Sandeep Mahindroo – Senior Manager, IR S. Gopalakrishnan – Managing Director and CEO S. D. Shibulal – COO V. Balakrishnan – CFO Amitabh Chaudhry – CEO and Managing Director, Infosys BPO

Bhavan Suri – William Blair and Co. Mark Marostica – Piper Jaffray Joseph Foresi – Janney Montgomery George Price – Stifel Nicolaus Julio Quinteros – Goldman Sachs Ed Caso – Wachovia Securities James Friedman – Susquehanna Rod Bourgeois – Bernstein

Good day, everyone, and welcome to the Infosys Fourth Quarter and Fiscal 2009 earnings release 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, Lisa. Good morning, everyone, and welcome to this call to discuss Infosys financial results for the quarter and year ending March 31, 2009. I am Sandeep from the Investor Relations team in New York. Joining us today on this call is CEO and MD, Mr. S. Gopalakrishnan; COO, Mr. S. D. 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 and the year, followed by the outlook for the quarter ended June 30, 2009, and year ending March 31, 2010. Subsequently, we will open up the discussion for Q&A. Before I pass it on to the management, I would like to remind you that anything that we say, which refers to our outlook for the future is a forward-looking statement and must be read in conjunction with the risk that the company faces. A full statement and explanation of these risks is available in our filings with the SEC, which can be found on www.sec.gov. I'd now pass it on to Mr. Gopalakrishnan. S. Gopalakrishnan: Thanks, Sandeep, and good morning, good afternoon, good evening to everyone wherever you are. Thanks for participating in this call. In spite of a challenging environment, we have met the lower end of our guidance in constant currency terms. Our revenue for the quarter was about $1.121 billion. In constant currency terms, the guidance would have been $1.118 billion to $1.159 billion. So we're just slightly above the lower end of the guidance. You know, we faced multiple challenges, you know, growth was a challenge, pricing was a challenge, and the currency volatility was a challenge. In spite of that we have been able to sustain the operating margins for the year. For the quarter, the operating margin declined by 2.3%. We have been able to continue to invest in the business and in this quarter we added about 5000 employees. Our attrition has come down. Utilization slightly come down. It is 74.3%, but compared to last quarter it is about a 0.5% drop. We have given a guidance of 3.7% to 5.4% decline next year. In constant currency terms, it will be a decline of about 0% to minus 3% or about flat to minus 3% decline. In the operating margins, we are looking at a decline of about 3% for next year, but when you look at the three challenges I talked about, growth, pricing and currency, we have sustained the margins in spite of the challenging environment. Going forward also it is still within a narrow band. Given the challenging environment, the guidance factors in a wider range because of the challenging environment, and we believe that the company has managed the challenging environment reasonably well, and is poised to take advantage of the growth that we anticipate when recovery happens. And for the fiscal year 2010, we will continue to add employees. At the gross level it is about 18,000, at the net level probably about 8000, because attrition is expected to be about 10%. So at the net level it'll be about 8000 people and this again is something, which we believe we can manage. All these are factored into our guidance and our margins and things like that. We believe that our investment into the future, our investment into solutions IP, our investment to increase sales, you know, we're adding another 1000 – another 100 people, 100 people in sales next year. So all these will help us get growth back when recovery happens. Of course, we are sustaining the margins, and we are managing this currency fluctuation very well. At the beginning of the year, the rupee was at 39 rupees. At the end of the year, the rupee is around 50 rupees per dollar, and still we have been able to sustain the margins. Most other currencies also have depreciated against the dollar, and in spite of that we have been able to sustain the margins. So the model is pretty robust. It is resilient and yes, we have been impacted on the growth side and that is because, you know, the impact is growing from the impact on our clients. Most of our clients are telling us that of course their budgets are lower, and the spending on their supplies is over. And that is what is causing the volume decline. Sequentially volume declined by 1.4%, and our guidance now factors in a decline because of that for the fiscal year 2010. Now, I will hand it over to Shibulal to give you more detail by the various segments, and give you more details about what is happening in each of those segments. S.D. Shibulal: This is Shibulal. Let me start by giving you some color on the demand situation. We recently conducted a survey of our 135 top clients. They account for 83% of our revenue in LTM basis. We are seeing a high level of uncertainty in the IT budgets for these clients. But we conducted a survey about 3 to 4 weeks back. At that time, only 61% had finalized their budgets. Now, majority of the people, the majority of the 135 we surveyed, 89% indicated decreased spending in FY10. So that means the budgets are down for 89%, 69% said that their budgets are down in low-double digits in FY10. Offshore continues to be of interest. 22% said that they will increase their offshore spending in FY10, 5% said that they will increase their offshore by more than 10% in FY10. On the same token, we have 69% saying that there will be decreased offshore spending in FY10. Recovery is expected to be protracted. 