Sandeep Mahindroo – Senior Manager, IR S. Gopalakrishnan – CEO and Managing Director S. D. Shibulal – COO V. Balakrishnan – CFO Ashok Vemuri – SVP and Global Head, Banking and Capital Markets Subhash Dhar – SVP, Communications, Media and Entertainment Amitabh Chaudhry – CEO and Managing Director, Infosys BPO T.V. Mohandas Pai – Director, HR, Education and Research and Administration

Bhavan Suri – William Blair Moshe Katri – Cowen & Company Joseph Foresi – Janney Montgomery George Price – Stifel Nicolaus Rod Bourgeois – Bernstein Trip Chowdhry – Global Equity Research Ed Caso – Wachovia Julio Quinteros – Goldman Sachs James Friedman – Susquehanna Mark Skitovich – Piper Jaffray

Good day, everyone, and welcome to the Infosys Third Quarter Earnings for Fiscal 2009 conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Sandeep Mahindroo. Please go ahead, sir.

Thanks, Jennifer. Good morning, everyone, and welcome to this call to discuss Infosys financial results for the quarter ending December 31, 2008. I am Sandeep, I am in the investor relations team in New York. Joining us today on this call is CEO and MD, Mr. Gopalakrishnan, COO, Mr. Shibulal, and CFO Mr. V. Balakrishnan, along with other members of 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 end and year ended March 31, 2009. Subsequently we will open up the discussion for Q&A. Before I pass it on to the management, I would like to remind you that anything that we say which refers to our outlook for the future is a forward-looking statement and must be read in conjunction with the rest of the company's papers. A full statement and explanation of these risks is available in our filings with the SEC which can be found on www.sec.gov. I'll now pass it on to Mr. Gopalakrishnan. S. Gopalakrishnan: Thanks, Sandeep, and good morning, good afternoon, good evening to everyone wherever you are. Thank you very much for participating in this call. Despite a challenging environment, including drastic movement in cross currencies, we have delivered a reasonable performance. It is an all-round performance. Revenues in constant currency grew 1% sequentially in dollar terms. The reported revenues of course dropped sequentially by 3.7%, but in constant currency terms, the revenue grew 1%. Volume growth was 2%. We had a blended pricing decline of 1.8% in constant currency terms, but operating margin increased by 2.3% sequentially during the quarter. We added almost 6,000 gross employees. We met our guidance, and revenue was in the range in which we had talked about. Our repeat business continues to be high at 97%. We added 30 new clients during this quarter. We closed four large deals of $15 million plus. Our attrition has come down to 11.8%. Utilization has gone up from 74.1% to 74.8%, so all around good performance. We are looking to add another 3,700 gross employees. Most of these are at entry level honoring the commitments we have made in the campuses. And given the challenging environment, we feel we’ve delivered a good performance. We have kept our guidance the same except for two things were taking into consideration. One is the currency movement; second is the vendor pricing decline. Other than that, we have kept the guidance for Q4 the same. The environment continues to be challenging. We feel that our model has again proved to be resilient. We have proved that we are been able to sustain margins in these difficult times. And as things improve, when the cycle ends and recovery starts, we should be in a strong position to take advantage of this. We have $1.98 billion of cash on hand and overall a good performance. Now I'll pass it on to my colleague, Shibulal, to give you more details on the business performance. S. D. Shibulal: This is Shibu. As Krish said, this has been a very good quarter for us. In spite of multiple issues, we have delivered on the guidance. Billing rates have come under pressure, our prices have come down by 1.8% on constant currency. We believe it is manageable at this point. There are multiple price negotiations. Our strategy is to convert the price negotiations into more of value conversations. We can convert deals to fixed price, to transaction based pricing, link volume to price, et cetera. We also believe that if the situation gets worse, the pricing could come under pressure again. We have not seen any material cancellation of projects as of right now. They seem to have run their course. At the same time, the velocity of the business has come down. Decision-making is slow, scrutinies are higher and that is impacting our – and that has impacted our growth. Budgets are not finalized. We are looking to February, March to finalizing budgets. We have won four large deals, $50 million to $100 million this quarter and there are multiple deals in the pipeline. Utilization has gone up 74.8% compared with 72.1%. We are comfortable with 76% to 80%. Three subsidiaries, Infosys China, Infosys Consulting and Infosys Mexico are still in the investments stage. But we need to look at these more from our MSI reporting rather than from the statutory reporting. We have added 30 new clients this quarter. Our top ten clients grew 2.3% in constant currency, and non-top ten group 0.1% sequentially in constant currency. The contribution from the largest, the top client came down in percentage terms. But in actual numbers, in constant currency, it has only moved down by a couple of million dollars, not anything material. We will add 27,000 people this year. We applied for 9,000 visas, and out of that, the government has taken up 4,800. Our visa utilization is 49%, which is very healthy. With that, let me now hand over to Bala to discuss the financials. V. Balakrishnan: Good morning, everybody. This quarter was good. Our revenues were $1.171 billion. It is a decline of 3.7% on a reported number basis, but if we look at the constant currency, it grew by 1% and it grew by around 14.6% on a year on year basis. I think if you look at the guidance we gave in the beginning of the quarter, we said that revenues will be somewhere between $1.175 billion to $1.220 billion. If you restate it for the currency, the range could be $1.137 billion to $1.181 billion. The actuals is $1.171 billion. So we met the guidance. Even if you look at the EPS, we gave a guidance of $0.57. The actual is around $0.58. If you remove that $0.02 because of the tax reversal pertaining to earlier years, it is $0.56. It is mainly because of the cross currency impact even though we had a benefit of $0.07 in the EPS. Because of the rupee depreciation against the dollar, we had an impact of $0.08 because of the cross currency movements. If you look at the operating margin for the quarter, it is around 43.6%, almost the same as last quarter. Operating margins have gone up. It is 31.8 as compared to 29.5 basically because the rupee impact, we got a benefit of 4.7% in the margins because of rupee, because it depreciated by close to 11%. And we had a negative impact because of cross currency on the operating margin of 1% and the utilization coming down from 70.7% last quarter to 68.5% this quarter impacted the margin by around 1.3%. There were offsetting factors like reduction in SG&A and the reduction in overall per capita revenue. So net net, at the net margin level, out net margins are at 28.3%. Last quarter was 26.2%. If you remove the tax reversal, it is 27.3% compared to 26.2% last quarter. As you all know, at the beginning of the year, we gave a guidance of 19% to 21% for growth in revenues. We reduced it to 13% to 15% in the beginning of the quarter, mainly to factor in a currency impact and also the general economic environment. Now we are revising it to 12% to 13%. If you look at the difference between 19% to 21% in the beginning, and the 12% to 13% what we give today, the differences are mainly because of the currency. Currency is around 4% to 5%. So on a constant currency basis, the way to look at 12% to 13% is to look at constant currencies. It'll be around 16% to 18%. Our guidance for next quarter factors in the reduced per capita revenue, because we have seen the per capita revenue reducing by 1.8% on constant currency terms. In the third quarter, we are taking the same per capita revenue for the fourth quarter, and we are maintaining the guidance just adjusting it for currency. If you look at the non-operating income, not-operating income, we have a loss because of translation and hedging. Last quarter, we had a loss of $28 million because of the currency. This quarter we have a loss of $44 million. We had a benefit in operating income because the rupee depreciated. Operating income went up by $41 million because of the rupee depreciation, but we had a impact on non-operating of around $44 million. I think net net at the net income level, the impact is minimized. Subsidiaries have done well. If you look at IBPO, it added $67 million of revenue. The net margin is 16%. Australia did $26 million in revenue. The revenue has come down there mainly because of currency. At net income, they have 6.2% as net margin. Consulting made a loss of $2.6 million, China $2 million, Mexico $0.5 million. All these subsidiaries are still in the investments stage and that is the reason why they are making losses. This quarter, the currency market has been quite volatile; the economic environment has been challenging. Even in this environment, with all the volatility, we are able to maintain the growth, we are able to maintain the margins, we're able to have better DSOs, DSO days of 56 days for the quarter in a quarter where there are a lot of holidays, where the environment is challenging, we were able to collect most of our receivables and make sure that DSO days are reduced. We are ending the quarter with $1.98 billion of cash. We believe that’s very important in an environment like this. It gives a lot of comfort to not only us, but also to the customers and other stakeholders who wants to deal with us. With this I conclude. Now we can open up the floor for Q&A. Thank you.

