________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
________________________________________________________________________________

FORM 20-F

(Mark One)
[_] Registration statement pursuant to section 12(b) or (g) of the Securities
Exchange Act of 1934

[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended March 31, 2001

[_] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Transition period from ______to ________

Commission File Number 333-72195

INFOSYS TECHNOLOGIES LIMITED
(Exact name of Registrant as specified in its charter)

Not Applicable
(Translation of Registrant's name into English)

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

Electronics City, Hosur Road,
Bangalore, Karnataka
India 561 229
+91-80-852-0261
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
None Not Applicable

Securities registered pursuant to Section 12(g) of the Act:

American Depositary Shares,
each represented by one-half of one Equity Share, par value Rs. 5 per share.
(Title of class)

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:
Not Applicable
(Title of class)

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the Annual
Report - 66,158,117 Equity Shares

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes ............ No ......X.......

Indicate by check mark which financial statement item the registrant has elected
to follow.

Item 17 ............ Item 18 ......X.......

Currency of Presentation and Certain Defined Terms

Unless the context otherwise requires, references herein to the "company" or to
"Infosys" are to Infosys Technologies Limited, a limited liability company
organized under the laws of the Republic of India. References to "U.S." or
"United States" are to the United States of America, its territories and its
possessions. References to "India" are to the Republic of India. Yantra
Corporation, a Delaware Corporation ("Yantra"), in which the company holds a
minority interest, is considered a subsidiary of the company for purposes of
Indian GAAP. "Infosys" is a registered trademark of the company in the United
States and India. All other trademarks or tradenames used in this Annual Report
on Form 20-F ("Annual Report") are the property of their respective owners.

In this Annual Report, references to "$ " or "dollars" or "U.S. dollars" are to
the legal currency of the United States and references to "Rs." or "rupees" or
"Indian rupees"" are to the legal currency of India. The company's financial
statements are presented in Indian rupees and translated into U.S. dollars and
are prepared in accordance with United States generally accepted accounting
principles ("U.S. GAAP"). References to "Indian GAAP" are to Indian generally
accepted accounting principles. Except as otherwise specified, financial
information is presented in dollars. References to a particular "fiscal" year
are to the company's fiscal year ended March 31 of such year.

Unless otherwise specified herein, financial information has been converted into
dollars at the noon buying rate in New York City for cable transfers in foreign
currencies as certified for customs purposes by the Federal Reserve Bank (the
"Noon Buying Rate") on March 31, 2001, which was Rs. 46.66 per $ 1.00. For the
convenience of the reader, this Annual Report contains translations of certain
Indian rupee amounts into U.S. dollars which should not be construed as a
representation that such Indian rupee or U.S. dollar amounts referred to herein
could have been, or could be, converted to U.S. dollars or Indian rupees, as the
case may be, at any particular rate, the rates stated below, or at all. Any
discrepancies in any table between totals and sums of the amounts listed are due
to rounding. For historical information regarding rates of exchange between
Indian rupees and U.S. dollars, see "Key Information - Exchange rates".

Forward-Looking Statements May Prove Inaccurate

IN ADDITION TO HISTORICAL INFORMATION, THIS ANNUAL REPORT CONTAINS CERTAIN
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED. THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE REFLECTED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT
MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED
IN THE SECTION ENTITLED "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" AND ELSEWHERE IN THIS REPORT. READERS ARE
CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH
REFLECT MANAGEMENT'S ANALYSIS ONLY AS OF THE DATE HEREOF. IN ADDITION, READERS
SHOULD CAREFULLY REVIEW THE OTHER INFORMATION IN THIS ANNUAL REPORT AND IN THE
COMPANY'S PERIODIC REPORTS AND OTHER DOCUMENTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") FROM TIME TO TIME.

Part I

Item 1. Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

3.A.1 & 2 Selected financial data

This information is set forth under the caption "Summary of selected
consolidated financial data" on page 98 of the Infosys Annual Report for
fiscal 2001 and is incorporated herein by reference.

3.A.3 Exchange rates

Fluctuations in the exchange rate between the Indian rupee and the U.S. dollar
will affect the U.S. dollar equivalent of the Indian rupee price of the equity
shares on the Indian stock exchanges and, as a result may affect the market
price of the ADSs in the United States, and vice versa. Such fluctuations will
also affect the U.S. dollar conversion by the Depositary of any cash dividends
paid in Indian rupees on the equity shares represented by the ADSs. The
following table sets forth, for the fiscal years indicated, certain
information concerning the exchange rates between Indian rupees and U.S.
dollars based on the Noon Buying Rate:

-----------------------------------------------------------------------------------
Fiscal year ended March 31, Period end/1/ Average/1,2/ High Low
-----------------------------------------------------------------------------------

1995/3/ 31.43 31.38 31.90 31.37
1996 34.35 33.47 38.05 31.36
1997 35.88 35.70 36.85 34.15
1998 39.53 37.37 40.40 35.71
1999 42.35 42.10 43.68 39.25
2000 43.65 43.46 43.68 42.84
2001 46.66 45.81 46.95 43.56
-----------------------------------------------------------------------------------

/1/ The Noon Buying Rate at each period end and the average rate for each
period differed from the exchange rates used in the preparation of the
company's consolidated financial statements.

/2/ Represents the average of the Noon Buying Rate on the last day of each
month during the period.

/3/ From March 1, 1992 through August 19, 1994, the rupee was not permitted to
fully float and convert on the current account. Instead, a dual exchange rate
mechanism made the rupee partially convertible by permitting conversion of 60%
of the foreign exchange received on a trade or revenue account at a market-
determined rate and the remaining 40% at the official Government of India
rate.

/4/ The high and low exchange rates for the previous six months are as
follows:

-----------------------------------------------------------
Month High Low
-----------------------------------------------------------

October 2000 Rs. 46.85 Rs. 46.05
November 2000 46.95 46.62
December 2000 46.95 46.69
January 2001 46.78 46.39
February 2001 46.66 46.41
March 2001 46.75 46.53
-----------------------------------------------------------

3.B Capitalization and indebtedness

Not applicable.

3.C Reasons for the offer and use of proceeds

Not applicable.

3.D Risk factors

This information is set forth under the caption "Management's discussion and
analysis of financial condition and results of operations" on pages 99 through
110 of the Infosys Annual Report for fiscal 2001 and such information is
incorporated herein by reference.

Item 4. Information on the Company

4.A History and development of the company

4.A.1 Company overview

Infosys was originally incorporated as Infosys Consultants Private Limited on
July 2, 1981, as a private limited company under the Companies Act, 1956
("Indian Companies Act"), of the Republic of India. The name of the company
was changed to Infosys Technologies Private Limited in April 1992 and
subsequently to Infosys Technologies Limited in June 1992 when it became a
public limited company. Information about the registered office of the company
is disclosed on the cover page to this Form 20-F. The name and address of the
agent for service in the United States is CT Corporation 1350 Treat Blvd,
Suite 100 Walnut Creek, CA. 94596.

The company, one of India's leading information technology ("IT") services
companies, utilizes an extensive non-U.S. based ("offshore") infrastructure to
provide managed software solutions to clients worldwide. Headquartered in
Bangalore, India, the company has sixteen state-of-the-art offshore software
development facilities located throughout India and one global development
center in Canada that enable it to provide high-quality, cost-effective
services to clients in a resource-constrained environment. The company has
also set-up Proximity Development Centers (PDCs) at Croydon in the United
Kingdom, Boston, Chicago, Fremont, New Jersey and Phoenix in the United
States. These centers will further help Infosys in addressing the requirements
of its clients with increased promptness. The company's services, which are
offered on either a fixed-price, fixed-time frame or a time-and-materials
basis, include custom software development, maintenance, re-engineering
services, e-commerce and Internet consulting as well as dedicated offshore
software development centers ("OSDCs") for certain clients. In each of its
service offerings, the company assumes full project management responsibility
in order to strengthen client relationships, offer higher value-added services
and enhance its profitability. In addition, the company develops and markets
certain company-owned software products. As a result of its extensive network
of offshore software development facilities, its quality systems, its
disciplined processes and its significant investment in people, the company
has built a platform from which it has been able to achieve significant growth
to date.

The company's initial public offering ("IPO") was in February 1993 on the
Bangalore Stock Exchange and raised approximately $ 4.4 million in gross
aggregate proceeds. To further fund its capital programs, Infosys raised
approximately $ 7.7 million in gross aggregate proceeds through a private
placement of shares in October 1994. These shares were purchased by foreign
institutional investors, mutual funds as well as Indian domestic financial
institutions and corporations. Most recently, in order to partially fund the
expansion of its existing Indian facilities and telecommunication
infrastructure in Bangalore, Bhubaneswar, Chennai, Mangalore and Pune and to
develop new facilities, the company raised approximately $ 70.38 million in
gross aggregate proceeds through its initial U.S. public offering of American
Depositary Shares ("ADSs") on March 11, 1999. The company has incurred $ 96.8
million, $ 35.9 million and $ 16.1 million in fiscal 2001, 2000 and 1999
respectively towards capital expenditure. The company intends to spend
approximately $ 80 million in capital expenditure, during fiscal 2002, the
majority of which will be utilized in India. This would be funded out of the
internal accruals and existing cash balances of the company.

Through its worldwide sales headquarters in Fremont, California and 24 other
sales offices located in the United States, Canada, the United Kingdom,
France, Belgium, Sweden, Germany, U.A.E, Australia, Japan, Hongkong, Argentina
and India, the company markets its services to large IT-intensive businesses.
During fiscal 2001, the company derived 73.5% of its revenues from North
America, 18.8% from Europe and 1.4% from India. While the company derives its
revenues primarily from the United States, Infosys maintains a diversified
client base, with its largest client representing 7.3% of fiscal 2001
revenues. As of March 31, 2001, the company had approximately 273 clients.
This diversified client base is comprised primarily of Fortune 500 companies,
growing Internet companies and other multinational companies. As a result of
its commitment to quality and client service, the company enjoys a high level
of repeat business. For fiscal 2001 and 2000, existing clients from the
previous fiscal year generated 84.5% and 87.6%, respectively, of the company's
revenues.

The company was incorporated in 1981 by seven founders who shared a vision to
build a world-class IT services organization based on a deeply-held value
system, leadership by example, and continuous innovation. Five of these
original founders remained with the company and, together with other members
of the company's management council, have pursued their vision by focusing on
certain key strategies including: (i) pursuing a world-class operating model;
(ii) investing heavily in human resources; (iii) focusing on managed software
solutions; (iv) capitalizing on a well established offshore development model;
(v) maintaining a disciplined focus on business and client mix; and (vi)
pursuing growth opportunities. In recognition of its efforts, the company was
voted "The Best Company in India" in the Far Eastern Economic Review 2000
poll, was voted the "Best Employer of India" by the Business Today-Hewitt
Study in a survey of over 150 companies in 2000, was voted the "Best Regional
Software House" by Financial Technology Asia magazine,

was the first recipient of the National Award for Excellence in Corporate
Governance instituted by the Ministry of Finance, Government of India and
sponsored by the UTI Institute of Capital Markets and was awarded the Silver
Shield in each of the last six years by the Institute of Chartered Accountants
of India as the Indian company with the best presented financial statements by
a non-financial company. Management believes that this reputation for
leadership and innovation and the recognition it has received has been and
will continue to be a key competitive advantage, particularly in attracting
and retaining the highest quality IT professionals.

4.B Business overview

4.B.1 Industry overview

In today's increasingly competitive business environment, companies have
become dependent on IT not only for efficiency in day-to-day operations, but
also as a strategic tool for re-engineering business processes, restructuring
organizations and for reacting quickly to competitive, regulatory and
technological changes. For these reasons, IT capabilities are particularly
critical in certain vertical markets that are undergoing rapid deregulation
and globalization like financial services, utilities and telecommunications.
As corporations are becoming increasingly reliant on their IT systems, the
technological challenges of managing such systems have increased. IS
departments must not only implement new systems based on technologies such as
Internet and client / server systems, but maintain and update legacy systems
to work with the latest software and hardware.

With the Year 2000 conversion completed, corporations are now focussing on
using the latest technologies available to revise their business models to
take advantage of the Internet, integrating operations, streamlining customer
supply chains and meeting customer needs. This focus is increasingly driving
corporate IT spending plans. According to the 1999 NASSCOM-McKinsey Study(TM)
on "Indian I. T. Strategies", the total market for IT products and services is
expected to grow from $ 461 billion in 1998 to $ 1.92 trillion by 2008.
India's share of the relevant market will grow to nearly $ 87 billion by 2008.

The need to outsource is particularly acute for companies whose IT staff lacks
the requisite skill set and project management capabilities to implement new
technologies, yet are reluctant to work solely with outdated technology. As a
result, such companies seek third-party IT service providers to implement new
technology and support existing legacy systems. Additionally, in many cases,
businesses are being forced to outsource IT projects due to the difficulty and
expense of recruiting and training sufficient IT staff in a resource-
constrained environment. Outsourcing enables businesses to minimize the risks
and reduce the time-to-completion of large IT projects by shifting some or all
of their IT responsibilities to capable service organizations. Outsourcing has
most recently been necessitated by the rapid proliferation of the Internet and
related technologies, as well as the need to restructure business operations
to allow for a faster response to changes in the economy and customer
requirements.

The recent advances in telecommunications and the growing acceptance of
telecommuting, has led to the globalization of the market for IT services. It
is now well accepted that remote offshore software development and maintenance
is possible if the offshore facilities leverage world-class physical and
technological infrastructure, quality processes, project management
methodologies, and data communications infrastructure to provide video
conferencing, Internet/e-mail connectivity and remote computer access. By
outsourcing software development and maintenance projects to offshore IT
service providers, establishing overseas facilities, or entering into joint
ventures with foreign partners, companies have been able to access skilled IT
professionals in lower cost environments with a large population of English-
speaking technical talent.

India: A source for software services. According to a survey of U.S. software
service vendors conducted by the World Bank, India is the leading offshore
destination for companies seeking to outsource software development or IT
projects. India's National Association of Software and Service Companies
("NASSCOM") estimates that India's export revenue from software, including
software services, was approximately $ 6.3 billion in fiscal 2001 and will
reach $ 8.5 billion by fiscal 2002. There are three key factors
contributing to this rapid growth of India's software market. First, India has
a large, skilled labor pool that is available at a relatively low labor cost.
With over four million engineers, India ranks second only to the United States
as the country with the largest population of English-speaking technical
personnel. According to NASSCOM, the number of software professionals employed
by the Indian software industry was around 280,000 in 1999 compared to 160,000
in 1996-97. India has more than 1,904 educational institutions, including
engineering colleges, technical institutes and polytechnics, that train more
than 73,580 people annually. According to the 1999 Nasscom-McKinsey(TM) report
on "Indian I.T. Strategies", India will require a minimum of 2.2 million IT
workers by 2008. This sizable pool of IT talent in India is available to
companies worldwide. According to Software Productivity Research, the average
annual wage for software professionals in India is approximately 15% of the
average U.S. rate. Although wages in India are rising faster than in the
United States, the labor rate differential is anticipated to remain a
competitive advantage for Indian companies in the foreseeable future.

A second key factor driving the Indian software market is the capability of
Indian IT firms to produce high-quality software deliverables. A NASSCOM
analysis of international quality standards of the top 300 Indian software
companies undertaken in December 1999, showed that 145 had already acquired
ISO 9000 or SEI Level 2 equivalent certification, with an additional 135
anticipated to acquire such certification by December 2001. These capabilities
have led to the

recognition of India's IT talent by companies worldwide. To take advantage of
India's high-quality IT services at attractive prices, companies worldwide
have outsourced their software services needs to India unrestrained by
distances or transportation limitations that often handicap Indian
manufacturing firms. In fact, the 10 to 12 hour time difference between India
and its largest market, the United States, allows work to be carried on by
teams spanning both countries on a 24-hour basis, shortening cycle times and
improving productivity and service quality.

The final factor driving the Indian software industry is the recognition by
successive Indian governments in recent times of the importance of the IT
sector in the Indian economy. In 1991, the Government of India introduced a
number of measures to liberalize the economy and thus addressed the economic
difficulties that India had been facing. These measures included policies to
stimulate investment in infrastructure industries and the growing Indian
software industry. This commitment to the software sector has been and
continues to be pursued by each successive government since 1991. For example,
in October 1999, the Government of India, established, the Ministry of
Information Technology (MIT). In addition to promoting the use and diffusion
of IT, the MIT will also encourage the adoption of streamlined procedures to
promote the construction of India's telecommunication infrastructure. In
addition, software firms benefit from a variety of incentives, such as relief
from import duties on hardware, a tax deduction for income derived from
software exports, and infrastructure support for companies operating in
Software Technology Parks.

