we had integrated very well with overall Infosys. We are seeing lot of deals coming through Consulting. The whole idea of moving up the value chain and use Consulting as the front end. I think all the subsidiaries are doing well. Some of them are still in the investment phase.

Udayan Mukherjee

By when do you internally, you will communicate only in April, but when will you get a proper sense Bala of what lies ahead in FY09?

V. Balakrishnan

As we said, we could get some kind of an indication on next year budgets somewhere in the middle of February, that is the time we will get to know. Our guidance is in April, so if there are any material discrepancies, we will see.

Udayan Mukherjee

We will wait for that. Good luck to all of you. Thanks very much and have a great 2008. That is Infosys this quarter. They sound pretty confident as you heard; no pain, no great apparent problems which is visible yet but they will of course give us the hard numbers when we sit in April and that is about 3 months away. They will need a little bit more time, this time might require a little bit more effort as well given all the dooms-sayers which are doing the rounds in the market place.

So, we are done with Infosys, not done with the show yet. Mid caps still reeling a little bit though they are off the lows of the days. Infosys is quite stable and the large cap universe lead by Reliance is quite stable as well. We will come back with more of the market after the break.

______________________________________________________________________________

EX-99.9

EXHIBIT 99.9
Form of Advertisement placed in Indian Newspaper

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

Audited financial results for the quarter and nine months ended December 31, 2007

(in Rs. crore, except share data)

	Quarter ended December 31,		Nine months ended December 31,		Year ended March 31,
	2007	2006	2007	2006	2007
Income from software services and products	3,999	3,454	11,413	9,594	13,149
Software development expenses	2,219	1,888	6,504	5,299	7,278
Gross profit	1,780	1,566	4,909	4,295	5,871
Selling and marketing expenses	172	182	541	530	719
General and administration expenses	281	235	790	688	927
Operating profit before interest and depreciation	1,327	1,149	3,578	3,077	4,225
Interest	–	–	–	–	–
Depreciation	138	129	404	336	469
Operating profit before tax and exceptional items	1,189	1,020	3,174	2,741	3,756
Other income, net	152	60	550	255	375
Provision for investments	–	–	–	3	2
Net profit before tax and exceptional items	1,341	1,080	3,724	2,993	4,129
Provision for taxation (refer to note 3 and note 6)	155	122	436	340	352
Net profit after tax and before exceptional items	1,186	958	3,288	2,653	3,777
Income from sale of investments	–	–	–	6	6
Net profit after tax and exceptional items	1,186	958	3,288	2,659	3,783
Paid-up equity share capital (par value Rs. 5/- each, fully paid) (refer to note 9)	286	279	286	279	286
Reserves and surplus	13,788	9,363	13,788	9,363	10,876
Earnings per share (par value Rs. 5/- each)
Before Exceptional items
Basic	20.77	17.20	57.58	47.82	67.82
Diluted	20.70	16.82	57.38	46.70	66.33
After Exceptional items
Basic	20.77	17.20	57.58	47.93	67.93
Diluted	20.70	16.82	57.38	46.81	66.44
Dividend per share (par value Rs. 5/- each)
Interim dividend	–	–	6.00	5.00	5.00
Final dividend	–	–	–	–	6.50
Total dividend	–	–	6.00	5.00	11.50
Total dividend percentage (%)	–	–	120.00	100.00	230
Total Public Shareholding#
Number of shares	36,77,38,769	35,54,77,282	36,77,38,769	35,54,77,282	36,75,70,027
Percentage of shareholding	64.34	63.72	64.34	63.72	64.35

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

Other Information:

(in Rs. crore)

	Quarter ended December 31,		Nine months ended December 31		Year ended March 31
	2007	2006	2007	2006	2007
Staff costs	1,931	1,631	5,693	4,608	6,314
Items exceeding 10% of aggregate expenditure	–	–	–	–	–
Details of other income:
Interest on deposits with banks and others	165	30	476	100	182
Dividend on investments in liquid mutual funds	–	36	4	83	116
Miscellaneous income	6	13	18	28	35
Exchange differences	(19)	(19)	52	44	42
Total	152	60	550	255	375

Audited consolidated financial results of Infosys Technologies Limited and its subsidiaries for the quarter and nine months ended December 31, 2007

(in Rs. crore, except share data)

	Quarter ended December 31,		Nine months ended December 31,		Year ended March 31,
	2007	2006	2007	2006	2007
Income from software services, products and business process management	4,271	3,655	12,150	10,121	13,893
Software development and business process management expenses	2,325	1,938	6,725	5,437	7,458
Gross profit	1,946	1,717	5,425	4,684	6,435
Selling and marketing expenses	205	236	693	661	929
General and administration expenses	349	285	972	829	1,115
Operating profit before interest, depreciation and minority interest	1,392	1,196	3,760	3,194	4,391
Interest	–	–	–	–	–
Depreciation	153	141	441	369	514
Operating profit before tax, minority interest and exceptional items	1,239	1,055	3,319	2,825	3,877
Other income, net	158	59	565	253	372
Provision for investments	–	–	–	3	2
Net profit before tax, minority interest and exceptional items	1,397	1,114	3,884	3,075	4,247
Provision for taxation (refer to note 3 and note 6)	166	130	474	359	386
Net profit after tax, before minority interest and exceptional items	1,231	984	3,410	2,716	3,861
Income from sale of Investments	–	–	–	6	6
Net profit after tax, exceptional items and before minority interest	1,231	984	3,410	2,722	3,867
Minority interest	–	1	–	10	11
Net profit after tax, exceptional items and minority interest	1,231	983	3,410	2,712	3,856
Paid-up equity share capital (par value Rs. 5/- each, fully paid) (refer to note 9)	286	279	286	279	286
Reserves and surplus	14,018	9,436	14,018	9,436	10,969
Earnings per share (par value Rs. 5/- each)
Before Exceptional items
Basic	21.54	17.64	59.70	48.75	69.11
Diluted	21.47	17.24	59.49	47.61	67.59
After Exceptional items
Basic	21.54	17.64	59.70	48.88	69.22
Diluted	21.47	17.24	59.49	47.73	67.70
Dividend per share (par value Rs. 5/- each)
Interim dividend	–	–	6.00	5.00	5.00
Final dividend	–	–	–	–	6.50
Total dividend	–	–	6.00	5.00	11.50
Total dividend percentage (%)	–	–	120.00	100.00	230
Total Public Shareholding#
Number of shares	36,77,38,769	35,54,77,282	36,77,38,769	35,54,77,282	36,75,70,027
Percentage of shareholding	64.34	63.72	64.34	63.72	64.35

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

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 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.

Note:

1.	The audited financial statements have been taken on record by the Board of Directors at its meeting held on January 11, 2008. 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 Company had 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 payment pertains to the last three years and such backwages would be paid to employees in due course.
3.	The tax provision for the nine months ended December 31, 2007 and for the year ending March 31, 2007 includes a reversal of Rs. 101 crore and Rs. 125 crore respectively relating to liabilities no longer required for taxes payable in various overseas jurisdictions on the expiry of the limitation period, conclusion of the Pre-Filing Agreement (PFA) with the Internal Revenue Service (IRS) of the United States and the completion of the assessment by taxation authorities.
4.	The Finance Act, 2007 included Fringe Benefit Tax (“FBT”) on Employee Stock Options Plan (ESOPs). FBT liability crystallizes on the date of exercise of stock options. During the quarter and 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 has been paid by the Company and subsequently recovered from the employees. Consequently, there is no impact on the profit and loss account.
5.	The Company records health insurance liabilities based on the maximum individual claimable amounts by employees. During the quarter, 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.
6.	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. 62 crore is carried as “Loans and Advances” in the balance sheet as of December 31, 2007.
7.	ASB Guidance on Implementing AS 15, Employee Benefits (revised 2005) states that benefits involving employer-established provident funds, which require interest shortfalls to be recompensed, are to be considered as defined benefit plans. Pending the issuance of the guidance note from the Actuarial Society of India, the Company’s actuary has expressed inability to reliably measure provident fund liabilities. Accordingly the Company is unable to exhibit the related information.
8.	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 profit and loss account over 10 years representing the average future service period of employees.
9.	During the nine months ended December 31, 2007 and 2006 and the year ended March 31, 2007 the company issued 3,44,075; 67,38,508 and 2,00,99,902 equity shares, pursuant to the exercise of stock options by certain employees under the 1998 and 1999 stock option plans.
10.	The final dividend of Rs. 6.50 per share (130% on an equity share of par value of Rs. 5/-) for fiscal 2007 was approved by the shareholders in the Annual General Meeting held on June 22, 2007 and paid on June 23, 2007.
11.	An interim dividend of Rs. 6.00 per share (120% on an equity share of par value of Rs. 5/-) was declared at the board meeting held on October 11, 2007 and paid on October 24, 2007. The interim dividend declared in the previous year was Rs. 5.00 per share (100% on an equity share of par value of Rs. 5/-).
12.	Information on investor complaints pursuant to Clause 41 of the Listing Agreement for the quarter ended December 31, 2007.

Nature of complaints received	Opening balance	Additions	Disposal	Closing balance
Dividend related	-	233	233	-

13. Infosys was liable to pay Aeronautical Development Agency (ADA) a maximum amount of Rs. 20 crore (US$ 4.4 million) by June 12, 2012 through a revenue sharing arrangement towards acquisition of Intellectual Property Rights in AUTOLAY, a commercial software application product used in designing high performance structural systems. During the quarter ended December 31, 2006, Infosys foreclosed the arrangement by paying the net present value of the future revenue share amounting to Rs. 13.5 crore (US$ 3 million). The remainder of the liability amounting to Rs. 6.5 crore (US$ 1.4 million) has been written back and disclosed in Other income.

Matters relating to Subsidiaries:

14.	As at December 31, 2007 the Company’s holding in Infosys BPO is 98.92%. The Company has committed to a deferred share purchase with the shareholders of Infosys BPO. As per the agreement, Infosys will purchase 3,60,417 Infosys BPO shares for Rs. 22 crore by February 2008, which is to be accounted as an investment on conclusion of the agreement along with the transfer of title in the shares. Upon conclusion, Infosys’ holding in Infosys BPO would be 99.98%.
15.	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 NV (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 (Philips BPO) for a consideration of Rs. 107 crore, wherein, the acquisition of Poland and Chennai centers were consummated on October 1, 2007 and that of Thailand center on December 3, 2007. The transaction was completed during the quarter and accounted as business combination which resulted in goodwill of Rs. 83 crore.
16.	During the nine months ended December 31, 2007, the Company invested US$ 20 million (Rs. 81 crore) in its wholly owned subsidary Infosys Consulting, Inc. As of December 31, 2007, the Company has invested an aggregate of US$ 40 million (Rs. 171 crore) in the subsidiary.
17.	On June 20, 2007 the company incorporated a wholly owned subsidiary, Infosys Technologies S. DE R.L. de C.V. in Mexico (“Infosys Mexico”). During the quarter ended December 31, 2007, the company invested Mexican Peso 50 million (Rs. 18 crore) in the subsidiary. As of December 31, 2007, the Company has invested an aggregate of Mexican Peso 60 million (Rs. 22 crore) in the subsidiary.
18.	During the nine months ended December 31, 2007, the company disbursed a loan of US$ 3 million (Rs. 11 crore) to its wholly owned subsidiary, Infosys Technologies (China) Co. Limited. The loan is repayable within five years from the date of disbursement at the discretion of the subsidiary. As of December 31, 2007 the company has invested US$ 10 million (Rs. 46 crore) as equity capital and US$ 8 million (Rs. 33 crore) as loan in the subsidiary.

Board of Directors:

19.

Effective June 22, 2007, the following changes were made to the senior management of the Company: Mr. Nandan M. Nilekani assumed the role of the Co-Chairman of the Board Mr. S. Gopalakrishnan assumed the role of the Chief Executive Officer and Managing Director Mr. S. D. Shibulal assumed the role of the Chief Operating Officer

Investments:

20. During the nine months ended December 31, 2006, the company received an amount of US$ 1 million (Rs. 5 crore) being the balance held in escrow account released on fulfillment of the escrow obligations on account of sale of investments in Yantra Corporation. The income is disclosed separately as an exceptional item in the profit and loss account.

Others:

Segment reporting (Consolidated – Audited)

(in Rs. crore)

	Quarter ended December 31,		Nine months ended December 31,		Year ended March 31,
	2007	2006	2007	2006	2007
Revenue by industry segment
Financial services	1,572	1,411	4,431	3,813	5,209
Manufacturing	622	469	1,707	1,390	1,877
Telecom	901	671	2,576	1,853	2,679
Retail	514	383	1,433	988	1,394
Others	662	721	2,003	2,077	2,734
Total	4,271	3,655	12,150	10,121	13,893
Less: Inter-segment revenue	–	–	–	–	–
Net revenue from operations	4,271	3,655	12,150	10,121	13,893
Segment profit before tax, interest, depreciation, amortization and minority interest:
Financial services	528	453	1,356	1,142	1,564
Manufacturing	171	141	472	420	577
Telecom	325	216	895	633	923
Retail	165	134	431	314	442
Others	203	252	606	685	885
Total	1,392	1,196	3,760	3,194	4,391
Less: Interest	–	–	–	–	–
Other un-allocable expenditure	153	141	441	369	514
(excluding un-allocable income)
Operating profit before tax, minority interest and exceptional items	1,239	1,055	3,319	2,825	3,877

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, comprise 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 11, 2008	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, 2007, prepared as per US GAAP. A summary of the financial statements is as follows:

(in US$ million, except ADS data)

	Quarter ended December 31,		Nine months ended December 31,		Year ended March 31
	2007 Unaudited	2006 Unaudited	2007 Unaudited	2006 Unaudited	2007 Audited
Revenues	1,084	821	3,034	2,227	3,090
Cost of revenues	629	468	1,789	1,280	1,777
Gross profit	455	353	1,245	947	1,313
Net income	310	218	844	591	850
Earnings per American Depositary Share (ADS)
Basic	0.54	0.39	1.49	1.07	1.53
Diluted	0.54	0.38	1.48	1.04	1.50
Total assets	4,144	2,517	4,144	2,517	3,073
Cash and cash equivalents	1,978	589	1,978	589	1,403
Liquid mutual funds	35	498	35	498	6

The reconciliation of net income as per Indian GAAP (audited) and US GAAP is as follows:

(in US$ million)

	Quarter ended December 31,		Nine months ended December 31,		Year ended March 31,
	2007 Unaudited	2006 Unaudited	2007 Unaudited	2006 Unaudited	2007 Audited
Consolidated net profit as per Indian GAAP	312	221	852	597	858
Stock compensation expenses (SFAS 123R)	-	(2)	(2)	(4)	(5)
Amortization of intangible assets	(2)	(1)	(6)	(2)	(3)
Consolidated net income as per US GAAP	310	218	844	591	850

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 including on account of the appreciation of the rupee against the US dollar, UK Pound and Euro, 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 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 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, 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 fili ngs including our Annual Report on Form 20-F for the fiscal year ended March 31, 2007 and Quarterly Report on Form 6-K for the quarter ended June 30, 2007, September 30, 2007 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 update any forward-looking statements that may be made from time to time by or on our behalf.

EX-99.10

EXHIBIT 99.10
Unaudited Consolidated Balance Sheets

Infosys Technologies Limited and subsidiaries

Unaudited Consolidated Balance Sheets

(Dollars in millions except per share data)

	As of
	March 31, 2007	December 31,  2007
	(1)
ASSETS
Current Assets
Cash and cash equivalents	$1,403	$1,978
Investments in liquid mutual fund units	6	35
Trade accounts receivable, net of allowances	565	662
Unbilled revenue	74	136
Prepaid expenses and other current assets	48	63
Deferred tax assets	2	3
Total current assets	2,098	2,877
Property, plant and equipment, net	738	968
Goodwill	128	151
Intangible assets, net	20	28
Deferred tax assets	19	37
Advance income taxes	33	38
Other assets	37	45
Total Assets	$3,073	$4,144
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$6	$8
Income taxes payable	4	76
Client deposits	1	3
Unearned revenue	72	94
Other accrued liabilities	272	326
Total current liabilities	355	507
Non-current liabilities
Other non-current liabilities	1	-
Stockholders’ Equity
Common stock, $0.16 par value 600,000,000 equity shares authorized, Issued and outstanding –571,209,862 and 571,553,937 as of March 31, 2007 and December 31, 2007 respectively	64	64
Additional paid-in capital	692	702
Accumulated other comprehensive income	90	365
Retained earnings	1,871	2,506
Total stockholders’ equity	2,717	3,637
Total Liabilities And Stockholders’ Equity	$3,073	$4,144

(1)  March 31, 2007 balances were obtained from audited financial statements

See accompanying notes to the unaudited consolidated financial statements

Unaudited Consolidated Statements of Income 

(Dollars in millions except per share data)

	Three months ended December 31,		Nine months ended December 31,
	2006	2007	2006	2007
Revenues	$821	$1,084	$2,227	$3,034
Cost of revenues	468	629	1,280	1,789
Gross profit	353	455	947	1,245
Operating Expenses:
Selling and marketing expenses	54	52	147	174
General and administrative expenses	64	89	183	243
Amortization of intangible assets	1	2	2	6
Total operating expenses	119	143	332	423
Operating income	234	312	615	822
Gain on sale of long term investment	-	-	1	-
Other income, net	13	40	55	140
Income before income taxes and minority interest	247	352	671	962
Provision for income taxes	29	42	78	118
Income before minority interest	218	310	593	844
Minority interest	-	-	2	-
Net income	$218	$310	$591	$844
Earnings per equity share
Basic	$0.39	$0.54	$1.07	$1.49
Diluted	$0.38	$0.54	$1.04	$1.48
Weighted average equity shares used in computing earnings per equity share
Basic	554,200,798	568,512,968	552,043,540	568,421,831
Diluted	566,883,484	570,363,129	564,849,610	570,439,766

See accompanying notes to the unaudited consolidated financial statements

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, 2006	551,109,960	$31	$410		$9	$1,387	$1,837
Common stock issued	6,738,508	1	92	-	-	-	93
Cash dividends	-	-	-	-	-	(336)	(336)
Stock compensation expense	-	-	4	-	-	-	4
Income tax benefit arising on exercise of stock options	-	-	6	-	-	-	6
Stock split effected in the form of a stock dividend	-	30	-	-	-	(30)	-
Comprehensive income
Net income	-	-	-	$591	-	591	591
Other comprehensive income
Unrealized gain on mutual fund investments, net of taxes	-	-	-	1	1	-	1
Translation adjustment	-	-	-	25	25	-	25
Comprehensive income	-	-	-	$617
Balance as of  December 31, 2006	557,848,468	$62	$512		$35	$1,612	$2,221
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

See accompanying notes to the unaudited consolidated financial statements

Unaudited Consolidated Statements of Cash Flows 

(Dollars in millions)

	Nine months ended December 31,
	2006	2007
OPERATING ACTIVITIES:
Net income	$591	$844
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	83	116
Minority interest	2	-
Stock compensation expense	4	2
Deferred taxes	(4)	(21)
Income tax benefit arising on exercise of stock options	(3)	-
Gain on sale of liquid mutual fund units	(2)	-
Changes in assets and liabilities, net of acquisition
Trade accounts receivable	(135)	(35)
Unbilled revenue	(23)	(54)
Prepaid expenses and other current assets	(22)	(15)
Accounts payable	1	1
Income taxes	15	70
Client deposits	2	2
Unearned revenue	31	15
Other accrued liabilities	46	34
Net cash provided by operating activities	586	959
Investing Activities:
Payment for purchase of Philips Financial Services B.V, net of cash acquired	-	(27)
Expenditure on property, plant and equipment, net of acquisition	(191)	(265)
Investment in liquid mutual fund units	(1,017)	(489)
Redemption of liquid mutual fund units	700	462
Acquisition of minority interest in subsidiary	(132)	-
Loans to employees	3	3
Non-current deposits placed with corporations	(11)	(4)
Withdrawal of non-current deposits placed with corporations	2	-
Payment towards intellectual property right	(3)	-
Proceeds from sale of long-term investment	1	-
Net cash used in investing activities	(648)	(320)
Financing Activities:
Proceeds from issuance of common stock on exercise of employee stock options and income tax benefits	93	8
Payment of dividends	(336)	(209)
Income tax benefit arising on exercise of stock options	3	-
Net cash used in financing activities	(240)	(201)
Effect of exchange rate changes on cash	2	137
Net (decrease) / increase in cash and cash equivalents during the period	(300)	575
Cash and cash equivalents at the beginning of the period	889	1,403
Cash and cash equivalents at the end of the period	$589	$1,978
Supplementary information:
Income taxes paid	$67	$70

See accompanying notes to the unaudited consolidated financial statements

Infosys Technologies Limited and subsidiaries

Notes to the Unaudited Consolidated Financial Statements

1. Company overview and significant accounting policies

1.1. Company overview

Infosys Technologies Limited (Infosys), along with its majority owned and controlled subsidiary, Infosys BPO Limited (Infosys BPO), formerly Progeon Limited and wholly-owned subsidiaries Infosys Technologies (Australia) Pty. Limited (Infosys Australia), Infosys Technologies (China) Co. Limited (Infosys China), formerly Infosys Technologies (Shanghai) Co. Limited, Infosys Consulting Inc. (Infosys Consulting) and Infosys Technologies S. DE R.L. de C.V. in Mexico ("Infosys Mexico") is a leading global technology services firm. The company provides end-to-end business solutions that leverage technology. The company provides solutions that span the entire software life cycle encompassing technical consulting, design, development, software re-engineering, maintenance, systems integration, package evaluation and implementation, testing and infrastructure management services. In addition, the company offers software products for the banking industry and business process management servic es.