Jennifer, we can start the Q&A.

(Operator instructions) We will go ahead and take our first question from Bhavan Suri with William Blair. Bhavan Suri – William Blair: Hey, guys. Good quarter. A couple of quick questions regarding the pricing issues. The first, could you elaborate a little more on kind of the discussions you have with customers around pricing and then where are you experiencing these conversations? Are there any specific vertical or any specific geo or is it across-the-board? S. D. Shibulal: So we are having pricing discussions with a few customers across verticals and across geos. You know if you look at the past ten quarters or so, you can clearly see that our prices have gone up, our revenue productivity has gone up quarter on quarter. We have been able to convince our customers of the value, which we provide and they have been willing to pay us higher value, higher rates throughout that period. Today the customers are undergoing trouble and they are under pressure, so that is where some of the discussions are happening. Also we are seeing at least in some occasions competitors cutting price globally and offshore. So our direction is usually to try and convert that discussion into a valid discussion on the value which we deliver and on the total cost of ownership. So we can look at linking those discussions through additional volume, we can look at converting the deal into fixed price, we can look at converting the deal into other pricing models, we can look at productivity improvements. So we explore all these possibilities, and usually we end up in a combination of some of these possibilities. Bhavan Suri – William Blair: Thanks, Shibu. Just… S. D. Shibulal: And – yes, go ahead. Bhavan Suri – William Blair: And then I guess could you give me some idea of sort of you said a handful of customers, a few customers, the magnitude of that? And is there a risk that other customers kind of see you doing this and then bring their rate card and say we want lower rates? Could you quantify sort of the magnitude of that and also the risk for the rest of the base to do that? S. Gopalakrishnan: See that is why we don't work at the rate card level. We try to work with the clients to fixed price the project so that we can get something out of it by improving productivity et cetera. We can meet the customer expectations on their budgets et cetera. We can also leverage our bench offshore so we can offer some free resources again to meet their requirements and things like that temporarily. So we're doing many things such that we meet their requirements and we keep our pricing intact as much as possible. Of course, overall there will be some small impact and that’s what we are seeing. But by and large, we are trying to keep it as minimum as possible. In some cases, we are tying up the increases with volume increases so that it’d be seen as volume discounts. Bhavan Suri – William Blair: Okay. If I could squeeze one last question in here, Bala, if you look at the lowered guidance for the full year, what is the impact of that lower pricing rate on that say 2% decline in guidance? Is there a portion of that that is due to the pricing versus the currency? V. Balakrishnan: Well, if you look at the numbers, at the beginning of the year, we said 19% to 21%. In the beginning of this quarter we said 13% to 15%. Now we are saying 12% to 13%. The reduction is mainly because of currency, the impact of pricing is hardly some 0.5%, but the balance is mainly currency. So from 19%, if you look at 12%, there is the decline of 7%, 7% to 8%. Of that 4% to 5% is currency, balance was due to economic environment. The pricing adjustment of fourth quarter is only 0.5%. Bhavan Suri – William Blair: Okay, thanks.