57% of the people who we surveyed, the accounts where we collected the information, said that the recovery will be beyond March 2010, which means the recovery is about 12 to 18 months away. Overall, the growth outlook for the clients we surveyed was down by 2%. Where they are spending money, we are seeing that they are spending money on application maintenance, which is (inaudible) work. They are outsourcing and offshoring application maintenance to generate better value. They are spending money on enterprise solutions. I tend to believe that these programs which are multi-year, which have kicked in already or these are programs, which they are kicking in today so that they can emerge stronger when the downturn is over. The verticals where we are seeing trouble, we are seeing pressures in banking and capital markets. We are seeing pressure in manufacturing as well as in retail. The energy and utility segment seems to be doing better. We are also expecting that there will be better spend in health care because of all the money going into health care. Our utilization levels have come down. Our utilization this quarter is 74.3%, excluding training, down from 74.8% last quarter, and this is a reflection of the demand situation. The utilization in a way is linked to demand. And this shows that the demand is down. That is it to my side, I will hand it over to Bala to give you the financial highlights. V. Balakrishnan: Good morning everybody. We had a great quarter. Our revenues were closer to the lower end of the guidance we gave in constant currency. We ended the quarter with $1.12 billion of revenue; the gross margin was 41.9%. It was 43.6% last quarter. In this fiscal year, we got the benefit of the currency in the third quarter that is quarter ending December. We allowed the benefit to flow into the margins because we had little time to invest, this quarter we invest. If you look at the operating income, operating margin came to 29.4% from 31.8%. At the net income level, the margins went to 28.5% from 28.3% because on the non-operating side, we had lesser impact because of the currency. We had only $3 million of impact coming because of currency, which was higher in the last quarter. Overall, we met the EPS guidance. We gave a guidance of $0.55. We have done $0.56. We ended the quarter with $2.2 billion of cash, with accounts receivable days of 57 days. It was 56 days in the third quarter. Slightly gone up, no concerns. More than 60% of the receivable is less than 30 days. So we had a great quarter. Last year was an extremely challenging year, because almost all the currencies moved by something between 25% to 30% against the dollar, and the rupee moved something around 26% against the dollar. So, we had an extreme volatile currency environment last year. In spite of that, we are able to maintain the margins or improve on the margins. If you look at year-on-year between fiscal ‘08 and fiscal ’09, our margins went up by around 200 basis points, because we were able to manage the environment much better. We have given guidance for next year. Our guidance assumes the revenues could decline by something between 3% to 7% in dollar terms for the full-year, and in Q1 it could decline somewhere between 4% to 5%. We assume the pricing level to remain at the same level like what we saw in the fourth quarter for rest of the – full-year next year. That means the pricing could decline by something around 6% on a year-on-year basis for next year. We're adding 18,000 people, because we have given certain commitments in the campus last year. We want to honor all the commitments, plus we lack some laterals. And we are also investing more money in the sales and marketing. So we want to hire at least 100 people on the sales and marketing side to strengthen our sales team, to make sure that future growth is not impacted. So we assume that operating margin could come down by around 300 basis points for full year of next year, because one, the pricing impact will be there. Even if you take the average of fourth quarter to remain the same as – for the full-year, the pricing could come down by around 5.7%. That could impact the margins. Of course, we will have the benefit of the rupee. At the same time, the utilization could come down because we are assuming a decline in the revenue growth, and we're adding people that could have an impact on the margins. So net-net, the operating margins could come down by around 300 basis points for full year of next year, and the net margins could come down by around 200 basis points. On a tax rate, I think the effective tax rate for full year of fiscal ‘09 was around 14.7% to 16.5% in the fourth quarter. We are assuming that the effective tax rate will be closer to 16.5% for next year full-year because one, we had higher yield on our cash and cash equivalents in fiscal ‘09, it was 9.6%. Next year it could come down to maybe around 7% to an extent that tax payout could be less. And also in our guidance, we assume the currency rate as of March end to be constant for the full-year. So the rupee impact could be there, but it could be more or less neutralized by the pricing decline, and also the utilization decline. So overall we have done well. We had maintained our margins or improved the margins in an extremely volatile economic situation, and also a currency situation and we had done well. We are ending the year with $2.2 billion of cash, and we continue to generate higher degree of cash even in this environment. I think with this I will conclude my opening remarks. Now we can open up the floor for Q&A.

Lisa, we can take questions now.