1.2. Basis of preparation of financial statements and consolidation

The consolidated financial statements include Infosys and its subsidiaries (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, 2007.

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 become aware of changes in circumstances surrounding the estim ates. Changes in estimates are reflected in the financials 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 classifie d 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-completion 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 of fair value (VSOE) has been established for ATS. VSOE 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 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 recognized on both, the time-and-material and fixed-price, fixed-timeframe basis. Revenue on time-and-material contracts is recognized as the related services are rendered. Revenue from fixed-price, fixed-timeframe 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 check 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 using a cumulative catch - -up adjustment. Furthermore, the company does not recognize any revenue up front for breakages immediately on the inception of an arrangement.

In accordance with EITF Issue 06-03, How taxes collected From Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement, which became applicable to the company on April 1, 2007, the company discloses revenues net of sales and value-added taxes in its consolidated statement of earnings, which did not undergo a change upon the company’s adoption of EITF Issue 06-03.

1.5. Cash and cash equivalents

The company considers all highly liquid investments with a remaining maturity at the date of purchase / investment 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. Decline in value judged to be other than temporary are 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 of the assets. 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 the 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 the company and Infosys BPO is the Indian Rupee. The functional currency for Infosys Australia, Infosys China and Infosys Consulting and Infosys Mexico is the respective local currency. 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 functional currency at exchange rates in effect at the balance sheet date. The gains or losses resulting from such translation 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 functional currency 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 consolidated group’s holding of the subsidiary’s securities.

If the number of common 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 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 subsidia ries outside India where it is expected that the earnings of the foreign subsidiary will be permanently 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 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.

The company adopted Financial Accounting Standards Board Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109, effective April 1, 2007. Accounting and disclosures of tax positions taken or expected to be taken by the Company are based on the recognition threshold and measurement attribute prescribed by FIN 48. The Company recognizes potential interest and penalties related to unrecognized tax benefits in income tax expense.

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 instrument 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 accrued liabilities, the carrying amounts approximate fair value due to the short maturity of those instruments.

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, 2007 and December 31, 2007 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 company’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 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 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 the Statement of Financial Accounting Standards ("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 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 are also eligible for superannuation benefit. Infosys BPO makes monthly provisions 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 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 was paid directly to the employees as an allowance and the balance amount was contributed to the trusts.

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 FASB Statement No.123 (revised 2004) (SFAS 123R), 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 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.
The company recorded stock compensation expense of $4 million for nine months ended December 31, 2006 and $2 million for the nine months ended December 31, 2007.

1.20. Dividends

Final dividends on common stock are recorded as a liability on the date of declaration by the stockholders and interim dividends are recorded as a liability on the date of declaration by the board of directors.

1.21. Equity issued by subsidiaries

Changes in the proportionate share of Infosys in the equity of subsidiaries resulting from additional equity issued by the subsidiaries are accounted for as an equity transaction in consolidation.

2. Notes to the Unaudited consolidated financial statements

2.1. Trade accounts receivable

Trade accounts receivable as of March 31, 2007 and December 31, 2007, net of allowance for doubtful accounts of $5 million and $12 million, amounted to $565 million and $662 million. The age profile of trade accounts receivable, net of allowances, is given below. 

In %

	As of March 31,  2007	As of December 31,  2007
Period (in days)
0 – 30	58.6	56.9
31 – 60	36.6	28.2
61 – 90	2.1	8.9
More than 90	2.7	6.0
	100.0	100.0

2.2. Loans to employees

The company provides loans to eligible employees in accordance with policy. No loans have been made to employees in connection with purchase of the company’s equity securities by all employees. 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 $28 million and $25 million were outstanding as of March 31, 2007 and December 31, 2007.

The required repayments of employee loans outstanding as of December 31, 2007 are as detailed below.

(Dollars in millions)

Repayment in the 12 months ending December 31,	Repayment
2008	$22
2009	2
2010	1
	$25

The estimated fair values of the loan to employee’s receivables amounted to $26 million as of March 31, 2007 and $24 million as of December 31, 2007. 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.

2.3. Business Combination

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 centres of Philips for finance, accounting and procurement business in Poland, Thailand and India for a consideration of $27 million, wherein, the acquisition of Poland and Chennai centers were consummated on October 1, 2007 and that of Thailand center on December 3, 2007.

The purchase price has been allocated on a preliminary basis, which is based on management’s estimates and independent appraisals of fair values as follows:

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

2.4. Non-operating income

In fiscal 2005, the Company sold its investment in Yantra Corporation. The carrying value of the investment in Yantra Corporation was completely written down in fiscal 1999. Consideration received from the sale resulted in a gain of $11 million during fiscal 2005. Further consideration of $1 million was received during the nine months ended December 31, 2006 resulting in a gain of $1 million for the period.

Other income, net, consists of the following:

(Dollars in millions)

	Nine months ended December 31,
	2006	2007
Interest income	$24	$124
Foreign exchange gains, net	9	13
Income from mutual fund investments	19	1
Others	3	2
	$55	$140

2.5. Income taxes

The provision for income taxes in the income statement comprises:

(Dollars in millions)

	Nine months ended December 31,
	2006	2007
Current taxes
Domestic taxes	$24	$85
Foreign taxes	58	54
	82	139
Deferred taxes
Domestic taxes	(2)	(19)
Foreign taxes	(2)	(2)
	(4)	(21)
Aggregate taxes	$78	$118

All components of the aggregate taxes of $78 million and $118 million for the nine months ended December 31, 2006 and 2007 are allocated to the continuing operations of the company.

In addition to the above, tax benefits of $6 million earned on exercise of employee stock options have been credited to stockholders’ equity during the nine months ended December 31, 2006 and deferred taxes of  $3 million arising due to amendment to the Gratuity Plan have been charged to stockholders’ equity during the nine months ended December 31, 2007.

Current foreign taxes for the nine months ended December 31, 2007 includes credit of $26 million being liability no longer required for taxes payable in various overseas jurisdictions on the expiry of the limitation period and conclusion of the Pre-Filing Agreement with the tax authorities.

The tax effects of significant temporary differences that resulted in deferred tax assets and liabilities, and a description of the financial statement items that created these differences are as follows:

(Dollars in millions)

	As of
	March 31, 2007	December 31, 2007
Deferred tax assets
Property, plant and equipment	$17	$23
Loss carryforwards in subsidiary	14	20
Minimum Alternate Tax credit entitlement	-	16
Investments	1	-
Others	6	7
	38	66
Less: Valuation allowance	(15)	(20)
	23	46
Deferred tax liabilities
Intangible asset	(2)	(3)
Others	-	(3)
Net deferred tax assets	$21	$40

In assessing the realisability 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, 2007. The valuation allowance relates to investments and losses in subsidiary. The amount of the deferred 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.

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 tax holidays on all facilities under STPs expire in stages by 2009. Under the Special Economic Zones Act, 2005 scheme, units in designated special economic zones which begin providing services on or after April 1, 2005 will be 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.

Pursuant to the changes in the Indian Income Tax Laws, Minimum Alternate Tax has been extended to income in respect of which deduction is claimed under sections 10A and 10B; consequently the company has calculated its tax liability for current domestic taxes after considering Minimum Alternate Tax (MAT). The excess tax paid under MAT provisions over and above normal tax liability can be carried forward and set off against future tax liabilities computed under normal tax provisions. The company was required to pay MAT during the nine month period ended December 31, 2007, and, accordingly, as per SFAS 109, Accounting for Income Taxes, a deferred tax asset of $16 million has been recognized on the balance sheet as of December 31, 2007, which can be carried forward for a period of 5 years.

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, 2007, Infosys’ US branch net assets amounted to approximately $334 million. As of December 31, 2007, 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.

Effective April 1, 2007, the company adopted the provisions of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”). This Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, Accounting for Income Taxes and prescribes a recognition threshold of more-likely-than-not to be sustained upon examination. As a result of the implementation of FIN 48, the company did not have to recognize any increase/decrease in the liability for unrecognized tax benefits related to tax positions taken in prior periods.

2.6. 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,
	2006	2007
Basic earnings per equity share - weighted average number of common shares outstanding, net of treasury stock	552,043,540	568,421,831
Effect of dilutive common equivalent shares – stock options outstanding	12,806,070	2,017,935
Diluted earnings per equity share – weighted average number of common shares and common equivalent shares outstanding	564,849,610	570,439,766

2.7. 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 $170 million, Euro 2 million and GBP 6 million as of March 31, 2007 and $870 million, Euro 26 million and GBP 17 million of foreign exchange forward contracts as of December 31, 2007. The foreign exchange forward contracts mature between 1 to 12 months. As of March 31, 2007, the company held range barrier options of $207 million and GBP 8 million, Euro Accelerator of Euro 24 million and Target Redemption Structure of GBP 16 million. As of December 31, 2007, the company held range barrier options of $115 million and GBP 12 million, Euro Accelerator of Euro 15 million, GBP Accelerator of GBP 11 million, GBP Forward Extra of GBP 10 m illion and USD-INR vanilla put options of $5 million.

2.8. 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 appl ied to record revenue and expenditure in individual segments, and are as set out in the summary of 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 the geographic 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.

2.8.1. Industry segments

(Dollars in millions)
Nine months ended December 31, 2006	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	$837	$305	$409	$218	$458	$2,227
Identifiable operating expenses	358	130	159	90	181	918
Allocated expenses	229	84	111	59	126	609
Segmental operating income	250	91	139	69	151	700
Unallocable expenses						85
Operating income						615
Gain on sale of long term investment						1
Other income, net						55
Income before income taxes and minority interest						671
Provision for income taxes						78
Income before minority interest						593
Minority interest						2
Net income						$591

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
Segmental operating income	340	118	224	107	151	940
Unallocable expenses						118
Operating income						822
Other income, net						140
Income before income taxes and minority interest						962
Provision for income taxes						118
Income before minority interest						844
Minority interest						-
Net income						$844

2.8.2. Geographic segments

(Dollars in millions)

Nine months ended December 31, 2006	North America	Europe	India	Rest of the World	Total
Revenues	$1,415	$586	$36	$190	$2,227
Identifiable operating expenses	611	229	10	68	918
Allocated expenses	388	160	9	52	609
Segmental operating income	416	197	17	70	700
Unallocable expenses					85
Operating income					615
Gain on sale of long term investment					1
Other income, net					55
Income before income taxes and minority interest					671
Provision for income taxes					78
Income before minority interest					593
Minority interest					2
Net income					$591

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
Segmental operating income	558	276	18	88	940
Unallocable expenses					118
Operating income					822
Other income, net					140
Income before income taxes and minority interest					962
Provision for income taxes					118
Income before minority interest					844
Minority interest					-
Net income					$844

2.8.3. Significant clients

No client individually accounted for more than 10% of the revenues in the nine months ended December 31, 2006 and 2007.

2.9. 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.

2.10. Tax contingencies

During fiscal 2007, the company received a demand from the Indian taxation authorities for payment of additional tax of $22 million, including interest of $4 million, upon completion of their tax review for fiscal 2004. 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 is pending before the Commissioner of Income tax (Appeals) Bangalore.
The company is contesting the demand and the management including its tax advisors believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements 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 position and results of operations.

2.11. Acquisition of minority interest in Infosys BPO

During fiscal 2007 Infosys increased its share-holding in Infosys BPO by:

• acquiring 8,750,000 equity shares of Infosys BPO from Citicorp International Finance Corporation (CIFC) on June 30, 2006;
• repurchasing 1,139,469 equity shares, of Infosys BPO from minority shareholders through Infosys BPO on December 29, 2006;
• acquiring 211,909 shares, of Infosys BPO in January 2007 and committing to purchase 360,417 shares of Infosys BPO, from minority shareholders, which will be acquired in February 2008;
• acquiring 1,737,092 options from the option holders of Infosys BPO in March 2007 by purchasing 1,218,732 options of Infosys BPO in cash and swapping 518,360 options of Infosys BPO for 151,933 Infosys options based on fair values.

An aggregate consideration of $148 million was paid in cash and 151,933 Infosys options were granted to the minority shareholders and options holders for consummating the above transactions. Further, an amount of $5 million was accounted as a liability in connection with the committed purchase of Infosys BPO shares entered into in January 2007. As of December 31, 2007, Infosys effectively holds 99.98% of the outstanding equity shares of Infosys BPO. Consequent to the above acquisitions a cumulative amount of $115 million was recorded as goodwill.

2.12. Amendment to the Gratuity Plan

Effective July 1, 2007, the company amended its Gratuity Plan, to suspend the voluntary defined death benefit component of the Gratuity Plan. This amendment resulted in a reduction of the company’s projected benefit obligation amounting to $9 million, which is being amortized to income on a straight-line basis over the average remaining service period of employees which is 10 years.

2.13. Provision for health insurance

The Company records health insurance liabilities based on the maximum individual claimable amounts by employees. During the quarter, 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 $18 million was reversed.  

2.14. California wage settlement

The Company had 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 $26 million. The payment pertains to the last three years and such backwages would be paid to employees in due course.

EX-99.11

EXHIBIT 99.11
Indian GAAP Standalone Statement, Notes and Report

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 2007, 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:

(i)	in the case of the Balance Sheet, of the state of affairs of the Company as at 31 December 2007;
(ii)	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
(iii)	in the case of the Cash Flow Statement, of the cash flows of the Company for the nine months ended on that date.

for BSR & Co.
Chartered Accountants

Natrajan Ramkrishna
Partner
Membership No. 32815

Bangalore
11 January 2008

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 2007 and the year to date results for the period 1 April 2007 to 31 December 2007, 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, issued by the Institute of Chartered Accountants of India 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 the regard; and
(ii)	give a true and fair view of the net profit and other financial information for the quarter ended 31 December 2007 as well as the year to date results for the period from 1 April 2007 to 31 December 2007.

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 shareholding, 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
11 January 2008

INFOSYS TECHNOLOGIES LIMITED  

in Rs. crore

Balance Sheet as at	Schedule	December 31, 2007	March 31, 2007
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	1	286	286
Reserves and surplus	2	13,788	10,876
		14,074	11,162
APPLICATION OF FUNDS
FIXED ASSETS	3
Original cost		4,559	3,889
Less: Accumulated depreciation		2,139	1,739
Net book value		2,420	2,150
Add: Capital work-in-progress		1,253	957
		3,673	3,107
INVESTMENTS	4	942	839
DEFERRED TAX ASSETS	5	97	79
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	6	2,421	2,292
Cash and bank balances	7	6,334	5,507
Loans and advances	8	2,221	1,162
		10,976	8,961
LESS: CURRENT LIABILITIES AND PROVISIONS
Current liabilities	9	1,287	1,162
Provisions	10	327	662
NET CURRENT ASSETS		9,362	7,137
		14,074	11,162
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	22

The schedules referred to above are an integral part of the balance sheet.