Okay. We will move forward to our next question which will come from Moshe Katri with Cowen & Company. Moshe Katri – Cowen & Company: Hey, thanks. Can you give us the revenue growth of the various verticals by constant currency? Hello? S. D. Shibulal: Yes. I will give it to you now. The revenue growth in constant currency, BFSI, 4.1% in constant currency; manufacturing declined 3.7% in constant currency; retail grew by 2.9% in constant currency; telecom declined 3.4% in constant currency. The remaining segments, others grew 4.3% in constant currency. Moshe Katri – Cowen & Company: Okay. And then Bala, can you just talk about the different moving parts that drove margins? You had a pretty strong growth in operating margin performance during the quarter? V. Balakrishnan: Well, the operating margin has increased by around 2%. It was 31.9% this quarter, last quarter was 29.9, mainly because of the rupee dollar, because the rupee depreciated by around 11% against the dollar. That gave a favorable impact of 4.7% on the margin. But it was offset by the cross currency move of around 1% and also a decline in utilization of 1.3%. There were some offsetting factors like reduction in SG&A which was more than compensated by the decrease in per capita revenue. So net net, operating margin went up by around 2%. Moshe Katri – Cowen & Company: Okay. And then Krish, you spoke very briefly about clients’ budgets. What are your preliminary thoughts based on what clients are telling you looking at 2009, looking at overall budgets, looking at the allocation for offshore? S. Gopalakrishnan: We believe that budgets would get finalized mid February. That is the indication we are getting. We also believe that budgets would be flat or maybe down, down maybe by maybe up to 4%, maybe 5%. In our discussions with clients, they have given us indications that offshore allocation would increase. We don't have a percentage at this point. They are just saying that please don't reduce your recruitment plans et cetera because we believe that offshore would increase and you need to be prepared for that. So that's the stage at which we are at this point. We will get a better picture of this probably mid February. They're also telling us that on the caution side, if things continue to be bad or worsen, even if the budget are there, they may hesitate to spend or they may not be allowed to spend. So that caution is also definitely there. Moshe Katri – Cowen & Company: Okay. And then finally, BFSI held up really well during the quarter. Can you talk about what you're saying there in general and then maybe talk about some of the recent wins. I think you have added about 30 customers, maybe you could talk about which part came from BFSI? Thanks. S. Gopalakrishnan: So, let me ask Ashok. He is here with me to talk about BFSI.

Thanks, Krish. So the BFSI segment actually from a client addition perspective, of the 30, nine clients are from BFSI, and this is across both the US as well as Europe. We are also beginning to see increased interest from our clients and prospects in other parts of the world, whether it is in Asia as well as in Latin America et cetera. We have seen both volumes growth and of course pricing, that’s continued to be a challenge. But at this point of time we are getting a premium for value-added services and we are seeing pricing either being maintained where it was and this is negotiation time for us, contracts and negotiation time for us, so we have seen pricing essentially being tied at a very flat level. We are also seeing that the kind of services that we have built out and the capabilities that we have built out and investments that we have made are finding traction and increasing traction in the marketplace, especially in the areas of corporate governance, regulatory corporate governance, risk management, compliance, et cetera. Also from our product perspective, that continues to gain traction both in Asia as well as increasingly in Western Europe and with clients in the US. From a budget perspective, we do expect an extension [ph], capital budgets will come in around the mid February time. And the good news is there is even though we may not be seeing increased allocations or increased dollars, the percentage to offshore companies is actually increasing, and we are very confident from the commentary that we are hearing in the market and unlike last year there will not be too much of variation in budget closure and too much variability, but the fact that the budgets will get definitely closed albeit the numbers may be lesser. Moshe Katri – Cowen & Company: Thanks. Good execution. S. Gopalakrishnan: Of the client additions, nine are in the BFSI space as Ashok said, six are in manufacturing, four in retail, rest are all over. Out of this, 11 customers are in North America, eight are in Europe, and balance in rest of the world, 11 rest of the world. Moshe Katri – Cowen & Company: Thanks, Krish.