4.B.2 Strategy

4.B.2.1 Business strategy

The company's vision is to become a globally respected corporation providing
best-of-breed solutions employing best-in-class professionals. In order to
achieve this goal, the company focuses on the following key elements of its
business strategy:

Pursue world-class operating model. The management believes that one of the
most critical contributing factors to the company's success has been its
commitment to pursue high-quality standards in all aspects of its business,
including deliverables to the customers, human resource management, investor
relations, planning, finance, physical and technological infrastructure, sales
and marketing. In its services and operations, the company achieves quality
through rigorous adherence to highly evolved processes, including a detailed
approach to planning and execution, multi-level testing and careful tracking
and analysis of quality control. The company is certified under the ISO 9001
and TickIT quality standards. In addition, the company has been certified at
Level 5 of the Capability Maturity Model, a software-specific quality
management model developed by the Software Engineering Institute at Carnegie
Mellon University. This model defines five levels of process maturity for a
software organization. Certification to Level 5 has been achieved by only
around 19 companies worldwide assessed under the Capability Maturity Model.
The company has also launched the Infosys Excellence Initiative ("IEI") to
address the challenges of the future, and to ensure performance improvement in
an integrated manner. The IEI is an umbrella for all quality initiatives
within the company, which includes different aspects of the company. This
includes sustaining and leveraging CMM Level 5 for delivery processes, the
Malcolm Balridge National Quality Award framework for organizational
management processes, and Six sigma Cross Functional Process Mapping ("CFPM")
techniques for improving cross-functional processes. The Malcolm Balridge
National Quality Award framework will focus on the overall assessment of the
company's business and integration of all its business activities. However,
given that Infosys is not a U.S. registered company, it is not eligible for
the Malcolm Balridge National Quality Award. Six sigma CFPM techniques are
being used to improve customer relationship management, customer order
management, talent deployment, and other cross-functional processes.

Infosys also adheres to high-quality standards in its investor relations. For
example, the company was one of the first public Indian companies to adopt
U.S. GAAP reporting in fiscal 1995 and quarterly-audited Indian financial
statements in fiscal 1998.

Invest heavily in human resources. The company believes that its continued
success will depend upon its ability to recruit, train, deploy and retain
highly talented IT professionals. Even as the field of software engineering
has been attracting the best and brightest Indian students, management
believes the company has become, for Indian engineering graduates, one of the
most sought after employers. The company focuses its recruiting efforts on the
top 20% of the students from the engineering departments of Indian
universities and uses a series of tests and interviews to identify the best
applicants. In an effort to attract the most highly qualified candidates, the
company has spent significant resources in creating a quality work
environment. For example, its main facility in Bangalore, which spans
approximately fifty acres, encompasses not only 882,500 sq. ft. of office
space but also 655,000 sq. ft. of landscaping, three cafeterias, sports
facilities such as a miniature golf course, tennis courts, a basketball court,
an outdoor swimming pool, meditation and health club, aerobics hall and
gymnasium with steam and sauna facilities, outdoor sitting area, amphitheater,
a theater and library. Through this campus-like environment, the company
fosters a collegial atmosphere and informal culture, which is further promoted
by its "open door" operating philosophy where communication and ideas flow
freely irrespective of title or tenure. The company also offers its IT
professionals challenging assignments, competitive salaries and benefits and
one of the first stock option plans adopted by a public Indian company. In
recognition of its efforts, the company was voted the "Best Employer of India"
by the Business Today-Hewitt Study in a survey of over 150 companies in 2000.
In addition, the company invests heavily in training, including 14 week
training sessions for newly recruited IT professionals as well as a variety of
two-week continuing education courses in technology and management skills
conducted by a 58-person faculty. The company recently established the
"Infosys Leadership Institute" in Mysore, India, to help manage the company's
growth, to prepare employees to face the complexities of the rapidly changing
marketplace and to influence work culture by instilling leadership qualities.
The Infosys Leadership Institute campus in

Mysore, India is expected to house classrooms, a business center, conference
rooms, and a library. It is expected to train approximately 1000 employees
annually. As a result of this high level of investment in its people,
management believes that the company has become one of the most attractive
employers for Indian software professionals and that its attrition rate is
significantly below the industry average.

Focus on managed software solutions. Since its inception, the company has
dedicated itself to providing managed software solutions, many of which are
offered on a fixed-price, fixed-time frame basis. By taking full project
management responsibility in every project, the company provides its clients
high-quality, cost-effective solutions with low risk. Such services offer the
company the opportunity to build client confidence with the potential benefit
of enhanced margins. Management believes that by demonstrating its ability to
manage and successfully execute large projects, the company is better
positioned to become a long-term partner to its clients for all of their
software needs. In addition, by retaining project management responsibility,
the company accumulates significant industry expertise and continues to
develop and refine its software development tools and proprietary
methodologies.

Capitalize on a well-established offshore development model. As one of the
pioneers of the offshore software development model, the company has made
significant investments in its infrastructure and has developed the advanced
processes and expertise necessary to manage and successfully execute projects
in multiple locations with seamless integration. The company has high levels
of project management skills and rigid controls as evidenced by its Level 5
Capability Maturity Model certification. This commitment to quality allows the
company to successfully execute approximately 66% of its project work in India
while maintaining a high level of client satisfaction. These capabilities not
only provide significant cost advantages but also shorten the time to deliver
a solution to the client. With significant investments in offshore software
development facilities, plans to expand its available facilities significantly
and plans to hire additional IT professionals, the company believes that it is
well-positioned to serve clients globally in a resource-constrained
environment.

Maintain disciplined focus on business and client mix. The company provides a
wide range of software services and maintains a disciplined focus on its
business mix in an effort to avoid service or client concentration. Beginning
in fiscal 1996, the company aggressively sought to minimize its client
concentration and to accept as clients only those that met strict guidelines
for overall revenue potential and profitability. In fiscal 2001 and 2000, the
company's largest client accounted for 7.3% and 7.2%, respectively, of
revenues and its five largest clients accounted for 26.0% and 30.2%,
respectively, of revenues. This balance is key to ensuring that the technology
skill sets of the company's IT professionals remain diversified. Such
diversification is critical not only in providing the company the flexibility
to adapt to changing market conditions but also in attracting and retaining
highly skilled professionals who seek the opportunity to continue to learn new
technologies.

4.B.2.2 Growth strategy

From fiscal 1997 to fiscal 2001, the company experienced compounded annual
revenue and net income growth rates of 79.8% and 97.7%, respectively, and grew
from approximately 1,405 IT professionals to approximately 8,656. The
following are the key elements of the company's growth strategy:

Broaden service offerings. To meet all of its clients' IT needs, the company
strives to offer a comprehensive range of services by continuously evaluating
new and emerging technologies. As a full-service provider, the company
believes that it can increase its revenues from existing clients as well as
attract new clients. Toward this end, the company has opportunistically
expanded its services beyond its core development, maintenance and re-
engineering services. For example, the company has recently begun initiatives
to develop practices focused on packaged applications implementation, e-
commerce and Internet/intranet services. E-commerce and Internet / intranet
services constituted 28.4% and packaged application implementation constituted
7.2% during fiscal 2001.

Increase business with existing clients. In fiscal 2001, the company provided
software services for more than 270 clients in the United States, Europe,
Australia, Asia and Japan. A key objective of the company's growth strategy is
to expand the nature and scope of its engagements with existing clients both
by increasing the volume of its projects and by expanding the breadth of
services offered. Establishing broad, long-term relationships potentially
increases the quality and efficiency of the company's service to a particular
client since each project performed for a client increases the company's
understanding of the client's systems, requirements and business practices.
For the same reason, establishing broad, long-term relationships with a client
also reduces the company's marketing costs, increases the client's reliance on
the company and creates barriers to entry for competitors. The company seeks
to foster such relationships by delivering high-quality services on time and
on budget and, over the course of a relationship, by increasing the
integration of its services with the client's internal IT operations. To date,
this approach has been highly effective. Despite the company's high rate of
growth during the last few years, over 84% of revenues in both fiscal 2001 and
2000 were generated from companies who were clients in the prior fiscal
year.

Develop new clients. The company pursues several new client development
strategies. First, the company offers a broad array of managed software
solutions that provide an initial entry into a new client. Second, Infosys
believes that it can leverage the industry-specific expertise it has developed
in key vertical markets (financial services, manufacturing and distribution,
retail, telecommunications and technology) to further develop its portfolio of
clients in these targeted markets. This vertical market orientation continues
to help Infosys design and develop re-usable software tools and processes
which have specific applications to clients in these markets and which can
improve the company's efficiency and productivity. Finally, the company
intends to expand its global sales and marketing infrastructure by hiring new
sales and marketing personnel, opening additional regional sales offices and
increasing its marketing expenditures. Infosys currently maintains sales and
marketing offices in 25 locations and intends to add new offices in North
America, Europe and Asia. The management believes that increasing the
company's geographic presence will enhance its ability to establish and
support new client relationships.

Increase revenue per IT professional. To increase its revenue per IT
professional, the company continually focuses on building expertise in
vertical markets, refining its software development tools and methodologies,
and storing and disseminating experiential knowledge in order to improve
efficiency and productivity. Additionally, to enhance productivity per IT
professional, Infosys continually monitors client accounts for profitability
and seeks to focus on select new clients and on those existing client
relationships that have the potential for high long-term profitability. The
company's policy is to decline or discontinue projects that do not offer the
potential to meet its profitability targets. From fiscal 1997 through 2001,
the company's blended per capita revenues grew at a compounded rate of 20.2%.
Finally, the

company is seeking to increase the proportion of projects that are undertaken
on a fixed-price, fixed-time frame rather than a time-and-materials basis. The
management believes that effectively structured fixed-price, fixed-time frame
projects benefit the client by reducing the client's risk, while offering the
company the potential benefit of enhanced margins for projects that are
performed efficiently.

Expand and diversify base of IT professionals. Management believes that a
critical element of the company's growth strategy is its ability to increase
its base of IT professionals. To address this issue, the company plans to
build new software development facilities in locations where it can access
local pools of talent as well as increase the number of professionals employed
at its existing locations. In addition, the company looks at other fields of
expertise, such as business school graduates and accountants, for recruiting.
Accordingly, the company has approved plans to expand its facilities in
Bangalore, Bhubaneswar, Chennai, Mangalore, Pune, Hyderabad, Mysore and Mohali
all in India. The company has also established Proximity Development Centers
(PDCs) in Boston, Chicago, Fremont, New Jersey, Phoenix all in the United
States, Croydon in the United Kingdom and Global Development Center (GDC) in
Toronto, Canada. These PDCs and GDCs will further help Infosys in addressing
the requirements of its clients with increased promptness. The company is also
contemplating addition of facilities in the United States, Europe and Asia.

Pursue selective strategic acquisitions. The company believes that pursuing
selective acquisitions of IT services and software applications firms could
potentially expand the company's technical expertise, facilitate expansion
into new vertical markets and increase its client base. Although no
acquisitions are currently being contemplated, the company anticipates that it
will seek to identify and acquire companies that have well-developed
applications in vertical markets, extensive client bases, proprietary
technical expertise, or other strengths that would complement the company's
business.

4.B.2.3 The Infosys offshore development model

The Indian offshore development model became popular in the mid-1990's as a
method of dividing software project activities between a service provider's
offshore software development facility and a client's on-site location. This
model contains many features that are attractive to IT consumers who are
primarily located in the United States, Europe and Japan, including: (i)
access to a large pool of highly skilled, English-speaking IT professionals;
(ii) relatively low labor costs of IT professionals offshore; (iii) the
ability to provide high-quality IT services at internationally recognized
standards; (iv) the capability to work on specific projects on a 24-hour basis
by exploiting time zone differences between India and client sites; and (v)
the ability to accelerate the delivery time of larger projects by parallel
processing different phases of a project's development.

As one of the pioneers of the offshore development model, Infosys has a long
history of successfully executing projects between its clients' sites in North
America, Europe and Asia and the company's offshore software development
facilities in India. In a typical software development or re-engineering
assignment, the company assigns a small team of two to five IT professionals
to visit a client's site and determine the scope and requirements of the
project. Once the initial specifications of the engagement have been
established, the project managers return to India to supervise a much larger
team of 10 to 50 IT professionals dedicated to the development of the required
software or system. A small team remains at the client's site to track changes
in scope and address new requirements as the project progresses. The client's
systems are then linked via satellite to the company's facilities enabling
simultaneous processing in as many as four offshore software development
facilities. Once the development stage of the assignment is completed and
tested in India, a team returns to the client's site to install the newly
developed software or system and ensure its functionality. At this phase of
the engagement, the company will often enter into an ongoing agreement to
provide the client with comprehensive maintenance services from one of its
offshore software development facilities. In contrast to development projects,
a typical maintenance assignment requires a larger team of 10 to 20 IT
professionals to travel to the client's site to gain a thorough understanding
of all aspects of the client's system. The majority of the maintenance team
subsequently returns to the offshore software development facility, where it
assumes full responsibility for day-to-day maintenance of the client's system,
while coordinating with a few maintenance professionals who remain stationed
at the client's site. By pursuing this model, the company completes
approximately 66% of its project work at its offshore software development
facilities in India.

The company's project management techniques, risk management processes and
quality control measures enable it to complete projects seamlessly across
multiple locations with a high level of client satisfaction. Certified under
ISO 9001, TickIT and at Level 5 of the Capability Maturity Model, the company
rigorously adheres to highly evolved processes. These processes govern all
aspects of the software product life cycle, from requirements to testing and
maintenance. The company seeks to prevent defects through its quality program,
which includes obtaining early sign off on acceptance test scripts, project
specifications and design documents, assigning software quality advisors to
help each team set up appropriate processes for each project and adhering to a
multi-level testing strategy. Defects are documented, measured, tracked and
analyzed, and feedback is provided to the project manager. The company
compiles metrics for not only defect density and size, but also actual effort
as compared to project estimates, adherence to schedule and productivity.
Frequent internal and external audits are conducted to assure compliance with
procedures. All of these procedures have been continuously refined throughout
the company's history of providing its clients with offshore software
development services.

In addition to the processes and methodologies necessary to successfully
execute the offshore model, the company has invested significant resources in
its infrastructure to ensure uninterrupted service to its clients. The company
has invested

in redundant infrastructure with "warm" backup sites. The network
architecture, designed and implemented with diversified telecommunication
capabilities (multiple service providers with a mix of satellite and fiber
links) with alternate routings, provides clients with high service levels.
Additionally, the company utilizes two telecommunications carriers in India
and has installed in its principal facilities multiple international satellite
links connecting the development centers in India with international network
hubs in Fremont, California, Quincy, Massachusetts, Croydon, UK and Tokyo,
Japan. A different ocean cable connecting Europe and the United States serves
each of these hubs. Within India, the company has high-speed links
interconnecting the development centers to the Corporate headquarters in
Bangalore.

4.B.3 Service offerings and products

The company's services include software development, maintenance and re-
engineering services, e-commerce and Internet/intranet consulting as well as
dedicated OSDCs for certain clients. In each of its service offerings the
company assumes full project management responsibility for each project it
undertakes rather than providing supplemental personnel to work under a
client's supervision. In addition to its IT services, the company also markets
its own product-FINACLE(TM), which is a banking branch automation
product.

4.B.3.1 Software development

The company provides turnkey software development, typically pursuant to
fixed-price, fixed-time frame contracts. The projects vary in size and may
involve the development of new applications or new functions for existing
software applications. Each development project typically involves all aspects
of the software development process, including definition, prototyping,
design, pilots, programming, testing, installation and maintenance. In the
early stage of a development project, Infosys personnel often work at a
client's site to help determine project definition and to estimate the scope
and cost of the project. Infosys then performs design review, software
programming, program testing, module testing, integration and volume testing,
primarily at its own facilities in India. For example, for one of the world's
leading risk management and consulting organizations, the company partnered in
providing knowledgeable, flexible and innovative solutions by leveraging the
latest Internet technologies. The engagements included working on the design,
development and deployment of the client's core US commercial brokerage Policy
Management System and Risk Management system for global risk managers.
Infosys' partnering helped the client to improve its technical proficiency.

4.B.3.2 Software maintenance

The company provides maintenance services for large legacy software systems.
Maintenance services include minor and major modifications and enhancements
and production support. Such systems are either mainframe-based or
client/server and are typically essential to a client's business, though over
time they become progressively more difficult and costly for the client's
internal IT department to maintain. By outsourcing the maintenance
responsibilities to Infosys, clients can control costs and free their IT
departments for other work. The company's IT professionals take an engineering
approach to software maintenance, focusing on the long-term functionality and
stability of the client's overall system and attempting to avoid problems
stemming from "quick-fix" solutions. The company performs most of the
maintenance work at its own facilities using satellite-based links to the
client's system. In addition, the company maintains a small team at the
client's facility to coordinate support functions. Infosys was a pioneer in
managing time-zone differences between India and the United States to provide
near 24-hour maintenance services. As an example, a leading provider of health
and retirement benefit plans and financial services was facing difficulties
balancing its need to maintain existing systems while simultaneously working
on its new Internet initiative. Infosys assumed the maintenance
responsibilities of the client in a significantly short time frame and
provided substantial cost benefits by utilizing its global delivery model.