As per our report attached

for BSR & Co.
Chartered Accountants

Natrajan Ramkrishna	N. R. Narayana Murthy	Nandan M. Nilekani	S. Gopalakrishnan	S. D. Shibulal
Partner Membership No. 32815	Chairman and Chief Mentor	Co-Chairman	Chief Executive Officer and Managing Director	Chief Operating Officer
	Deepak M. Satwalekar	Marti G. Subrahmanyam	Rama Bijapurkar	Claude Smadja
	Director	Director	Director	Director
	Sridar A. Iyengar	David L. Boyles	Jeffrey S. Lehman	K. Dinesh
	Director	Director	Director	Director
Bangalore	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan	Parvatheesam K.
January 11, 2008	Director	Director	Chief Financial Officer	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,
		2007	2006	2007	2006
Income from software services and products		3,999	3,454	11,413	9,594
Software development expenses	11	2,219	1,888	6,504	5,299
GROSS PROFIT		1,780	1,566	4,909	4,295
Selling and marketing expenses	12	172	182	541	530
General and administration expenses	13	281	235	790	688
		453	417	1,331	1,218
OPERATING PROFIT BEFORE INTEREST AND DEPRECIATION		1,327	1,149	3,578	3,077
Interest		-	-	-	-
Depreciation		138	129	404	336
OPERATING PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS		1,189	1,020	3,174	2,741
Other income, net	14	152	60	550	255
Provision for investments		-	-	-	3
NET PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS		1,341	1,080	3,724	2,993
Provision for taxation (refer to note 22.2.12)	15	155	122	436	340
NET PROFIT AFTER TAX BEFORE EXCEPTIONAL ITEMS		1,186	958	3,288	2,653
Income on sale of Investments, net of taxes (refer to note 22.2.22)		-	-	-	6
NET PROFIT AFTER TAX AND EXCEPTIONAL ITEMS		1,186	958	3,288	2,659
Balance Brought Forward		6,545	3,574	4,844	2,195
Less: Residual dividend paid		-	-	-	4
Dividend tax on the above		-	-	-	1
		6,545	3,574	4,844	2,190
AMOUNT AVAILABLE FOR APPROPRIATION		7,731	4,532	8,132	4,849
Dividend
Interim		-	-	343	278
Final		-	-	-	-
Total dividend		-	-	343	278
Dividend tax		-	-	58	39
Amount transferred to general reserve		-	-	-	-
Balance in profit and loss account		7,731	4,532	7,731	4,532
		7,731	4,532	8,132	4,849
EARNINGS PER SHARE *
Equity shares of par value Rs. 5/- each
Before exceptional Items
Basic		20.77	17.20	57.58	47.82
Diluted		20.70	16.82	57.38	46.70
After exceptional Items
Basic		20.77	17.20	57.58	47.93
Diluted		20.70	16.82	57.38	46.81
Number of shares used in computing earnings per share
Basic		57,13,46,568	55,70,34,398	57,12,55,430	55,48,77,140
Diluted		57,32,85,874	56,97,17,084	57,32,10,538	56,81,73,059
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	22

* Refer to note 22.2.20

The schedules referred to above are an integral part of the profit and loss account

As per our report attached

for BSR & Co.
Chartered Accountants

Natrajan Ramkrishna	N. R. Narayana Murthy	Nandan M. Nilekani	S. Gopalakrishnan	S. D. Shibulal
Partner Membership No. 32815	Chairman and Chief Mentor	Co-Chairman	Chief Executive Officer and Managing Director	Chief Operating Officer
	Deepak M. Satwalekar	Marti G. Subrahmanyam	Rama Bijapurkar	Claude Smadja
	Director	Director	Director	Director
	Sridar A. Iyengar	David L. Boyles	Jeffrey S. Lehman	K. Dinesh
	Director	Director	Director	Director
Bangalore	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan	Parvatheesam K.
January 11, 2008	Director	Director	Chief Financial Officer	Company Secretary

INFOSYS TECHNOLOGIES LIMITED

in Rs. crore

Cash Flow Statement for the	Schedule	Nine months ended  December 31,
		2007	2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit before tax and exceptional items		3,724	2,993
Adjustments to reconcile net profit before tax to cash provided by operating activities
(Profit)/ loss on sale of fixed assets		-	-
Depreciation		404	336
Interest and dividend income		(480)	(183)
Profit on sale of liquid mutual funds		-	(8)
Provision for investments		-	3
Effect of exchange differences on translation of foreign currency cash and cash equivalents		(37)	(16)
Changes in current assets and liabilities
Sundry debtors		(129)	(568)
Loans and advances	16	(233)	(246)
Current liabilities and provisions	17	107	233
Income taxes paid	18	(227)	(290)
NET CASH GENERATED BY OPERATING ACTIVITIES		3,129	2,254
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets and change in capital work-in-progress	19	(970)	(818)
Payment for intellectual property rights		-	14
Investment in subsidiaries (refer to note 22.2.16)		(103)	(553)
Investments in securities (refer to note 22.2.16)	20	-	(1,359)
Interest and dividend income		480	183
Cash flow from investing activities before exceptional items		(593)	(2,533)
Proceeds on sale of Long Term Investments (Net of taxes) (refer to note 22.2.22)		-	6
NET CASH USED IN INVESTING ACTIVITIES		(593)	(2,527)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital on exercise of stock options		25	421
Dividends paid during the period		(713)	(1,343)
Dividend Tax paid during the period		(121)	(189)
NET CASH USED IN FINANCING ACTIVITIES		(809)	(1,111)
Effect of exchange differences on translation of foreign currency cash and cash equivalents		37	16
NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS		1,764	(1,368)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		5,650	3,779
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	21	7,414	2,411
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	22

The schedules referred to above are an integral part of the cash flow statement.

As per our report attached

for BSR & Co.
Chartered Accountants

Natrajan Ramkrishna	N. R. Narayana Murthy	Nandan M. Nilekani	S. Gopalakrishnan	S. D. Shibulal
Partner Membership No. 32815	Chairman and Chief Mentor	Co-Chairman	Chief Executive Officer and Managing Director	Chief Operating Officer
	Deepak M. Satwalekar	Marti G. Subrahmanyam	Rama Bijapurkar	Claude Smadja
	Director	Director	Director	Director
	Sridar A. Iyengar	David L. Boyles	Jeffrey S. Lehman	K. Dinesh
	Director	Director	Director	Director
Bangalore	T. V. Mohandas Pai	Srinath Batni	V. Balakrishnan	Parvatheesam K.
January 11, 2008	Director	Director	Chief Financial Officer	Company Secretary

INFOSYS TECHNOLOGIES LIMITED

in Rs. crore, except as otherwise stated

Schedules to the Balance Sheet as at		December 31,2007	March 31, 2007
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
	57,15,53,937 ( 57,12,09,862) 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 22.2.11
	* Also refer to note 22.2.20 for details of basic and diluted shares
2	RESERVES AND SURPLUS
	Capital reserve	6	6
	Share premium account - Opening balance	2,768	1,543
	Add: Receipts on exercise of employee stock options	25	1,206
	Income tax benefit arising from exercise of stock options	-	19
		2,793	2,768
	General reserve - Opening balance	3,258	3,015
	Less: Gratuity transitional liability (refer to note 22.2.23)	-	9
	Less: Capitalized on issue of bonus shares	-	138
	Add: Transferred from the Profit and Loss Account	-	378
	Add: Fair value of employee options issued in exchange of Infosys BPO options (refer to note 22.2.16)	-	12
		3,258	3,258
	Balance in Profit and Loss Account	7,731	4,844
		13,788	10,876

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	Additions	Deductions/	As at	As at	For the	Deductions/	As at	As at	As at
		April 1,	during the period	Retirement during	December 31,	April 1,	Period	Retirement during	December 31,	December 31,	March 31,
		2007		the period	2007	2007		the period	2007	2007	2007
	Land : free-hold	76	55	-	131	-	-	-	-	131	76
	leasehold	95	3	-	98	-	-	-	-	98	95
	Buildings*	1,471	298	-	1,769	266	80	-	346	1,423	1,205
	Plant and machinery*	760	108	-	868	414	95	-	509	359	346
	Computer equipment*	944	130	4	1,070	714	164	4	874	196	230
	Furniture and fixtures*	541	80	-	621	344	65	-	409	212	197
	Vehicles	2	-	-	2	1	-	-	1	1	1
		3,889	674	4	4,559	1,739	404	4	2,139	2,420	2,150
	Previous period	2,837	820	6	3,651	1,275	336	3	1,608	2,043	1,562
	Previous year	2,837	1,098	46	3,889	1,275	469	5	1,739	2,150

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 22.2.6 for details

INFOSYS TECHNOLOGIES LIMITED

in Rs. crore

Schedules to the Balance Sheet as at		December 31, 2007	March 31, 2007
4	INVESTMENTS
	Trade (unquoted) – at cost
	Long- term investments
	In subsidiaries
	Infosys BPO Ltd**
	3,34,61,902 (3,34,61,902) equity shares of Rs. 10/- each, fully paid	637	637
	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
	4,00,00,000 (2,00,00,000) common stock of US $1.00 par value, fully paid	171	90
	Infosys Technologies, S. De R.L. De C.V., Mexico	22	-
		942	839
	In other investments*	11	11
	Less: Provision for investments	11	11
		-	-
	Non-trade (unquoted), current investments, at the lower of cost and fair value
	Liquid mutual fund units *	-	-
		942	839
	Aggregate amount of unquoted investments	942	839
	* Refer to note 22.2.16 for details of investments
	** Investments include 17,37,092 ( 17,37,092 ) options in Infosys BPO (refer note 22.2.16)
5	DEFERRED TAX ASSETS
	Fixed assets	85	69
	Sundry debtors	7	3
	Others	5	7
		97	79
6	SUNDRY DEBTORS*
	Debts outstanding for a period exceeding six months
	Unsecured
	considered doubtful	38	15
	Other debts
	Unsecured
	considered good**	2,421	2,292
	considered doubtful	6	7
		2,465	2,314
	Less: Provision for doubtful debts	44	22
		2,421	2,292
	* Includes dues from companies where directors are interested	-	7
	** Includes dues from subsidiaries (refer note 22.2.7)	1	2
7	CASH AND BANK BALANCES
	Cash on hand	-	-
	Balances with scheduled banks in Indian Rupees
	In current accounts *	129	302
	In deposit accounts	5,601	4,827
	Balances with non-scheduled banks in foreign currency **
	in deposit accounts	145	-
	In current accounts	459	378
		6,334	5,507
	*Includes balance in unclaimed dividend account (refer note 22.2.25a)	3	2
	**Refer to note 22.2.13 for details of balances in non-scheduled banks
8	LOANS AND ADVANCES
	Unsecured, considered good
	Loans to subsidiary (refer to note 22.2.7)	32	22
	Advances
	prepaid expenses	19	28
	for supply of goods and rendering of services*	4	3
	advance to gratuity and provident fund trust	28	-
	others	13	20
		96	73
	Unbilled revenues	527	312
	Advance income tax	147	352
	MAT credit entitlement	57	-
	Loans and advances to employees
	housing and other loans	39	42
	salary advances	50	63
	Electricity and other deposits	24	20
	Rental deposits	11	10
	Deposits with financial institution and body corporate (refer to note 22.2.14)	1,228	275
	Mark to Market on options/ forward contracts	42	15
		2,221	1,162
	Unsecured, considered doubtful
	Loans and advances to employees	1	1
		2,222	1,163
	Less: Provision for doubtful loans and advances to employees	1	1
		2,221	1,162
	* Includes advances to subsidiary company	-	-
9	CURRENT LIABILITIES
	Sundry creditors
	goods and services *	15	23
	accrued salaries and benefits
	salaries	27	28
	bonus and incentives	228	208
	unavailed leave	138	120
	for other liabilities
	provision for expenses	269	281
	retention monies	42	23
	withholding and other taxes payable	173	172
	due to option holders of Infosys BPO	-	2
	others	36	4
		928	861
	Advances received from clients	12	4
	Unearned revenue	344	295
	Unclaimed dividend	3	2
		1,287	1,162
	*Includes dues to subsidiary companies (refer to note22.2.7)	1	-
10	PROVISIONS
	Proposed dividend	-	371
	Provision for
	tax on dividend	-	63
	income taxes *	286	207
	post-sales client support and warranties	41	21
		327	662

* Refer to note 22.2.12

INFOSYS TECHNOLOGIES LIMITED

 in Rs. Crore

Schedules to Profit and Loss Account for the		Quarter ended  December 31,		Nine months ended December 31,
		2007	2006	2007	2006
11	SOFTWARE DEVELOPMENT EXPENSES
	Salaries and bonus including overseas staff expenses	1,743	1,393	4,987	3,936
	Overseas group health insurance	(43)	28	7	68
	Contribution to provident and other funds	42	37	125	105
	Staff welfare	15	11	35	29
	Technical sub-contractors - subsidiaries	192	159	575	446
	Technical sub-contractors - others	48	73	167	170
	Overseas travel expenses	75	70	221	206
	Visa charges and others	28	20	104	84
	Software packages
	for own use	65	57	154	140
	for service delivery to clients	8	5	22	20
	Communication expenses	15	14	40	40
	Computer maintenance	5	6	15	16
	Consumables	6	6	15	17
	Rent	6	4	17	11
	Provision for post-sales client support and warranties	14	5	20	11
		2,219	1,888	6,504	5,299
12	SELLING AND MARKETING EXPENSES
	Salaries and bonus including overseas staff expenses	117	111	367	329
	Overseas group health insurance	(2)	1	-	2
	Contribution to provident and other funds	-	1	1	2
	Staff welfare	1	1	2	2
	Overseas travel expenses	20	24	63	69
	Visa charges and others	1	-	2	1
	Traveling and conveyance	1	1	2	2
	Commission and earnout charges	3	4	10	23
	Brand building	14	17	41	44
	Professional charges	5	5	17	16
	Rent	3	4	9	12
	Marketing expenses	4	10	13	18
	Telephone charges	2	2	6	5
	Communication expenses	1	-	1	1
	Printing and stationery	-	1	1	1
	Advertisements	1	-	4	2
	Office maintenance	-	-	-	-
	Sales promotion expenses	1	-	2	1
	Consumables	-	-	-	-
	Software packages
	for own use	-	-	-	-
	Computer maintenance	-	-	-	-
	Power and fuel	-	-	-	-
	Insurance charges	-	-	-	-
	Rates and taxes	-	-	-	-
	Bank charges and commission	-	-	-	-
	Miscellaneous expenses	-	-	-	-
		172	182	541	530
13	GENERAL AND ADMINISTRATION EXPENSES
	Salaries and bonus including overseas staff expenses	57	45	162	127
	Overseas group health insurance	(2)	-	(2)	-
	Contribution to provident and other funds	3	3	9	8
	Professional charges	42	34	115	100
	Telephone charges	31	28	87	80
	Power and fuel	26	22	79	66
	Traveling and conveyance	27	21	69	61
	Overseas travel expenses	3	3	10	12
	Visa charges and others	-	-	-	1
	Office maintenance	32	23	86	70
	Guest house maintenance*	1	1	2	1
	Insurance charges	3	7	15	19
	Printing and stationery	3	4	10	10
	Donations	5	7	15	16
	Rent	3	4	11	13
	Advertisements	1	2	5	6
	Repairs to building	6	5	14	15
	Repairs to plant and machinery	4	4	13	10
	Rates and taxes	14	7	26	19
	Professional membership and seminar participation fees	2	3	7	7
	Postage and courier	2	2	7	6
	Books and periodicals	1	1	3	3
	Provision for bad and doubtful debts	15	5	36	24
	Provision for doubtful loans and advances	-	-	-	-
	Commission to non-whole time directors	1	1	3	1
	Freight charges	1	-	1	1
	Bank charges and commission	-	-	1	1
	Research grants	-	2	4	7
	Auditor’s remuneration
	statutory audit fees	-	-	-	-
	certification charges	-	-	-	-
	others	-	-	-	-
	out-of-pocket expenses	-	-	-	-
	Miscellaneous expenses	-	1	2	4
		281	235	790	688
	*For non training purposes
14	OTHER INCOME, NET
	Interest received on deposits with banks and others*	165	30	476	100
	Dividend received on investment in liquid mutual funds (non-trade unquoted)	-	36	4	83
	Profit on sale of liquid mutual funds	-	-	-	-
	Miscellaneous income (refer to note 22.2.15)	6	13	18	28
	Exchange (losses) / gains	(19)	(19)	52	44
		152	60	550	255
	*includes tax deducted at source	8	4	46	22
15	PROVISION FOR TAXATION
	Income taxes*	186	125	511	355
	MAT credit entitlement	(25)	-	(57)	-
	Deferred taxes	(6)	(3)	(18)	(15)
		155	122	436	340

*Refer to note 22.2.12

INFOSYS TECHNOLOGIES LIMITED

 in Rs. Crore

Schedules to Cash Flow Statements for the		Nine months ended December 31,
		2007	2006
16	CHANGE IN LOANS AND ADVANCES
	As per the Balance Sheet*	2,221	1,769
	Add: Gratutity negative plan amendment liability (refer to Note 22.2.23)	(37)	13
	Less: Deposits with financial institutions and body corporates
	included in cash and cash equivalents	(1,080)	(743)
	MAT credit entitlement	(57)	-
	Advance income taxes separately considered	(147)	(309)
		900	730
	Less: Opening balance considered	(667)	(484)
		233	246
	* includes loans to subsidiary and net of gratuity transitional liability
17	CHANGE IN CURRENT LIABILITIES AND PROVISIONS
	As per the Balance Sheet	1,614	1,361
	Add/ (Less): unclaimed dividend	(3)	(3)
	Due to option holders of Infosys BPO	-	-
	Gratuity negative plan amendment liability	(37)	-
	Provisions separately considered in the cash flow statement
	Income taxes	(286)	(294)
		1,288	1,064
	Less: Opening balance considered	(1,181)	(831)
		107	233
18	INCOME TAXES PAID
	Charge as per the Profit and Loss Account	436	340
	Add: Increase/(Decrease) in advance income taxes	(205)	42
	Increase/(Decrease) in deferred taxes	18	15
	Increase/(Decrease) in MAT entitlement credit	57	-
	Less : (Increase)/Decrease in income tax provision	(79)	(107)
		227	290
19	PURCHASE OF FIXED ASSETS AND CHANGE IN CAPITAL
	WORK-IN-PROGRESS
	As per the Balance Sheet*	674	816
	Less: Opening Capital work-in-progress	(957)	(571)
	Add: Closing Capital work-in-progress	1,253	573
		970	818
	* Excludes Rs. nil (Rs 4 crore) towards movement of land from Leasehold to Freehold
20	INVESTMENTS IN SECURITIES *
	As per the Balance Sheet	942	2,793
	Add: Provisions on investments	-	3
		942	2,796
	Less: Investment in subsidiaries	(103)	(553)
	Profit on sale of liquid mutual funds	-	(8)
	Opening balance considered	(839)	(876)
		-	1,359
	* Refer to note 22.2.16 for investment and redemptions
21	CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
	As per the Balance Sheet	6,334	1,668
	Add: Deposits with financial institutions, included herein	1,080	743
		7,414	2,411

Schedules to the Financial Statements for the quarter and nine months ended December 31, 2007

22 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, India ("Infosys BPO") formerly known as Progeon Limited, and wholly owned subsidiaries, Infosys Technologies (Australia) Pty. Limited ("Infosys Australia"), Infosys Technologies (China) Co. Limited ("Infosys China"), formerly known as Infosys Technologies (Shanghai) Co. Limited, Infosys Consulting, Inc., USA ("Infosys Consulting") and Infosys Technologies S. DE R.L. de C.V. ("Infosys Mexico") is a leading global technology services organisation. The Company provides end-to-end business solutions that leverage technology thereby enabling clients to enhance business performance. The Company provides solutions that span the entire software life cycle encompassing technical consulting, design, development, re-engineering, maintenance, systems integration and package evaluation and implementatio n, testing and infrastructure management services. In addition, the Company offers software products for the banking industry.

22.1 Significant accounting policies

22.1.1 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. 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, 2007. 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.
Management evaluates all recently issued or revised accounting standards on an on-going basis.

22.1.2 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 assets and 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.

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. 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. Actual results could differ from those estimates.

22.1.3. Revenue recognition

Revenue from software development on fixed-price, fixed-time frame contracts, where there is no uncertainty as to measurement or collectability of consideration is recognized as per the percentage of completion method. On time-and-materials contracts, revenue is recognized as the related services are rendered. 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 proportionately 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 multiple element contracts, w here revenue is recognized as per the percentage of completion method.

Profit on sale of investments is recorded on transfer of title from the company and is determined as the difference between the sales price and the then 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.

22.1.4 Expenditure

The cost of software purchased for use in software development and services is charged to cost of revenues in the year of acquisition. Charges relating to non-cancelable, long-term operating leases are computed primarily on the basis of the lease rentals, payable as per the relevant lease agreements. Post-sales customer support costs are estimated by management, determined on the basis of past experience. The costs provided for are carried until expiry of the related warranty period. Provisions are made for all known losses and liabilities. Leave encashment liability is determined on the basis of an actuarial valuation.

22.1.5 Fixed assets, intangible assets and capital work-in-progress

Fixed assets are stated at cost, less accumulated depreciation. 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 balance sheet date. Intangible assets are recorded at the consideration paid for acquisition.

22.1.6 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	2-5 years
Furniture and fixtures	5 years
Vehicles	5 years

22.1.7 Retirement benefits to employees

22.1.7.a Gratuity

Infosys provides for gratuity, a defined benefit retirement plan (the “Gratuity Plan”) covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, 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 as of the balance sheet date, based upon which, the company contributes all the 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.