Thank you sir. (Operator instructions) And we have a question from Bhavan Suri with William Blair and Co. Bhavan Suri – William Blair and Co.: Good morning guys, or good evening your time. I guess a couple of quick questions. The first is what are you seeing on customers coming back and renegotiating existing deals. Sort of what has been the ramp down of existing work? S. Gopalakrishnan: We're not seeing existing work being rammed down, what we are seeing is that when projects end, we're not unable to replenish the work because of delays in decision-making and lack of demand. Bhavan Suri – William Blair and Co.: And if you look at some of, I think you signed 37 new customers this quarter, were average deal sizes less than what you have seen, how is that looking, and then if you could talk a little bit about the pipe, and what you are seeing on kind of the deal size and the duration of those deals? S. Gopalakrishnan: Deal sizes are smaller now. Actually what happens is the pipeline continues to be pretty good, the deals start off as large deals $250 million, $300 million et cetera, then during the discussion and negotiation et cetera what happens is either the scope gets reduced, because the client does not want to commit everything at this point. Second, it is possible that then suddenly they decide to make this a multi-vendor deal. And they also quote this high number up front so that they can get better terms and conditions and things like that, but the deal size when it completes, when it closes typically is much, much lower than the starting point. The second thing is the time taken for these deals to close. Typically the deal would take six months, now it would probably take 9 to 10 months. So 30%, 40% increase in closure time. The third thing is, you know, the velocity of closure which I talked about. So that does have an impact on growth at this point. Bhavan Suri – William Blair and Co.: And so I guess if you kind of look at kind of your guidance for fiscal 2010, you know, what provides sort of the confidence – you know, is your visibility, you have typically guided where you have had sort of 70% visibility into your guidance, is that still the case and what do you think about visibility going into this year now? S. Gopalakrishnan: So, you know our model is still the same. We do a bottom-up of building up the forecast. Then we, as you said, we need visibility of 65% for four quarters out, and about 80%, 85% for the next quarter and that is the model we still use. That has not changed. The reason why we are confident of any other guidance we give et cetera are because the model has not changed and you know, yes, growth has come down. So that reflects the market conditions, but the model is still the same. Second, we are confident about margins et cetera because the company has shown time and again that we are able to manage margins in a challenging pricing environment, in a challenging currency environment, and so we are confident about margins. We still have many levers, which we can use in order to manage our portfolio such that the margins are sustained. The company is run very efficiently. It has strong customer relationships, you know, as Shibulal said, we're not seeing cancellations. We're not losing clients etc. It is the fact they have ramped down their projects, they have cut their budgets, and hence the volume has come down and that is reflected in our guidance. Bhavan Suri – William Blair and Co.: Great thanks.

Our next question comes from Mark Marostica with Piper Jaffray. Mark Marostica – Piper Jaffray: Good evening. I was hoping you could provide just maybe a little bit of clarity on the operating margin guidance that you put out, the 300 BIPS, can you sort of talk about what gets you there, does it relate to utilization, volume et cetera. I'm just trying to maybe get a little better clarity, maybe if you can break that out a little bit better. V. Balakrishnan: See, we had assumed that the pricing for the fourth quarter could remain constant for the next full year, because that is what we do every year. We factor in only the knowns, not the unknowns. So if you do that, pricing on a year-on-year basis could come down by around 6%. That could have an impact on operating margin of around 3%. The rupee could be beneficial because last year, that is fiscal 2009 the average rupee dollar rate was around 46.50 or so. Next year it was running 50.70. That would give a benefit of around 4.5%. Then the utilization could come down, because we are assuming a decline in revenues by around 3% to 7% for the full year. At the same time, we're adding around 18,000 people, because we want to ensure all the commitments are fulfilled. So net-net, the utilization impact could be there. So overall, the operating margin could come down by around 300 basis points because of all these factors. Mark Marostica – Piper Jaffray: So, just so I understand that right, so you are assuming in that 300 BIPS there is roughly a 4.5% rupee benefit? V. Balakrishnan: Yes. Mark Marostica – Piper Jaffray: Okay, and then just shifting to geographies, just – you’re obviously seeing Europe come down at a greater pace than US, I'm just curious can you – when you talk about your visibility, you know 65% out, how does that look in Europe relative to North America?

(inaudible) Overall, for the year in Europe, again if you look at Europe, UK, as well as the Continent Europe, in the continent we saw a significant growth year-on-year, 26% growth in reported currency terms. However, the decline in UK, specific to 2, 3 sectors has offset the growth in the continent. For the full year, last fiscal year, we added $100 million in the continent incremental revenue. So that has been the overall number. In terms of the global, and the percentage of global revenues in constant currency terms, it is 25% of revenues from Europe. Specific to sectors, as we look forward for the coming fiscals, we still see (inaudible) opportunities in pharmaceuticals, in specific sectors within manufacturing including resources and aerospace, in CPG clients in the continent Europe. Telecom is a mixed bag. Some of our clients are doing well and they continue to invest into the future, and we will still see that translating into dollar revenue for Infosys. Apart from that, we are also seeing substance and also growth coming from energy and utilities. This cuts across both UK and the continent. Mark Marostica – Piper Jaffray: Okay, great. Thank you. And just one quick final question, of your top 10 clients, are there any clients that are indicating budget cuts in excess of the 9% average that you're seeing among your client base? S. Gopalakrishnan: Not in the top 10, if you look at our client survey of 135 clients, about 89% of that have said decrease and about 69% have said that maybe 10% or more but the top 10, it is not – in the top 10 now, we believe the top 10 will be actually around 3% to 5% that is all. Mark Marostica – Piper Jaffray: Great, thank you very much.