4.B.3.3 Software re-engineering

The company's re-engineering services assist clients in migrating to new
technologies while extending the life cycle of existing systems that are rich
in functionality. Projects include re-engineering software to migrate
applications from mainframe to client/server architectures, to extend existing
applications to the Internet, to migrate from existing operating systems to
UNIX or Windows NT, or to update from a non-relational to a relational
database technology. For companies with extensive proprietary software
applications, implementing such technologies may require rewriting and testing
millions of lines of software code. As with its other services, the company
has developed proven methodologies that govern the planning, execution and
testing of the software re-engineering process. For instance, Infosys re-
engineered the on-line analytical processing system of a leading computer
manufacturing firm by changing the legacy systems to the new generation
systems. Infosys ensured that the client had more robust systems for better
transaction processing and decision support.

4.B.3.4 Dedicated offshore software development centers ("OSDCs")

The company has pioneered the concept of dedicated OSDCs in which a software
development team that is dedicated to a single client uses technology, tools,
processes and methodologies unique to that client. Each dedicated OSDC is
located at a company facility in India and is staffed and managed by the
company. Once the project priorities are established by the client, the
company, in conjunction with the client's IT department, manages the execution
of the project. By focusing on a single client over an extended time frame,
the dedicated OSDC team gains a deeper understanding of the client's business
and technology and can begin to function as a virtual extension of the
client's software team.

4.B.3.5 New services

The company is also focussed in certain emerging new service areas such as
Internet consulting, which includes the development of e-commerce and
Internet/intranet solutions. For example, an online marketplace for carriers,
shippers and private fleet owners, was merging with a "bricks-and-mortar"
subsidiary of a Fortune 500 company. Infosys helped build the integrated
business plan for a new combined online business and laid out a road map for
IT initiatives to realize benefits from this merger. Further, Infosys also
worked on developing the core applications offered as part of the marketplace.

4.B.3.6 Software products

In addition to the IT services described above, the company develops and
markets certain proprietary software applications for the banking industry.
The company offers a suite of robust solutions under an umbrella brand
"Infosys Enterprise Banking E-Platform". This suite is comprised of
FINACLE(TM), the core banking solution, BankAway(TM), the Internet banking
solution, and PayAway(TM), the universal bill presentment and payment
solution. This suite has been deployed by over 42 banks in 15 countries.
FINACLE(TM) is a fully web enabled, integrated core banking solution that
addresses the retail, corporate and trade finance activities of a bank.
Features include workflow capability to map the business process in the bank
and a tool kit to extend and integrate the application with surround
applications and support for true 24x7x365 capability. FINACLE(TM) is the core
banking solution of choice for banks across the world. BankAway(TM) is an
Internet banking solution which, in addition to addressing routine banking
transactions, offers value added features such as internal shopping mall,
external shopping gateway, support for electronic bill presentment and
payment, Corporate Limits Enquiry, Letter of Credit and Bank Guarantee.
BankAway(TM) also allows customers of the bank to access their accounts or
receive alerts on their banking transactions through any WAP or SMS enabled
devices. BankAway(TM) has been recognised by Meridien Research, USA as one of
the top 10 Internet banking solutions in the world, and is the only solution
from the Asia Pacific region in this list. PayAway(TM) is a universal bill
presentment and payment solution that supports both business-to-consumer and
business-to-business payment requirements of the customers of the banks.

4.B.4 Markets and sales revenue

The company markets its services primarily to large IT-intensive organizations
in North America, Europe, and Japan. The company focuses on certain market
segments, including financial services, manufacturing and distribution,
retail, telecommunications and technology. The company provides a wide range
of IT services and maintains a disciplined focus on its business mix in an
effort to avoid service or client concentration. Beginning in fiscal 1996, the
company aggressively sought to minimize its client concentration and to accept
as clients only those that met strict guidelines for overall revenue potential
and profitability. For fiscal 2001, 2000 and 1999, the company's largest
client accounted for 7.3%, 7.2% and 6.4%, respectively, of revenues. Revenues
for the last three fiscal years by geographic area are as follows:

----------------------------------------------------------------------
Year ended March 31, 2001 2000 1999
----------------------------------------------------------------------

North America $304,242,537 $158,723,649 $ 99,203,989
Europe 77,892,656 30,064,939 11,302,791
India 5,778,286 2,912,091 2,051,492
Rest of the world 25,937,031 11,743,075 8,396,954
----------------------------------------------------------------------
$413,850,510 $203,443,754 $120,955,226
======================================================================

4.B.5 Sales and marketing

The company sells and markets its services and products from 25 sales offices
located in thirteen countries. In the United States, the company presently has
sales offices located in Atlanta, Boston, Chicago, Dallas, Detroit, Fremont,
Los Angeles, New York and Seattle. Additionally, the company's international
sales offices are located in Argentina, Canada, Belgium, France, Sweden,
Germany, Australia, Japan, U.A.E, Hong Kong and India. With its global sales
headquarters in Fremont, California and its corporate marketing group in
Bangalore, India, the company targets its sales and marketing efforts towards
IT-intensive organizations in North America, Europe and Japan. As of March 31,
2001, the company had 84 sales and marketing employees outside of India. To
continue this focus on countries with sophisticated IT services needs, the
company intends to expand its global sales and marketing infrastructure by
opening additional regional sales and marketing offices in North America and
Europe.

From its offices located around the world, the company's sales professionals
contact prospective clients in developed markets and position the company as a
leading IT services provider with operations in India. In many cases,
potential clients in their search for offshore IT service providers submit a
request for proposal from leading Indian software firms, including the
company. The company's superior management team, quality of work, competence
of its IT professionals, and competitive prices are often cited as reasons for
the award of competitive contracts. In addition, the company's impressive
client references and endorsements as well as its willingness to participate
in trade shows and speaking engagements, have helped the company to generate
greater awareness for its services. The company believes that its NASDAQ
listing and its profile as a public company in the United States will further
enhance its corporate marketing

efforts. The company has focused its sales and marketing efforts on expanding
the scope and depth of its relationships with existing clients. Although
initially the company may only provide one service to a client, the company
seeks to convince the client to expand and diversify the type of services the
client outsources to the company. As a result, the company strengthens its
relationships with its clients by closely integrating its services with its
clients' IT operations. The success of this targeted strategy is reflected in
the company's high rate of repeat business. Over 84% of the company's revenues
in each of the last two fiscal years were generated from pre-existing
clients.

4.B.6 Competition

The market for IT services is highly competitive. Competitors include IT
services companies, large international accounting firms and their consulting
affiliates, systems consulting and integration firms, temporary employment
agencies, other technology companies and client in-house MIS departments.
Competitors include international firms as well as national, regional and
local firms located in the United States, Europe and India. The company
expects that future competition will increasingly include firms with
operations in other countries, potentially including countries with lower
personnel costs than those prevailing in India. Part of the company's
competitive advantage has historically been a cost advantage relative to
service providers in the United States and Europe. Since wage costs in India
are presently increasing at a faster rate than those in the United States, the
company's ability to compete effectively will become increasingly dependent on
its reputation, the quality of its services and its expertise in specific
markets. Many of the company's competitors have significantly greater
financial, technical and marketing resources and generate greater revenue than
the company, and there can be no assurance that the company will be able to
compete successfully with such competitors and will not lose existing clients
to such competitors. The company believes that its ability to compete also
depends in part on a number of factors outside its control, including the
ability of its competitors to attract, train, motivate and retain highly
skilled IT professionals, the price at which its competitors offer comparable
services and the extent of its competitors' responsiveness to client
needs.

4.B.7 Intellectual property

Ownership of software and associated deliverables created for clients is
generally retained by or assigned to the client, and the company does not
retain an interest in such software or deliverables. The company also develops
software products and software tools which are licensed to clients and remain
the property of the company. The company relies upon a combination of non-
disclosure and other contractual arrangements and copyright, trade secret and
trademark laws to protect its proprietary rights in technology. The company
currently requires its IT professionals to enter into non-disclosure and
assignment of rights agreements to limit use of, access to and distribution of
its proprietary information. The source code for the company's proprietary
software is generally protected as trade secrets and as unpublished
copyrighted works. The company has obtained registration of "INFOSYS" as a
trademark in India and in the United States. The company does not have any
patents or registered copyrights in the United States. The company generally
applies for trademarks and service marks to identify its various service and
product offerings.

The laws of India may not, under some circumstances, permit the protection of
the company's proprietary rights in the same manner or to the same extent as
the laws of the United States. India is a member of the Berne Convention and
the Universal Copyright Convention, as revised at Paris (1971), both
international treaties. As a member of the Berne Convention, the Government of
India has agreed to extend copyright protection under its domestic laws to
foreign works, including works created or produced in the United States. The
company believes that laws, rules, regulations and treaties in effect in the
United States and India are adequate to protect it from misappropriation or
unauthorized use of its copyrights. However, there can be no assurance that
such laws will not change in ways that may prevent or restrict the protection
of the company's proprietary rights. There can be no assurance that the steps
taken by the company to protect its proprietary rights will be adequate to
deter misappropriation of any of its proprietary information or that the
company will be able to detect unauthorized use and take appropriate steps to
enforce its intellectual property rights.

Although the company believes that its services and products do not infringe
on the intellectual property rights of others, there can be no assurance that
such a claim will not be asserted against the company in future. Assertion of
such claims against the company could result in litigation, and there is no
assurance that the company would prevail in such litigation or be able to
obtain a license for the use of any infringed intellectual property from a
third party on commercially reasonable terms. There can be no assurance that
the company will be able to protect such licenses from infringement or misuse,
or prevent infringement claims against the company in connection with its
licensing efforts. The company expects that the risk of infringement claims
against the company will increase if more of the company's competitors are
able to obtain patents for software products and processes. Any such claims,
regardless of their outcome, could result in substantial cost to the company
and divert management's attention from the company's operations. Any
infringement claim or litigation against the company could, therefore, have a
material adverse effect on the company's results of operations and financial
condition.

4.B.8 Government of India incentives and regulation.

The company benefits from a variety of incentives given to software firms in
India, such as relief from import duties on hardware, a tax exemption for
income derived from software exports, and tax holidays and infrastructure
support for companies, such as Infosys, operating in specially designated
"Software Technology Parks". There can be no assurance that these incentives
will continue in future. Further, there is a risk that changes in tax rates or
laws affecting foreign

investment, currency exchange rates or other regulations will render the
Government of India's regulatory scheme less favorable to the company and
could adversely affect the market price of the company's equity shares and its
ADSs. Should the regulations and incentives promulgated by the Government of
India become less favorable to the company, the company's results of
operations and financial condition could be adversely affected.

4.C Organizational structure

The company holds a minority interest in Yantra and OnMobile Systems Inc.
(formerly Onscan Inc.), and is a joint venture member of the JASDIC Park
Company ("JASDIC") which is an Indo-Japanese consortium founded by Kenichi
Ohmae. Yantra's primary objectives are to develop, sell and support software
products in the retail and distribution areas. When Infosys established
Yantra, it transferred the intellectual property rights in EAGLE (subsequently
known as WMSYantra), a software solution for warehouse management, to Yantra,
for shares of common stock of Yantra. Subsequently, in September 1998, Yantra
raised working capital funds from the company and U.S. venture capitalists
through a private placement of its convertible preferred stock. In the third
quarter of fiscal 1999, the company sold 1,363,637 shares of Yantra's
preferred stock held by it to a U.S. venture capital fund based in Boston. As
a result of this sale, the company reduced its economic interest in Yantra to
less than one-half of the voting stock of Yantra. The company continues to own
a majority of the outstanding common stock in Yantra but has no financial
obligations or commitments to Yantra and does not intend to provide it with
financial support, and therefore does not recognize Yantra's performance in
financial statements after October 20, 1998. On June 14, 1999, Yantra sold
Series C Convertible Preferred Stock for an aggregate purchase price of $ 15
million to various existing and new investors. Additionally, during the
current year, Yantra raised $49 million in venture financing from various
investors. This reduced Infosys' economic interest in Yantra to approximately
16%. During the year, Yantra announced a broad strategic alliance with
Accenture (formerly Andersen Consulting) to provide supply chain solutions
through PureEcommerce, a fully web-enabled application that manages, tracks
and executes complex customer transactions across a company's extended supply
chain.

OnMobile Systems Inc. (formerly Onscan Inc.) is a wireless solutions provider
to enterprises and wireless carriers around the world. OnMobile Systems Inc.
("OnMobile") offers platforms, applications and professional services to
deliver end-to-end wireless solutions. The OnMobile solution allows wireless
carriers to provide innovative services to their customers and enterprises to
deploy applications targeted towards their mobile workforce. During the year,
Infosys transferred the intellectual property rights in the Onscan product - a
web-enabled notification product to OnMobile. The product was transferred for
a gross consideration of $ 2 million, received in the form of common,
preferred voting and preferred non-voting stock of OnMobile. OnMobile also
closed a $ 12 million venture financing round with various investors. During
the year, Onscan Inc. changed its name to OnMobile Systems Inc. The change
reflects the increased portfolio of wireless products and services and best
symbolizes its vision to bring depth of experience in systems integration and
application development and in building robust, scalable, carrier-grade
products to worldwide telecommunications carriers.

JASDIC was formed as a consortium of several Japanese companies and three
Indian companies, including Infosys. JASDIC's primary objectives are to
provide high-quality software services from India to the Japanese market.
During fiscal 1999, the company invested 24 million Yen equivalent to $ 0.18
million in JASDIC with the purpose of promoting the company's strategy of
diversifying its geographic customer base.

The company has made strategic investments in several companies in an
aggregate amount of $5.9 million during the year ended March 31, 2001. The
table on page 122 of this Annual Report sets forth the information relating to
the company's investments made during the year.

4.D Property, plants and equipment

The company's principal campus situated at Electronics City, Bangalore, India,
is owned by Infosys and consists of its corporate office and three software
development facilities - "KEC", "Infosys Park I" and "Infosys Park II". This
campus is known as Infosys City and currently housing over 4,500 employees.
The campus consists of approximately 2,158,400 square feet of land with
655,000 square feet of landscaped area, 882,500 square feet of buildings with
104 conference rooms, customer suites, and a world-class conference room with
a video-wall made up of 4x10 cubes with the capacity to simultaneously video
conference 24 locations across the globe. An additional 435,000 square feet of
buildings are under construction to house an additional 2,400 employees.

The Infosys City campus includes leisure infrastructure, including 3
cafeterias, sports facilities such as tennis courts, a miniature golf course,
a basketball court, an outdoor swimming pool with an attached hot tub,
meditation and health club, aerobics hall and a gymnasium with steam and sauna
facilities. The technological infrastructure at the Infosys City campus
includes over a 10,000 networked workstations, several Windows NT, Windows
2000, UNIX systems from HP, IBM, SUN, COMPAQ, ACER and DELL, several midrange
systems, multi-point video-conferencing facilities, and a high speed
communication backbone. The campus also has an Education and Research block
consisting of 115,000 square feet of buildings housing a state-of-art library,
six class rooms and six training rooms with video-conferencing, computer-based
learning and audio-visual aids, and over 70 faculty rooms.

As part of its strategy to provide high-quality services to its clients, the
company has a detailed facility management plan. First, the company seeks to
provide its Indian IT professionals with facilities that are comparable to
those used by software companies in the United States and Europe. Second, the
company seeks to establish facilities near large sources

of technical talent. Third, the company equips its facilities to minimize
vulnerability to interruptions in local utility and telecommunication
services.

The company acquired the land where its corporate headquarters are located
from the State of Karnataka in 1993 and has subsequently acquired parcels for
various other offices, pursuant to certain lease cum sale agreements (the
"Conditional Purchase Agreements"), which are used by the State of Karnataka
to make land available to private companies for specific purposes. Under the
Conditional Purchase Agreements, property is sold subject to a long-term
(typically 25-year), rental-free lease which transfers ownership to the buyer
at the end of the period provided that the buyer uses the land for specified
purposes. The Conditional Purchase Agreements require the company to use the
various parcels for software development facilities. Typically, the company
pays 99% of the purchase price at the time the agreement is signed and pays
the remaining 1% when the term is concluded.

The company has its worldwide sales headquarters in Fremont, California and
branch sales offices in Atlanta, Bangalore, Beunos Aires, Boston, Brussels,
Chennai, Chicago, Dallas, Detroit, Frankfurt, Hongkong, London, Los Angeles,
Melbourne, Mumbai, New Delhi, New York, Paris, Seattle, Stockholm, Sharjah,
Sydney, Tokyo and Toronto. All sales offices, except the Mumbai office and one
of the Bangalore offices are in leased facilities.