22.1.7.b Superannuation

Certain employees of Infosys are also participants in a defined contribution plan. Until March 2005, the company made contributions under the superannuation plan (the Plan) to the Infosys Technologies Limited Employees’ Superannuation Fund Trust. The company had no further obligations to the Plan beyond its monthly contributions. From 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 trust.

22.1.7.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. Infosys also contributes 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.

22.1.8. 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.

22.1.9. Foreign currency transactions

Revenue from overseas clients and collections deposited in foreign currency bank accounts are recorded at the exchange rate as of the date of the respective transactions. Expenditure in foreign currency is accounted at the exchange rate prevalent when such expenditure is incurred. Disbursements made out of foreign currency bank accounts are reported at the daily rates. Exchange differences are recorded when the amount actually received on sales or actually paid when expenditure is incurred, is converted into Indian Rupees. The exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise.

Fixed assets purchased at overseas offices are recorded at cost, based on the exchange rate as of the date of purchase. The charge for depreciation is determined as per the company’s accounting policy.

Monetary current assets and monetary current liabilities that are denominated in foreign currency are translated at the exchange rate prevalent at the date of the balance sheet. The resulting difference is also recorded in the profit and loss account.

22.1.10 Forward contracts and options in foreign currencies

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

The company records the gain or loss on effective hedges 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 contract or option 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.

22.1.11. Income tax

Income taxes are computed using the tax effect accounting method, where 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 alternative 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 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 substantially 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 balance sheet 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 exce ss of compensation charged to profit and loss account are credited to the share premium account.

22.1.12. Earnings per share

In determining earnings per share, the company considers the net profit after tax and includes the post tax effect of any extra-ordinary/exceptional item. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares that could have been issued on the 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. The number of shares and potentially dilutive equity shares are adjusted for any stock splits and bonus shares iss ues effected prior to the approval of the financial statements by the board of directors.

22.1.13. 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 the 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.

22.1.14. 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.

22.1.15 Onerous contracts

Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event based on a reliable estimate of such obligation.

22.2 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 22.3. 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.

22.2.1 Aggregate expenses

The aggregate amounts incurred on certain specific expenses

in Rs. crore

	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Salaries and bonus including overseas staff expenses#	1,917	1,549	5,516	4,392
Contribution to provident and other funds	45	41	135	115
Staff welfare
Staff welfare	16	12	37	31
Overseas group health insurance*	(47)	29	5	70
Overseas travel expenses	98	97	294	287
Visa charges and others	29	20	106	86
Traveling and conveyance	28	22	71	63
Technical sub-contractors - subsidiaries	192	159	575	446
Technical sub-contractors - others	48	73	167	170
Software packages	-	-	-	-
For own use	65	57	154	140
For service delivery to clients	8	5	22	20
Professional charges	47	39	132	116
Telephone charges	33	30	93	85
Communication expenses	16	14	41	41
Power and fuel	26	22	79	66
Office maintenance	32	23	86	70
Guest house maintenance**	1	1	2	1
Commission and earnout charges	3	4	10	23
Brand building	14	17	41	44
Rent	12	12	37	36
Insurance charges	3	7	15	19
Computer maintenance	5	6	15	16
Printing and stationery	3	5	11	11
Consumables	6	6	15	17
Donations	5	7	15	16
Advertisements	2	2	9	8
Marketing expenses	4	10	13	18
Repairs to building	6	5	14	15
Repairs to plant and machinery	4	4	13	10
Rates and taxes	14	7	26	19
Professional membership and seminar participation fees	2	3	7	7
Postage and courier	2	2	7	6
Provision for post-sales client support and warranties	14	5	20	11
Books and periodicals	1	1	3	3
Provision for bad and doubtful debts	15	5	36	24
Provision for doubtful loans and advances	-	-	-	-
Commission to non-whole time directors	1	1	3	1
Sales promotion expenses	1	-	2	1
Freight charges	1	-	1	1
Bank charges and commission	-	-	1	1
Auditor’s remuneration	-	-	-	-
Statutory audit fees	-	-	-	-
Certification charges	-	-	-	-
Others	-	-	-	-
Out-of-pocket expenses	-	-	-	-
Research grants	-	2	4	7
Miscellaneous expenses	-	1	2	4
	2,672	2,305	7,835	6,517
Fringe Benefit Tax (FBT) in India included in the above	4	5	12	12

^# The Company had 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 payment pertains to the last three years and such backwages would be paid to employees in due course.

* The Company records health insurance liabilities based on the maximum individual claimable amounts by employees. During the quarter, 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

22.2.2. Capital commitments and contingent liabilities

 in Rs. Crore

	As at
Particulars	December 31, 2007	March 31, 2007
Estimated amount of unexecuted capital contracts
(net of advances and deposits)	650	655
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	2	2
Claims against the company, not acknowledged as debts*	17	15
(Net of Amount Rs. 101 crore (Rs. 138 crore ) crore paid to statutory authorities)
Forward contracts outstanding
In US$	US $ 857,000,000	US $ 165,000,000
(Equivalent approximate in Rs. crore)	3,377	711
In Euro	€ 25,000,000	€ 2,000,000
(Equivalent approximate in Rs. crore)	144	12
In GBP	£15,000,000	£5,500,000
(Equivalent approximate in Rs. crore)	117	47
Options outstanding
Range barrier options in US $	US $ 100,000,000	US $ 205,000,000
(Equivalent approximate in Rs. crore)	394	884
Euro Accelerator in Euro	€ 15,000,000	€ 24,000,000
(Equivalent approximate in Rs. crore)	86	138
GBP Accelerator	£10,500,000	-
(Equivalent approximate in Rs. crore)	82	-
Target Redemption structure (GBP)	-	£16,000,000
(Equivalent approximate in Rs. crore)	-	136
USD-INR Plain Vanila Put option	US $ 5,000,000	-
(Equivalent approximate in Rs. crore)	20	-
Euro Forward extra	-	-
(Equivalent approximate in Rs. crore)	-	-
GBP Forward extra	£10,000,000	-
(Equivalent approximate in Rs. crore)	78	-

* Claims against the company not acknowledged as debts include demand from the Indian tax authorities for payment of additional tax of Rs 98 crore ( Rs 234 crore), including interest of Rs 18 crore ( Rs 51 crore) upon completion of their tax review for fiscal 2004. 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 is pending before the Commissioner of Income tax ( Appeals) Bangalore.

The company is contesting the demand and the management including its tax advisors believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements 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 has net foreign currency exposures that are not hedged by a derivative instrument or otherwise is Nil (Rs. 995 crore as at March 31, 2007)

22.2.3 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.

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

in Rs. Crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Capital goods	59	61	228	209
Software packages	3	-	7	3
	62	61	235	212

22.2.5. Activity in foreign currency

in Rs. Crore

Particulars	Quarter endedDecember 31,		Nine months ended December 31,
	2007	2006	2007	2006
Earnings in foreign currency (on receipts basis)
Income from software services and products	3,826	3,321	10,944	8,896
Interest received on deposits with banks	5	3	14	10
Expenditure in foreign currency (on payments basis)
Travel expenses (including visa charges)	92	80	303	269
Professional charges	16	16	54	48
Technical sub-contractors - subsidiaries	192	156	556	431
Other expenditure incurred overseas for software development	1,319	1,224	3,909	3,094
Net earnings in foreign currency (on the receipts and payments basis)	2,212	1,848	6,136	5,064

22.2.6. 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,
	2007	2006	2007	2006
Lease rentals recognized during the period	12	12	37	36

in Rs. Crore

Lease obligations	As at
	December 31, 2007	March 31, 2007
Within one year of the balance sheet date	28	32
Due in a period between one year and five years	86	92
Due after five years	28	44
	142	168

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 the lease agreements have a price escalation clause.

Fixed assets provided on operating lease to Infosys BPO, a subsidiary company, as at December 31, 2007 and March 31, 2007 :

in Rs. Crore

Particulars	Cost	Accumulated depreciation	Net book value
Building	53	11	42
	46	9	37
Plant and machinery	22	14	8
	20	11	9
Computers	2	2	-
	2	2	-
Furniture & fixtures	13	11	2
	12	10	2
Total	90	38	52
	80	32	48

The aggregate depreciation charged on the above during the quarter and nine months ended December 31, 2007 amounted to Rs. 2 crore and Rs. 6 crore respectively. (Rs.2 crore and Rs.7 crore respectively for the quarter and nine months ended December 31, 2006.)

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 Note 22.2.7). Lease Rental commitments from Infosys BPO:

in Rs. Crore

Lease rentals	As at
	December 31, 2007	March 31, 2007
Within one year of the balance sheet date	7	12
Due in a period between one year and five years	-	4
Due after five years	-	-
	7	16

The rental income from Infosys BPO for the quarter and nine months ended December 31, 2007 amounted to Rs. 4 crore and Rs.13 crore (Rs. 5 crore and Rs. 12 crore for the quarter and nine months ended December 31, 2006)

22.2.7. Related party transactions

List of related parties:
Name of the related party	Country	Holding, as at
		December 31, 2007	March 31, 2007
Infosys BPO***	India	98.92% #	98.92% #
Infosys Australia	Australia	100%	100%
Infosys China	China	100%	100%
Infosys Consulting	USA	100%	100%
Infosys Mexico	Mexico	100%	-
Infosys BPO s. r. o *	Czech Republic	98.92%	98.92%
P-Financial Services Holding B.V. Netherlands **	Netherlands	98.92%	-

* Infosys BPO s.r.o is a wholly owned subsidiary of Infosys BPO.
**P-Financial Services Holding B.V. Netherlands is a wholly owned subsidiary of Infosys BPO
***On December 8, 2006, the shareholders of Infosys BPO approved a buy-back of upto 12,79,963 equity shares at a fair market value of Rs.604/- per equity share. The buy-back was in accordance with Section 77A of the Indian Companies Act, 1956. Pursuant to the buy-back offer Infosys BPO bought back 11,39,469 equity shares which were subsequently cancelled on December 29, 2006. Also refer to note 22.2.16
# Excludes deferred purchase of shares from shareholders of Infosys BPO of 3,60,417 shares

The details of the related party transactions entered into by the company, in addition to the lease commitments described in note 22.2.6, for the quarter and nine months ended December 31, 2007 and 2006 are as follows:

in Rs. Crore

Particulars	Quarter ended December 31		Nine months ended  December 31,
	2007	2006	2007	2006
Capital transactions:
Financing transactions
Infosys China	-	-	-	9
Infosys Mexico	18	-	22	-
Infosys Consulting	-	-	81	14
Loans
Infosys China	-	-	11	9
Revenue transactions:
Purchase of services
Infosys BPO (Including Infosys BPO s.r.o)	-	3	-	8
Infosys Australia	114	97	361	272
Infosys China	14	13	39	29
Infosys Consulting	61	47	170	136
Infosys Mexico	1	-	1	-
Purchase of shared services including facilities and personnel
Infosys BPO (Including Infosys BPO s.r.o)	4	1	6	2
Interest Income
Infosys China	-	-	-	1
Sale of services
Infosys Australia	1	1	2	2
Infosys China	-	1	-	2
Infosys Consulting	1	-	1	3
Sale of shared services including facilities and personnel
Infosys BPO (Including Infosys BPO s.r.o)	11	4	32	10
Infosys Consulting	1	1	1	2

Details of amounts due to or due from and maximum dues from subsidiaries for the nine months ended December 31, 2007 and year ended March 31, 2007:

 in Rs. Crore

Particulars	As at
	December 31, 2007	March 31, 2007
Loans and advances
Infosys China	32	22
Debtors
Infosys China	1	2
Infosys BPO (Including Infosys BPO s.r.o)	-	-
Creditors
Infosys BPO (Including Infosys BPO s.r.o)	-	-
Maximum balances of loans and advances
Infosys BPO (Including Infosys BPO s.r.o)	2	2
Infosys Australia	31	24
Infosys China	32	25
Infosys Consulting	16	14
Sundry Creditors
Infosys Mexico	1	-

During the quarter and nine months ended December 31, 2007, an amount of Rs.5 crore and Rs.15 crore (Rs. 5 crore and Rs.14 crore for the quarter and nine months ended December 31, 2006 ) was donated to Infosys Foundation, a not-for-profit foundation, in which certain directors of the company are trustees.

22.2.8. Transactions with key management personnel

Key Management personnel comprise directors and statutory officers. 

Particulars of remuneration and other benefits paid to key management personnel during the quarter and nine months ended December 31, 2007 and December 31, 2006 have been detailed in Schedule 22.3 since the amounts are less than a crore.

22.2.9. Research and development expenditure

in Rs. crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Revenue	45	43	154	116

22.2.10. Dues to small-scale industrial undertakings

As at December 31, 2007 and March 31, 2007, the company has no outstanding dues to small-scale industrial undertaking.

22.2.11. 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. The 1998 Plan automatically expires in January 2008, unless terminated earlier. 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.

Number of options granted, exercised and forfeited during the	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Options outstanding, beginning of period	20,84,124	37,33,549	20,84,124	45,46,480
Granted	-	-	-	-
Less: exercised	(162,633)	(346,993)	(162,633)	(1,022,564)
forfeited	-	(25,446)	-	(162,806)
Options outstanding, end of period	19,21,491	33,61,110	19,21,491	33,61,110

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 June 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,
	2007	2006	2007	2006
Options outstanding, beginning of period	18,31,218	1,51,26,339	18,97,840	1,91,79,074
Granted	-	-	-	-
Less: exercised	(181,442)	(1,716,474)	(181,442)	(5,715,944)
forfeited	(4,477)	(23,875)	(71,099)	(77,140)
Options outstanding, end of period	16,45,299	1,33,85,990	16,45,299	1,33,85,990

In fiscal 2007, the company has accelerated the vesting of 5,72,000 outstanding unvested options which were due to be vested in the normal course by October, 2007.

The aggregate options considered for dilution are set out in note 22.2.20

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 endedDecember 31,		Nine months ended  December 31
	2007	2006	2007	2006
Net Profit:
As Reported	1,186	958	3,288	2,659
Less: Stock-based employee compensation expense	3	-	9	-
Adjusted Proforma	1,183	958	3,279	2,659
Basic Earnings per share as reported	20.77	17.20	57.58	47.93
Proforma Basic Earnings per share	20.71	17.20	57.40	47.93
Diluted Earnings per share as reported	20.70	16.82	57.38	46.81
Proforma Earnings per share as reported	20.64	16.82	57.20	46.81

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, 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 has been paid by the Company and subsequently recovered from the employees. Consequently, there is no impact on the Profit and loss account.

22.2.12. 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 and March 31, 2009.

Infosys also has operations in a 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 changes in the Indian Income Tax Act, the company has calculated its tax liability after considering Minimum Alternate Tax (MAT). The MAT liability can be carried forward and set off against the future tax liabilities. Accordingly a sum of Rs 57 crore was carried forward and shown under "Loans and advances" in the balance sheet as at December 31, 2007.

The tax provision for the nine months ended December 31, 2007 and for the year ending March 31, 2007 includes a reversal of Rs. 101 crore and Rs. 125 crore respectively relating to liabilities no longer required for taxes payable in various overseas jurisdictions on the expiry of the limitation period, conclusion of the Pre-Filing Agreement (PFA) with the Internal revenue Service (IRS) of the United States and the completion of the assessment by taxation authorities.

22.2.13. 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, 2007	March 31, 2007
In current accounts
Bank of America, Palo Alto, USA	258	293
Citibank NA, Melbourne, Australia	28	36
Citibank NA, Tokyo, Japan	1	1
Deutsche Bank, Brussels, Belgium	7	13
Deutsche Bank, Frankfurt, Germany	6	4
Deutsche Bank, Amsterdam, Netherlands	1	2
Deutsche Bank, Paris, France	1	3
Deutsche Bank, Zurich, Switzerland	-	-
Deutsche Bank, UK	140	5
HSBC Bank PLC, Croydon, UK	11	11
Royal Bank of Canada, Toronto, Canada	3	7
ABN Amro Bank , Taipei, Taiwan	1	2
Deutsche Bank, Spain	2	1
ABN Amro Bank, Copenhagen, Denmark	-	-
Citibank NA, Singapore	-	-
Citibank NA, Thailand	-	-
Nordbanken, Stockholm, Sweden	-	-
Svenska Handelsbanken, Sweden	-	-
The Bank of Tokyo-Mitsubishi UFJ, Ltd., Japan	-	-
	459	378

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,
	2007	2006	2007	2006
In current accounts
ABN Amro Bank , Taipei, Taiwan	2	1	2	1
Bank of America, Palo Alto, USA	637	501	637	614
Citibank NA, Melbourne, Australia	98	199	117	199
Citibank NA, Tokyo, Japan	14	18	14	23
Deutsche Bank, Brussels, Belgium	37	65	38	65
Deutsche Bank, Frankfurt, Germany	17	40	17	62
Deutsche Bank, Amsterdam, Netherlands	1	6	2	10
Deutsche Bank, Paris, France	4	15	5	19
Deutsche Bank, Spain	2	1	2	1
Deutsche Bank, Zurich, Switzerland	6	11	15	30
Deutsche Bank, UK	146	-	169	-
HSBC Bank PLC, Croydon, UK	19	163	32	236
Nordbanken, Stockholm, Sweden	1	2	1	2
Royal Bank of Canada, Toronto, Canada	13	17	13	37
Svenska Handels Bank, Stockholm, Sweden	1	1	1	1
UFJ Bank, Tokyo, Japan	3	5	3	34
ABN Amro Bank, Copenhagen, Denmark	-	-	-	-
Citibank NA, Singapore	-	-	-	-
Citibank NA, Thailand	-	-	-	-

The cash and bank balances comprise their respective values as of the balance sheet date including accumulated interest of Rs 139 crore. (As at March 31, 2007 Rs 37 crore).

22.2.14. 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, 2007	March 31, 2007
Deposits with financial institutions and body corporate:
HDFC Limited	1,030	-
GE Capital Services India	50	143
Life Insurance Corporation of India	148	132
	1,228	275
Interest accrued but not due (included above)	30	14

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

in Rs. Crore

	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Deposits with financial institutions and body corporate:
HDFC Limited	1,030	502	1,030	502
GE Capital Services India	203	241	268	241
Life Insurance Corporation of India	148	121	148	130

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/ leave obligations as and when they arise during the normal course of business.

22.2.15. Fixed assets

Profit / (loss) on disposal of fixed assets during the quarter and nine months ended December 31, 2007 and 2006 is less than Rs. 1 crore and accordingly disclosed in note 22.3

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,
	2007	2006	2007	2006
Charged during the period	5	8	8	14

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, 2007.