Okay. We will move to our next question which will come from Joseph Foresi with Janney Montgomery. Joseph Foresi – Janney Montgomery: Hello, gentlemen. My first question here is just the decision to take up the hiring guidance. Obviously we know that it is a tough environment out there, and it sounds like you are doing this because a lot of your potential customers have said that you might need excess capacity, not stop hiring. I wondered if you could just give us some insight as to why you wouldn't at this point try to do more with less? S. Gopalakrishnan: Now let me explain this. At the beginning of the year, we said we will hire 25,000 people as the target for the year. We had two components. The first component was the people who are freshers for whom we had made 18,000 offers last year. The second component was the laterals and the third corporate was the BPO. Now as of this quarter, we have already hired about nearly 24,000 people. Part of the increase compared to the pro rata figures that we had are due to the fact that the higher percentage of people than estimated from the fresher batch joined the company. We made a certain estimate, a higher percentage joined. Now we sat down and made a full evaluation to see what is going to be the gross numbers for the entire year and we found it is going to be closer to 27 based upon offers made the previous year and percentage joins, based upon the lateral hires that we are going to be doing currently, a very, very small number for specialized skills, and the joins in the BPO. So we're not having additional hiring targets, we're not hiring more people than required for this year, we are just coming out with the statement as to what the estimated final count of hiring will be at a gross level just for this year. For the next year, our hiring is based upon the offers we’ve made sometime the previous year in the calendar year 2008. Because the fresher batch is hired, nearly one to 1.25 years ahead of our need, because we always hire in advance. So we have made 20,000 offers already before the first quarter closed, the first quarter itself. So we had already made those offers because the college hiring starts from January, February of the calendar year and possibly ends by about June, July. Out of 20,000, we estimate maybe 75% of the people may join, but 15,000 people may join next year. The date of joining is going to be decided and intimated to them in a closed band or otherwise and we are going to tell them. Most of them will join at a particular point and they will not be available for billing in the next financial year because the period of training is 16 weeks. After 16 weeks, they have to take a test and past with a four out of five CGPA. If they don't get that, they go outside the company. And right now to avoid people going into the bench and not having work, we have given them additional training of eight more weeks. So for the next year, if things do not improve or things do not change in a big manner, we could have an extended training session. So most of the people who join will join at different quarters, and they may still be training, they may not add to the billable resources next year. But this is what we want to explain about the hiring. V. Balakrishnan: You will also realize that this quarter including trainers, utilization is 69%. We were able to sustain or improve the margins. So our model includes the cost of training there, the cost is not that very high. So we believe that we are looking at this from a long-term perspective. By honoring our commitments, we are creating goodwill in the campuses. By creating this trained pool of resources, we are preparing ourselves for the future, and will be able to respond faster if we see opportunities in the market. So we see this as a strength of the model and a competitive advantage in some sense. Joseph Foresi – Janney Montgomery: Okay. Just I mean traditionally you have linked or at least I believe the analyst community has believed that you have linked headcount to revenue growth. So as hiring numbers have gone up here, can we expect that same link, or is there not a link between the two? S. Gopalakrishnan: See traditionally we would have planned for a utilization of 78% to 80%. The utilization is lower because growth has slowed down, so you will have to use that factor. The utilization will continue to be lower than our optimum level for the next few quarters unless of course growth picks up and we are able to use these people. Attrition also is coming down, so that will also reduce the utilization. We're looking at how we can leverage this, how we can maybe take advantage of this, but right now it looks like utilization will be lower. But that cost are not too high and we hope to sustain the margins in spite of all this. Joseph Foresi – Janney Montgomery: Just one last question on the labor front, as far as, let’s assume the outlook for next year is potentially worse than maybe some of the data points that you're getting right now, and there is not as much work for your projected hiring schedule, what is management’s view as far as how to handle that? Would you be pushing out offers or assuming things get very bad, would you look at potential layoffs? S. Gopalakrishnan: No let me explain that again. Out of the 15,000 people who may join, next year will have an opening balance of maybe 105,000 people, 104,000 people. Assuming an attrition rate of 10%, because a 10% attrition would be a normal attrition even in the worst period. In the worst period, in the most difficult period that we had in 2001, we had an attrition of something like 6.7% to 6.9%. So if you have a 10% attrition rate, you will normally have about 10,000 people leaving over a period of time for higher studies or whatever. Let us not forget that 20% of people who leave, leave for higher studies. And about 10% of people who leave, leave because they drop out of the workforce on account of marriage or what family reasons or something else. So a 10% attrition rate means we will have 10,000 people, that means that we have a net increase of 5000 people, and those 5000 people will not be billable at the end of the next financial year as per our current training schedule. So they will not be sitting idle there, they will be in training. So I think we have found a nice balance in the target that we have set for the next year. Joseph Foresi – Janney Montgomery: Okay. And just one last quick question, just maybe on the Satyam front, if management could give any of its sort of views on customers relationships? I know you have some overlapping customers and its view on taking business or additional business from its potential fallout and also employees, if you guys could just present your views? Thanks. S. Gopalakrishnan: So we are seeing some requests from our clients. We are treating these as new requests and we would put together a proposal, give it to the customer, the customer accepts the proposal, then we will take this forward as we would do any other business that comes away. We are not proactively canvassing for Satyam business for obvious reasons. It is not the right thing to do. And if a request comes, we will take it up. Over and above this, of course, there is some increased due diligence from our customers. Infosys is very well prepared. Whatever questions that clients have, we are able to answer. In fact whatever the questions investors have, also we are able to answer. We have increased our level of disclosure, we want to make sure that we give comfort to customers, prospects, investors, et cetera about the corporate governance practices. At Infosys, we have increased the disclosures as I said. I don't think this will increase the time taken to close deals et cetera. Already the velocity of business had been impacted because of the economic slowdown. We don't see this having an impact especially in the medium to long term. Joseph Foresi – Janney Montgomery: Okay, thank you.