The company plans to expand its facilities to meet its anticipated growth.
Currently, the company is expanding its software facilities in Bangalore,
Bhubaneswar, Chennai, Mangalore, Hyderabad, Mysore, Mohali and Pune. The table
on the following page sets forth certain information as of March 31, 2001
relating to the company's principal facilities and proposed developments:

- -------------------------------------------------------------------------------------------------------------------------
Location Approximate Ownership Type of facility
sq.ft.
- -------------------------------------------------------------------------------------------------------------------------

Bangalore, India 322,500/1/ Conditional Software development facility
(Plots 45, 46, Electronics City) purchase

Bangalore, India 400,000/2/ Conditional Software development facility
(Plots 4/1, 4/2, 4/3, 4/4, 26/1, 26/2, purchase
97C, 97D and 97E, Electronics City)

Bangalore, India 160,000/3/ Conditional Corporate headquarters,
(Plots 44 and 97A, Electronics City) purchase software development facility

Bangalore, India --/4/ Conditional Proposed software
(Survey No. 8 and 9, Electronics City) purchase development facility

Bangalore, India --/5/ Owned Proposed software
(Survey No. 26/3, 26/4, 26/5, 26/6, Electronics City) development facility

Bangalore, India (Dickenson Road) 7,000 Owned Office premises

Bangalore, India (BTM Layout) 11,300 Leased Software development facility

Bangalore, India (Koramangala) 22,000 Leased Software development facility

Bangalore, India (J. P. Nagar, Phase II) --/6/ Owned Proposed office premises

Bangalore, India (J. P. Nagar, Phase III) 59,500 Leased Software development facility

Bangalore, India (Adarsh Gardens) 78,700 Owned Employee residence flats
and guesthouses
Hyderabad, India (Cyber Tower, Hi-TEC City) 15,000 Leased Software development facility

Hyderabad, India (Manikonda Village) --/7/ Conditional Proposed software development
Purchase facility

Mangalore, India (Kottara) 198,000/8/ Owned Software development facility

Mangalore, India 5,100 Owned Guesthouses

Mohali, Punjab, India 21,000 Leased Software development facility

Mumbai, India (Nariman Point) 1,200 Owned Sales and marketing office

Mumbai, India (Santa Cruz) 13,600 Owned Guesthouses

Mysore, India 9,000 Leased Software development facility

Mysore, India (Hebbal, Electronics City) --/9/ Conditional Proposed software development
Purchase facility and Leadership Institute

Pune, India (Hinjewadi) 202,700/10/ Conditional Software development facility
purchase

Pune, India 3,300 Owned Employee residence flats

Bhubaneswar, India (Nayapalli) 52,900 Leased Software development facility

Bhubaneswar, India (Export Promotion Industrial Park) 86,000/11/ Conditional Proposed software development
purchase facility

Bhubaneswar, India --/12/ Conditional Proposed software
(S/2, Jayadev Vihar Mouza) purchase development facility

Chennai, India 26,600 Leased Software development facility

Chennai, India (Sholinganallur) 80,000/13/ Conditional Proposed software development
purchase facility

Delhi, India 2,500 Leased Sales and marketing office

Fremont, California 17,700 Leased Worldwide sales headquarters
& Proximity development center

London, U. K. 10,000 Leased Proximity development center

Dallas 6,000 Leased Sales and marketing office

Phoenix 4,000 Leased Proximity development center

New Jersey 17,000 Leased Proximity development center

Chicago 17,000 Leased Proximity development center

Toronto, Canada 20,500 Leased Global development center

Boston, Massachusetts 7,400 Leased Proximity development center
- -------------------------------------------------------------------------------------------------------------------------

/1/Total land parcel is 435,600 square feet.
/2/Total land parcel is 753,161 square feet. 135,500 square feet of buildings
are under construction.
/3/Total land parcel is 220,000 square feet.
/4/The company has not yet determined the aggregate square feet of the
proposed development. The land parcel is approximately 435,600 square feet.
/5/Total land parcel is 314,068 square feet. 300,000 square feet of
buildings are under construction.
/6/The company has not yet determined the aggregate square feet of the
proposed development. The land parcel is approximately 16,500 square feet.

/7/Total land parcel is 1,306,800 square feet. 273,000 square feet of
buildings are under construction.
/8/Total land parcel is 119,790 square feet.
/9/Total land parcel is 9,452,956 square feet. 354,000 square feet of
buildings are under construction.
/10/Total land parcel is 1,089,000 square feet. 388,280 square feet of
buildings are under construction.
/11/Total land parcel is 1,089,000 square feet. 103,000 square feet of
buildings are under construction.
/12/The company has not yet determined the aggregate square feet of the
proposed development. The land parcel is approximately 293,333 square feet.
/13/Total land parcel is 577,607 square feet. 354,000 square feet of
buildings are under construction.

Material plans to construct, expand and improve facilities

The company intends to create new software development facilities in various
places in India partly to shift the operations which are in the existing
leased facilities and partly to expand the existing capacities to provide for
the growth in business. Such expansions are planned in Bangalore, Bhubaneswar,
Chennai, Mysore, Mangalore, Hyderabad, Mohali and Pune, all in India. Most of
these facilities would be operational in the next 12 to 18 months. As of March
31, 2001, the company had contractual commitments for capital expenditure of
$34.0 million. The company intends to spend approximately $ 80.0 million on
various capital expenditures during fiscal 2002 which will be financed from
internal accruals and existing cash balances of the company. In the opinion of
the company, the working capital is sufficient for the company's present
requirements.

Item 5. Operating and Financial Review and Prospects

5.A Operating results

Investment in Yantra Corporation

Up to October 20, 1998, the company owned a majority of the voting stock of
Yantra. Consequently, all of Yantra's operating losses through October 20,
1998 were recognized in the company's consolidated financial statements. For
fiscal 1998 and fiscal 1999, Yantra's losses recognized in the company's
financial statements were $ 1.6 million and $ 2.0 million, respectively. On
October 20, 1998, the company sold a portion of Yantra's shares held by it,
thereby reducing its interest to less than one-half of the voting stock of
Yantra. The company continues to own all of the outstanding common stock of
Yantra but has no financial obligations or commitments to Yantra and does not
intend to provide Yantra with financial support. Accordingly, Yantra's results
subsequent to October 20, 1998 were not recognized in the company's financial
statements under U.S. GAAP. Yantra's revenues were $ 1.3 million and $ 2.0
million for fiscal 1998 and for the period ended October 20, 1998,
respectively, while gross profits were $ 574,000 and $ 546,000, respectively,
for these same periods. Yantra's revenues were 1.9% and 2.3% of the company's
revenues for fiscal 1998 and for the period ended October 20, 1998,
respectively. Its gross profits were 2.0% and 1.4% of the company's gross
profits for these same periods. Yantra currently provides e-commerce
operations solutions through PureEcommerce, a scalable web-based solution that
facilitates real-time transaction management across the extraprise. On June
14, 1999, Yantra sold Series C Convertible Preferred Stock in the amount of $
15 million to unrelated existing and new investors, further reducing the
company's voting control to approximately 25%. During the fiscal year ended
March 31, 2001, Yantra raised $49 million in venture financings from various
investors. This reduced Infosys' economic interest in Yantra to approximately
16%. During the year, Yantra announced a broad strategic alliance with
Accenture (formerly Andersen Consulting) to provide supply chain solutions
through PureEcommerce, a fully web-enabled application that manages, tracks
and executes complex customer transactions across a company's extended supply
chain.

5.B Liquidity and capital resources

5.C Research and development, patents and licences, etc.

The company has committed and expects to continue to commit in the future, a
material portion of resources to research and development. Research and
development efforts are focused on development and refinement of
methodologies, tools and techniques, implementation of metrics, improvement in
estimation process, and the adoption of new technologies. The company's
research and development expenses in fiscal 2001, 2000, and 1999 were $ 3.6
million, $ 1.9 million and $ 2.8 million, respectively which amounts to
approximately 0.9%, 0.9% and 2.3% of total revenues, respectively.

5.D Trend information

5.D.1 Management's Discussion and Analysis

5.D.2 Business Outlook for Fiscal 2002

The company believes that the economic slowdown in the U.S. may affect its
revenue growth and operating results for fiscal 2002. There are indications
that the economic slowdown in the U.S. has impacted the growth prospects of
companies that operate in some industry segments including the insurance,
banking and financial services and telecom segments. Consequently, these
companies may cut their IT spending or postpone decisions regarding new
expenditure with respect to IT spending. Based on currently available
information, the company expects its business outlook for the quarter ending
June 30, 2001 and the fiscal year ending March 31, 2002 to be as follows:

Quarter ending June 30, 2001

. Net revenue is expected to be in the range of $ 123 million to $ 125
million
. Earnings per ADS is expected to be in the range of $ 0.28 to $ 0.29

Fiscal year ending March 31, 2002

. Net revenue is expected to be in the range of $ 530 million to $ 545
million
. Earnings per ADS is expected to be in the range of $ 1.24 to $ 1.27

The above mentioned expectations and projections regarding the future
performance of the company are forward-looking statements. These expectations
and projections are based on currently available economic and financial
information along with the company's operating plans and are subject to future
uncertainties that could cause actual results to differ materially from those
that may be indicated by these statements. The company does not undertake to
update any forward-looking statement that may be made from time to time by or
on behalf of the company.

Item 6. Directors, Senior Management and Employees

6.A Directors and senior management

The directors and executive officers of the company, their respective ages as
of March 31, 2001, and their respective positions with the company are as
follows:

----------------------------------------------------------------------------------------------------------------------------------

Name Age Position
----------------------------------------------------------------------------------------------------------------------------------

N. R. Narayana Murthy 54 Chairman and Chief Executive Officer
Nandan M. Nilekani/4/ 45 Managing Director, President and Chief Operating Officer
Deepak Satwalekar/1,2/ 52 Non-executive director
Ramesh Vangal/2,3/ 44 Non-executive director
Marti G. Subrahmanyam, Prof./1,2/ 54 Non-executive director
Philip Yeo/1,3,4/ 55 Non-executive director
Jitendra Vir Singh, Prof./1,3/ 47 Non-executive director
Omkar Goswami, Dr./1,2/ 44 Non-executive director
Larry Pressler, Sen./2,3/ 58 Non-executive director
Rama Bijapurkar/2,4/ 44 Non-executive director
Gopalakrishnan S. 45 Deputy Managing Director - Customer Service & Technology
Dinesh K./4/ 46 Director - Human Resources Development, Information Systems, Quality &
Productivity and Communication Design Group
Shibulal S. D./4/ 46 Director - Customer Delivery
Mohandas Pai T. V. 42 Director - Administration and Facilities and Chief Financial Officer
Phaneesh Murthy 37 Director - Head of Sales and Marketing and Communications Products Services
Srinath Batni 46 Director - Delivery - West North America
Ajay Dubey 43 Vice President - Delivery - Europe
Balasubramanian P., Dr. 51 Senior Vice President - Domain Competency Group
Balakrishnan V. 36 Vice President - Finance and Company Secretary
Basab Pradhan 35 Regional Manager and Vice President - Sales - West North America
Deepak Sinha, Gp. Capt. (Retd.) 53 Associate Vice President - Computers & Communications Division
Girish Vaidya 50 Senior Vice President - Banking Business Unit
Hema Ravichandar 39 Senior Vice President - Human Resources Development
Jan DeSmet 42 Vice President - Infosys Business Consulting Services
Mohan Sekhar 39 Vice President - Head Delivery - North East and Canada
Prabhu M. S. S., Dr. 53 Senior Vice President - Engineering Services and Consultancy Practice
Rajiv Kuchhal 35 Associate Vice President - Communication & Product Services -Nortel and PCC,
Development Center - Mohali
Sobha Meera P. R. 33 Regional Manager and Vice President - Sales - Canada & East North America
Satyendra Kumar 48 Vice President and Head - Quality
----------------------------------------------------------------------------------------------------------------------------------

/1/Member of the Compensation Committee /2/ Member of the Audit Committee
/3/Member of the Nomination Committee /4/ Member of the Investor Grievance
Committee

N. R. Narayana Murthy has served as Chairman of the Board and Chief Executive
Officer of Infosys since 1981, when he founded the company with six software
professionals. Mr. Murthy also served as Managing Director of Infosys until
February 1999. While at Infosys, from 1992 to 1994, Mr. Murthy also served as
the President of the National Association of Software and Service Companies
("NASSCOM"). Mr. Murthy is on the Governing Council of the National
Information Technology Task Force of India and was voted "IT Man of the Year"
for 1996 by Dataquest India. In 1998, Mr. Murthy was awarded the prestigious
J.R.D. Tata Corporate Leadership Award. Since 1998, Mr. Murthy has served as a
director of ICICI Ltd. and as a director of Videsh Sanchar Nigam Ltd. ("VSNL")
and since 1999 he has served as a director of India Growth Fund, New York.
Since December 2000, he has served as a Director on the Board of the Reserve
Bank of India, and since January 2001 as the Chairman of the Bangalore
International Airport Limited. He is a Fellow of the All India Management
Association ("AIMA") and the Computer Society of India ("CSI"). Mr. Murthy
received a B.E. in Electrical Engineering from the University of Mysore and a
M.Tech. from the Indian Institute of Technology ("IIT") Kanpur.

Nandan M. Nilekani is a co-founder of Infosys and has served as a director
since 1981, Head - Marketing and Sales of Infosys since 1987, Head - Banking
Business Unit since 1997 and Managing Director, President and Chief Operating
Officer since February 1999. From 1981 to 1987, Mr. Nilekani was in the United
States managing the marketing and development efforts of Infosys. Mr. Nilekani
is a co-founder of NASSCOM and received a B.Tech. in Electrical Engineering
from IIT Bombay.

Deepak M. Satwalekar has served as a director of Infosys since October 1997.
He is the Managing Director of HDFC Standard Life Assurance Company Limited.
From 1993 to 2000 he was Managing Director of Housing Development Finance
Corporation Ltd., and was Deputy Managing Director between 1990 and 1993. He
was a member of the Managing Committee of the Bombay Chamber of Commerce and
Industry from 1996 to 1998. Mr. Satwalekar was also a Member of the Economic
Affairs Committee of the Indo-American Chamber of Commerce from 1993 to 1994
and 1996 to 1997. He is a director of Tata Housing Development Corporation
Ltd., HDFC Ltd., HDFC Bank Ltd., HDFC Holdings Ltd., HDFC Investments Ltd.,
Indian Opportunities Fund (Mauritius) Ltd., Maruti Countrywide Auto Financial
Service Ltd., Mahindra Holidays & Resorts India Ltd., SchoolNet India Ltd.,
Tube Investments of India Ltd., Chemplast Sanmar Ltd. and Templeton Asset
Management India Private Ltd. Mr. Satwalekar received a B.Tech. in Mechanical
Engineering from IIT Bombay and an M.B.A. from the American University.

Prof. Marti G. Subrahmanyam has served as a director of Infosys since April
1998. He has served as the Charles E. Merrill Professor of Finance and
Economics at the Stern School of Business at New York University since 1991
and has been a visiting professor at leading academic institutions in England,
France, Germany and India including at INSEAD and Chruchill College, Cambridge
University. He is a director of ICICI Ltd., Aventine Investment Management
Inc., Nippon Performance Fund Ltd., Indiaserver.com Inc., SpeedMerchant.com
Inc., Usha Communications Inc., RMAS Ltd., Nomura Asset Management Inc.,
Nexgen Financial Holdings Ltd. and Deutsche Software India Ltd. Prof.
Subrahmanyam has written several books and published numerous articles in the
areas of finance and economics. He currently serves as an Associate Editor of
the Journal of Banking and Finance, Journal of Finance, Management Science,
Journal of Derivatives, Journal of International Finance and Accounting, and
Japan and the World Economy. Prof. Subrahmanyam received a B.Tech. from IIT
Madras, a Diploma in Business Administration, from IIM Ahmedabad and a Ph.D.
in Finance and Economics from the Massachusetts Institute of Technology.

Ramesh Vangal has served as a director of Infosys since 1997. He has served as
the President of Seagram Asia Pacific since 1998 and is currently the Chairman
of Seagram India Ltd., Seagram Asia Pacific Ltd., Asia Net Media BVI Ltd.,
BL.com, and is a director in Indo Bio Care, CEBECO India, Kirin Seagram, Agro
Biochem (India) Pvt. Ltd., and Arudra Nemara Developers Pvt. Ltd. From 1994 to
1997, he was a member of the Worldwide Operating Council of PepsiCo and was
President of PepsiCo Foods International, Asia Pacific. From 1985 to 1994, he
served in various management capacities for PepsiCo. Mr. Vangal received a
B.Tech. from IIT Bombay and a M.Sc. in Business from the London Business
School. He also holds a Certificate Diploma, Accounting and Finance from the
Institute of Chartered Accountants in England and Wales.