22.2.16. Details of Investments

in Rs. crore

Particulars	As at
	December 31, 2007	March 31, 2007
Long- term investments
OnMobile Systems Inc., (formerly Onscan Inc.) USA
1,00,000 (1,00,000) common stock at US$ 0.4348 each, fully paid, par value US$ 0.001 each	-	-
1,00,000 (1,00,000) Series A voting convertible preferred stock at US$ 0.4348 each, fully paid, par value US$ 0.001 each	-	-
44,00,000 (44,00,000) Series A non-voting convertible preferred stock at US$ 0.4348 each, fully paid, par value US$ 0.001 each	9	9
M-Commerce Ventures Pte Ltd, Singapore
100 (100) ordinary shares of Singapore $ 1 each, fully paid, par value Singapore $ 1 each	-	-
563 (684) redeemable preference shares of Singapore $ 1, fully paid, at a premium of Singapore $ 1,110 per redeemable preferred stock	2	2
216 (216) redeemable preference shares of Singapore $ 1, fully paid, par value Singapore $ 1 each	-	-
	11	11
Less: Provision for investment	11	11
	-	-

Details of investments in and disposal of securities during the quarter and nine months ended December 31, 2007 and 2006:

 in Rs. crore

Particulars	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Investment in securities
Subsidiaries	18	-	103	553
Long-term investments	-	-	-	-
Liquid Mutual funds	-	590	1,518	3,480
	18	590	1,621	4,033
Redemption / Disposal of Investment in securities
Long-term investments	-	-	-	6
Liquid Mutual funds	-	1,241	1,518	2,121
	-	1,241	1,518	2,127
Net movement in investments	18	(651)	103	1,906

Investment purchased and sold during the nine months ended December 31, 2007:

 in Rs. crore

Name of the fund	Face value Rs /-	Units	Cost
Reliance Liquidity Fund - Treasury Plan	10	24,20,31,906	242
Birla Cash Plus Fund- Institutional Plan	10	14,97,08,069	150
Tata Liquid Super High Investment Fund- Monthly Dividend	1000	9,75,757	110
Birla Liquid Plus Fund- Institutional Plan	10	9,99,96,063	100
Deutsche Insta Cash Plus Fund - Institutional Plan	10	9,98,32,115	100
Deutsche Money Plus Fund - Institutional Plan	10	9,88,84,670	100
DSP Merrill Lynch Liquid Fund - Institutional Plan	1000	4,49,824	45
DSP Liquid plus - Institutional Plan	1000	4,49,824	45
Franklin Floating Rate - Institutional Plan	10	7,47,75,059	75
Templeton India Treasury Mang Acct - Institutional Plan	1000	7,38,016	75
HSBC - Cash Fund Institutional Plan	10	9,99,56,442	100
HSBC Liquid Plus - Institutional Plan	10	9,91,02,655	100
ICICI Institutional Liquid Plus	10	9,50,63,038	100
Grindlays Cash Fund - Institutional Plan	1000	4,99,985	50
SCB-Grindlays Floating Rate Fund - Institutional Plan	10	4,98,93,280	50
Sundaram Liquid Plus Super - Institutional Plan	10	7,41,34,846	75

Particulars of investments made during the quarter and nine months ended December 31, 2007 and 2006:

 in Rs. crore

Particulars of investee companies	Quarter ended  December 31,		Nine months ended  December 31
	2007	2006	2007	2006
Infosys Consulting	-	-	81	14
Infosys Mexico	18	-	22	-
Infosys China	-	-	-	9
Infosys BPO	-	-	-	530
	18	-	103	553

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"). During the quarter ended December 31, 2007, the company invested Mexican Peso 50 million (Rs. 18 crore) in the subsidiary. As of December 31, 2007, 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

In January 2007, the Company initiated the purchase of all the share and outstanding options in Infosys BPO from its shareholders and option holders comprising current and former employees of Infosys BPO. The share holders were given a choice to sell their shares at fair market value and the option-holders were given the choice to sell their options and/or swap Infosys BPO options for Infosys options at a swap ratio based on fair market value.

Consequent to this proposal Infosys paid an aggregate of Rs 71 crore for the purchase of shares and options and granted 1,51,933 Infosys options under the 1999 plan valued at fair value of Rs 12 crore. Accordingly, the investment in Infosys BPO increased by Rs 83 crore and reserves have increased by 12 crore.

Additionally, the Company has committed to a deferred share purchase with the shareholders of Infosys BPO. As per the agreement, Infosys will purchase 3,60,417 Infosys BPO shares for Rs 22 crore by February, 2008. The same will be accounted as investments on conclusion of the agreement along with the transfer of title in the shares. Upon conclusion Infosys holding in Infosys BPO would be 99.98%

Investment in Infosys Consulting

During the nine months ended December 31, 2007, the Company invested US$ 20 million (Rs. 81 crore) in its wholly owned subsidary Infosys Consulting, Inc. As of December 31, 2007, the Company has invested an aggregate of US$ 40 million (Rs. 171 crore) in the subsidiary.

Conversion of Cumulative Preference shares in Infosys BPO

Infosys BPO had issued an aggregate of 87,50,000 0.005% Cumulative Convertible Preference shares of par value Rs. 100 each to Citicorp International Finance Corporation ("CIFC") for an aggregate consideration of Rs. 94 crore as per the shareholder's agreement as of March 31, 2005. Each preference share was convertible to one equity share of par value Rs. 10/-. On June 30, 2005 CIFC exercised its rights under the shareholder's agreement and converted the preference shares to equity shares. Pursuant to the conversion, the equity share capital of Infosys BPO increased by Rs. 9 crore to Rs. 33 crore and the share premium increased by Rs. 79 crore to Rs. 85 crore. On June 30, 2006, the company completed the acquisition of the entire holdings (87,50,000 shares amounting to 23% of the equity on a fully diluted basis) of CIFC in Infosys BPO for a consideration amounting to Rs. 530 crore (US$ 115.13 million). The net consideration of Rs. 309 crore, after withholding taxes of Rs. 221 crore wa s remitted to CIFC on the same date.

Provisions for investments

The Company evaluates all investments for any diminution in their carrying values that is other than temporary. The amount of provision made on trade investments during the quarter and nine months ended December 31, 2007 amounted to Rs. Nil and Rs. Nil respectively. (Nil and Rs. 2 crore respectively for quarter and nine months ended December 31, 2006).

The company provided Nil during the quarter and nine months ended on December 31, 2007 (Nil and Rs 1 crore during the quarter and nine months ended December 31, 2006 ) on revision of the carrying amount of non-trade current investments to fair value.

Redemption of preference shares

On September 7, 2007 the company realised Rs. 0.36 crore on redemption of the preference shares in M-Commerce Ventures Pte. Limited, Singapore ("M-Commerce"), and their subsequent sale. There were no such transactions in the quarter or the nine months ended December 31, 2006. The entire investment in M-Commerce was fully provided for in earlier years. Accordingly, the realised gain was taken to the profit and loss account and the provision written back.

22.2.17. 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 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, 2007 and 2006:

in Rs. crore

	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	1,511	561	801	507	619	3,999
	1,344	455	592	379	684	3,454
Identifiable operating expenses	603	255	345	210	273	1,686
	555	198	257	149	282	1,441
Allocated expenses	373	139	197	125	152	986
	336	114	148	95	171	864
Segmental operating income	535	167	259	172	194	1,327
	453	143	187	135	231	1,149
Unallocable expenses						138
						129
Operating income						1,189
						1,020
Other income (expense), net						152
						60
Net profit before taxes and exceptional items						1,341
						1,080
Income taxes						155
						122
Net profit after taxes and before exceptional items						1,186
						958
Income on sale of investments (net of taxes)						-
						-
Net profit after taxes and exceptional items						1,186
						958

Industry Segments

Nine months ended December 31, 2007 and 2006:

 in Rs. crore

	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	4,239	1,607	2,305	1,413	1,849	11,413
	3,622	1,334	1,667	983	1,988	9,594
Identifiable operating expenses	1,807	729	1,030	608	813	4,987
	1,569	578	703	420	839	4,109
Allocated expenses	1,057	401	576	352	462	2,848
	909	335	418	247	499	2,408
Segmental operating income	1,375	477	699	453	574	3,578
	1,144	421	546	316	650	3,077
Unallocable expenses						404
						336
Operating income						3,174
						2,741
Other income (expense), net						550
						252
Net profit before taxes and exceptional items						3,724
						2,993
Income taxes						436
						340
Net profit after taxes and before exceptional items						3,288
						2,653
Income on sale of investments (net of taxes)						-
						6
Net profit after taxes and exceptional items						3,288
						2,659

Geographic Segments

Quarter ended December 31, 2007 and 2006:

 in Rs. crore

	North America	Europe	India	Rest of the World	Total
Revenues	2,545	1,081	53	320	3,999
	2,198	906	65	285	3,454
Identifiable operating expenses	1,076	409	17	184	1,686
	940	337	12	152	1,441
Allocated expenses	628	267	13	78	986
	550	227	16	71	864
Segmental operating income	841	405	23	58	1,327
	708	342	37	62	1,149
Unallocable expenses					138
					129
Operating income					1,189
					1,020
Other income (expense), net					152
					60
Net profit before taxes and exceptional items					1,341
					1,080
Income taxes					155
					122
Net profit after taxes and before exceptional items					1,186
					958
Income on sale of investments (net of taxes)					-
					-
Net profit after taxes and exceptional items					1,186
					958

Geographic Segments

Nine months ended December 31, 2007 and 2006:

in Rs. crore

	North America	Europe	India	Rest of the World	Total
Revenues	7,230	3,037	161	985	11,413
	6,151	2,472	159	812	9,594
Identifiable operating expenses	3,171	1,217	41	558	4,987
	2,670	960	44	435	4,109
Allocated expenses	1,804	757	41	246	2,848
	1,545	621	39	203	2,408
Segmental operating income	2,255	1,063	79	181	3,578
	1,936	891	76	174	3,077
Unallocable expenses					404
					336
Operating income					3,174
					2,741
Other income (expense), net					550
					252
Net profit before taxes and exceptional items					3,724
					2,993
Income taxes					436
					340
Net profit after taxes and before exceptional items					3,288
					2,653
Income on sale of investments (net of taxes)					-
					6
Net profit after taxes and exceptional items					3,288
					2,659

22.2.18. Provision for doubtful debts

Periodically, the company evaluates all customer dues to the company for collectibility. The need for provisions is assessed based on various factors including collectibility 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, 2007 the company has provided for doubtful debts of Rs.6 crore (Rs. 7 crore as at March 31, 2007) 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.

22.2.19. 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,
		2007	2006	2007	2006
Interim dividend for Fiscal 2008	10,92,19,011	66	-	66	-
Interim dividend for Fiscal 2007	7,76,06,280	-	39	-	39
Final dividend for Fiscal 2007	10,92,18,536	-	-	71	-
Silver Jubilee special dividend*	7,70,94,270	-	-	-	116
Final dividend for Fiscal 2006*	7,70,94,270	-	-	-	33

* Adjusted for bonus issue

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

Particulars	Quarter ended December 31,		Nine months ended  December 31,
	2007	2006	2007	2006
Number of shares considered as basic weighted average shares outstanding	57,13,46,568	55,70,34,398	57,12,55,430	55,48,77,140
Add: Effect of dilutive issues of shares/stock options	19,39,306	1,26,82,686	19,55,108	1,32,95,919
Number of shares considered as weighted average shares and potential shares outstanding	57,32,85,874	56,97,17,084	57,32,10,538	56,81,73,059

22.2.21 Intellectual Property Rights

Infosys was liable to pay Aeronautical Development Agency (ADA) a maximum amount of Rs. 20 crores (US $4.4 million) by June 12, 2012 through a revenue sharing arrangement towards acquisition of Intellectual Property Rights in AUTOLAY, a commercial software application product used in designing high performance structural systems. During the quarter ended December 31, 2006, Infosys foreclosed the arrangement by paying the net present value of the future revenue share amounting to Rs. 13.5 crore (US$ 3 million). The remainder of the liability amounting to Rs. 6.5 crore (US$ 1.4 million) has been written back and disclosed in Other income.

22.2.22 Exceptional items

During the year ended March,31,2005 the company sold its entire investment in Yantra Corporation, USA (Yantra) for a total consideration of US $12.57 million. An amount of Rs. 49 crore representing 90% of the consideration was received by the company and the balance amount was deposited in Escrow to indemnify any contractual contingencies.During the nine months ended December 31, 2006, the company received the balance amount of Rs. 5 crore on fulfillment of the Escrow obligations. Since the carrying value of the investment is Nil, the entire proceeds of Rs. 5 crore (net of taxes, as applicable) has been recognized in the profit and loss account as an exceptional item

During the nine months ended December 31, 2006, the company received Rs. 1 crore from CiDRA Corporation towards redemption of shares on recapitalisation. The remainder of investment was written off against provision made earlier.

22.2.23 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.

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, 2007	March 31, 2007
Obligations at period beginning	221	180
Service Cost	32	44
Interest cost	12	14
Actuarial (gain)/loss	(2)	-
Benefits paid	(15)	(17)
Amendment in benifit plans	(37)	-
Obligations at period end	211	221
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	221	167
Expected return on plan assets	13	16
Actuarial gain/(loss)	2	3
Contributions	9	52
Benefits paid	(15)	(17)
Plans assets at period end, at fair value	230	221
Reconciliation of present value of the obligation and the fair value of the plan assets:
Fair value of plan assets at the end of the period	230	221
Present value of the defined benefit obligations at the end of the period	211	221
Asset recognized in the balance sheet	19	-
Assumptions
Interest rate	7.78%	7.99%
Estimated rate of return on plan assets	7.78%	7.99%

in Rs. Crore

	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Gratuity cost for the period
Service cost	12	12	32	34
Interest cost	4	3	12	10
Expected return on plan assets	(4)	(5)	(13)	(12)
Actuarial (gain)/loss	(3)	(1)	(4)	(3)
Amortizations(Reduction in benefit)	(1)	-	(3)	-
Net gratuity cost	8	9	24	29
Assumptions
Interest rate			7.78%	7.60%
Estimated rate of return on plan assets			7.78%	7.60%

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 has been amortized on a straight line basis to the net profit and loss account over 10 years representing the average future service period of employees.

22.2.24 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.

22.2.25 Cashflow Statement

22.2.25.a

The balance of cash and cash equivalents includes Rs.3 crore as at December 31, 2007 (Rs. 2 crore as at March 31, 2007) set aside for payment of dividends.

22.2.25.b Restricted Cash

Deposits with financial institutions and body corporate as at December 31, 2007 include an amount of Rs.148 crore (Rs. 132 crore as at March 31, 2007) deposited with Life Insurance Corporation of India to settle employee benefit/ leave 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".

22.3 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, 2007	March 31, 2007
3. Fixed assets
	Additions
	Vehicles	0.53	-
	Deductions/retirements
	Plant and Machinery	-	0.34
	Furniture and Fixtures	0.11	0.15
	Depreciation & Amortization for the period
	Furniture and Fixtures	0.10	-
	Vehicles	-	1.00
7. Cash in Hand		-	-
22.2.6. Computers on operating lease to Infosys BPO
	- Net Book Value	0.23	0.08
22.2.13. Balances with non-scheduled banks
	- ABN Amro Bank, Copenhagen, Denmark	0.01	0.04
	- Bank of China, Beijing China	-	-
	- Citibank NA, Singapore	0.03	0.03
	- Citibank NA, Thailand	0.33	0.16
	- Deutsche Bank, Paris, France	0.92	3.00
	- Nordbanken, Stockholm, Sweden	0.72	0.05
	- Svenska Handels Bank, Stockholm, Sweden	0.01	0.01
	- UFJ Bank, Tokyo, Japan	0.04	0.06
	- Deutsche Bank, Zurich, Switzerland	0.62	0.21
	- Nordbanken, Stockholm, Sweden	0.72	0.05
22.2.16. Long- term investments
	Onmobile (common stock)	-	0.19
	Onmobile (Series A - voting)	-	0.19

Profit & Loss Items

in Rs. crore

Schedule	Description	Quarter ended December 31,		Nine months ended  December 31,
		2007	2006	2007	2006
Profit & Loss	Provision for investments	-	0.20	(0.40)	2.98
	Additional Dividend tax	-	-	-	-
12. Selling and Marketing expenses
	Overseas group health insurance	-	-	0.43	-
	Contribution to provident and other funds	0.46	0.51	1.32	1.44
	Visa charges and others	-	-	1.13	-
	Staff Welfare	-	0.69	-	1.06
	Printing & Stationery	0.29	0.50	0.86	1.21
	Sales promotion expenses	-	0.39	0.94	1.30
	Office maintenance	0.15	0.10	0.30	0.22
	Computer maintenance	0.09	0.03	0.11	0.08
	Advertisement	-	0.34	-	2.36
	Software Packages for own use	0.01	-	0.08	0.42
	Communication Expenses	-	0.18	0.43	0.50
	Rates and Taxes	-	-	0.01	-
	Consumables	0.07	0.08	0.18	0.26
13. General and Administrative expenses
	Provision for doubtful loans and advances	0.12	0.05	0.30	0.12
	Overseas group health insurance	-	0.14	(0.17)	(0.04)
	Commission to non-whole time directors		0.47	-	1.45
	Visa charges others	(0.01)	0.21	0.22	1.36
	Auditor’s remuneration :
	Statutory audit fees	0.16	0.14	0.48	0.40
	Others	-	0.01	-	0.01
	Certification Charges	0.01	-	0.03	-
	Out-of-pocket expenses	0.01	-	0.03	0.04
	Research Grants	0.41	2.04	3.93	7.02
	Freight charges	0.24	0.18	0.63	0.63
	Bank charges and commission	0.25	0.13	0.85	0.99
	Miscellaneous expenses	0.47	-	-	-
22.2.1. Aggregate expenses
	Provision for doubtful loans and advances	0.12	0.05	0.30	0.12
	Commission to non whole time directors	-	0.47	-	1.45
	Sales promotion expenses	-	0.39	0.94	1.30
	Guest house maintenance	-	-	1.43	-
	Auditor’s remuneration
	Statutory audit fees	0.16	0.14	0.48	0.40
	Others	-	0.01	-	0.01
	Certification Charges	0.01	-	0.03	-
	Out-of-pocket expenses	0.01	-	0.03	0.04
	Bank charges and commission	0.25	0.13	0.85	0.99
	Freight charges	-	0.18	0.39	0.63
	Research Grants	0.41	2.04	3.93	7.02
	Miscellaneous expenses	0.47	-	-	-
22.2.7. Related Party Transactions
	Revenue Transactions
	Interest Income - Infosys China	0.48	-	0.48	-
	Sale of services - Infosys consulting	0.36	-	0.36	-
22.2.15. Profit on disposal of fixed assets, included in miscellaneous income		0.01	0.06	0.05	0.13
	Loss on disposal of fixed assets, included in miscellaneous expenses	-	(0.01)	(0.01)	(0.03)
	Profit/(loss) on disposal of fixed assets, net	0.01	0.05	0.04	0.10
22.2.13. Balances with non-scheduled banks
	- ABN Amro Bank, Copenhagen, Denmark	0.11	-	0.25	-
	- Citibank NA, Singapore	0.07	0.14	0.08	0.19
	- Citibank NA, Sharjah, UAE	-	0.14	-	0.18
	- Citibank NA, Thailand	0.33	0.15	0.33	0.15
	- Bank of china, Beijing, China	-	-	-	0.02

Cash Flow Statement Items

in Rs. crore

Schedule	Description	Nine months ended December 31,
		2007	2006
Cash Flow	Profit/ loss on sale of fixed assets	0.04	(0.05)
Statement	Proceeds on disposal of fixed assets	0.04	0.30

Transactions with key management personnel

Key management personnel comprise directors and statutory officers.