We will go ahead and move forward to our next question from George Price with Stifel Nicolaus. George Price – Stifel Nicolaus: Hi. Thanks very much. Just a couple of topics. First wanted to understand why telecom, even on a constant currency basis was down 3.4%, if it is beyond – in fact even beyond British Telecom, didn’t sound like BT really moved a whole lot. And if you could, related to that comment on – there are kind of press indications about over thousand employees working at BT possibly being benched in March and the fact that you are still hiring even if that occurs? Thank you.

Hi, this is Subhash Dhar representing the communications business. On a constant currency basis, you have the telecom vertical declines. I think there is a couple of reasons for that. One is of course that the telecom industry has very few clients which have large accounts for us, and therefore any deficient freezing that happens takes with it a bunch of revenues. There is some lumpiness in that industry, both in terms of business coming and getting frozen at times, that’s one. Second, we did have some vacation enforced in December, in actually some of our biggest clients, which was first it was something we have encountered in the past but has never been enforced in the past years but it was enforced in the year just went by – just went by. So that gave us a couple of weeks in fact on some of our biggest clients. George Price – Stifel Nicolaus: Okay, and if you could just comment on the press articles talking about the potentially benching, I think it was like 1200 employees at BT possibly by March and maybe how that factors into how you are thinking about, you know, quarter-over-quarter growth into the June quarter? S. Gopalakrishnan: Well, we don’t know where that article came from. As it is we don’t have a policy on commenting on specific customers but we clearly don’t understand where that article came from. George Price – Stifel Nicolaus: Okay. So that is something that you don’t – I guess, just as the June quarter question, do you think you could see another quarter-over-quarter decline in June? S. Gopalakrishnan: No, we expect it to be flat on a constant currency basis. George Price – Stifel Nicolaus: Okay. And that is an overall question for the business not just telecom? S. Gopalakrishnan: Yes, for the business. George Price – Stifel Nicolaus: Okay. Thank you. S. Gopalakrishnan: All right.

We will move to a question from Rod Burgess from Bernstein. Rod Bourgeois - Bernstein: Yes, Rob Rod Bourgeois here. Hey we talked about pricing on the earlier call, but I wanted to clarify what you are assuming precisely in your guidance for the March quarter and if you have got any assumptions on that in terms of how it might play out over the next year? Are you assuming flat pricing in dollar terms or are you assuming a similar decline in pricing as what occurred in the December quarter? V. Balakrishnan: So, right now we are assuming flat pricing in dollar terms for Q4, same pricing as end of Q3. Rod Bourgeois - Bernstein: Okay, great. And is there something happening in the market that would cause you to believe that the pricing decline will attenuate now. Is there a mix factor or some other dynamic happening where the pricing concession requests are subsiding at this point? S. Gopalakrishnan: No, by and large we have been able to manage the pricing by giving various options and choices to our clients so that their requirements are met, their budgets are met and our requirement to hold on to the pricing is met, fixed pricing by moving work offshore, by looking at, we have a bench anyway, so by giving for the short period maybe some additional resources to clients et cetera. So, we are able to meet their expectations and manage our requirements also. So, that is what we are doing. In some cases we are linking pricing decreases with volume growth. So volume discount is again something we do always, and so it’s part of that. So, we are trying to manage this as best as we can. Now if the situation just continues like this, we believe that we will be able to handle it better, but if the environment worsens, then it could become challenging. So we have to wait and see; we don’t know what is going to happen there. Rod Bourgeois - Bernstein: So what you are seeing right now with your value approach is the deal structuring, you think pricing can definitely be flat in the March quarter but it’s definitely a factor that you are monitoring closely, is it the way to look at it? S. Gopalakrishnan: Yes, we feel that we can handle the margin. We are saying the margin will be flat, we’ve assumed that pricing will be the same level as Q3, and then we are monitoring the situation very, very carefully. We – every pricing discussion gets escalated up to the Chief Operating Officer and the CFO. So we are fully aware of its impact. We have a portfolio approach, so based on our ability to absorb that we take the decision. So we have a portfolio approach, we look at it company wide, we look at the impact, so it is centralized at this point, and we tightly control this. Rod Bourgeois - Bernstein: Okay. And I think you’ve indicated on this topic, but I just wanted to follow up. I mean we’ve seen in the last several months kind of an elongation of decision making cycles because of all the macro issues that are out there. And in the two to three months we have had the Satyam fiasco as well as the Mumbai terrorist attacks, are you expecting any further elongation in decision making cycles or do you feel like the worst is behind us on that front? S. Gopalakrishnan: No. Whatever has happened in Mumbai and with Satyam, we are not seeing at this point any increase in decision making time et cetera. Already velocity of business had slowed down past September. That is when the collapse of the various banks happened et cetera. That is when the pendulum swung to the other side in terms of, you know, what everybody expected the economy to do. Till then there was hope that it may not happen, but after that you know everybody decided the worst is going to happen. So the pendulum swung to the other extreme. So, velocity came down after September. We have not seen anything different now. It continues to be challenging and slow. Rod Bourgeois - Bernstein: Thank you guys very much.