Philip Yeo has served as a director of Infosys since October 1999. Mr. Yeo has
served as the Executive Chairman of the Singapore Economic Development Board
since January 1986 and as Deputy Chairman of Singapore's National Science and
Technology Board since June 1999. He is also the Chairman of the Institute for
Molecular & Cell Biology, Pidemco Land and Singapore Aerospace Manufacturing
and is a Board member in INSEAD, Paris. Mr. Yeo was the first Chairman of
Singapore's National Computer Board from 1981 to 1987. Mr. Yeo joined the
Administrative Service in 1970 and served in the Ministry of Defence where he
held several appointments including the appointment of Permanent Secretary for
logistics, technology research & development and defence industries upto
January 1986. He retired from the Administrative Service on March 31, 1999.
Mr. Yeo graduated in 1970 in Applied Science (Industrial Engineering) from the
University of Toronto, Canada under a Colombo Plan Scholarship. He later
obtained a Master of Science (Systems Engineering) from the University of
Singapore in 1974. In 1976, he obtained a Master in Business Administration
from Harvard University, under a Fulbright scholarship. He is the recipient of
many international awards, and was conferred an Honorary Doctorate in
Engineering from the University of Toronto.

Prof. Jitendra Vir Singh has served as a Director of Infosys since October 10,
2000. He is the Vice Dean, International Academic Affairs at the Wharton
School, University of Pennsylvania, since 1998. Earlier, Prof. Singh was
Director of

the Emerging Economies Program at Wharton from 1996 to 1998. From 1991 to
1995, he was Research Director, Entrepreneurship at the Sol C. Snider
Entrepreneurial Center at Wharton. Prof. Singh has been a faculty member at
Wharton since 1987. Prior to that, he was an Associate Professor in the Rotman
School of Business, University of Toronto in Canada. Prof. Singh received his
Ph.D. from Stanford Business School in 1983. In 1991, he received an M.A.
(h.c.) from University of Pennsylvania. He received his B.Sc. from Lucknow
University in India in 1972. Prof. Singh received his MBA from the Indian
Institute of Management, Ahmedabad, India in 1975. Prof. Singh serves as
advisor for several high technology startup firms, including, San Francisco
based Esurance Inc., an integrated online insurance company and Seattle based
vCustomer Corporation, which, provides online customer support to e-commerce
firms. He is also on the advisory board of EurIndia, a London based marketing
accelerator for small Indian software companies and other high tech firms in
India and the US.

Dr. Omkar Goswami has served as a Director of Infosys since November 13, 2000.
He has been working as Senior Consultant and Chief Economist to the
Confederation of Indian Industry since August 1998. Prior to that, from March
1997 through July 1998, Dr. Goswami was the Editor of Business India magazine,
from March 1997 through July 1998. Prior to that, from 1981 to 1997, he was a
research professor at Oxford University, Delhi School of Economics, Harvard,
Tufts, Jawaharlal Nehru University, Rutgers University and the Indian
Statistical Institute, New Delhi. Dr. Goswami has served on several government
committees. Dr. Goswami has also been a consultant to the World Bank, IMF, the
Asian Development Bank and the OECD. Dr. Goswami received his Masters in
Economics from the Delhi School of Economics in 1978 and his D.Phil. (Ph.D.)
from Balliol College, Oxford in 1982.

Senator Larry Pressler has served as a Director of Infosys since January 9,
2001. He is a Senior Partner in the Washington, D.C. law firm of O'Connor &
Hannan LLP, and chairs the law firm's Telecommunications and Business Group.
Prior to that, from 1974 to 1997, he was Member of U.S. Congress, with 18
years in the U.S. Senate. He was Chairman of the Senate Commerce, Science and
Transportation Committee and was the author of the Telecommunications Act of
1996 among others. He has also worked with McKinsey & Company, and spent three
years as a government lawyer in the U.S. State Department Legal Advisor's
Office. Senator Pressler is a Vietnam veteran (U.S. Army) and was awarded
Vietnam Service Medals. Senator Pressler is a former Rhodes Scholar and
graduate of Oxford University and Harvard Law School. Currently, Senator
Pressler serves on the Boards of Directors of Global Light Telecommunications
Inc., American Technologies Group, Philadelphia Stock Exchange Board of
Governors, Customerlinx and L&T Trade.com Ltd. Senator Pressler also serves on
the Boards of Advisors of several companies in the pharmaceutical,
telecommunications, and financial sectors.

Rama Bijapurkar has served as a Director of Infosys since March 29, 2001. She
is a recognized leader on marketing strategy and consumer related issues in
India and runs a strategic marketing consulting practice working across a wide
range of sectors, helping organizations with their marketing strategies. Prior
to that, from 1995 to 1997, Ms. Bijapurkar worked with McKinsey and Company as
a Senior Marketing Consultant. From 1989 to 1995 she was the Deputy Managing
Director of MARG and worked between 1982 and 1987 with MODE Services, which
she co-founded. In addition, she is a visiting faculty at IIM Ahmedabad. She
is an alumna of IIM Ahmedabad and holds an Honors degree in Physics from the
Delhi University. Ms. Bijapurkar serves on the Boards of Titan Watches Ltd.,
Godrej Consumer Products Ltd., Ideasnyou.com Ltd. and CRISIL Ltd.

S. Gopalakrishnan is a co-founder of Infosys and has served as a director from
1981 to 1987. From 1987 to 1994, he was Technical Vice President and managed
all projects at the US-based KSA/Infosys, a former joint venture between the
company and Kurt Salmon Associates. From 1994 to date he has served as a
director of Infosys. Mr. Gopalakrishnan was head of Technical Support Services
from 1994 to 1996, Head - Client Delivery and Technology of Infosys from 1996
to 1999 and has served as Head - Customer Service & Technology from 1999 to
date. Mr. Gopalakrishnan received an M.Sc. in Physics and an M.Tech. in
Computer Science from IIT Madras. Mr. Gopalakrishnan is a director in Yantra
Corporation.

K. Dinesh is a co-founder of Infosys and has served as a director since 1985.
He has served as Head - Quality, Productivity and MIS of Infosys since 1996.
From 1991 to 1996, Mr. Dinesh served in various project management capacities
and was responsible for worldwide software development efforts for Infosys.
From 1981 to 1990, he managed projects for Infosys in the United States. Mr.
Dinesh received an M.Sc. degree in Mathematics from Bangalore University.

S. D. Shibulal is a co-founder of Infosys and has served as a director from
1984 to 1991 and since 1997. He has served as Head - Manufacturing,
Distribution and Year 2000 Business Unit, and Head - Internet and Intranet
Business Unit of Infosys since 1998. From 1991 to 1996, Mr. Shibulal was on
sabbatical from Infosys and served as Senior Information Resource Manager at
Sun Microsystems Inc. From 1981 to 1991, he worked for Infosys in the United
States on projects in the retail and manufacturing industries. Mr. Shibulal
received an M.Sc. in Physics from the University of Kerala and an M.S. in
Computer Science from Boston University.

T. V. Mohandas Pai has served as Director of Infosys since May 27, 2000. From
1996 to 2000 he was Senior Vice President, Head - Finance and Administration
and Chief Financial Officer of Infosys. From 1994 to 1996, he served as Vice
President of Finance at Infosys. From 1988 to 1994, Mr. Pai was Executive
Director of Prakash Leasing Ltd. Mr. Pai received a B.Com. from St. Joseph's
College of Commerce, Bangalore and an LL.B. from the University Law College,
Bangalore. Mr. Pai is a Fellow Member of the Institute of Chartered
Accountants of India.

Phaneesh Murthy has served as Director of Infosys since May 27, 2000. From
1996 to 1999 he served as Senior Vice President and Head - Worldwide Sales of
Infosys. From 1992 to 1996, Mr. Murthy was a Marketing Manager for Infosys
based in the United States. From 1987 to 1992, he worked in sales and
marketing for Sonata Software Ltd. Mr. Murthy received a B.Tech. in Mechanical
Engineering from IIT Madras and a post graduate diploma in business
administration from IIM Ahmedabad.

Srinath Batni has served as Director of Infosys since May 27, 2000. From 1996
to 2000 he has served as Senior Vice President and Head - Retail and
Telecommunications Business Unit of Infosys. After joining Infosys in 1992,
Mr. Batni was a Project Manager. From 1990 to 1992, he was Manager of
Technical Support for PSI Bull, an Indian software development subsidiary of
Bull, S.A., a French company. Mr. Batni received a B.E. in Mechanical
Engineering from Mysore University and an M.E. in Mechanical Engineering from
the Indian Institute of Science, Bangalore.

Ajay Dubey has served as Vice President - Financial Services and
Transportation Business Unit of Infosys since April 1999. From 1995 to 1999,
he was an Associate Vice President working in the Financial Services and
Transportation Business Unit. He joined the company in 1993 as a Senior
project manager. From 1990 to 1993, he served as a Technical Team leader in
ANZ Grindlays, New Zealand. Mr. Dubey received a B.Tech. from IIT Kanpur in
1980.

Dr. P. Balasubramanian has served as Senior Vice President and Head - Domain
Competency Group since 1999. Prior to that, from 1995 to 1999 he was Senior
Vice President and Head - Financial Services and Transportation Business Unit
of Infosys. From 1989 to 1992, Dr. Balasubramanian was Chief Executive Officer
and Technical Director of Hitek Software Engineers Ltd. ("Hitek"), Jamaica,
West Indies. From 1992 to 1994, he was a Technical Director of Hitek. From
1986 to 1989, Dr. Balasubramanian was Chief Executive Officer of Cholamandalam
Software Ltd., Chennai. Dr. Balasubramanian has been invited as guest faculty
to several executive training programs in India as well as at the University
of West Indies. Dr. Balasubramanian received a B.Tech. and M.Tech. from IIT
Madras and a Ph.D. in Operations Research and Financial Management from Purdue
University.

V. Balakrishnan has served as Vice President - Finance and Company Secretary
since April 25, 2001. Prior to that, from 1999 to January 2001, he was
Associate Vice President - Finance. In January 2001, he took over additional
responsibility as Company Secretary. After joining Infosys in 1991, he has
served in various capacities in the Finance department of the company. Prior
to joining Infosys, he was Senior Accounts Executive for Amco Batteries Ltd.,
Mr. Balakrishnan received a B.Sc. from the University of Madras and is an
Associate Member of the Institute of Chartered Accountants of India, a Member
of the Institute of Company Secretaries of India and an Associate Member of
the Institute of Cost & Works Accountants of India.

Basab Pradhan has served as Regional Manager since 1998. After joining Infosys
in 1994, Basab served in various capacities for the company, including as
Business Development Manager between 1995-98. Prior to joining Infosys, he was
Area Sales Manager for Lipton India Ltd. Basab received a B.Tech. in
Mechanical Engineering from IIT Kanpur in 1987 and a Post Graduate Diploma in
Management from IIM Ahmedabad in 1989.

Group Captain (Retd.) Deepak Sinha has served as Associate Vice President and
Head - Computer and Communications Division ("CCD") since April 25, 2001.
Prior to that, from April 1998 to April 2001, he has served as Senior Manager
and Head - CCD. Prior to joining Infosys, he was Director - IMMOLS Project for
the Indian Air Force. Group Captain (Retd.) Sinha received a B. Tech from IIT
Kharagpur in 1968.

Girish Vaidya has served as Senior Vice President and Head - Banking Business
Unit of Infosys since April 1999. Prior to that, Mr. Vaidya was Director and
Head - Operations India for ANZ Grindlays with whom he had been since 1975.
Mr. Vaidya received a B.E. from S.P College of Engineering, Mumbai in 1973 and
a Post Graduate Diploma in Management from IIM Calcutta in 1975.

Hema Ravichandar has served as Senior Vice President and Head - Human
Resources of Infosys since 1998. From 1996 to 1998, Ms. Ravichandar was an
independent consultant. From 1992 to 1995, she served as Head - Human
Resources at Infosys. From 1983 to 1992, Ms. Ravichandar was Deputy Manager -
Human Resource Development at Motor Industries Company Ltd. Ms. Ravichandar
received a B.A. in Economics and a Post Graduate Diploma in Management from
IIM Ahmedabad.

Jan DeSmet has served as Vice President - Consulting Services and Head -
Strategic Business Unit since January 1999 and is currently Vice President -
Business Consulting Services. From 1996 to 1998, Mr. DeSmet was Senior
Principal with Diamond Technology Partners in Chicago. Mr. DeSmet received a
M.B.A from the University of Dallas in 1982.

Mohan Sekhar has served as Vice President and Head - Delivery, North East
United States and Canada since April 25, 2001. Prior to that, from April 1999
to April 2001, he has served as Associate Vice President and Head - Delivery.
Prior to that, from 1998 to 1999, he served as a Senior Project Manager in the
Manufacturing, Distribution and Year 2000 Business Unit. From 1986 to 1998 he
worked for Cap Gemini America and AT&T in New Jersey in various capacities in
the Voice, Telephony and Networking services. Mohan received a B.E. in
Mechanical Engineering from Bangalore University and a M.S. in Computer
Science from New Jersey Institute of Technology, New Jersey, USA.

Dr. M. S. S. Prabhu has served as Senior Vice President and Head - Engineering
Services Business Unit of Infosys since 1997. From 1994 to 1997, Dr. Prabhu
served as head of CAD/CAM group at Tata Consultancy Services. From 1972 to
1994, he served in various capacities for the Indian Satellite Research
Organization. Dr. Prabhu received a B.E. in Civil

Engineering from Bangalore University and a Ph.D. in Aeronautical Engineering
from Indian Institute of Science, Bangalore.

Rajiv Kuchhal has served as Associate Vice President of Infosys since 1998 and
Head - Nortel OSDC Business Unit of Infosys since April 1998. From 1990 to
1998, Mr. Kuchhal served in various capacities for the company, including
projects relating to an electronic telex interface and management of the
Nortel OSDC before it became a separate business unit. Mr. Kuchhal received a
B.Tech. in Electrical and Electronics Engineering from IIT Delhi.

Sobha Meera P. R. has served as Regional Manager - Canada & East North America
since 1998. After joining Infosys in 1995 Ms. Meera served as Branch Manager
between 1995 and 1998. Prior to joining Infosys, she worked in various Sales &
Marketing positions for HCL Ltd. & Sonata Software Ltd. Ms. Meera received her
Post Graduate Diploma in Management from IIM Ahmedabad in 1995 and a B.E. from
Osmania University in 1989.

Satyendra Kumar has served as Vice President and Head - Quality since
September 2000. Prior to that, from 1998 to August 2000, he was Head of
Quality at IMR Global, Bangalore. From 1995 to 1998 he worked as the Deputy
Chief Executive for Tata Quality Management Services from 1996 to 1998. He
has been a software quality consultant for several companies and is also a
registered TickIT auditor and an ISO lead auditor. Kumar has a post graduate
degree in Electronics from Delhi University.

6.B Compensation

In fiscal 2001, the company's eight non-employee directors were paid an
aggregate of $ 127,123. Directors who are also employees of the company do not
receive any additional compensation for their service on the board of
directors. Directors are also reimbursed for certain expenses in connection
with their attendance at the board and the committee meetings.

The table below sets forth the compensation for the officers and directors of
the company, for the fiscal year ended March 31, 2001.