Our next question comes from Joseph Foresi with Janney Montgomery. Joseph Foresi – Janney Montgomery: Hi, guys. My first question here is just statically [ph] and historically there has been a link between headcount and revenues, I was just curious, you are obviously going to add people but the guidance is for low volumes, (inaudible) reconcile that? V. Balakrishnan: The reason for continuing to add people are two-fold, one, last April before anybody saw this downturn coming; we had gone to campuses and made 20,000 offers. Remember that our Q2 fiscal 2009 was one of the best quarters we had. We saw a sequential growth of almost 6%, and so we had made those offers, and right now we feel that it is important that we give a commitment – we gave a commitment so we need to honor those commitments, and we are asking those people to join. They will join starting July, August and we have extended the training, so the training is now almost 6 months long. So they will come out actually starting Jan, Feb 2010. So let us say the recovery starts, and we are in a better position. So that is what we had thought. The second thing is net of attrition the 18,000 gross number actually comes down to 8000, and so the impact on utilization is not that much. And lastly the impact on margin, yes, it is there. But still it is not significant. So when we look at our brand, our commitment, the goodwill we build with these campuses et cetera. And be prepared for the future, we believe that this is the right thing that we should be doing and that is so we have gone ahead and done this. So yes we understand, yes, the revenue is slightly down. That is what we have predicted. But still we're adding people. Joseph Foresi – Janney Montgomery: And on the tax rate side, what was your expectation for tax rate for next year? V. Balakrishnan: If you look at the effective tax rate, it was around 16.5% in the Q4, if you remove the tax reversal. And for the full year it was 14.7%. So for next full year, it could be close to 16% to 16.5%, because one, the yield on the cash and cash equivalents could come down. We had an effective yield of 9.6% in fiscal 09. It could come down to maybe around 7%. So to that extent the impact could be lessened. At the same time, some of the units which are operating under the STP scheme could come out of the scheme. So net-net overall the effective tax rate could go up somewhere from 14.7% in fiscal ‘09 to somewhere between 16% and 16.5% in fiscal 2010. Joseph Foresi – Janney Montgomery: Okay and then just lastly typically going into the year, and obviously the economy has gotten much worse. You guys have tended to be – and going through your (inaudible) models, maybe a little bit on the conservative side, is that the case this year, in other words have you changed your guidance method at all for looking at revenue numbers in your opinion? V. Balakrishnan: No. Our methodology for giving guidance still remains the same. It is a bottom-up exercise. We collect data from the field of what our clients are telling us, what they will be spending with this et cetera. Add it all up, and we need as we said about 65%, 70% visibility for the next year, and based on that we come up with guidance. We then also verify this with analyst reports and things like that. We have other sources of looking at this data, and then that is how we come up with our guidance. It is neither conservative nor aggressive. It is a reflection of the data we have and the model we have. It factors in that growth has come down, so that is what we have come up. Joseph Foresi – Janney Montgomery: Thank you.

Lisa, can we take the next question?