Particulars of remuneration and other benefits paid to key management personnel during the quarter and nine months ended December 31, 2007 and 2006 :

in Rs. crore

Name	Salary	Contributions to provident and other funds	Perquisites and incentives	Total Remuneration
Chairman and Chief Mentor
N R Narayana Murthy *	-	-	-	-
	-	-	-	-
	-	-	-	-
	0.06	0.02	0.21	0.29
Co-Chairman
Nandan M Nilekani	0.06	0.01	0.22	0.29
	0.04	0.01	0.05	0.10
	0.15	0.04	0.38	0.57
	0.12	0.03	0.24	0.39
Chief Executive Officer and Managing Director
S Gopalakrishnan	0.06	0.01	0.22	0.29
	0.04	0.01	0.05	0.10
	0.15	0.04	0.38	0.57
	0.12	0.03	0.25	0.40
Chief Operating Officer
S D Shibulal	0.05	0.01	0.22	0.28
	0.03	0.01	0.04	0.08
	0.14	0.04	0.36	0.54
	0.10	0.03	0.20	0.33
Whole-time Directors
K Dinesh	0.06	0.01	0.22	0.29
	0.04	0.01	0.05	0.10
	0.15	0.04	0.38	0.57
	0.10	0.03	0.24	0.37
T V Mohandas Pai	0.09	0.03	0.51	0.63
	0.06	0.02	0.09	0.17
	0.24	0.07	0.93	1.24
	0.18	0.06	0.44	0.68
Srinath Batni	0.08	0.02	0.33	0.43
	0.05	0.01	0.07	0.13
	0.22	0.06	0.61	0.89
	0.15	0.03	0.37	0.55
Chief Financial Officer
V Balakrishnan	0.07	0.02	0.45	0.54
	0.04	0.01	0.16	0.21
	0.20	0.06	0.64	0.90
	0.13	0.03	0.43	0.59

* Wholetime director till August 20, 2006

Name	Commission	Sitting fees	Reimbursement of expenses	Total remuneration
Non-Whole time Directors
Deepak M Satwalekar	0.14	-	-	0.14
	0.06	-	-	0.06
	0.41	-	0.01	0.42
	0.18	-	-	0.18
Prof.Marti G. Subrahmanyam	0.11	-	0.02	0.13
	0.05	-	-	0.05
	0.35	-	0.11	0.46
	0.17	-	0.05	0.22
David L. Boyles	0.11	-	-	0.11
	0.05	-	-	0.05
	0.35	-	-	0.35
	0.17	-	-	0.17
Dr.Omkar Goswami	0.11	-	-	0.11
	0.05	-	0.01	0.06
	0.34	-	0.01	0.35
	0.15	-	0.02	0.17
Sen. Larry Pressler	-	-	-	-
	-	-	-	-
	-	-	-	-
	0.03	-	0.03	0.06
Rama Bijapurkar	0.11	-	-	0.11
	0.05	-	-	0.05
	0.34	-	-	0.34
	0.17	-	0.01	0.18
Claude Smadja	0.11	-	-	0.11
	0.05	-	0.04	0.09
	0.32	-	0.12	0.44
	0.17	-	0.17	0.34
Sridar A Iyengar	0.11	-	0.03	0.14
	0.05	-	-	0.05
	0.33	-	0.10	0.43
	0.17	-	0.08	0.25
Jeffrey S. Lehman	0.10	-	-	0.10
	0.05	-	-	0.05
	0.32	-	-	0.32
	0.15	-	-	0.15
N R Narayana Murthy *	0.12	-	-	0.12
	0.06	-	-	0.06
	0.37	-	-	0.37
	0.09	-	-	0.09

* Appointed as Additional Director effective August 21, 2006

EX-99.12

EXHIBIT 99.12
Indian GAAP Consolidated Statement, Notes and Report

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 2007, 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, 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 2007;
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
11 January 2008

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 2007 and the consolidated year to date results for the period 1 April 2007 to 31 December 2007, 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 fmancial 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, issued by the Institute of Chartered Accountants of India 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:

a. include the quarterly financial results and year to date of the following entities:

1. Infosys BPO Limited;
2. Infosys BPO s.r.o;
3. Infosys Consultigg Inc;
4. Infosys Technologies (Australia) Pty Limited;
5. Infosys Technologies (China) Co. Limited;
6. Infosys Technologies S. De R.L.De C.V. -Mexico ;
7. P- Financial Services Holding B.V. Netherlands;
8. P- Financial Services Poland Sp z.o.o;
9. P-F Services Centre Thailand Limited; and
10. Pan Financial Shared Services India Private Limited

b. have been presented in accordance with the requirements of Clause 41 of: the Listing Agreement in this regard; and

c. give a true and fair view of the consolidated net profit and other financial information for the quarter ended 31 December 2007 as well as the consolidated year to date results for the period fiom 1 April 2007 to 31 December 2007.

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
11 January 2008

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES
in Rs. crore
Consolidated Balance Sheet as at	Schedule	December 31, 2007	March 31, 2007
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital	1	286	286
Reserves and surplus	2	14,018	10,969
		14,304	11,255
MINORITY INTEREST		5	4
		14,309	11,259
APPLICATION OF FUNDS
FIXED ASSETS	3
Original cost		5,453	4,642
Less: Accumulated depreciation and amortization		2,272	1,836
Net book value		3,181	2,806
Add: Capital work-in-progress		1,305	965
		4,486	3,771
INVESTMENTS	4	136	25
DEFERRED TAX ASSETS	5	115	92
CURRENT ASSETS, LOANS AND ADVANCES
Sundry debtors	6	2,608	2,436
Cash and bank balances	7	6,679	5,871
Loans and advances	8	2,299	1,214
		11,586	9,521
LESS: CURRENT LIABILITIES AND PROVISIONS
Current liabilities	9	1,666	1,469
Provisions	10	348	681
NET CURRENT ASSETS		9,572	7,371
		14,309	11,259
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	23
The schedules referred to above are an integral part of the consolidated balance sheet.

As per our report attached

for BSR & Co.
Chartered Accountants

Natrajan Ramkrishna Partner Membership No. 32815	N. R. Narayana Murthy Chairman and Chief Mentor	Nandan M. Nilekani Co-Chairman	S. Gopalakrishnan Chief Executive Officer and Managing Director	S. D. Shibulal Chief Operating Officer
	Deepak M. Satwalekar Director	Marti G. Subrahmanyam Director	Rama Bijapurkar Director	Claude Smadja Director
	Sridar A. Iyengar Director	David L. Boyles Director	Jeffrey S. Lehman Director	K. Dinesh Director
Bangalore January 11, 2008	T. V. Mohandas Pai Director	Srinath Batni Director	V. Balakrishnan Chief Financial Officer	Parvatheesam K. 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,
		2007	2006	2007	2006
Income from software services, products and business process management		4,271	3,655	12,150	10,121
Software development and business process management expenses	11	2,325	1,938	6,725	5,437
GROSS PROFIT		1,946	1,717	5,425	4,684
Selling and marketing expenses	12	205	236	693	661
General and administration expenses	13	349	285	972	829
		554	521	1,665	1,490
OPERATING PROFIT BEFORE INTEREST, DEPRECIATION AND MINORITY INTEREST		1,392	1,196	3,760	3,194
Interest		-	-	-	-
Depreciation		153	141	441	369
OPERATING PROFIT BEFORE TAX, MINORITY INTEREST AND EXCEPTIONAL ITEMS		1,239	1,055	3,319	2,825
Other income, net	14	158	59	565	253
Provision for investments		-	-	-	3
NET PROFIT BEFORE TAX, MINORITY INTEREST AND EXCEPTIONAL ITEMS		1,397	1,114	3,884	3,075
Provision for taxation (refer to note 23.2.8)	15	166	130	474	359
NET PROFIT AFTER TAX AND BEFORE MINORITY INTEREST AND EXCEPTIONAL ITEMS		1,231	984	3,410	2,716
Income on sale of investments, net of taxes (refer to note 23.2.19)		-	-	-	6
NET PROFIT AFTER TAX, EXCEPTIONAL ITEMS AND BEFORE MINORITY INTEREST		1,231	984	3,410	2,722
Minority interest		-	1	-	10
NET PROFIT AFTER TAX, EXCEPTIONAL ITEMS AND MINORITY INTEREST		1,231	983	3,410	2,712
Balance Brought Forward		6,719	3,626	4,941	2,219
Less: Residual dividend paid		-	-	-	4
Additional dividend tax		-	-	-	1
		6,719	3,626	4,941	2,214
AMOUNT AVAILABLE FOR APPROPRIATION		7,950	4,609	8,351	4,926
Dividend
Interim		-	-	343	278
Final		-	-	-	-
Total dividend		-	-	343	278
Dividend tax		-	-	58	39
Amount transferred to General Reserve		-	-	-	-
Balance in profit and loss account		7,950	4,609	7,950	4,609
		7,950	4,609	8,351	4,926
EARNINGS PER SHARE *
Equity shares of par value Rs. 5/- each
Before Exceptional items
Basic		21.54	17.64	59.70	48.75
Diluted		21.47	17.24	59.49	47.61
After Exceptional items
Basic		21.54	17.64	59.70	48.88
Diluted		21.47	17.24	59.49	47.73
Number of shares used in computing earnings per share
Basic		57,13,46,568	55,70,34,398	57,12,55,430	55,48,77,140
Diluted		57,32,85,874	56,97,17,084	57,32,10,538	56,81,73,059
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	23
* Refer to note 23.2.17
The schedules referred to above form an integral part of the consolidated profit and loss account.

As per our report attached

for BSR & Co.
Chartered Accountants

Natrajan Ramkrishna Partner Membership No. 32815	N. R. Narayana Murthy Chairman and Chief Mentor	Nandan M. Nilekani Co-Chairman	S. Gopalakrishnan Chief Executive Officer and Managing Director	S. D. Shibulal Chief Operating Officer
	Deepak M. Satwalekar Director	Marti G. Subrahmanyam Director	Rama Bijapurkar Director	Claude Smadja Director
	Sridar A. Iyengar Director	David L. Boyles Director	Jeffrey S. Lehman Director	K. Dinesh Director
Bangalore January 11, 2008	T. V. Mohandas Pai Director	Srinath Batni Director	V. Balakrishnan Chief Financial Officer	Parvatheesam K. 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,
		2007	2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit before tax, minority interest and exceptional items		3,884	3,075
Adjustments to reconcile net profit before tax to cash provided by operating activities
(Profit)/ loss on sale of fixed assets		-	-
Depreciation		441	369
Interest and dividend income		(501)	(194)
Profit on sale of liquid mutual funds		-	(8)
Provisions for investments		-	3
Effect of exchange differences on translation of foreign currency cash and cash equivalents		40	(27)
Changes in current assets and liabilities
Sundry debtors	16	(141)	(608)
Loans and advances	17	(311)	(235)
Current liabilities and provisions	18	233	339
Income taxes paid	19	(279)	(306)
NET CASH GENERATED BY OPERATING ACTIVITIES		3,366	2,408
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets and change in capital work-in-progress	20	(1,063)	(866)
Payment for purchase of business, net of cash acquired		(107)	-
Proceeds on disposal of fixed assets		-	-
Payment for intellectual property rights		-	14
Investments in securities	21	(111)	(1,432)
Acquisition of minority interest in subsidiary		(2)	(599)
Interest and dividend income		501	194
Cash flow from investing activities before exceptional items		(782)	(2,689)
Proceeds on sale of long term Investments (net of taxes)		-	6
NET CASH USED IN INVESTING ACTIVITIES		(782)	(2,683)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital on exercise of stock options		25	423
Dividends paid during the period, including dividend tax		(834)	(1,532)
NET CASH USED IN FINANCING ACTIVITIES		(809)	(1,109)
Effect of exchange differences on translation of foreign currency cash and cash equivalents		(26)	27
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS		1,749	(1,357)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		6,048	3,956
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	22	7,797	2,599
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS	23
The schedules referred to above are an integral part of the consolidated cash flow statement.

As per our report attached

for BSR & Co.
Chartered Accountants

Natrajan Ramkrishna Partner Membership No. 32815	N. R. Narayana Murthy Chairman and Chief Mentor	Nandan M. Nilekani Co-Chairman	S. Gopalakrishnan Chief Executive Officer and Managing Director	S. D. Shibulal Chief Operating Officer
	Deepak M. Satwalekar Director	Marti G. Subrahmanyam Director	Rama Bijapurkar Director	Claude Smadja Director
	Sridar A. Iyengar Director	David L. Boyles Director	Jeffrey S. Lehman Director	K. Dinesh Director
Bangalore January 11, 2008	T. V. Mohandas Pai Director	Srinath Batni Director	V. Balakrishnan Chief Financial Officer	Parvatheesam K. 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, 2007	March 31, 2007
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
	57,15,53,937 ( 57,12,09,862) 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 23.2.7
	* Refer to note 23.2.17 for details of basic and diluted shares
2	RESERVES AND SURPLUS
	Capital reserve	6	5
	Foreign currency translation reserve	14	-
	Share premium account - Opening balance	2,768	1,543
	Add: Receipts on exercise of employee stock options	25	1,206
	Income Tax benefit arising from exercise of stock options	-	19
		2,793	2,768
	General reserve - Opening balance	3,255	3,012
	Less: Capitalized on issue of bonus shares	-	138
	Less: Gratuity transitional liability (refer to note 23.2.20)	-	9
	Add: Transfer from the Profit and Loss Account	-	378
	Add: Fair value of employee options issued in exchange of Infosys BPO options (refer to note 23.2.12)	-	12
		3,255	3,255
	Balance in Profit and Loss Account	7,950	4,941
		14,018	10,969

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, 2007	Additions	Deletions/ Retirement	As at December 31, 2007	As at April 1, 2007	For the period	Deletions/ Retirement	As at December 31, 2007	As at
										December 31, 2007	March 31, 2007
	Goodwill	589	83	-	672	-	-	-	-	672	589
	Land: free-hold	76	55	-	131	-	-	-	-	131	76
	leasehold	96	3	-	99	-	-	-	-	99	96
	Buildings	1,471	302	-	1,773	267	80	-	347	1,426	1,204
	Plant and machinery	787	122	-	909	423	102	-	525	384	364
	Computer equipment	1,028	155	5	1,178	774	186	5	955	223	254
	Furniture and fixtures	573	89	-	662	362	69	-	431	231	211
	Leasehold improvements	20	6	-	26	10	4	-	14	12	10
	Vehicles	2	1	-	3	-	-	-	-	3	2
		4,642	816	5	5,453	1,836	441	5	2,272	3,181	2,806
	Previous period	2,983	1,331	6	4,308	1,328	369	2	1,695	2,613	1,655
	Previous year	2,983	1,706	47	4,642	1,328	514	6	1,836	2,806
Note: Buildings include Rs. 250/- being the value of 5 shares of Rs. 50/- each in Mittal Towers Premises Co-operative Society Limited

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES
in Rs. crore
Schedules to the Consolidated Balance Sheet as at		December 31, 2007	March 31, 2007
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
	Liquid mutual funds*	136	25
		136	25
	Aggregate amount of unquoted investments	136	25
	* refer to note 23.2.11
5	DEFERRED TAX ASSETS
	Fixed assets	90	74
	Sundry debtors	7	3
	Leave provisions and others	18	15
		115	92
6	SUNDRY DEBTORS
	Debts outstanding for a period exceeding six months
	Unsecured
	considered good	-	-
	considered doubtful	40	16
	Other debts
	Unsecured
	considered good*	2,608	2,436
	considered doubtful	6	7
		2,654	2,459
	Less: Provision for doubtful debts	46	23
		2,608	2,436
	* Includes dues from companies where directors are interested	-	7
7	CASH AND BANK BALANCES
	Cash on hand	-	-
	Balances with scheduled banks
	In current accounts *	166	481
	In deposit accounts in Indian Rupees	5,601	4,989
	Balances with non-scheduled banks
	In deposit accounts in foreign currency	289	-
	In current accounts in foreign currency	623	401
		6,679	5,871
	*Includes balance in unclaimed dividend account	3	2
8	LOANS AND ADVANCES
	Unsecured, considered good
	Advances
	prepaid expenses	22	34
	for supply of goods and rendering of services	8	3
	advance to gratuity and provident fund trust	28	-
	others	26	20
		84	57
	Unbilled revenues	535	320
	Advance income tax	150	353
	MAT credit entitlement	62	-
	Loans and advances to employees
	housing and other loans	39	42
	salary advances	60	76
	Electricity and other deposits	29	21
	Rental deposits	25	15
	Deposits with financial institution and body corporate (refer note 23.2.9)	1,266	309
	Mark to Market forward contract & option - asset	49	15
	Other assets	-	6
		2,299	1,214
	Unsecured, considered doubtful
	Loans and advances to employees	1	1
		2,300	1,215
	Less: Provision for doubtful loans and advances to employees	1	1
		2,299	1,214
9	CURRENT LIABILITIES
	Sundry creditors
	capital goods	-	-
	goods and services	30	25
	accrued salaries and benefits
	salaries	54	39
	bonus and incentives	291	264
	unavailed leave	178	149
	for other liabilities
	accrual for expenses	465	456
	retention monies	45	24
	withholding and other taxes payable	175	181
	others	42	12
		1,280	1,150
	Advances received from clients	13	4
	Unearned revenue	370	311
	Unclaimed dividend	3	2
	Due to option holders of Infosys BPO	-	2
		1,666	1,469
10	PROVISIONS
	Proposed dividend	-	371
	Provision for
	tax on dividend	-	63
	income taxes*	301	224
	post-sales client support and warranties	45	23
	Gratuity	2	-
		348	681
* Refer to note 23.2.8

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,
		2007	2006	2007	2006
11	SOFTWARE DEVELOPMENT AND BUSINESS PROCESS MANAGEMENT EXPENSES
	Salaries and bonus including overseas staff expenses	1,917	1,572	5,575	4,416
	Contribution to provident and other funds	49	40	140	113
	Staff welfare	18	13	42	33
	Overseas travel expenses	124	107	381	342
	Traveling and conveyance	-	-	2	-
	Technical sub-contractors	62	85	214	211
	Software packages
	for own use	68	60	163	147
	for service delivery to clients	9	5	23	20
	Communication expenses	22	18	56	53
	Rent	15	8	32	24
	Computer maintenance	5	7	17	17
	Consumables	6	6	17	18
	Provision for post-sales client support and warranties	14	5	19	11
	Miscellaneous expenses	16	12	44	32
		2,325	1,938	6,725	5,437
12	SELLING AND MARKETING EXPENSES
	Salaries and bonus including overseas staff expenses	139	136	443	411
	Contribution to provident and other funds	1	1	3	3
	Staff welfare	1	1	3	2
	Overseas travel expenses	25	27	77	77
	Traveling and conveyance	1	1	3	6
	Brand building	14	17	42	44
	Commission and earnout charges	3	27	61	54
	Professional charges	6	5	19	17
	Rent	4	5	12	14
	Marketing expenses	6	11	16	19
	Telephone charges	2	2	6	5
	Printing and stationery	-	1	-	1
	Advertisements	1	-	5	2
	Sales promotion expenses	1	1	2	2
	Office maintenance	-	-	-	1
	Communication Expenses	1	1	1	1
	Insurance charges	-	-	-	-
	Consumables	-	-	-	-
	Software packages
	for own use	-	-	-	-
	Computer maintenance	-	-	-	-
	Rates and taxes	-	-	-	-
	Miscellaneous expenses	-	-	-	2
		205	236	693	661