- ---------------------------------------------------------------------------------------------------------------------------------
Annual compensation awards Stock options
- ---------------------------------------------------------------------------------------------------------------------------------
Name Salary Bonus Other No. of Grant No. of Grant Expiration Amount
annual options price options price date accrued
compen- granted granted
sation during the during the
year (1999 year (1998
ESOP) ESOP)
- ---------------------------------------------------------------------------------------------------------------------------------

N. R. Narayana Murthy $ 18,431 - $14,284 - - - - - $5,863
Nandan M. Nilekani 18,431 - 16,876 - - - - - 5,863
Gopalakrishnan S. 18,431 - 14,302 - - - - - 5,863
Dinesh K. 18,431 - 16,951 - - - - - 5,863
Shibulal S. D. 18,431 - 14,292 - - - - - 5,863
Deepak M. Satwalekar - - 25,000 - - - - - -
Ramesh Vangal - - 25,000 - - - - - -
Marti G. Subrahmanyam,
Prof. - - 25,000 - - - - - -
Philip Yeo - - 25,000 - - - - - -
Jitendra Vir Singh, Prof. - - 11,849 - - - - - -
Omkar Goswami, Dr. - - 9,521 - - - - - -
Larry Pressler, Sen. - - 5,616 - - - - - -
Rama Bijapurkar - - 205 - - - - - -
Mohandas Pai T. V. 20,820 - 8,918 10,000 $122.72 - - February 26, 2010 6,623
Phaneesh Murthy 249,568 165,000 2,589 - - 20,000 $98.25 February 26, 2010 -
Srinath Batni 18,709 - 7,802 5,500 122.72 2,000 98.25 February 26, 2010 5,951
Ajay Dubey 10,309 - 11,340 2,610 122.72 780 98.25 February 26, 2010 3,279
Basab Pradhan 120,000 64,400 760 - - 12,000 98.25 February 26, 2010 -
Balasubramaniam P., Dr. 15,314 - 18,874 3,000 122.72 - - February 26, 2010 4,871
Balakrishnan V. 11,363 - 13,694 6,000 122.72 - - February 26, 2010 3,615
Deepak Sinha, Gp. Capt.
(Retd.) 6,166 1,008 13,901 2,550 122.72 900 98.25 February 26, 2010 1,962
Girish Vaidya 16,567 - 18,997 5,310 122.72 1,380 98.25 February 26, 2010 5,270
Hema Ravichandar 12,102 - 14,001 2,200 122.72 2,400 98.25 February 26, 2010 3,850
Jan DeSmet 181,500 41,250 - - - 6,000 98.25 February 26, 2010 -
Mohan Sekhar 9,294 - 13,344 4,800 122.72 2,400 98.25 February 26, 2010 2,957
Prabhu M. S. S., Dr. 29,961 - 14,905 3,000 122.72 - - February 26, 2010 4,601
Rajiv Kuchhal 9,064 - 13,212 1,000 122.72 - - February 26, 2010 2,883
Satyendra Kumar* 5,052 - 13,583 3,000 156.18 - - October 10, 2009 1,607
Sobha Meera P. R. 120,000 68,250 3,013 - - 12,000 98.25 February 26, 2010 -
- ---------------------------------------------------------------------------------------------------------------------------------

* Employed for part of the year

6.C.1 Board practices

- ---------------------------------------------------------------------------------------------------------------------------------
Name Expiration of current Term of office
term of office
- ---------------------------------------------------------------------------------------------------------------------------------

N. R. Narayana Murthy April 30, 2002 5 years/1/ Deepak Satwalekar Retirement by rotation
Nandan M. Nilekani April 30, 2002 5 years/2/ Ramesh Vangal Retirement by rotation
Gopalakrishnan S. October 17, 2004 5 years/2/ Marti G. Subramanyam, Prof. Retirement by rotation
Dinesh K. April 30, 2002 5 years/2/ Philip Yeo Retirement by rotation
Shibulal S. D. April 30, 2002 5 years/2/ Jitendra Vir Singh, Prof. Retirement by rotation
Mohandas Pai T. V. June 2, 2001 5 years/2,3/ Omkar Goswami, Dr. Retirement by rotation
Phaneesh Murthy June 2, 2001 5 years/2,4/ Larry Pressler, Sen. Retirement by rotation
Srinath Batni June 2, 2001 5 years/2,5/ Rama Bijapurkar Retirement by rotation
- ---------------------------------------------------------------------------------------------------------------------------------

/1/ Mr. N. R. Narayana Murthy is not liable to retire by rotation so long as
he controls 5% of the voting in Infosys together by himself and with his
family members.

/2/ The period of appointment as an executive director is for five years.
However, these directors customarily retire by rotation once in three years
and are to be re-elected by the stockholders.

/3/ Mr. T. V. Mohandas Pai was appointed as Director by the board for a term
of five years ending on May 26, 2005 and his appointment has been recommended
for the approval of the stockholders in the ensuing Annual General Meeting and
forms part of the Items of Special Business of the Notice to the stockholders,
which is attached as an exhibit to this Form 20-F.

/4/ Mr. Phaneesh Murthy was appointed as Director by the board for a term of
five years ending on May 26, 2005 and his appointment has been recommended for
the approval of the stockholders in the ensuing Annual General Meeting and
forms part of the Items of Special Business of the Notice to the stockholders,
which is attached as an exhibit to this Form 20-F.

/5/ Mr. Srinath Batni was appointed as Director by the board for a term of
five years ending on May 26, 2005 and his appointment has been recommended for
the approval of the stockholders in the ensuing Annual General Meeting and
forms part of the Items of Special Business of the Notice to the stockholders,
which is attached as an exhibit to this Form 20-F.

/6/ The board constantly evaluates the contribution of its members, and
recommends to stockholders their re-appointment periodically as per statute.
The Indian Companies Act mandates that two-thirds of the members of the board
should retire by rotation, of which, one-third of such members should retire
every year, and qualifies the retiring members for re-appointment. However all
the directors of the company customarily retire by rotation. The executive
directors are appointed by the stockholders for a maximum period of five years
at one time but are eligible for re-appointment upon completion of their term.
The nominations committee of the board, composed entirely of independent
directors, recommends such appointment / re-appointment. However, the
membership term is limited by the retirement age for members. The board has
adopted a retirement policy for its members. Under this policy, the maximum
age of retirement of executive directors, including the CEO, is 60 years,
which is the age of superannuation for the employees of the company. Their
continuation as members of the board upon superannuation / retirement is
determined by the nominations committee. The age limit for retirement from the
board is 65 years. The directors' contracts do not contain material severance
packages.

6.C.2 Employment contracts

Under the Indian Companies Act, the company's stockholders must approve the
salary, bonus and benefits of all employee directors at an Annual General
Meeting of stockholders. Each employee director of the company has signed an
agreement containing the terms and conditions of employment, including a
monthly salary, performance bonus and benefits including vacation, medical
reimbursement and pension fund contributions. These agreements are made for a
five year period, but either the company or the employee director may
terminate the agreement upon six months notice to the other party.

6.C.3 Board committee information

The details relating to the company's audit committee and remuneration
committee, including the names of committee members and a summary of the terms
of reference under which the committee operates is on pages 47 through 48 of
the Infosys Annual Report for fiscal 2001 and is incorporated herein by
reference.

6.D Employees

As of March 31, 2001, the company had approximately 9,830 employees, including
approximately 8,660 IT professionals, up from approximately 5,390 employees
and approximately 4,625 IT professionals, respectively, as of March 31, 2000
and approximately 3,770 employees and approximately 3,160 IT professionals
respectively as of March 31, 1999. The company invests heavily in its programs
to recruit, train and retain qualified employees, and management believes the
company has established a reputation as one of the most preferred employers
for software engineers in India.

The company focuses its recruiting efforts on the top 20% of students from
engineering departments of Indian schools and relies on a rigorous selection
process involving a series of tests and interviews to identify the best
applicants. Because the company emphasizes flexibility and innovation,
applicants are selected on the basis of their ability to learn as well as
their academic achievement, conceptual knowledge and their temperament for,
and fit with, the company's culture. The company's reputation as a premier
employer enables it to select from a large pool of qualified applicants. For
example, in fiscal 2001, the company received approximately 385,200 job
applications, tested approximately 49,100 interviewed approximately 20,800
and extended job offers to approximately 7,650, of whom approximately 6,100
accepted. The company seeks to attract and motivate IT professionals by
offering: an entrepreneurial environment that empowers IT professionals;
programs that recognize and reward performance; challenging assignments; a
continuous updating of skills; and a culture that emphasizes openness,
integrity and respect for the employee. IT professionals receive competitive
salaries and benefits and are eligible to participate in the company's stock
option plans. In addition, the company spends significant resources on
training and continuing education. To conduct training, the company employs a
58-person faculty, including 39 with doctorate or master's degrees. The
faculty conducts three-month training sessions for new recruits and a variety
of two-week continuing education courses in technology and management skills.

At any given time, approximately 34% of the company's IT professionals are
working on-site at client facilities in the United States and elsewhere while
the balance are working offshore in India. On average, approximately 1,570,
980 and 530 of the company's IT professionals worked on-site in the United
States and elsewhere per month in fiscal 2001, 2000 and 1999, respectively. On
average, approximately 7,086, 3,100 and 2,630 of the company's IT
professionals and support staff worked offshore in India per month in fiscal
2001, 2000 and 1999, respectively.

The company's professionals that work on-site at client facilities in the
United States on temporary and extended assignments are typically required to
obtain visas. As of March 31, 2001, substantially all of the company's
personnel in the United States were working pursuant to H-1B visas (1,090
persons) or L-1 visas (292 persons). Both H-1B and L-1 visas require that
recipients meet certain education requirements; however, only employees who
have worked for the company for at least one year are eligible to obtain L-1
visas. The company is generally able to obtain H-1B and L-1 visas within two
to four months of applying for such visas, which remain valid for three years.
Although there is no limit to new L-1 petitions, there is a limit to the
number of new H-1B petitions that the United States Immigration and
Naturalization Service may approve in any government fiscal year. In the years
in which this limit is reached, the company may be unable to obtain H-1B visas
necessary to bring critical Indian IT professionals to the United States on an
extended basis. The H-1B limit was reached in March 2000 by the U.S.
Government for its fiscal year ending September 30, 2000 and in May 1999 for
its fiscal year ending September 30, 1999. The H-1B limit had recently been
increased to 195,000 for the next two years ending September 30, 2002. The
limit is yet to be reached for the year ending September 30, 2001. The company
planned for the H-1B limit being reached prior to the end of the U.S.
Government's current fiscal year primarily by forecasting its annual needs for
such visas early in the U.S. Government's fiscal year and applying for such
visas as soon as practicable. In addition, the company utilizes L-1 visas
whenever available and redeploys existing H-1B visa holders in order to
minimize the number of new H-1B visas needed by the company. While the company
anticipated that such limit would be reached prior to the end of the U.S.
government's fiscal year and has made efforts to plan accordingly, there can
be no assurance that the company will continue to be able to obtain a
sufficient number of H-1B visas.

The market for hiring software professionals is highly competitive. Competing
employers include multinational corporations that perform software development
in India through subsidiaries and joint ventures with Indian companies; a
number of well-known Indian IT services and software product companies; and a
large number of small and medium regional companies, many with affiliates or
parent companies in the United States and Europe.

6.E.1 Share ownership (As of March 31, 2001)

The following table sets forth the options to purchase securities, granted to
executive officers and directors, that were outstanding as of March 31, 2001.

-----------------------------------------------------------------------------------------------------
Class of securities Total securities Exercise price/1/ Expiration dates
-----------------------------------------------------------------------------------------------------

Equity shares 153,720 $107.07 Nov 2003-Feb 2010
American Depositary Shares 320,260 $ 36.26 Mar 2003-Feb 2010
-----------------------------------------------------------------------------------------------------

/1/ Weighted Average Exercise Price

The following table sets forth for each director and executive officer, the
total number of equity shares, ADSs and Options to purchase equity shares and
ADSs held as of March 31, 2001.

------------------------------------------------------------------------------------------------------
Name Shares % of shares Shares Exercise Expiration
beneficially beneficially underlying price
owned owned options
granted
------------------------------------------------------------------------------------------------------

N. R. Narayana Murthy /1/ 4,906,400 7.42 - - -
Nandan M. Nilekani /1/ 3,331,900 5.04 - - -
Dinesh K. /1/ 2,333,400 3.52 - - -
Gopalakrishnan S. /1/ 3,180,000 4.81 - - -
Shibulal S. D. /1/ 2,118,500 3.20 - - -
Mohandas Pai T. V. /2/ - - - - -
Phaneesh Murthy /2/ - - - - -
Srinath Batni /2/ - - - - -
Deepak Satwalekar - - - - -
Ramesh Vangal /2/ - - - - -
Marti G. Subrahmanyam, Prof. /2/ - - - - -
Philip Yeo - - - - -
Jitendra Vir Singh, Prof. - - - - -
Omkar Goswami, Dr. - - - - -
Larry Pressler, Sen. - - - - -
Rama Bijapurkar - - - - -
Ajay Dubey /2/ - - - - -
Balasubramanian P., Dr. /2/ - - - - -
Balakrishnan V. /2/ - - - - -
Basab Pradhan /2/ - - - - -
Deepak Sinha, Gp. Capt. (Retd.) /2/ - - - - -
Girish Vaidya /2/ - - - - -
Hema Ravichandar /2/ - - - - -
Jan DeSmet /2/ - - - - -
Mohan Sekhar /2/ - - - - -
Prabhu M. S. S., Dr. /2/ - - - - -
Rajiv Kuchhal /2/ - - - - -
Satyendra Kumar /2/ - - - - -
Sobha Meera P. R. /2/ - - - - -
------------------------------------------------------------------------------------------------------

/1/ Number of shares and percentage ownership is based on 66,158,117 equity
shares outstanding as of March 31, 2001. Beneficial ownership is determined
in accordance with rules of the SEC and includes voting and investment power
with respect to such shares. Shares subject to options that are currently
exercisable or exercisable within 60 days of March 31, 2001 are deemed to be
outstanding and to be beneficially owned by the person holding such options
for the purpose of computing the percentage ownership of such person, but are
not deemed to be outstanding and to be beneficially owned for the purpose of
computing the percentage ownership of any other person. All information with
respect to the beneficial ownership of any principal shareholder has been
furnished by such shareholder and, unless otherwise indicated below, the
company believes that persons named in the table have sole voting and sole
investment power with respect to all the shares shown as beneficially owned,
subject to community property laws, where applicable. The shares beneficially
owned by the directors include the equity shares owned by their family
members to which such directors disclaim beneficial ownership.

/2/ Hold less than one percent of the class of shares and individual share
ownership has not previously been disclosed to shareholders or otherwise made
public.

6. E. 2 Option plans

The company has three Option plans in operation - the 1994 Employee Stock
Offer Plan, the 1998 Stock Option Plan and the 1999 Stock Option Plan - a
description of which is provided below:

1994 Employees Stock Offer Plan. In September 1994, the company established
the Employees Stock Offer Plan ("ESOP") which provides for the issuance of
6,000,000 warrants (as adjusted to reflect the company's 2-for-1 stock split
by means of a stock dividend in fiscal 1998 and 1999 and a 2-for-1 stock split
in fiscal 2000) to eligible employees. The warrants were issued to an employee
welfare trust ("Trust") at Rs. 0.50 each. The warrants were purchased by the
Trust using the proceeds of a loan obtained from the company. The Trust holds
the warrants and transfers them to eligible employees. The warrants are
transferred to employees at Rs. 0.50 each and each warrant entitles the holder
to purchase one of the company's equity shares at a price of Rs. 50 per share.
The warrants and the equity shares received upon the exercise of warrants are
subject to a five-year aggregate vesting period from the date of issue of
warrants to employees. The warrants expire upon the earlier of five years from
the date of issue or September 1999.

In 1997, in anticipation of a share dividend to be declared by the company,
the Trust exercised all warrants held by it and converted them into equity
shares with the proceeds of a loan obtained from the company. In connection
with the warrant exercise and the share dividend, on an adjusted basis,
3,011,200 equity shares were issued to employees of the company who exercised
stock purchase rights and 2,988,800 equity shares were issued to the Trust for
future issuance to employees pursuant to the ESOP. Following such exercise,
there were no longer any rights to purchase equity shares from the company in
connection with the ESOP. Only equity shares held by the Trust remained for
future issues to employees, subject to vesting provisions. The equity shares
acquired upon the exercise of the warrants vests 100% upon the completion of
five years of service. The warrant holders were entitled to exercise early,
but the shares received are subject to the five year vesting period. As of
March 31, 2001, the company's outstanding equity shares included 587,400
equity shares held by the Trust of which 330,000 equity shares were allotted
to employees, subject to vesting provisions and have been included in the
calculation of basic and diluted earnings per share. The remaining 257,400
equity shares were not considered outstanding for purposes of calculating
diluted earnings per share calculations. The warrants allotted and the
underlying equity shares are not subject to any repurchase obligations by the
company.

The company has elected to use the intrinsic value-based method of APB Opinion
No. 25 to account for its employee stock-based compensation plan. During the
years ended March 31, 2001, 2000 and 1999, the company recorded deferred
compensation of Nil, $ 1,029,649 and $ 30,407,892, respectively, for the
difference, on the grant date, between the exercise price and the fair value
as determined by quoted market prices of the common stock underlying the
warrants. The deferred compensation is amortized on a straight-line basis over
the vesting period of the warrants/equity shares.

In fiscal 1998, the company declared a stock split of two equity shares for
each equity share outstanding in the form of a stock dividend to all its
shareholders including participants in the ESOP. Under the terms of the ESOP,
the additional equity shares issued to ESOP participants as a result of the
stock dividend were not subject to vesting. Consequently, the amortization of
deferred stock compensation of $ 1,519,739 relating to these shares was
accelerated at the time of the stock dividend. Similarly, in fiscal 1999, the
company declared a stock split of two equity shares for each equity share
outstanding to all its shareholders including participants in the ESOP in the
form of a stock dividend and consequently recognized an accelerated
compensation charge at the time of the stock dividend amounting to
$12,906,962.