Thank you sir. The next question comes from George Price of Stifel Nicolaus. Please go ahead. George Price – Stifel Nicolaus: Hi, thanks very much. Just kind of piggybacking on Joe’s – one of his questions, any thoughts on the tax rate going into fiscal ’11. I know that is way out, but going into fiscal ‘11 on the other side of the STPI exemption falling off, based on your current fiscal ‘10 growth outlook, and the STPI footprint that you see? V. Balakrishnan: No, on the incremental growth (inaudible), but still the growth for fiscal 2010 is guided to be declining by 3% to 7%. It may not change materially for fiscal 2010. And fiscal 2010 and is the last year for STPI tax holiday. We don't know whether the government will extend it. If they don't do it, in fiscal 2011 quite possible the effective tax rate could go to somewhere between 20% and 22%. George Price – Stifel Nicolaus: Is – I think that is a range that you have talked – that you have thrown out at least loosely previously. You know, given what I think is probably a, at least a modestly disappointing growth outlook now versus say a 6 or 12 months ago, doesn’t that suggest that you are going to have less incremental growth going into SEZs and the tax rate could actually go higher? V. Balakrishnan: Yes, it could but if you look at the associated [ph] revenues, because 5% of our overall revenues. Now it has gone up to 9%, 10% of our overall revenues. Third, the extent of the impact could be lesser, that is why I'm stating a range of 20% to 22%. George Price – Stifel Nicolaus: Okay, just wanted to clarify something, there was some mention about investing more money in sales and marketing, and I think I heard 1000 people, and then a 100 people more. Is it 100? V. Balakrishnan: It is 100 people more for sales, 100. The thousand is, in this 18,000 gross additions, about 16,000 are at entry-level, and about 2000 are experienced hires. Out of those 2000, we plan to hire half of that about 1000 outside the country, primarily in North America, in the US. George Price – Stifel Nicolaus: Okay, got you. Could you talk about how demand, your demand outlook, you know, tracked may be on a monthly basis as you went through the quarter, January versus February, February versus March, just – I don’t know, try and get a sense of how the client mindset on the year forward evolved as we move forward? V. Balakrishnan: So, you know, in the beginning of the year, I'm not comparing January to April. January most companies had not finalized their budgets. There was confusion about the budgets et cetera. Now about four weeks back, it was about 61%, now we believe at least about 70% of the companies have finalized their budgets. Even where they have finalized their budgets, they are telling us that they will allocate money on a monthly basis in most cases and they may not spend all that money. So that is one data point. The second is about 22% of the companies we talk to tell us that will increase, but remaining 78% are saying that everything is affected including offshore. So that is the second data point we have. So, come from January to now there is a significant improvement in the situation with respect to demand. George Price – Stifel Nicolaus: I guess the way I was thinking about is has there been a significant deterioration in the outlook as you from the – when you entered the quarter as to when you left it? V. Balakrishnan: If you look at the pipeline, the pipeline still continues to be pretty robust and strong. It is just that the closure is taking much longer. As I said, previously basically it took six months, it is taking nine months, and the pipeline is actually pretty robust. We added 37 clients in Q4, a similar number from Q3. So the customer additions still continue to be very strong. We have not lost any customer, no projects got cancelled. So there are positives and negatives. The negative is cuts in budget, maybe cut in offshore also, delays in decision-making, budget closures taking much longer, pricing pressure. These are the differences let us say six-months back to now. George Price – Stifel Nicolaus: Okay, last question pricing assumptions you are saying remains flat with levels in fiscal 4Q09, and I guess given the environment and given your comments about how clients are – most clients are cutting back on rolling on a monthly basis, and may not spend all of their budgets, and things this could last into 2010. Is that a conservative enough assumption at this point? I mean, why won’t pricing deteriorate further from fiscal fourth-quarter levels? V. Balakrishnan: Again, you know anything could happen in this environment. Now we have based this on our discussions and what we know today. So it is based on what we know today. Many of the negotiations we believe are behind us. So that – we have seen the impact, clients have reacted pretty fast to the deteriorating environment. This started somewhere in September middle. So they have reacted pretty fast, and we believe that a significant number of these are behind us. There is always a possibility that they will come back and renegotiate. It is possible. And we have to wait and see. George Price – Stifel Nicolaus: Okay, thanks for taking my questions.

Our next question comes from Julio Quinteros with Goldman Sachs. Julio Quinteros – Goldman Sachs: Hi guys. One of the things I was wondering about the timing of the revenue growth for fiscal year 2010. Obviously, we're expecting to be down into the June quarter, when do you guys expect to see a constant currency sequential improvement in the revenue growth through the course of fiscal ’10? S. Gopalakrishnan: From second quarter onwards a slight increase, we are predicting a slight increase, not a great increase may be about 1% to 2% that is what we have assumed at this point. Julio Quinteros – Goldman Sachs: Okay got it, and when you look at the existing client base that you have, in the survey data that you guys compiled, did you guys get any sense on potential client share shifts away from you, in other words are you seeing more competition in some of your larger clients, especially where it appears that wasn't as much growth. Could you possibly have lost some momentum to wild share shifts to some competitors? S. Gopalakrishnan: You see, no, we've not lost any major client or any major project. We have worked very hard at it. Of course, there is some luck because at least till now none of our clients have completely gone bankrupt. They have been acquired of course, and we've been benefiting from some of those acquisitions. So I think it is a combination of our relationship, hard work, and some luck. Julio Quinteros – Goldman Sachs: Okay, and then maybe for Bala, what was the level of doubtful accounts that you guys are reserving for at this point and where they are [ph]? V. Balakrishnan: It is very small. I mean, we provide for all account receivables, which are more than 180 days. We also provide for receivables, which are doubtful. In the fourth quarter, we made a provision of around $4 million. For the full year, we made a provision of $16 million. So it is not very big compared to the kind of receivables we have. Julio Quinteros – Goldman Sachs: Okay, and then if, I am not sure who would be best to comment on this, but can you guys talk specifically to – I guess I'm trying to find if there is any linkage at all between some of the backlash impact that we are seeing in terms of the political environment here in the United States, especially on some of the TARP clients, how much of that is sort of spilling into the longer sales cycles or even delays or hesitancy from the clients to actually ramp up or just given sort of the kind of political backdrop that we are seeing right now here. Can you guys address that directly please? S. Gopalakrishnan: Yes, this is Chris here. We have not seen any impact till now, at this point. If you look at the number of visas being applied, this is the H-1 season right. The numbers have not exceeded the limit. So less number of visas are being applied. So we have not seeing an impact when I think Congress also put a condition that companies who have taken TARP money should not use H-1B, they did not say should not outsource. So we have not seen an impact now. Again, this is definitely an area where we are watching the situation. It is possible that some new regulation may come in this regard. It is possible, but in the past we have seen the impact has not been there. Julio Quinteros – Goldman Sachs: Okay and just finally, can you provide some sense on what has cost you guys to carry a bench of freshers who are in training, any sort of range for what the actual carrying costs (inaudible) but not have them build out? V. Balakrishnan: It is about $5000 per year of carrying cost per employee in training approximately. Julio Quinteros – Goldman Sachs: Okay, got it. Thanks guys. Good luck. V. Balakrishnan: Thank you.