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

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

Thank you and very good execution. I was just wondering regarding the H1 visas will start to be opened again in the month of April, how do you see your needs would be regarding H1 visas and do you see it will be same as last year, up, down? And how about the pricing on visas, and has your guidance incorporated the fee structure and the expenses related to visa? Thank you? S. Gopalakrishnan: You know it considers that there is seasonality to visa and typically in Q1 we will have higher visa expenses et cetera that we normally factor in. Now what the visa policy would be, what the regime is et cetera we don’t know at this point. All data what we have is what you also have and our assumptions are all based on that it continues to be what it is today. There is no new information we have about that. Trip Chowdhry - Global Equities: Thanks.

Okay. Our next question comes from Ed Caso with Wachovia. Ed Caso – Wachovia: Good morning. Congratulations on managing in a tough environment. Couple of quick questions here. Was there a breakup fee for the Axon deal and then how much was it in dollars? S. Gopalakrishnan: Well we got around 4 million pounds, which is after break inducement fee for the Axon deal, there was a expense of around 1.8 million pounds and the net 2.2 million pounds is shown in the non-operating income. Ed Caso – Wachovia: And any license fees out of the ordinary this quarter. I thought I heard that the product business is doing well? S. Gopalakrishnan: There is nothing extraordinary except in the tax line item. We had a reversal of $13 million pertaining to earlier years. Other than that I don’t think there are any exceptional items. Ed Caso – Wachovia: Anything different on your accrual for variable comps or and could you give us some thoughts on where wages stand sort of going forward? S. Gopalakrishnan: Well, the variable component for this quarter is similar or slightly higher than the last two quarters. There is no change there. Going forward the variable payout depends on the revenue growth and operating margins. So that is a function of those two. At least for third quarter there is no reduction in the variable pay. This is almost similar to first two quarters or slightly higher than that. Ed Caso – Wachovia: I was curious about sort of coming up on the annual wage cycle here in April. So any thoughts at this point. I assume wages have been – increases have been dropping, I mean, is it looking like they are going to be flat year-over-year coming up in FY10? S. Gopalakrishnan: We believe that salary increases would be muted if any this year. You know, the environment is considerably softened at this point. So it maybe very much muted this year. Ed Caso – Wachovia: A final question. On the BPO business, I think it is down if I saw the numbers right. How much of that is sort of the timing of contract and how much of that is just sort of volume, lower volumes that you might be doing? V. Balakrishnan: :

I am not going to cater to the revenue question, but if it was, then yes the basic decline in revenue is because of currency. 58% of our revenues come in pounds and euros and if you take a look on a constant currency basis we actually grew 4% plus quarter-on-quarter from a BPO perspective. So it is mainly because of the currency that we have got hit in a big way this quarter because of pound and euro depreciation against the dollar. Ed Caso – Wachovia: Thank you.