1998 Stock Option Plan. The company's 1998 Stock Option Plan ("1998 Plan")
provides for the grant of nonstatutory stock options and incentive stock
options [within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Internal Revenue Code")], to employees of the company.
The establishment of the 1998 Plan was approved by the board of directors in
December 1997 and by the shareholders in January 1998. The Government of India
has approved the 1998 Plan, subject to maximum limit of 1,470,000 equity
shares issuable under the 1998 Plan. A total of 1,600,000 equity shares are
currently reserved for issuance pursuant to the 1998 Plan. Unless terminated
sooner, the 1998 Plan will terminate automatically in January 2008. All
options under the 1998 Plan will be exercisable for ADSs represented by ADRs.

The 1998 Plan is administered by the compensation committee of the Board (the
"Committee"). The Committee has the power to determine the terms of the
options granted, including the exercise price, the number of ADSs subject to
each option, the exercisability thereof, and the form of consideration payable
upon such exercise. In addition, the Committee has the authority to amend,
suspend or terminate the 1998 Plan, provided that no such action may affect
any ADS previously issued and sold or any option previously granted under the
1998 Plan.

Options granted under the 1998 Plan are not generally transferable by the
optionee, and each option is exercisable during the lifetime of the optionee
only by such optionee. Options granted under the 1998 Plan must generally be
exercised within three months of the end of optionee's status as an employee
of the company, but in no event later than the expiration of the option's
term. In the event of optionee's termination as a result of death or
disability, the vesting and exercisability of the optionee's option will
accelerate in full and the option must be exercised within 12 months after
such optionee's termination by death or disability, but in no event later than
the expiration of the option's term. The exercise price of incentive stock
options granted under the 1998 Plan must be at least equal to the fair market
value of the ADSs on the date of grant. The exercise price of nonstatutory
stock options granted under the 1998 Plan must be at least equal to 90% of the
fair market value of the ADSs on the date of grant. With respect to any
participant who owns stock

possessing more than 10% of the voting power of all classes of the company's
outstanding capital stock, the exercise price of any incentive stock option
granted must equal at least 110% of the fair market value on the grant date
and the term of such incentive stock option must not exceed five years. The
term of all other options granted under the 1998 Plan may not exceed 10 years.

The 1998 Plan provides that in the event of a merger of the company with or
into another corporation, a sale of substantially all of the company's assets
or a like transaction involving the company, each option shall be assumed or
an equivalent option substituted by the successor corporation. If the
outstanding options are not assumed or substituted as described in the
preceding sentence, the vesting and exercisability of each option will
accelerate in full.

1999 Stock Option Plan. The company's 1999 Stock Option Plan ("1999 Plan") was
approved by the shareholders and the board of directors in June 1999. The 1999
Plan provides for the issue of 6,600,000 equity shares to employees. The 1999
Plan is administered by a compensation committee of the board of directors.
Under the 1999 Plan, options will be issued to employees at an exercise price
not less than the Fair Market Value. Fair Market Value means the closing price
of the company's shares on the stock exchange where there is the highest
trading volume on a given date and if the shares are not traded on that day,
the closing price on the next trading day. Under the 1999 Plan, options may
also be issued to employees at exercise prices that are less than Fair Market
Value only if specifically approved by the members of the company in a general
meeting.

Options granted under the 1999 Plan are not generally transferable by the
optionee, and each option is exercisable during the lifetime of the optionee
only by such optionee. Options granted under the 1999 Plan must generally be
exercised within three months of the end of optionee's status as an employee
of the company, but in no event later than the expiration of the option's
term. In the event of optionee's termination as a result of death or
disability, the vesting and exercisability of the optionee's option will
accelerate in full and the option must be exercised within 12 months after
such optionee's termination by death or disability, but in no event later than
the expiration of the option's term.

The 1999 Plan provides that in the event of a merger of the company with or
into another corporation, a sale of substantially all of the company's assets
or a like transaction involving the company, each option shall be assumed or
an equivalent option substituted by the successor corporation. If the
outstanding options are not assumed or substituted as described in the
preceding sentence, the vesting and exercisability of each option will
accelerate in full.

Item 7 Major Shareholders and Related Party Transactions

7.A Major shareholders

The following table sets forth certain information regarding the beneficial
ownership of the equity shares on March 31, 2001 of (i) each person or group
known by the company to own beneficially 5% or more of the outstanding equity
shares and (ii) the beneficial ownership of all officers and directors as a
group, in each case as reported to Infosys by such persons.

------------------------------------------------------------------------------------------------------------------------------
Name of the Class of No of shares % of No of shares % of No of shares % of
beneficial owner security beneficially class beneficially class beneficially class
held/1,2/ held/1,2/ held/1,2/
------------------------------------------------------------------------------------------------------------------------------
March 31, 2001 March 31, 2000 March 31, 1999
------------------------------------------------------------------------------------------------------------------------------

N. R. Narayana Murthy Equity shares 4,906,400 7.42 4,931,300 7.45 5,047,200 7.63
Nandan M. Nilekani Equity shares 3,331,900 5.04 3,334,900 5.04 3,376,400 5.10
N. S. Raghavan* Equity shares 3,417,360 5.17 3,467,860 5.24 3,531,200 5.33
Unit Trust of India Equity shares 5,546,098 8.38 5,958,497 9.01 5,907,004 8.93
Government of Singapore Equity shares 3,625,402 5.48 2,055,778 3.11 408,800 0.62
Shareholding of all directors and
officers as a group (30 persons)/3/ 16,540,180 24.92
------------------------------------------------------------------------------------------------------------------------------

* Ceased to be director of the company effective as of February 7, 2000.

/1/ Number of shares and percentage ownership is based on 66,158,117 equity
shares outstanding as of March 31, 2001. Beneficial ownership is determined in
accordance with rules of the SEC and includes voting and investment power with
respect to such shares. Shares subject to options that are currently
exercisable or exercisable within 60 days of March 31, 2001 are deemed to be
outstanding and to be beneficially owned by the person holding such options
for the purpose of computing the percentage ownership of such person, but are
not deemed to be outstanding and to be beneficially owned for the purpose of
computing the percentage ownership of any other person. All information with
respect to the beneficial ownership of any principal shareholder has been
furnished by such shareholder and, unless otherwise indicated below, the
company believes that persons named in the table have sole voting and sole
investment power with respect to all the shares shown as beneficially owned,
subject to community property laws, where applicable. The shares beneficially
owned by the directors include the equity shares owned by their family members
to which such directors disclaim beneficial ownership.

/2/ As adjusted to reflect the company's 2-for-1 stock dividend in 1998 and 2-
for-1 stock split in 2000.

/3/ 40,500 shares subject to options that are currently exercisable or
exercisable within 60 days of March 31, 2001 by various officers and directors
of the company have been deemed to be outstanding and to be beneficially owned
by the person holding such options for calculating the total shareholding of
all directors and officers as a group. Accordingly, the percentage ownership
of the group is based on 66,379,420 equity shares which includes 221,303
options that are currently exercisable or exercisable by all employees within
60 days of March 31, 2001.

The major shareholders of the company do not have a differential voting right
in respect of the equity shares of the company.

The company's American Depositary Shares listed on the NASDAQ National
Market(R) each representing one-half of one equity share of Rs. 5 par value
are registered pursuant to Section 12(g) of the Securities Exchange Act of
1934 and are held by approximately 10,100 holders of record in the United
States of America ("USA"), as of March 31, 2001.

The company's equity shares can be held by Foreign Institutional Investors
("FIIs"), Overseas Corporate Bodies ("OCBs") and Non-resident Indians ("NRIs")
who are registered with the Securities and Exchange Board of India ("SEBI")
and the Reserve Bank of India ("RBI"). As of March 31, 2001, 28.89 % of the
company's equity shares are held by these FIIs, OCBs and NRIs of which some of
them may be residents or bodies corporate registered in the United States of
America and elsewhere. The company is not aware which of these FIIs, OCBs and
NRIs hold these equity shares as residents of or bodies corporates registered
in the USA and is not aware of the portion of these equity shares held by
these FIIs, OCBs and NRIs in the USA.

To the best of its knowledge, the company is not owned or controlled directly
or indirectly by any government or by any other corporation. The company is
not aware of any arrangement, the operation of which may at a subsequent date
result in a change in control of the company.

The above shares are issued and traded within India and is held, directly or
indirectly, in the beneficial name of the holders.

7.B Related party transactions

The company had no material transaction with any shareholders owning more than
10% of the equity of the company.

Yantra Corporation

In December 1996, the company transferred all rights, title and interest in
and to the WMSYantra (formerly known as EAGLE) software product to Yantra,
then a majority-owned subsidiary of the company. Yantra granted Infosys a non-
exclusive right to reproduce, distribute and service the product to the extent
necessary to fulfill the company's pre-existing contractual obligations for
the product. In consideration for this transaction Infosys received 7,500,000
shares of common stock of Yantra, which had a fair market value at the time of
$ 0.20 per share. In September 1997, the company purchased 2,000,000 shares of
Series A Preferred Stock of Yantra at $ 0.75 per share. Certain of the
company's directors or officers are directors of Yantra. As of March 31, 1998,
Mr. Phaneesh Murthy, an executive officer of the company, held options to
purchase 100,000 shares of common stock of Yantra at an exercise price of $
0.10 per share, all of which were granted on September 29, 1997. Other than
Mr. Phaneesh Murthy, none of the company's directors or officers beneficially
owns any shares or options of Yantra. On October 20, 1998, the company sold
1,363,637 shares of Series A Preferred Stock of Yantra for $ 1.10 per share to
an unaffiliated purchaser. As a result, the company reduced its interest in
Yantra to less than one-half of voting stock of Yantra. On June 14, 1999,
Yantra issued Series C Preferred Stock amounting to $ 15.0 million to various
existing and new investors. Sales to Yantra in fiscal 2001 were $ 2.6 million.
During fiscal 2001, Yantra raised $49 million in venture financings from
various investors. This reduced Infosys' economic interest in Yantra to
approximately 16%. During the year, Yantra announced a broad strategic
alliance with Accenture (formerly Andersen Consulting) to provide supply chain
solutions through PureEcommerce, a fully web-enabled application that manages,
tracks and executes complex customer transactions across a company's extended
supply chain. As of March 31, 2001, Mr. Phaneesh Murthy, a director of the
company holds 74,992 shares of common stock of par value $ 0.01 per share in
Yantra, acquired at a purchase price of $ 0.10 per share.

OnMobile Systems Inc.

OnMobile Systems Inc. (formerly Onscan Inc.) is a wireless solutions provider
to enterprises and wireless carriers around the world. OnMobile Systems Inc.
("OnMobile") offers platforms, applications and professional services to
deliver end-to-end wireless solutions. The OnMobile solution allows wireless
carriers to provide innovative services to their customers and enterprises to
deploy applications targeted towards their mobile workforce. During the year,
Infosys transferred the intellectual property rights in the Onscan product - a
web - enabled notification product to OnMobile. The product was transferred
for a gross consideration of $ 2 million, received in the form of common,
preferred voting and preferred non-voting stock of OnMobile. OnMobile also
closed a $ 12 million venture financing round with various investors.

Mr. S Gopalakrishnan and Mr. S D Shibulal, members of the board of directors
of Infosys hold 200,000 and 500,000 shares, respectively in OnMobile Systems
Inc. acquired at a price of $ 0.0435 per share. Mr. V Balakrishnan, Vice
President - Finance and Company Secretary, holds 100,000 options in OnMobile
Systems Inc. granted at an exercise price of $ 0.0435 per option.

Mr. S.D. Shibulal is the chairman of the Board of OnMobile Systems Inc. USA
and Mr. V. Balakrishnan is one of the directors of OnMobile Asia Pacific
Limited, India, which is the wholly owned subsidiary of OnMobile Systems Inc.

All transactions with the related party concerns are at arms-length, at
prevailing market rates.

7.B.1 Employment agreements

The company has entered into agreements with its employee directors containing
a monthly salary, performance bonus and benefits including vacation, medical
reimbursement and pension fund contributions. These agreements are made for a
five-year period, but either the company or the employee director may
terminate the agreement upon six months notice to the other party.

7.B.2 Loans to employees

Pursuant to an employee loan program, the company grants loans to employees to
acquire certain assets such as property, vehicles or for personal needs. Such
loans are made at interest rates ranging from 0% to 4% and are repayable over
fixed periods ranging from one to 100 months. The loans generally are secured
by the assets acquired by the employees. As of March 31, 2001, there were $16
million in loans outstanding to employees, of which $ 227,121 were loans
receivable from executive officers of the company in amounts less than $
60,000. The largest outstanding loan during fiscal 2001 was a housing loan for
$ 32,216 given to Mr. Satyendra Kumar, Vice President and Head - Quality. The
loan, made on January 16, 2001 carried no interest and was outstanding in the
amount of $ 31,250 as of March 31, 2001.

7.C Interests of experts and counsel

Not applicable.

Item 8. Financial Information

8.A.1 Consolidated statements and other financial information

The following financial statements of the company and the auditors' report
appearing on pages 112 through 131 of the Infosys Annual Report for fiscal
2001 are incorporated herein by reference:

. Independent auditors' report.
. Balance Sheets as of March 31, 2001 and 2000.
. Statements of Income for the years ended March 31, 2001, 2000 and 1999.
. Statements of Stockholder's Equity and Comprehensive Income for the years
ended March 31, 2001, 2000 and 1999.
. Statements of Cash Flows for the years ended March 31, 2001, 2000 and 1999.
. Notes to financial statements.

The Infosys Annual Report for fiscal 2001, except for those portions which are
expressly incorporated by reference in this filing, is furnished for the
information of the Securities and Exchange Commission and is not to be deemed
as filed as a part of this report on Form 20-F.

8.A.2 Legal proceedings

The company, its directors, senior executive officers and affiliates are not
currently a party to any material legal proceedings in any of the
jurisdictions where it does business.

8.A.3 Dividends

Dividends

Under Indian law, a corporation pays dividends upon a recommendation by the
Board of Directors and approval by a majority of the shareholders, who have
the right to decrease but not increase the amount of the dividend recommended
by the Board of Directors. Under the Indian Companies Act, dividends may be
paid out of profits of a company in the year in which the dividend is declared
or out of the undistributed profits of previous fiscal years. Interim
Dividends may also be paid during a fiscal year out of the undistributed
profits of the previous fiscal years. In the last three fiscal years, the
company declared an aggregate of approximately $ 0.42 per equity share (as
adjusted to reflect the company's 2-for-1 stock split by means of a stock
dividend in fiscal 1998 and 1999 and a 2-for-1 stock split in fiscal 2000) in
cash dividends (equivalent to approximately $ 0.21 per ADS). Although the
company has no current intention to discontinue dividend payments, there can
be no assurance that any future dividends will be declared or paid or that the
amount thereof will not be decreased. Owners of ADSs will be entitled to
receive dividends payable in respect of the equity shares represented by such
ADSs. The equity shares represented by ADSs will rank pari passu with existing
equity shares of the company in respect of dividends. Cash dividends in
respect of the equity shares represented by the ADSs will be paid to the
Depositary in rupees and except as otherwise described in the Deposit
Agreement dated March 11, 1999 (the "Deposit Agreement") will be converted by
the Depositary into U.S. dollars and distributed, net of Depositary fees and
expenses, to the holders of such ADSs.

The following table sets forth the annual dividends paid per equity share for
each of the years indicated.

------------------------------------------------------------------------
Year ended March 31, Dividend paid per equity share/1/
------------------------------------------------------------------------
Indian rupee $
------------------------------------------------------------------------

2001 10.00 0.22
2000 4.50 0.11
1999 3.75 0.09
1998 3.00 0.04
1997 2.75 0.02
1996 2.50 0.02
------------------------------------------------------------------------

/1/ Dividends are retroactively adjusted to reflect the company's 2-for-1
stock split by means of a stock dividend in fiscal 1998 and 1999 and a 2-for-
1 stock split in fiscal 2000.

8.B Significant changes

None.

Item 9. The Offer and Listing

9.1 General

The company's equity shares are traded on The Stock Exchange, Mumbai ("BSE"),
the Bangalore Stock Exchange ("BgSE") and The National Stock Exchange ("NSE")
in India ("Indian Stock Exchanges"). The company's American Depositary Shares
as evidenced by American Depositary Receipts ("ADRs") are traded in the U.S.
on the NASDAQ National Market(R) under the ticker symbol "INFY". Each equity
share of the company is represented by two American Depositary Shares
("ADSs"). The ADRs evidencing ADSs began trading on the NASDAQ from March 11,
1999 when they were issued by the depositary Bankers Trust Company (the
"Depositary"), pursuant to the Deposit Agreement.