Our next question comes from Ed Caso with Wachovia Securities? Ed Caso – Wachovia Securities: Hi, thank you and good evening. Following on on Julio’s question here, what steps are you taking to sort of address the growing protectionist environment in the US, I mean are you hoping to hire more native set of more officers here, give us some thoughts please? S. Gopalakrishnan: You know, it will be a combination of multiple things. We have to look at hiring more employees in the US. One of the things I said was that out of the 2000 experienced hires, we're looking at 1000 outside India. Second is shifting more work offshore. We have seen this in the past that when it becomes difficult to get H-1 et cetera, clients actually are willing to come to India and work with us in India. So those are again some of the possibilities. The third is, near shore [ph] centers, we have a center in Canada; we have a center in Mexico. So there are multiple options that we can use. Ed Caso – Wachovia Securities: Can you talk a little bit about what is happening with Satyam, how that is impacting your business, particularly in regard to maybe any moves on their part or others to be more aggressive on pricing? S. Gopalakrishnan: We are glad that this issue is now put behind us, resolved. The Government of India has acted very quickly to bring in a new owner and things like that. We have always had competition, you know, both companies were competition, now they have joined together, but we believe that it is not anything new. We know these companies, we have competed well and we will continue to do well against all kinds of competition. We have done this many times. So there is a confidence here that we can manage competition. Ed Caso – Wachovia Securities: Can you talk a little bit about any consolidation and what you are seeing, and particularly how maybe irrational in pricing some say smaller buyers might be at this time? S. Gopalakrishnan: See, we've not seen significant amount of consolidation. There is some cross-border acquisition, Satyam is a case where there is some consolidation within the same geography, but by and large most of the acquisitions have been cross-border. This industry always had a long tail. In Bangalore alone there are 1000 companies registered. Across India there are more than 8000 companies registered in the IT space, and even in the US, it is therefore a handful of companies who are seen as leaders in this industry. There have been hundreds and thousands of companies who have – who have been there actually and some continue to do well, some continue to just stay around et cetera. So, this industry has always had a pretty long tail. Ed Caso – Wachovia Securities: Okay, thank you.

Our next question comes from Moshe Katri with Cowen & Company. Mr. Katri, your line is open. Mr. Katri, your line is open.

Lisa, let us move to the next question.

Thank you sir. The next question comes from James Friedman with Susquehanna. James Friedman – Susquehanna: Hi, good evening. Thanks for taking my questions. I just had three, first about Infosys BPO, it seems like that did have a good quarter, the operating margin there was better in the fourth quarter than it was any time prior in the year, I was wondering Balakrishnan, if you might give some give some commentary about Infosys BPO’s operating margins? V. Balakrishnan: We have Amitabh Chaudhry, who is the CEO of Infosys BPO. I am going to ask him to respond. James Friedman – Susquehanna: Oh, great.

Hi, yes, I think this quarter we did I would say a good one, but not in the sense that we had a negative growth in the third quarter and this quarter we have grown by 3.1% quarter-on-quarter. Our operating margin moved up, partly helped by the fact that the rupee continued to depreciate, and we benefited from that. Over and above that, we also have been improving our utilization in a very significant way over the last couple of quarters and we benefited from the improved utilization. So the combined impact of you know, the rupee depreciation, the fact that we were able to hold our prices. The asset utilization went up and as we were able to manage our workforce well. We have seen obviously, we had an impact on that on operating margin. Also please understand that the Philips deal, which we did in October ’07, the possibility of that deal continues to improve, and we are again benefiting from that and so is our operations in international centers. So that is the other factor, which is helping us improving our operating margins. James Friedman – Susquehanna: Thank you. That’s helpful. If I could just ask related to that. Is Philips a top 5 customer?