All right. We will move to a question from Julio Quinteros with Goldman Sachs. Julio Quinteros - Goldman Sachs: Hi guys. A quick question. I mean I realize that the constant currency growth rate relative to the beginning of the year hasn’t moved all that much but when you look at the rate of deceleration from the beginning of the year to what is projected into the fourth quarter it looks like we are finishing the fourth quarter out above the 5% to 9% year-over-year growth in constant currency and if you sort of project that growth rate out into fiscal 2010, what drivers or what are you seeing right now in the business that would actually lead to any acceleration into fiscal year 2010? S. Gopalakrishnan: We have seen constant currency terms the growth rate would probably be around 16% – 15% to 18%. Julio Quinteros - Goldman Sachs: That is for the full year, but for the fourth quarter it is finishing at 5% to 9% right? S. Gopalakrishnan: Okay, fourth quarter, okay. Now going forward yes it is going to be a challenging environment. We are looking at all drivers for growth looking at what else we can do. The feeling is that if there is some stability. Recovery it doesn’t have to really happen, but if there is some stability then customers will feel confident in kicking off some projects and that should give us some increase in growth. So that is what we feel now. We are waiting for the budgets to be finalized. We will know by probably mid-February. That will also give us some indication about allocation to offshore. In our discussions with clients they are telling us that, you know please don’t significantly reduce your recruitment and things like that. So, we will have to wait and see. Julio Quinteros - Goldman Sachs: Okay, got it. And then just a couple of quick questions on looking at the balance sheet, Bala can you just talk to the other comprehensive losses that were seen. I think the other – accumulated other comprehensive income that is now negative $413 million and detailed in the balance sheet of a build up of a stockholder of the book – shareholders equity. Can you talk about what is driving that down because it started – the balance started with a positive 39 and it is now down to a negative $413. What are the other drivers on that? S. Gopalakrishnan: Can you repeat that? We are not able to completely follow that question? Can you just about the balance sheet… Julio Quinteros - Goldman Sachs: On the balance sheet in the build up for stockholders equity, the accumulation other comprehensive income entry is negative $413 million. V. Balakrishnan: Yes that is a translation loss or gain because when the rupee depreciates or appreciates in a big way in any quarter that number comes up bigger because the rupee depreciated by 11% this quarter. So that is a translation of the balance sheet items on a particular date. Julio Quinteros - Goldman Sachs: Got it. And then on the decline in the DSOs for the quarter, can you just walk back through why your DSOs went down so much. Are you actively going after your accounts to try and collect some cash and by the same token it doesn’t appear like you are taking up any reserves for doubtful accounts. Can you just sort of give us a balance in terms of the faster collections but no real improvement in the doubtful accounts reserves? S. Gopalakrishnan: See in an environment like this we are focused on collecting the money as quickly as diligently as possible. So there has been tremendous focus from everyone on collection and our people have done a good job. It is just that – they have done a good job. That is all. Julio Quinteros - Goldman Sachs: And then what about on the doubtful account side? Why wouldn’t you also taking out the doubtful account reserves? S. Gopalakrishnan: Again can you just repeat that Julio? Julio Quinteros - Goldman Sachs: Why would the doubtful account balance not be going up at the same time? It doesn’t look like it actually went up for the quarter? S. Gopalakrishnan: Now are you saying that we are writing off more receivables? Julio Quinteros - Goldman Sachs: No, no, no. The doubtful accounts – I can follow up offline that is no problem. S. Gopalakrishnan: No, no. Look Julio, we provide for all receivables more than 180 days. Even for receivables less than 180 days for their concerns we do provide for it. We don’t have any large uncollectable receivables at any point of time. This quarter the DSO days basically went down because in an environment like this we said we have to go behind all customers and make sure we collect money on time because this is an environment where people have lot of challenges on the liquidity front. So the DSOs actually came down because we are aggressive in collecting the money. In spite of more holidays in this quarter our sales force went out and collected most of the dues from the clients. That is why the DSO days came down. Julio Quinteros - Goldman Sachs: And Bala real quickly on the last quarter, the implied operating margin, it looks like it is down from the third quarter just based on the comments for flat margins for the year. The level that it would come down to just back of the envelope calculation is something like 23% down from 31%. What are you guys factoring into that fourth quarter operating margin for it to decline so much? V. Balakrishnan: See Julio for the fourth quarter we are assuming the rupee-dollar rate to be at 48.71. If you remember 49.42 is the average rate for the third quarter that is one. Number two, in the third quarter we had the substantial benefit of the rupee depreciation. There was an impact of close to 3.7% on our operating margin because of the currency and we had the equal amount of the impact on the non operating line item because of translation hedging loss. So on the net level if you look at the fourth quarter guidance, the net margins are similar to what we have seen in the third quarter. There was an operating gain in the third quarter. There was a non operating loss. Both were not assumed in the fourth quarter. Julio Quinteros - Goldman Sachs: Thank you.

Okay. Our next question will come from James Friedman with Susquehanna. James Friedman – Susquehanna: Hi, thanks for taking my question. And I know it has been a bit of a delicate one but with regard to Satyam, would you see the development at Satyam as being a net benefit or net positive to Infosys and why? S. Gopalakrishnan: You know, we – if you take an industry view it is – it is sad, it is disappointing, it is dismaying. If you take a company view, you know, there are positives and negatives again. You know, we have to – we have to provide additional information to our clients. They are increasing their due diligence and things like that. If you are able to convince probably still give you more business and more opportunity. So there are some positives also. James Friedman – Susquehanna: Okay Mohan, with regard to your expectations on wages, is there any chance to potentially reduce wages in 2010, fiscal 2010? T.V. Mohandas Pai: I don’t think there is potential to reduce wages which people get because it doesn’t work that way. We must remember that 30% of what we pay as salaries offshore is variable. The offshore cost is about 15% to 16% of revenues. So 30% of that is variable. That means we have about maybe 4% to 5% of revenues available in the compensation and it is not possible to reduce anybody’s salary. The second thing is that industry-wide like Kris said the salary increase for next year will be very, very muted. I am not sure how many companies are even going to give salary increases. Some companies are talking about not giving any increases. So anyway, in any case it will be very muted because our projects are very much less. James Friedman – Susquehanna: You know, Mohan, many of the people on this call can confirm that in fact it is possible to reduce salaries, but that is aside, Balakrishnan, this is my last question – T.V. Mohandas Pai: No I think – well there are three things. It depends on what you define as salary. For example, if you have a salary of $100, $50 is variable and $50 is fixed. You get $50 and that is $50 is variable, then they not get it. So there is a large part. But if you say the entire $100 can be reduced, we are told that it requires the contract to be changed because there is an employment contract that has to be changed, people have to be called. And I don’t think we are at a stage when we need to anything like that. James Friedman – Susquehanna: Okay, and then with regard to the use of funds, you know you have quite cash hoard to peers, Balakrishnan, I know you have spoken in the past about relative merits of a dividend versus a repurchase, but could you refresh your thinking about that? V. Balakrishnan: Well, the thinking is same. We don’t need to refresh. James Friedman – Susquehanna: Sorry. Refresh our thinking about your thinking. V. Balakrishnan: What we said was we can buy back some dividends. Dividend is better for our shareholders because factoring the hands of shareholders in India. Having said that we want to have sufficient cash in the balance sheet to make sure our growth is not impacted and gives us comfort in the business and we also clearly define what our return expectation in the business. As now the returns are not impacted. We are willing to have cash to give us comfort in the business and make sure the growth is not impacted. And if at some part of time the returns are going to get hurt and if you don’t find alternate use of cash we are willing to return it to our shareholders. We have done it already three times. James Friedman – Susquehanna: You are referring to special dividends or ordinary? V. Balakrishnan: Well, we have given special dividends in the last 3 instances. So if there is extra cash available in the system where we don’t find any strategic use we will look at that. S. Gopalakrishnan: Last question please.