13	GENERAL AND ADMINISTRATION EXPENSES
	Salaries and bonus including overseas staff expenses	91	73	253	202
	Contribution to provident and other funds	3	3	9	9
	Staff welfare	-	-	1	-
	Telephone charges	35	31	99	90
	Professional charges	48	38	131	109
	Power and fuel	30	25	91	73
	Office maintenance	36	26	96	78
	Guesthouse maintenance	1	-	1	-
	Traveling and conveyance	29	23	76	68
	Overseas travel expenses	6	5	17	17
	Insurance charges	5	8	19	23
	Printing and stationery	4	5	14	12
	Rates and taxes	14	8	28	20
	Donations	5	7	15	16
	Rent	5	6	17	16
	Advertisements	1	2	6	6
	Professional membership and seminar participation fees	2	3	7	8
	Repairs to building	6	5	15	15
	Repairs to plant and machinery	5	4	14	10
	Postage and courier	2	1	8	6
	Books and periodicals	1	1	3	3
	Recruitment and training	-	1	2	6
	Provision for bad and doubtful debts	17	5	38	25
	Provision for doubtful loans and advances	-	-	-	-
	Commission to non-whole time directors	1	1	3	2
	Auditor’s remuneration			-
	statutory audit fees	-	-	-	1
	certification charges	-	-	-	-
	others	-	-	-	-
	out-of-pocket expenses	-	-	-	-
	Bank charges and commission	-	-	-	1
	Freight charges	-	-	-	-
	Research grants	-	2	3	7
	Miscellaneous expenses	2	2	6	6
		349	285	972	829
14	OTHER INCOME, NET
	Interest received on deposits with banks and others*	169	32	494	107
	Dividend received on investment in liquid mutual funds (non-trade unquoted)	1	38	7	87
	Profit on sale of liquid mutual funds	-	-	-	-
	Miscellaneous income, net (Refer to note 23.2.10)	2	9	7	16
	Exchange gains / (losses)	(14)	(20)	57	43
		158	59	565	253
	*includes tax deducted at source	9	4	69	23
15	PROVISION FOR TAXATION
	Income taxes*	198	134	557	376
	MAT credit entitlement	(25)	-	(64)	-
	Deferred taxes	(7)	(4)	(19)	(17)
		166	130	474	359
* Refer to note 23.2.8

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES
in Rs. crore
Schedules to Consolidated Cashflow Statements for the		Nine months ended December 31,
		2007	2006
16	CHANGE IN SUNDRY DEBTORS
	As per the Balance Sheet	2,608	2,216
	Less: Opening balance considered	(2,436)	(1,608)
	Sundry debtors pertaining to acquired company	(31)	-
		141	608
17	CHANGE IN LOANS AND ADVANCES
	As per the Balance Sheet*	2,299	1,786
	Add/ (Less): Gratuity plan amendment (Refer to note 23.2.20)	37	13
	Less: Deposits with financial institutions,
	included in cash and cash equivalents	(1,118)	(751)
	MAT credit entitlement	(62)	-
	Advance income taxes separately considered	(150)	(309)
		1,006	739
	Less: Opening balance considered	(684)	(504)
	Loans and Advances pertaining to acquired company	(11)	-
		311	235
	* Net of gratuity transitional liability
18	CHANGE IN CURRENT LIABILITIES AND PROVISIONS
	As per the Balance Sheet	2,014	1,601
	Add/ (Less): Unclaimed dividend	(3)	(3)
	Gratuity plan amendment	37	-
	Due to option holders of Infosys BPO	-	-
	Provisions separately considered in the cash flow statement
	Income taxes	(301)	(303)
		1,747	1,295
	Less: Opening balance considered	(1,488)	(956)
	Current Liabilities and Provisions pertaining to acquired company	(26)	-
		233	339
19	INCOME TAXES PAID
	Charge as per the Profit and Loss Account	474	359
	Add:Increase/ (Decrease) in advance income taxes	(203)	42
	Increase / (Decrease) in deferred taxes	23	18
	Increase / (Decrease) in MAT credit entitlement	62	-
	Less: Income Tax benefit arising from exercise of stock options	-	-
	(Increase)/Decrease in income tax provision	(77)	(113)
		279	306
20	PURCHASE OF FIXED ASSETS AND CHANGE IN CAPITAL WORK-IN-PROGRESS
	As per Balance Sheet*	723	859
	Less: Opening Capital work-in-progress	(965)	(571)
	Add: Closing Capital work-in-progress	1,305	578
		1,063	866
	* Excludes Rs Nil crore (Rs 4 crore) towards movement of land from Leasehold to Freehold
	* Excludes goodwill Rs Nil crore (Rs 411 crore) on buyback of Infosys BPO Ltd shares
	* Excludes Goodwill of Rs. 83 crore and net fixed assets of Rs. 10 crore related to acquired company
21	INVESTMENTS IN / (DISPOSAL OF) SECURITIES *
	As per the Balance Sheet	136	2,192
	Add:Provisions made on investments	-	3
		136	2,195
	Less: Profit on sale of liquid mutual funds	-	(8)
	Opening balance considered	(25)	(755)
		111	1,432
	* Refer to note 23.2.11 for details of investments and redemptions
22	CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
	As per the Balance Sheet	6,679	1,848
	Add:Deposits with financial institutions, included herein	1,118	751
		7,797	2,599

CONSOLIDATED FINANCIAL STATEMENTS OF INFOSYS TECHNOLOGIES LIMITED AND SUBSIDIARIES
Schedules to the Consolidated Financial Statements for the quarter and nine months ended December 31, 2007
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, India ("Infosys BPO") formerly known as Progeon Limited and,wholly owned subsidiaries, Infosys Technologies (Australia) Pty. Limited ("Infosys Australia"), Infosys Technologies (China) Co. Limited ("Infosys China") formerly known as Infosys Technologies (Shanghai) Co. Limited, Infosys Consulting, Inc., USA ("Infosys Consulting") and Infosys Technologies S. DE R.L. de C.V. ("Infosys Mexico") is a leading global technology services organisation. The group of companies ("the Group") provide 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-engi neering, maintenance, systems integration and 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.
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 accruals basis. 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. The interim financial statements are prepared to conform to the accounting standard on "Interim Financial Reporting". 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.
Management evaluates all recently issued or revised accounting standards on an on-going basis.
The financial statements are prepared in accordance with the principles and procedures requried 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 c ontrolled 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.
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 assets and 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.
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. 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. Actual results could differ from those estimates.
23.1.3. Revenue recognition
Revenue from software development and business process management on fixed-price, fixed-time frame contracts, where there is no uncertainty as to measurement or collectability of consideration is recognized as per the percentage of completion method. On time-and-materials contracts, revenue is recognized as the related services are rendered. 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 proportionately 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 multiple element co ntracts, where revenue is recognized as per the percentage of completion method.
Profit on sale of investments is recorded on transfer of title from the company and is determined as the difference between the sales price and the then carrying value of the investment. 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. Expenditure
The cost of software purchased for use in software development and services is charged to cost of revenues in the year of acquisition. Charges relating to non-cancelable, long-term operating leases are computed primarily on the basis of the lease rentals, payable as per the relevant lease agreements. Post-sales customer support costs are estimated by management, determined on the basis of past experience. The costs provided for are carried until expiry of the related warranty period. Provisions are made for all known losses and liabilities. Leave encashment liability is determined on the basis of an actuarial valuation.
23.1.5. Fixed assets, including goodwill, intangible assets and capital work-in-progress
Fixed assets are stated at cost, less accumulated depreciation. 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 balance sheet date. Intangible assets are recorded at the consideration paid for acquisition. Goodwill comprises the excess of purchase consideration over the fair value of the net assets of the acquired enterprise. Impairment of goodwill is evaluated annually, unless indications require a more frequent evaluation. Impairment is recorded in the profit and loss account to the extent the net discounted cashflows from the continuance of the acquisition are lower than its carrying value.
23.1.6. 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	2-5 years
Furniture and fixtures	5 years
Vehicles	5 years
23.1.7. Retirement benefits to employees
23.1.7.a. Gratuity
Infosys provides for gratuity, a defined benefit retirement plan (the “Gratuity Plan”) covering eligible employees at the company and Infosys BPO. In accordance with the Payment of Gratuity Act, 1972, 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 as at the balance sheet date and as per gratuity regulations for Infosys and Infosys BPO respectively. Infosys fully contributes all ascertained liabilities to the Infosys Technologies Limited Employees’ Gratuity Fund Trust (the “Trust”). Infosys BPO fully contributes all ascertained liabilities to the Infosys BPO Employees' Gratuity Fund Trust. Trustees administer contributions made to the Trust and contributions are invested in specific investments, as permitted by law.
23.1.7.b. Superannuation
Certain employees of Infosys are also participants in a defined contribution plan. Until March 2005, the company made contributions under the superannuation plan (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. From 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 trust.
23.1.7.c. Provident fund
Eligible employees 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 contributions are made to government administered provident fund. The interest rate payable by the trust to the beneficiaries every year is being administered by the government. The company has an obligation to make good the short fall, if any, between the return from its investments and the administered 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.
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
Revenue from overseas clients and collections deposited in foreign currency bank accounts are recorded at the exchange rate as of the date of the respective transactions. Expenditure in foreign currency is accounted at the exchange rate prevalent when such expenditure is incurred. Disbursements made out of foreign currency bank accounts are reported at the daily rates. Exchange differences are recorded when the amount actually received on sales or actually paid when expenditure is incurred is converted into Indian Rupees. The exchange differences arising on foreign currency transactions are recognized as income or expense in the period in which they arise.
Fixed assets purchased at overseas offices are recorded at cost, based on the exchange rate as of the date of purchase. The charge for depreciation is determined as per the Group’s accounting policy.
Monetary current assets and monetary current liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of the balance sheet. The resulting difference is also recorded in the profit and loss account. 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"
23.1.10. Forward contracts and options in foreign currencies
The company uses foreign exchange forward contracts and options to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts and options reduces the risk or cost to the company and the company does not use the foreign exchange forward contracts or options for trading or speculation purposes.
The company records the gain or loss on effective hedges 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 contract and option 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.
23.1.11. Income tax
Income taxes are computed using the tax effect accounting method, where 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 alternative 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 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 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 substantially 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 balance sheet 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.
23.1.12. Earnings per share
In determining earnings per share, the Group considers the net profit after tax and includes the post-tax effect of any extra-ordinary/exceptional item. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares that could have been issued on the 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. The number of shares and potentially dilutive equity shares are adjusted for any stock s plits and bonus shares issues 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 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.
23.1.14. 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.
23.1.15. Onerous contracts
Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event based on a reliable estimate of such obligation.

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:
	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Salaries and bonus including overseas staff expenses#	2,147	1,781	6,271	5,029
Contribution to provident and other funds	53	44	152	125
Staff welfare	19	14	46	35
Overseas travel expenses	155	139	475	436
Traveling and conveyance	30	24	81	74
Technical sub-contractors	62	85	214	211
Software packages
for own use	68	60	163	147
for service delivery to clients	9	5	23	20
Professional charges	54	43	150	126
Telephone charges	37	33	105	95
Communication expenses	23	19	57	54
Power and fuel	30	25	91	73
Office maintenance	36	26	96	79
Guesthouse maintenance	1	-	1	-
Rent	24	19	61	54
Brand building	14	17	42	44
Commission and earnout charges	3	27	61	54
Insurance charges	5	8	19	23
Printing and stationery	4	6	14	13
Computer maintenance	5	7	17	17
Consumables	6	6	17	18
Rates and taxes	14	8	28	20
Advertisements	2	2	11	8
Donations	5	7	15	16
Marketing expenses	6	11	16	19
Professional membership and seminar participation fees	2	3	7	8
Repairs to building	6	5	15	15
Repairs to plant and machinery	5	4	14	10
Postage and courier	2	1	8	6
Provision for post-sales client support and warranties	14	5	19	11
Books and periodicals	1	1	3	3
Recruitment and training	-	1	2	6
Provision for bad and doubtful debts	17	5	38	25
Provision for doubtful loans and advances	-	-	-	-
Commission to non-whole time directors	1	1	3	2
Sales promotion expenses	1	1	2	2
Auditor’s remuneration	-	-	-	-
statutory audit fees	-	-	-	1
certification charges	-	-	-	-
others	-	-	-	-
Bank charges and commission	-	-	-	1
Freight charges	-	-	-	-
Research grants	-	2	3	7
Miscellaneous expenses	18	14	50	40
	2,879	2,459	8,390	6,927
Fringe Benefit Tax (FBT) in India amounting included in the above	4	6	15	15
# The Company had 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 payment pertains to the last three years and such backwages would be paid to employees in due course.
# The Company records health insurance liabilities based on the maximum individual claimable amounts by employees. During the quarter, 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.

23.2.2. Capital commitments and contingent liabilities
in Rs. Crore
Particulars			As at
			December 31, 2007	March 31, 2007
Estimated amount of unexecuted capital contracts
(net of advances and deposits)			686	680
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			9	9
Claims against the company, not acknowledged as debts
(Net of Amount paid to statutory authorities of Rs. 101 crore (Rs. 138 crore) *			53	15
Forward contracts outstanding
In US $			US $ 870,000,000	US$ 170,000,000
(Equivalent approximate in Rs. Crore)			3,429	733
In Euro			€ 26,200,000	€ 2,000,000
(Equivalent approximate in Rs. crore)			151	12
In GBP			£16,500,000	£5,500,000
(Equivalent approximate in Rs. crore)			129	47
Options contracts outstanding
GBP Forward Extra in GBP			£10,000,000	-
(Equivalent approximate in Rs. Crore)			78	-
Range barrier options in US $			US $ 115,000,000	US $ 206,500,000
(Equivalent approximate in Rs. Crore)			453	890
Euro Accelerator			€ 15,000,000	€ 24,000,000
(Equivalent approximate in Rs. Crore)			86	138
GBP Accelerator			£10,500,000	-
(Equivalent approximate in Rs. Crore)			82	-
Target Redemption structure (GBP)			-	£16,000,000
(Equivalent approximate in Rs. Crore)			-	136
Range barrier options in GBP			£12,000,000	£8,250,000
(Equivalent approximate in Rs. Crore)			94	70
USD - INR Vanilla Put Option in USD			5,000,000	-
(Equivalent approximate in Rs. Crore)			20	-
* Claims against the company not acknowledged as debts include demand from the Indian tax authorities for payment of additional tax of Rs 98 crore ( Rs 234 crore), including interest of Rs 18 crore ( Rs 51 crore) upon completion of their tax review for fiscal 2004. 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 is pending before the Commissioner of Income tax ( Appeals) Bangalore.
The company is contesting the demand and the management including its tax advisors believes that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements 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.
23.2.3. Obligations on long-term, non-cancelable operating leases
The lease rentals charged during the quarter and nine months ended December 31, 2007 and 2006 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,
	2007	2006	2007	2006
Lease rentals recognized during the period	24	19	61	54
in Rs. Crore
Lease obligations			As at
			December 31, 2007	March 31, 2007
Within one year of the balance sheet date			65	48
Due in a period between one year and five years			118	111
Due after five years			28	44
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.
23.2.4. Related party transactions
During the quarter and nine months ended December 31, 2007, an amount of Rs.5 crore and Rs. 15 crore (Rs.5 crore and Rs.14 crore for the quarter and nine months ended December 31, 2006) was donated to Infosys Foundation, a not-for-profit foundation, in which certain directors of the company are trustees.
23.2.5. 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, 2007 and 2006 have been detailed in Schedule 23.3, since the amounts are less than a crore.
23.2.6. Research and development expenditure
in Rs. Crore
Particulars	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Revenue	45	43	154	115
	45	43	154	115

23.2.7. 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. The 1998 Plan automatically expires in January 2008, unless terminated earlier. 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.
Number of options granted, exercised and forfeited during the	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Options outstanding, beginning of period	20,84,124	37,33,549	20,84,124	45,46,480
Granted	-	-	-	-
Less: exercised	(162,633)	(346,993)	(162,633)	(1,022,564)
forfeited	-	(25,446)	-	(162,806)
Options outstanding, end of period	19,21,491	33,61,110	19,21,491	33,61,110
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 June 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,
	2007	2006	2007	2006
Options outstanding, beginning of period	18,31,218	1,51,26,339	18,97,840	1,91,79,074
Granted	-	-	-	-
Less: exercised	(181,442)	(1,716,474)	(181,442)	(5,715,944)
forfeited	(4,477)	(23,875)	(71,099)	(77,140)
Options outstanding, end of period	16,45,299	1,33,85,990	16,45,299	1,33,85,990
In fiscal 2007, the company has accelerated the vesting of 5,72,000 outstanding unvested options which were due to be vested in the normal course by October, 2007.
The aggregate options considered for dilution are set out in note 23.2.17
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 June 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 during the quarter ended December 31, 2007 and 2006 :-
Number of options granted, exercised and forfeited	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Options outstanding, beginning of period	375	25,69,739	2,200	24,52,330
Granted	-	-	-	5,93,300
Less: exercised	-	(34,467)	-	(430,329)
forfeited	(375)	(188,467)	(2,200)	(268,496)
Options outstanding, end of period	-	23,46,805	-	23,46,805
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 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 guidance note "Accounting of employee share based premiums". 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:-
Number of options granted, exercised and forfeited	Quarter ended December 31,		Nine months ended December 31,
Particulars	2007	2006	2007	2006
Net Profit:
As Reported	1,231	983	3,410	2,712
Less: Stock-based employee compensation expense	3	2	9	6
Adjusted Proforma	1,228	981	3,401	2,706
Basic Earnings per share as reported	21.54	17.64	59.70	48.88
Proforma Basic Earnings per share	21.49	17.60	59.54	48.78
Diluted Earnings per share as reported	21.47	17.24	59.49	47.73
Proforma Earnings per share as reported	21.42	17.21	59.33	47.64
The Fair value of each option under the Infosys BPO Employee Stock Option Plan is estimated on the date of grant using the Black-Scholes model with the following assumptions:
Particulars	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Dividend yield %	-	-	-	0.00%
Expected life	-	-	-	1-6 years
Risk free interest rate	-	-	-	8.11%
Volatility	-	-	-	50.00%
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, 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 has been paid by the Company and subsequently recovered from the employees. Consequently, there is no impact on the Profit and loss account.
23.2.8. 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 the company’s and all of Infosys BPO’s 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 and March 31, 2009.
Infosys also has operations in a 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 changes 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 62 crore is carried in "Loans and Advances" in the balance sheet as of December 31, 2007.
The tax provision for the nine months ended December 31, 2007 and for the year ending March 31, 2007 includes a reversal of Rs. 101 crore and Rs. 125 crore respectively relating to liabilities no longer required for taxes payable in various overseas jurisdictions on the expiry of the limitation period, conclusion of the Pre-Filing Agreement (PFA) with the Internal revenue Service (IRS) of the United States and the completion of the assessment by taxation authorities.
23.2.9. Loans and advances
in Rs. Crore
Particulars			As at
			December 31, 2007	March 31, 2007
Deposits with financial institutions and body corporate:
HDFC Limited			1,043	13
GE Capital Services India Limited			75	164
Life Insurance Corporation of India			148	132
			1,266	309
Interest accrued but not due (included above)			31	14
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/ leave obligations as and when they arise during the normal course of business.