Yes, for BPO it is. James Friedman – Susquehanna: Thank you. And then I wanted to say going into consulting. So that’s a less sanguine subject. You know, the Infosys consulting division appears to have lost about $6 million to $7 million in the quarter. And you know, I guess as it – if you could share any observations, is there a light at the end of the tunnel there, it looks to us like the fiscal fourth quarter was, you know, maybe the worst in the year in terms of the losses, because you only lost $12 million in that year, but you lost $7 million in the quarter, so what’s going on there? V. Balakrishnan: The IT subsidiary has no meaning anymore in the business environment. It is a subsidiary which holds a bunch of people, it was created long time back and it is kept there because of employee contracts and various other factors. Today, consulting operates across IT subsidiary [ph] and ITL, there are a lot of people in ITL who work with the consulting at one single unit. So as a group, one has to look at the MIS [ph] numbers rather than the numbers published for that subsidiary. And the MIS numbers are very different from what you will see in the subsidiary numbers, so that there is no reason to look at the subsidiary numbers. James Friedman – Susquehanna: Okay, I apologize. I had a – S. Gopalakrishnan: No, no, no. It is just simply that today you know, if you remember one year back, we mentioned that we have created one group by consolidating the consulting and solution space, and the solutions people were created as a separate unit with ITL and merged with ITL and MIS business, but it was never moved. So, it spans across the organization, and the net income is 2% to 3% if I look at the MIS report. James Friedman – Susquehanna: Okay, and then if I could sneak in one last one about products, which is cynical. So it looks like that generated about $45 million in the quarter. You know, so that looks like a pretty good quarter on the – like the products in the software Finacle, what can we expect I guess for that. You know, it seems like software is going to harder sales in this environment. Is that $45 million? Is that sustainable going forward or should we expect that to trend down? S. Gopalakrishnan: Finacle is doing extremely well, actually it is finding good traction. Haragopal, who heads our Finacle group is here. So I am going to let him answer this question. Haragopal.

Hi, yes like Chris said we are seeing good traction including the markets like the U.S. as well as U.K. Having said that some of the decisions are taking longer than you know, what we would expect, you know, including in some of the decisions of Q3 spilling over to Q4. Secondly, you know some of these decisions we are looking at in a staggered fashion, going in a phased deployment and which is – it is not that wholesome transformation in one goal. So, overall I think in some geographies we were seeing a slowdown in some of the markets, definitely it is picking up, some segments, typically the tier one, there aren’t quick deficiencies yet, but the mid-segment banks are really looking at the transmission using Finacle as the platform. James Friedman – Susquehanna: Thank you so much. S. Gopalakrishnan: You know, just to add to that Finacle has had sales now in North America, in U.S., in Europe, in Australia, in Singapore. So you know, it is now finding traction in developed markets. We are working with medium to large-sized banks. So you know, it is progressing, and its level at which is now is selling. And we are also getting multi-country role outs, where Finacle is being used as a standard, and there were phased manner in which they implement. They implement in smaller countries first, and then slowly migrate to home country. So you know, Finacle is actually doing very well at this point. James Friedman – Susquehanna: Thank you for taking my question.