We will move to a question from Mark Marostica with Piper Jaffray. Mark Skitovich - Piper Jaffray: Thank you. It is actually Mark Skitovich for Mark Marostica. Just a couple of clarifications on the hiring front, where do you anticipate net hires to finish this year? S. Gopalakrishnan: This year the net hires is at about – we are at about 103,000 and we have said that this quarter we are going to hire about 3,500 and I will just give the figure, just one minute. I think we will hire 3,500. Mark Skitovich - Piper Jaffray: 3,500 net hires this quarter. S. Gopalakrishnan: Yes, 3,500 – yes we said we will hire about – just hang on for a minute – quarter four – yes, we will hire about 3,700 gross that is 3,700 gross. Last quarter we hired a gross addition of 5,997 and the net addition about 2,700. So, we had an attrition of 3,200 people. Out of 3,200 people we had an attrition of about 1,750 or odd in the services business and the balance 1,500 – I mean 1,400 odd in the BPO business. So the BPO business is still running at an attrition of about 30%-31%. So the BPO may not see any net addition and we have got 1,000 people in the BPO or there could be a slight decline. Even if you assume that 1,500 attrition in the services business and maybe 1,000 in the BPO business that is 2,500 there could be a net increase of maybe 1,000 to 1,200. Mark Skitovich - Piper Jaffray: Okay. So the net of that you had roughly 19,000 net additions in ’08. Is that number going to be flat or down or up I guess? S. Gopalakrishnan: Yes, I think, yes, I think we will hire something like about maybe 18,500 to 19,000 net hires this year and that will be about 103,000 people to end with. Mark Skitovich - Piper Jaffray: Okay good .That is helpful. And then just a further clarification on negotiated salaries, for your fresher hires next year, just trying to get clearer here, your – the salaries that will be negotiated will be flat year-over-year or down to some number and what would that be? S. Gopalakrishnan: Okay let me – let me clarify. I got the data here. We ended last year with 91,187 people. Quarter three we are at 103,078. Even if you add maybe 1,000 to 1,200 people we could end up this year with 104,500 that will be about a net addition this year overall for the group or something like about 13,000 people. It is not 19,000, it is 13,000. I am sorry, I got the data right. Mark Skitovich - Piper Jaffray: 13,000. So that 13,000 is down from the 19,000 net hires last year. Is that the right comparison? S. Gopalakrishnan: Yes, yes, yes, yes. That is fiscal ’09, fiscal ’09; ’08 to ’09 will go up from 91,000 to 100 – and let us say 104,500 [ph] and previous year we had a net hires about 19000. And as far the fresher salary go, the freshers’ salary for the next year is what we offered when we made the offer last year. Mark Skitovich - Piper Jaffray: Okay. It is already assumed that some of these fresher salaries may be not at Infosys but have been negotiated, renegotiated at lower levels, some 10% to 20%. Is that not the case at Infosys? S. Gopalakrishnan: No, we have made an offer in the letter to all freshers in colleges last year, because that is what we need to do and we will stick to that offer. When they come and join us we will stick to that offer and the offer is not very different from what was the compensation for freshers in this fiscal year. Mark Skitovich - Piper Jaffray: Okay. Okay and then just a bit of clarification on visibility. I think I heard you say that you expect telecom, the telecom business to be roughly flat. I am just trying to get a sense of what gives you confidence that it will be flat year-over-year in the current quarter and if that has something to do with your $50 million plus deal pipeline, maybe you can talk a little bit about what sectors contributed to Q3 and what you expect to see contributing to Q4. V. Balakrishnan: Well, I think overall at the constant currency level, we expect it to be flat. It is what we are seeing. Was there a specific question on that? Mark Skitovich - Piper Jaffray: I am just trying to get a sense of your confidence level in it being flat constant currency. Is the pipeline, the $50 million plus pipeline more concentrated on the telecom side or what gives us confidence that that telecom business should be flat year-over-year? S. Gopalakrishnan: See, telecom has few large customers. In fact, if we look at the pipeline you know we have 10 large deals in the pipeline. They are two out of that which are in the telecom area. We have not actually factored in that we will win any other large deals at this point because they could take anywhere from 3 months to sometimes 9, 12 months to close. So, we have not factored that in. It is just that we have some large relationships and few customers only in telecom and we have some visibility into this pattern et cetera and that is what gives us the confidence. Mark Skitovich - Piper Jaffray: Okay. S. Gopalakrishnan: Unfortunately we are completely out of time. I want to thank all of you for participating in the call. If you have further questions you can contact Sandeep or Shekar, the investor relationship managers in US and India and we will reply to all your questions. Thank you and see you next quarter or in between in one of the investor meetings or something. Thank you all very much.

Thank you sir. This does conclude today’s teleconference and thank you all for your participation. Have a great day.