23.2.10. Fixed assets
Profit / loss on disposal of fixed assets during the quarter and nine months ended December 31, 2007 and 2006 is less than Rs.1 crore and accordingly disclosed in note 23.3
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, 2007.
23.2.11. Details of Investments
Details of investments in and disposal of securities during the quarter and nine months ended December 31, 2007 and 2006:
in Rs crore
Particulars	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Investment in securities
Liquid Mutual funds	242	633	1,960	3,630
	242	633	1,960	3,630
Redemption / Disposal of Investment in securities
Long-term investments	-	-	-	6
Liquid Mutual funds	121	1,262	1,849	2,192
	121	1,262	1,849	2,198
Net movement in investment	121	(629)	111	1,432
23.2.12. Holding of Infosys in its subsidiaries
Name of the subsidiary		Country of incorporation	Holding as at
			December 31, 2007	March 31, 2007
Infosys BPO***		India	98.92% #	98.92% #
Infosys Australia		Australia	100%	100%
Infosys China		China	100%	100%
Infosys Consulting		USA	100%	100%
Infosys Mexico		Mexico	100%	-
Infosys BPO s.r.o.* (formerly progeon s.r.o)		Czech Republic	98.92%	98.92%
P-Financial Services Holding B.V. Netherlands **		Netherlands	98.92%	-
* Infosys BPO s.r.o is a wholly owned subsidiary of Infosys BPO.
**P-Financial Services Holding B.V. Netherlands is a wholly owned subsidiary of Infosys BPO
*** On December 8, 2006, the shareholders of Infosys BPO approved a buy-back of upto 12,79,963 equity shares at a fair market value of Rs.604/- per equity share. The buy-back was in accordance with Section 77A of the Indian Companies Act, 1956. Pursuant to the buy-back offer Infosys BPO bought back 11,39,469 equity shares which were subsequently cancelled on December 29, 2006. As of December 31, 2007 Infosys holds 98.92% of the outstanding equity shares of Infosys BPO.
# Excludes deffered purcase of share from shareholders of Infosys BPO of 360,417 shares
On October 1, 2007, Infosys BPO acquired 100% of the equity shares of P-Financial Services Holding B.V. and its subsidiaries. This business acquisition was conducted by entering into a Sale and Purchase Agreement with Koninklijke Philips Electronics NV (Philips), a company incorporated under the laws of Netherland, for acquiring the shared service centres of Philips for finance, accounting (F&A) and procurement business in Poland, Thailand and India (Philips BPO) for a consideration of Rs. 107 crore. The transaction was completed during the quarter and accounted as a business combination which resulted in a Goodwill of Rs.83 crore.
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"). During the quarter ended December 31, 2007, the company invested Mexican Peso 50 million (Rs. 18 crore) in the subsidiary. As of December 31, 2007, 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
In January 2007, the Company initiated the purchase of all the share and outstanding options in Infosys BPO from its shareholders and option holders comprising current and former employees of Infosys BPO. The share holders were given a choice to sell their shares at fair market value and the option-holders were given the choice to sell their options and/or swap Infosys BPO options for Infosys options at a swap ratio based on fair market value.
Consequent to this proposal Infosys has paid an aggregate of Rs 71 crore for the purchase of shares and options and granted 1,51,933 Infosys options under the 1999 plan valued at fair value of Rs 12 crore. Accordingly, the investment in Infosys BPO has increased by Rs 83 crore and reserves have increased by Rs. 12 crore.
Additionally, the Company has committed to a deferred share purchase with the shareholders of Infosys BPO. As per the agreement, Infosys will purchase 3,60,417 Infosys BPO shares for Rs 22 crore by February, 2008. The same will be accounted as investments on conclusion of the agreement along with the transfer of title in the shares. Upon conclusion, Infosys holding in Infosys BPO would be 99.98%
Investment in Infosys Consulting
During the nine months ended December 31, 2007, the Company invested US$ 20 million (Rs. 81 crore) in its wholly owned subsidary Infosys Consulting, Inc. As of December 31, 2007, the Company has invested an aggregate of US$ 40 million (Rs. 171 crore) in the subsidiary.
23.2.13. Provision for doubtful debts
Periodically, the company evaluates all customer dues to the company for collectibility. The need for provisions is assessed based on various factors including collectibility 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 company normally provides for debtor dues outstanding for 180 days or longer as at the balance sheet date. As at December 31, 2007, the company has provided for doubtful debts of Rs.6 crore (as at March 31, 2007 Rs. 7 crore) 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.

23.2.14. 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, 2007 and 2006:
in Rs. crore
	Financial services	Manufacturing	Telecom	Retail	Others	Total
Revenues	1,572	622	901	514	662	4,271
	1,411	469	671	383	721	3,655
Identifiable operating expenses	608	279	326	207	276	1,696
	575	201	273	145	273	1,467
Allocated expenses	436	172	250	142	183	1,183
	383	127	182	104	196	992
Segmental operating income	528	171	325	165	203	1,392
	453	141	216	134	252	1,196
Unallocable expenses						153
						141
Operating income						1,239
						1,055
Other income (expense), net						158
						59
Net profit before taxes and exceptional items						1,397
						1,114
Income taxes						166
						130
Net profit after taxes and before exceptional items						1,231
						984
Income from sale of investments (net of taxes)						-
						-
Net profit after taxes, exceptional items and before minority interest						1,231
						984
Nine months ended December 31, 2007 and 2006:
in Rs. crore
	Financial Services	Manufacturing	Telecom	Retail	Others	Total
Revenues	4,431	1,707	2,576	1,433	2,003	12,150
	3,813	1,390	1,853	988	2,077	10,121
Identifiable operating expenses	1,827	754	955	599	833	4,968
	1,632	592	715	405	826	4,170
Allocated expenses	1,248	481	726	403	564	3,422
	1,039	378	505	269	566	2,757
Segmental operating income	1,356	472	895	431	606	3,760
	1,142	420	633	314	685	3,194
Unallocable expenses						441
						369
Operating income						3,319
						2,825
Other income (expense), net						565
						250
Net profit before taxes and exceptional items						3,884
						3,075
Income taxes						474
						359
Net profit after taxes and before exceptional items						3,410
						2,716
Income from sale of investments (net of taxes)						-
						6
Net profit after taxes, exceptional items and before minority interest						3,410
						2,722

Geographic segments
Quarter ended December 31, 2007 and 2006:
in Rs. crore
	North America	Europe	India	Rest of the World	Total
Revenues	2,660	1,219	53	339	4,271
	2,309	980	65	301	3,655
Identifiable operating expenses	1,090	457	17	132	1,696
	977	372	14	104	1,467
Allocated expenses	737	338	15	93	1,183
	627	266	18	81	992
Segmental operating income	833	424	21	114	1,392
	705	342	33	116	1,196
Unallocable expenses					153
					141
Operating income					1,239
					1,055
Other income (expense), net					158
					59
Net profit before taxes and exceptional items					1,397
					1,114
Income taxes					166
					130
Net profit after taxes and before exceptional items					1,231
					984
Income from sale of investments (net of taxes)					-
					-
Net profit after taxes, exceptional items and before minority interest					1,231
					984
Nine months ended December 31, 2007 and 2006:
in Rs. crore
	North America	Europe	India	Rest of the World	Total
Revenues	7,591	3,353	161	1,045	12,150
	6,440	2,661	159	861	10,121
Identifiable operating expenses	3,219	1,308	40	401	4,968
	2,771	1,045	46	308	4,170
Allocated expenses	2,138	944	46	294	3,422
	1,755	725	43	234	2,757
Segmental operating income	2,234	1,101	75	350	3,760
	1,914	891	70	319	3,194
Unallocable expenses					441
					369
Operating income					3,319
					2,825
Other income (expense), net					565
					250
Net profit before taxes and exceptional items					3,884
					3,075
Income taxes					474
					359
Net profit after taxes and before exceptional items					3,410
					2,716
Income from sale of investments (net of taxes)					-
					6
Net profit after taxes, exceptional items and before minority interest					3,410
					2,722

23.2.15 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,
		2007	2006	2007	2006
Interim dividend for Fiscal 2008	10,92,19,011	66	-	66	-
Interim dividend for Fiscal 2007	7,76,06,280	-	39	-	39
Final dividend for Fiscal 2007	10,92,18,536	-	-	71	-
Silver Jubilee special dividend*	7,70,94,270	-	-	-	116
Final dividend for Fiscal 2006*	7,70,94,270	-	-	-	33
* adjusted for bonus issue
23.2.16. Provisions for investments
The Company evaluates all investments for any diminution in their carrying values that is other than temporary. The company made a provision of Nil during the quarter and nine months ended December 31, 2007 (Nil and Rs. 2 crore for the quarter and nine months ended December 31, 2006) on trade investments.
The company provided nil during the quarter and nine months ended December 31, 2007 (Nil and Rs 1 crore for the quarter and nine months ended December 31, 2006 respectively) on revision of the carrying amount of non-trade current investments to fair value.
Redemption for preference shares On september 7, 2007 the company realised Rs. 0.36 crore on redemption of preference shares in M - Commerce Ventures Pte Limited, Sinagpore ("M-commerce"), and their subsequent sale.There were no such transactions in the quarter or the half year ended september 30,2006.The entire investment in M-commerce was fully provided for in earlier years.Accordingly , the realised gain was taken to the profit and loss account and provision written back.
						23.2.17. Reconciliation of basic and diluted shares used in computing earnings per share
		Quarter ended December 31,		Nine months ended December 31,
		2007	2006	2007	2006
Number of shares considered as basic weighted average shares outstanding		57,13,46,568	55,70,34,398	57,12,55,430	55,48,77,140
Add: Effect of dilutive issues of shares/stock options		19,39,306	1,26,82,686	19,55,108	1,32,95,919
Number of shares considered as weighted average shares and potential shares outstanding		57,32,85,874	56,97,17,084	57,32,10,538	56,81,73,059
23.2.18. Intellectual Property Rights
Infosys was liable to pay Aeronautical Development Agency (ADA) a maximum amount of Rs. 20 crores (US $4.4 million) by June 12, 2012 through a revenue sharing arrangement towards acquisition of Intellectual Property Rights in AUTOLAY, a commercial software application product used in designing high performance structural systems. During the quarter ended December 31, 2006, Infosys foreclosed the arrangement by paying the net present value of the future revenue share amounting to Rs. 13.5 crore (US$ 3 million). The remainder of the liability amounting to Rs. 6.5 crore (US$ 1.4 million) has been written back and disclosed in Other income.
23.2.19. Exceptional item
During the year ended March 31, 2005 the company sold its entire investment in Yantra Corporation, USA (Yantra) for a total consideration of US $12.57 million. An amount of Rs. 49 crore representing 90% of the consideration was received by the company and the balance amount was deposited in Escrow to indemnify any contractual contingencies.During the nine months ended December 31, 2006, the company received the balance amount of Rs. 5 crore on fulfillment of the Escrow obligations. Since the carrying value of the investment is Nil, the entire proceeds of Rs. 5 crore (net of taxes, as applicable) has been recognized in the profit and loss account as an exceptional item.
During the nine months ended December 31, 2006, the company received Rs. 1 crore from CiDRA Corporation towards redemption of shares on recapitalisation. The remainder of investment was written off against provision made earlier.

23.2.20. 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, 2007	March 31, 2007
Obligations at period beginning			225	183
Service Cost			33	45
Interest cost			12	14
Actuarial (gain)/loss			(1)	(1)
Benefits paid			(16)	(16)
Ammendement in benefit plan			(37)	-
Obligations at period end			216	225
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			225	170
Expected return on plan assets			13	16
Actuarial gain/(loss)			2	3
Contributions			11	54
Benefits paid			(16)	(18)
Plans assets at period end, at fair value			235	225
Reconciliation of present value of the obligation and the fair value of the plan assets:
Fair value of plan assets at the end of the period			235	225
Present value of the defined benefit obligations at the end of the period			216	225
Asset recognized in the balance sheet			19	-
Assumptions
Interest rate			7.78%	7.99%
Estimated rate of return on plan assets			7.78%	7.99%
	Quarter ended December 31,		Nine months ended December 31,
	2007	2006	2007	2006
Gratuity cost for the period
Service cost	12	12	33	35
Interest cost	4	3	12	10
Expected return on plan assets	(4)	(5)	(13)	(12)
Actuarial (gain)/loss	(2)	-	(3)	(2)
Amortizations(reduction in benefits )	(1)	-	(3)	-
Net gratuity cost	9	10	26	31
Investment details of plan assets
100% of the plan assets are invested in debt instruments.
Assumptions
Interest rate			7.78%	7.60%
Estimated rate of return on plan assets			7.78%	7.60%
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 has been amortized on a straight line basis to the net profit and loss account over 10 years representing the average future service period of employees.
23.2.21 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.
23.2.22 Cash flow statement
a. The balance of cash and cash equivalents includes Rs. 3 crore as at December 31, 2007 (Rs. 2 crore as at March 31, 2007 ) set aside for payment of dividends.
b. Deposits with financial institutions and body corporate as at December 31, 2007 include an amount of Rs.148 crore (Rs. 132 crore as at March 31, 2007) deposited with Life Insurance Corporation of India to settle employee benefit/ leave 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, 2007	March 31, 2007
Balance Sheet
3. Fixed assets
	Additions
	Vehicles			-	0.33
	Deductions/retirements
	Plant and machinery			-	0.35
	Furniture and fixtures			0.11	0.15
	Vehicles			0.05	-
	Depreciation
	Vehicles			0.39	0.31
7. Cash on hand				0.03	0.06
8. Unsecured, considered doubtful
	Advance to gratuity trust			-	0.01
Profit & Loss Items
in Rs. Crore
Schedule	Description	Quarter ended December 31,		Nine months ended December 31,
		2007	2006	2007	2006
Profit & Loss
	Provision for investment	-	0.20	0.36	3.21
12. Selling and Marketing expenses
	Contribution to provident and other funds	-	0.78	-	2.23
	Advertisements	-	0.36	-	2.39
	Communication Expenses	-	0.40	0.81	0.96
	Printing and Stationery	0.34	0.57	0.98	1.40
	Sales promotion expenses	-	0.41	2.49	1.32
	Office maintenance	0.16	0.12	0.33	0.25
	Insurance charges	0.05	-	0.15	0.10
	Consumables	0.08	0.11	0.20	0.30
	Computer maintenance	0.09	0.03	0.11	0.08
	Staff welfare	-	0.87	-	2.25
	Cost of Software for Own Use	0.01	-	0.08	0.42
	Miscellaneous expenses	0.40	0.10	0.87	1.96
	Rates and taxes	0.01	-	0.02	-
13. General and Administrative expenses
	Provision for doubtful loans and advances	0.13	0.07	0.32	0.16
	Auditor’s remuneration :
	Statutory audit fees	0.29	0.26	0.89	0.90
	Out-of-pocket expenses	0.01	-	0.03	0.04
	Certification charges	0.01	0.01	0.09	0.01
	Bank charges and commission	0.35	0.17	1.07	1.18
	Freight charges	0.34	0.20	0.80	0.65
	Bad Debts Written Off	-	-	0.16	-
	Research grants	0.41	2.04	3.53	7.02
	Recruitment and training	0.21	-	3.00	-
23.2.1. Aggregate expenses
	Provision for doubtful loans and advances	0.13	0.07	0.32	0.16
	Auditor’s remuneration
	statutory audit fees	0.29	0.26	0.09	0.90
	certification charges	0.01	0.01	0.09	0.01
	out-of-pocket expenses	0.01	-	0.03	0.04
	Bank Charges and Commission	0.35	0.17	1.07	1.18
	Freight charges	0.34	0.20	0.80	0.65
	Research grants	0.41	2.04	3.53	7.02
	Recruitment and training	0.21	-	3.00	-
23.2.10. Profit on disposal of fixed assets, included in miscellaneous income		0.01	0.06	0.05	0.13
	Loss on disposal of fixed assets, included in miscellaneous expenses	-	(0.01)	(0.01)	(0.03)
	Minority Interest	0.34	1.00	1.21	10.00
23.2.16. Provision for investments		-	0.20	0.36	3.21
Cash Flow Statement Items
in Rs. Crore
Schedule	Description			Nine months ended December 31,
				2007	2006
Cash Flow	Profit/ loss on sale of fixed assets			0.04	(0.05)
Statement	Provisions for investments			0.36	3.21
	Proceeds on disposal of fixed assets			0.04	0.30

Transactions with key management personnel
Key management personnel comprise directors and statutory officers.
Particulars of remuneration and other benefits provided to key management personnel during the quarter and nine months ended December 31, 2007 and 2006 are as follows:
in Rs. crore
Name	Salary	Contributions to provident and other funds	Perquisites and incentives	Total Remuneration
Chairman and Chief Mentor
N R Narayana Murthy*	-	-	-	-
	-	-	-	-
	-	-	-	-
	0.06	0.02	0.21	0.29
Co-Chairman
Nandan M Nilekani	0.06	0.01	0.22	0.29
	0.04	0.01	0.05	0.10
	0.15	0.04	0.38	0.57
	0.12	0.03	0.24	0.39
Chief Executive Officer and Managing Director
S Gopalakrishnan	0.06	0.01	0.22	0.29
	0.04	0.01	0.05	0.10
	0.15	0.04	0.38	0.57
	0.12	0.03	0.25	0.40
Chief Operating Officer
S D Shibulal	0.05	0.01	0.22	0.28
	0.03	0.01	0.04	0.08
	0.14	0.04	0.36	0.54
	0.10	0.03	0.20	0.33
Whole-time Directors
K Dinesh	0.06	0.01	0.22	0.29
	0.04	0.01	0.05	0.10
	0.15	0.04	0.38	0.57
	0.10	0.03	0.24	0.37
T V Mohandas Pai	0.09	0.03	0.51	0.63
	0.06	0.02	0.09	0.17
	0.24	0.07	0.93	1.24
	0.18	0.06	0.44	0.68
Srinath Batni	0.08	0.02	0.33	0.43
	0.05	0.01	0.07	0.13
	0.22	0.06	0.61	0.89
	0.15	0.03	0.37	0.55
Chief Financial Officer
V Balakrishnan	0.07	0.02	0.45	0.54
	0.04	0.01	0.16	0.21
	0.20	0.06	0.64	0.90
	0.13	0.03	0.43	0.59
* Wholetime director till August 20, 2006
Particulars of remuneration and other benefits paid to key management personnel during the quarter and nine months ended December 31, 2007 and 2006:
Name	Commission	Sitting fees	Reimbursement of expenses	Total Remuneration
Non-Whole time Directors
Deepak M Satwalekar	0.14	-	-	0.14
	0.06	-	-	0.06
	0.41	-	0.01	0.42
	0.18	-	-	0.18
Prof.Marti G. Subrahmanyam	0.11	-	0.02	0.13
	0.05	-	-	0.05
	0.35	-	0.11	0.46
	0.17	-	0.05	0.22
Dr.Omkar Goswami	0.11	-	-	0.11
	0.05	-	0.01	0.06
	0.34	-	0.01	0.35
	0.15	-	0.02	0.17
Sen.Larry Pressler	-	-	-	-
	-	-	-	-
	-	-	-	-
	0.03	-	0.03	0.06
Rama Bijapurkar	0.11	-	-	0.11
	0.05	-	-	0.05
	0.34	-	-	0.34
	0.17	-	0.01	0.18
Claude Smadja	0.11	-	-	0.11
	0.05	-	0.04	0.09
	0.32	-	0.12	0.44
	0.17	-	0.17	0.34
Sridar A. Iyengar	0.14	-	0.03	0.17
	0.05	-	-	0.05
	0.40	-	0.09	0.49
	0.17	-	0.08	0.25
Jeffrey S. Lehman	0.10	-	-	0.10
	0.05	-	-	0.05
	0.32	-	-	0.32
	0.15	-	-	0.15
David L. Boyles	0.11	-	-	0.11
	0.05	-	-	0.05
	0.35	-	-	0.35
	0.17	-	-	0.17
N. R. Narayana Murthy*	0.12	-	-	0.12
	0.06	-	-	0.06
	0.37	-	-	0.37
	0.09	-	-	0.09
* Appointed as Additional Director effective August 21, 2006.