Our next question comes from Rod Bourgeois with Bernstein. Rod Bourgeois – Bernstein: Great. It looks like the pricing environment was somewhat of a surprise over the last three months, given the change in tone on the pricing front. As a result of the pricing environment and other competitive dynamics out there, is Infosys changing its competitive and financial strategy in anyway to address that environment? S. Gopalakrishnan: See, in spite of challenging pricing, if you look at the actual impact, it is minus 1.4% in Q3 and minus 2% in Q4. So we have handled it, you know reasonably well. We’ve been able to sustain margins, and the impact is there but it is not you know, that much. Having said that you know, we are giving our clients many more options and choices, increased offshore fixed pricing, you know other pricing models like pricing based on tickets or number of maintenance requests or number of devices we manage. We also have platform-based solutions where we take the initial investment and the client base for use. So we are giving them multiple choices so that you know, they can look at what they want to achieve, what their goals are, and still we are able to through productivity improvement or through efficiencies of scale to creating a shared services model. We are able to also get, you know, the margins we want. So we have been able to do this smartly and the bottom line is actually the bottom line itself. You know, we have been able to sustain the margins. Rod Bourgeois – Bernstein: That makes sense. I guess so on top of that, I mean it looks like you are increasing your aggression in investment in sales and marketing, and that may be somewhat of a reaction to the environment that we are in, where are trying to invest more aggressively to preserve your market share in the offshore market. So I guess the question there is, is the increased investment and things like sales and marketing, is that a temporary investment just for the current environment, or is that a level of investment that likely to reflect a more permanent part of your cost structure and then essentially a change somewhat in your strategy? S. Gopalakrishnan: See, typically we would, you know, invest in sales and marketing along with growth. Since growth is not there, we believe that to kick-start growth, you know, we have to invest and you know, and in normal years because of the growth, you know the percentage will not change, but here when the growth is not there, the percentage would change. These investments are into new areas. You know, we want to enter new markets, we want to enter into new industry vertical, we want to look at you know, public sector government. So there are various things we need to do. On an ongoing basis to expand the market footprint we have, the industry footprint we have, et cetera. We are also investing in solutions and new services that will require investment in sales. So the remaining reasons why this is required, you know, it is part of the plan and when the growth comes back, you will see that you know, as a percentage it will drop back to traditional levels. Rod Bourgeois – Bernstein: Are you increasing your investment in kind of onshore relationship management type function to have more sort of account management and sort of vertical expertise, you know, more so with the client? S. Gopalakrishnan: Yes, we are – but again, you know over time we will balance that. You know we’ve done this very well because you know when we do these investments, we also simultaneously tweak the models such that you know, we are able to get back the margin. See, what I think we have demonstrated very well over many, many years is that despite currency movement, despite changes in business, et cetera. you know our ability to sustain margin is pretty good, and that’s because you know, we have several levers. For example, today you know if you look at utilizations come down, traditionally we would look at utilization of 78% to 80%. That is just one example of you know, the levers we still have within the business. Rod Bourgeois – Bernstein: You may be suggesting there that the 300 basis points of margin degradation in your outlook is a potentially overly conservative outlook. I mean you are getting over 400 basis points of benefit from the rupee, but still guiding to 300 basis points of margin contraction. So that’s a pretty meaningful change in the margin structure unless that’s a highly, highly conservative kind of outlook. S. Gopalakrishnan: No it is not conservative or aggressive or anything that you know, the model we have. As we said, you know, we are increasing our sales. We have reduced, you know, the utilization is going to be lower, and then the pricing impact will be felt. So it is based on the data we have and the model we have, and that’s what it is about. Our aim always has been to get, you know the highest margins in our industry, or one of the highest margins in the industry. In the industry, you will have a range of margins, and to get to the soft end of that, you know, always our aim. It is a self-driven thing, you know it is not something, you know, something which somebody outside is telling us, this is the philosophy of the company always. Rod Bourgeois – Bernstein: You definitely deserve credit. S. Gopalakrishnan: And we have demonstrated that we are able to do that. Even in BPO, if you look at BPO margins, you know, we have again one of the highest. You know, it is a business, which was started five to six years back, and again we are one of the highest margins in the industry. Nobody has anywhere close to that margins in BPO. Rod Bourgeois – Bernstein: Yes, the margins are definitely impressive relative to the rest of the industry. One of the things that came up on the 4:30 a.m. conference call, and that’s Eastern timeframe. The – there was some indication that there might be a bit of a recovery happening in the financial services vertical, and I just wanted to maybe even Ashok could elaborate on that. I mean, we are seeing maybe some stabilization where things are not dropping at the same rate in that vertical, but it is unclear to me that there’s really a recovery happening. So not to fight over (inaudible), and without looking at analyst reports and things that are out there, are you guys seeing a recovery or a stabilization type of a scenario there? S. Gopalakrishnan: You know, let me explain. You know, what we said was if you look at the results announced by some of the banks, et cetera. there seem to be some maybe stabilization recovery. You know, I saw some news reports where you know regulators of government officials in the U.S. saying that maybe this is a start of a recovery. All I said was from the data we have, which is based on our client survey, etc. we are not assuming any recovery. Rod Bourgeois – Bernstein: Got it. S. Gopalakrishnan: We are assuming that first quarter is going to be tough quarter. It is a sequential decline again, but at some point the recovery must happen, and if that happens it will be positive. That’s what I said, but there are some signs there, out there saying that you know, it maybe a start of the recovery. I said that let’s hope that you know, it is true, it is real and it sustained. So let’s see that. Rod Bourgeois – Bernstein: That’s helpful. Thanks for the clarification. S. Gopalakrishnan: Unfortunately, we are completely out of time. I want to thank everyone for participating in the call. Our investment relationship managers are always there to answer any further questions you have, and we look forward to interacting with you doing the quarter or at the end of the next quarter. Thank you again.

And that concludes today’s teleconference. Thank you for your participation. Have a good day.