The number of outstanding equity shares in the company, as of March 31, 2001,
were 66,158,117. As of March 31, 2001, there were approximately 10,100
record holders of ADRs evidencing 4,176,234 ADSs (equivalent to 2,088,117
equity shares). As of March 31, 2001, there were approximately 90,000 record
holders of the 66,158,117 equity shares listed and traded on the stock
exchanges in India.

The following table sets forth for the periods indicated the price history of
the equity shares and the ADSs on the Indian Stock Exchanges and the NASDAQ
respectively:

Annual high-low price history for previous five years

---------------------------------------------------------------------------------------------
BSE NSE BgSE NASDAQ
Price per equity Price per equity Price per equity Price per American
share share share Depositary Share
---------------------------------------------------------------------------------------------
Fiscal Year High Low High Low High Low High Low
---------------------------------------------------------------------------------------------

2001 $239.97 $80.41 $239.41 $80.92 $238.66 $80.71 $284.56 $60.13
2000 316.84 29.29 319.57 28.90 320.55 55.24 375.00 19.63
1999 40.73 11.16 40.82 10.84 13.18 7.21 $ 25.00 $18.69
1998 11.56 3.54 11.89 3.32 9.85 3.76 - -
1997 $ 4.10 $ 1.67 $ 4.18 $ 1.76 $ 4.08 $ 1.65 - -
---------------------------------------------------------------------------------------------

Stock price per share have been restated to reflect a two-for-one stock-
dividend in fiscal 1998 and 1999 and two-for-one stock split in 2000.

Source: www.bseindia.com for BSE quotes, The Economic Times for NSE and BgSE
----------------
quotes and finance.yahoo.com for ADS quotes.
-----------------

Quarterly high-low price history for previous two years

----------------------------------------------------------------------------------------------------------------------
BSE NSE BgSE NASDAQ
Price per equity Price per equity Price per equity Price per American
share share share /1/ Depositary Share
----------------------------------------------------------------------------------------------------------------------
Fiscal Year High Low High Low High Low High Low
----------------------------------------------------------------------------------------------------------------------

2001
First quarter $239.97 $126.47 $239.41 $124.77 $238.66 $124.23 $284.56 $130.74
Second quarter 196.08 137.34 196.49 137.36 197.57 136.79 186.94 96.5
Third quarter 172.06 115.88 172.06 116.00 171.69 115.77 147.25 90.6
Fourth quarter 150.19 80.41 149.16 80.92 152.60 80.71 131.38 60.13
2000
First quarter 44.04 29.29 43.39 28.90 - - 30.63 19.63
Second quarter 91.56 41.69 91.61 41.91 86.32 55.24 73.88 28.69
Third quarter 168.75 78.70 167.35 78.85 168.19 79.49 180.00 65.50
Fourth quarter $316.84 $130.74 $319.57 $129.88 $320.55 $131.89 $375.00 $133.00
----------------------------------------------------------------------------------------------------------------------

/1/ The company's shares were not traded on the BgSE between May 1998 and
July 1999.

Stock prices per share have been restated to reflect a two-for-one stock-split
in fiscal 2000.

Source: www.bseindia.com for BSE quotes, The Economic Times for NSE and BgSE
----------------
quotes and finance.yahoo.com for ADS quotes.
-----------------

Monthly high-low price history for previous six months

----------------------------------------------------------------------------------------------------------------
BSE NSE BgSE NASDAQ
Price per equity Price per equity Price per equity Price per American
share share share Depositary Share
----------------------------------------------------------------------------------------------------------------
Month High Low High Low High Low High Low
----------------------------------------------------------------------------------------------------------------

Oct 2000 $165.29 $130.75 $165.52 $131.13 $164.99 $130.92 $137.55 $105.13
Nov 2000 171.62 152.58 171.02 152.80 171.25 152.58 147.25 112.00
Dec 2000 164.49 116.00 172.24 116.13 168.30 115.89 141.50 90.06
Jan 2001 150.67 118.05 149.63 118.23 153.08 118.63 131.38 86.13
Feb 2001 147.94 118.78 148.16 118.70 147.51 119.00 123.00 86.75
Mar 2001 $135.18 $ 80.35 $134.24 $ 80.87 $137.03 $ 80.65 $ 92.64 $ 60.13
----------------------------------------------------------------------------------------------------------------

Stock price per share have been restated to reflect a two-for-one stock-split
in fiscal 2000.

Source: www.bseindia.com for BSE quotes, The Economic Times for NSE and BgSE
----------------
quotes and finance.yahoo.com for ADS quotes.
-----------------

9.2 Trading practices and procedures on the Indian Stock Exchanges

The Stock Exchange, Mumbai ("BSE") and the National Stock Exchange ("NSE")
together account for more than 80% of the total trading volume on the Indian
Stock Exchanges. Trading on both of these exchanges is accomplished through
online execution. These two stock exchanges handle over 1,442,000 trades per
day. Trading takes place on a five-day fixed settlement basis on most of the
exchanges, including the BSE and NSE. Any outstanding amount at the end of
the settlement period is settled by delivery and payment. However,
institutional investors are not permitted to "net out" their transactions and
must trade on a delivery basis only. Beginning, July 2, 2001, the company's
equity shares as well as all other securities classified by the BSE and NSE
as 'A' Group securities are required to be traded compulsorily on a rolling
settlement basis.

The BSE permits carry forwards of trades in certain securities by non-
institutional investors with an associated charge. In addition, orders can be
entered with a specified term of validity that may last until the end of the
session, day or settlement period. Dealers must specify whether orders are
for a proprietary account or for a client. The BSE specifies certain margin
requirements for trades executed on the exchange, including margins based on
the volume or quantity of exposure that the broker has on the market, as well
as mark-to-market margins payable on a daily basis for all outstanding
trades. Trading on the BSE takes place from 10:00 a.m. to 3:30 p.m. on all
weekdays, except holidays. The NSE does not permit carry forwards of trades.
It has separate margin requirements based on the net exposure of the broker
on the exchange. The NSE trades from 9:30 a.m. until 4:00 p.m. on weekdays,
except holidays. The NSE and BSE have separate online trading systems and
separate clearing houses. The BSE was closed from March 20 through March 22,
1995, the Governing Board of the BSE closed the market due to a default of
one of the broker members. There have been no closures of the Indian Stock
Exchanges in response to "panic" trading or large fluctuations. The equity
shares of the company were not traded on the BgSE between May 1998 and July
1999 owing to the absence of quotes for trades in the BgSE.

Item 10. Additional Information

10.A Share capital

Not applicable.

10.B Memorandum and Articles of Association

Description of equity shares

Set forth below is a brief summary of the material provisions of the
company's Articles of Association ("AOA") and the Indian Companies Act, all
as currently in effect. The company is registered under the Indian Companies
Act with the Registrar of Companies, Karnataka, India with Company No. 13115.
The following description of the company's Articles does not purport to be
complete and is qualified in its entirety by the AOA and Memorandum of
Association ("MOA") of the company that are included as exhibits to the
company's quarterly report on Form 6-K filed with the Commission on January
21, 2000 and is incorporated herein by reference.

Share capital

The company's authorized share capital is 100,000,000 shares, par value Rs. 5
per share. As of March 31, 2001, 66,158,117 equity shares (as adjusted to
reflect the company's stock split in fiscal 2000) were issued and
outstanding. The equity shares are the only class of share capital of the
company. There are no convertible debentures or warrants of the company
currently in existence. For the purposes of this Annual Report, "shareholder"
means a shareholder who is registered as a member in the register of members
of the company.

Dividends

Under the Indian Companies Act, unless the board of directors of the company
(the "board") recommends the payment of a dividend, the company has no power
to declare a dividend. Similarly, under the AOA, although the shareholders
may, at the annual general meeting, approve a dividend in an amount less than
that recommended by the board, they cannot increase the amount of the
dividend. Dividends generally are declared as a percentage of the par value
of the company's shares. The dividend recommended by the board, and subject
to the limitations described above, is distributed and paid to shareholders
in proportion to the paid up value of their shares within 30 days of the
approval by the shareholders at the annual general meeting. Pursuant to the
company's AOA, the board has discretion to declare and pay interim dividends
without shareholder approval. Under the Indian Companies Act, dividends can
only be paid in cash to the registered shareholder at a record date fixed on
or prior to the annual general meeting or to his order or his banker's order.

Under the Indian Companies Act, dividends may be paid out of profits of a
company in the year in which the dividend is declared or out of the
undistributed profits of previous fiscal years. Interim Dividends may also be
paid during a fiscal year out of the undistributed profits of the previous
fiscal years. Before declaring a dividend greater than 10%, a company is
required under the Indian Companies Act to transfer to its reserves a minimum
percentage of its profits for that year, ranging from 2.5% to 10% depending
upon the dividend percentage to be declared in such year. The Indian
Companies Act further provides that, in the event of an inadequacy or absence
of profits in any year, a dividend may be declared for such year out of the
company's accumulated profits, subject to the following conditions: (i) the
rate of dividend to be declared shall not exceed 10% of its paid up capital
or the average of the rate at which dividends were declared by the company in
the prior five years, whichever is less; (ii) the total amount to be drawn
from the accumulated profits earned in the previous years and transferred to
the reserves shall not exceed an amount equivalent to 10% of its paid up
capital and free reserves, and the amount so drawn is to be used first to set
off the losses incurred in the fiscal year before any dividends in respect of
preference or equity shares are declared; and (iii) the balance of reserves
after withdrawals shall not fall below 15% of its paid-up capital. A dividend
tax of 10.2% of the total dividend declared, distributed or paid after June
1, 2001 is payable by the company.

Bonus shares

In addition to permitting dividends to be paid out of current or retained
earnings as described above, the Indian Companies Act permits the company to
distribute an amount transferred from the general reserve or surplus in the
company's profit and loss account to its shareholders in the form of bonus
shares (similar to a stock dividend). The Indian Companies Act also permits
the issuance of bonus shares from a share premium account. Bonus shares are
distributed to shareholders in the proportion recommended by the board.
Shareholders of record on a fixed record date are entitled to receive such
bonus shares.

Preemptive rights and issue of additional shares

The Indian Companies Act gives shareholders the right to subscribe for new
shares in proportion to their respective existing shareholdings unless
otherwise determined by a special resolution passed by a general meeting of
the shareholders. Under the Indian Companies Act, in the event of an issuance
of securities, subject to the limitations set forth above, the company must
first offer the new shares to the shareholders on a fixed record date. The
offer must include: (i) the right, exercisable by the shareholders of record,
to renounce the shares offered in favor of any other person; and (ii) the
number of shares offered and the period of the offer, which may not be less
than 15 days from the date of offer. If the offer is not accepted it is
deemed to have been declined. The board is authorized under the Indian
Companies Act to distribute any new shares not purchased by the preemptive
rights holders in the manner that it deems most beneficial to the company.

Annual general meetings of shareholders

The company must convene an annual general meeting of its shareholders within
six months after the end of each fiscal year and may convene an extraordinary
general meeting of shareholders when necessary or at the request of a
shareholder or shareholders holding at least 10% of the company's paid up
capital carrying voting rights. The annual general meeting of the
shareholders is generally convened by the company secretary pursuant to a
resolution of the board. Written notice setting out the agenda of the meeting
must be given at least 21 days (excluding the days of mailing and receipt)
prior to the date of the general meeting to the shareholders of record.
Shareholders who are registered as shareholders on the date of the general
meeting are entitled to attend or vote at such meeting. The Indian Companies
(Amendment) Act, 2000 has made provision for voting on certain matters by a
postal ballot in certain circumstances. However, the Department of Company
Affairs, which is the governing agency, is yet to make rules determining the
matters which require a postal ballot.

The annual general meeting of shareholders must be held at the registered
office of the company or at such other place within the city in which the
registered office is located; meetings other than the annual general meeting
may be held at any other place if so determined by the board. The company's
registered office is located at Electronics City, Hosur Road, Bangalore, 561
229, Karnataka, India.

The AOA provide that a quorum for a general meeting is the presence of at
least five shareholders in person.

Voting rights

At any general meeting, voting is by show of hands unless a poll is demanded
by a shareholder or shareholders present in person or by proxy holding at
least 10% of the total shares entitled to vote on the resolution or by those
holding shares with an aggregate paid up capital of at least Rs. 50,000. Upon
a show of hands, every shareholder entitled to vote and present in person has
one vote and, on a poll, every shareholder entitled to vote and present in
person or by proxy has voting rights in proportion to the paid up capital
held by such shareholders. The chairman of the board has a deciding vote in
the case of any tie.

Any shareholder of the company may appoint a proxy. The instrument appointing
a proxy must be delivered to the company at least 48 hours prior to the
meeting. A proxy may not vote except on a poll. A corporate shareholder may
appoint an authorized representative who can vote on behalf of the
shareholder, both upon a show of hands and upon a poll. Ordinary resolutions
may be passed by simple majority of those present and voting at any general
meeting for which the required period of notice has been given. However,
certain resolutions such as amendments of the AOA and the MOA, commencement of
a new line of business, the waiver of preemptive rights for the issuance of
any new shares and a reduction of share capital, require that votes cast in
favor of the resolution (whether by show of hands or poll) are not less than
three times the number of votes, if any, cast against the resolution.

The company maintains a register of shareholders of the company. For the
purpose of determining the shares entitled to annual dividends, the register
is closed for a specified period prior to the annual general meeting. To
determine which shareholders are entitled to certain shareholder rights, the
company, pursuant to a board resolution, may close the register of
shareholders. The Indian Companies Act and each of the company's listing
agreements with the Indian Stock Exchanges require the company to give at
least 30 days' prior notice to the Indian Stock Exchanges and at least seven
days' prior notice to the public. The Company may not close the register of
shareholders for more than 30 consecutive days, and in no event more than 45
days in a year. Trading of equity shares may, however, continue while the
register of shareholders is closed.

Following the introduction of the Depositories Act, 1996, and the repeal of
Section 22A of the Securities Contracts (Regulation) Act, 1956, which enabled
companies to refuse to register transfers of shares in certain circumstances,
the shares of the company are freely transferable, subject only to the
provisions of Section 111A of the Indian Companies Act. The AOA currently
contain provisions which give the directors discretion to refuse to register a
transfer of shares in certain circumstances. In accordance with the provisions
of Section 111A(2) of the Indian Companies Act, the directors may exercise
this discretion if they have sufficient cause to do so. Pursuant to Section
111A(3), if the transfer of shares contravenes any of the provisions of the
Securities and Exchange Board of India Act, 1992 or the regulations issued
thereunder or the Sick Industrial Companies (Special Provisions) Act, 1985 or
any other similar laws, the Company Law Board (the "CLB") may, on application
made by the company, a depositary incorporated in India, an investor, the SEBI
or certain other parties, direct the rectification of the register of records.
The CLB may, in its discretion, issue an interim order suspending the voting
rights attached to the relevant shares before making or completing its
investigation into the alleged contravention. Notwithstanding such
investigation, the rights of a shareholder to transfer the shares will not be
restricted.

Under the Indian Companies Act, unless the shares of a company are held in a
dematerialised form, a transfer of shares is effected by an instrument of
transfer in the form prescribed by the Indian Companies Act and the rules
thereunder together with delivery of the share certificates. The transfer
agent of the company is Karvy Consultants Limited, Bangalore, Karnataka,
India.

Takeover Code and Listing Agreement

Under the Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997 ("the Takeover Code"), upon the
acquisition of more than 5% of the outstanding equity shares or voting rights
of a publicly listed Indian company, a purchaser is required to notify the
company; and the company and the purchaser are required to notify all stock
exchanges on which the shares of such company are listed. An ADS holder would
be subject to these notification requirements. Upon the acquisition of 15% or
more of such shares or voting rights, or a change in control of the company,
the purchaser is required to make an open offer to the other shareholders,
offering to purchase at least 20% of all the outstanding shares of the company
at a minimum offer price as determined pursuant to the Takeover Code. Although
the Takeover Code will not apply to the equity shares so long as they are
represented by ADSs, holders of ADSs may be required to comply with the
provisions of the Takeover Code only when they convert the ADSs into
underlying equity shares.

The company has entered into listing agreements with each of the Indian Stock
Exchanges. Clause 40A of each of the listing agreements provides that if an
acquisition of a listed company's shares results in the acquiror and its
associates holding 5% or more of the company's outstanding equity shares or
voting rights, the acquiror must report its holding to the company and the
relevant stock exchange(s). If an acquisition results in the acquiror and its
associates holding equity shares that have 15% or more of the voting rights,
then the acquiror must, before acquiring such equity shares, make an offer (in
accordance with Clause 40B of the listing agreements) on a uniform basis to
all remaining shareholders of the company to acquire equity shares that have
at least an additional 20% of the voting rights of the total equity shares of
the company at a prescribed price. The acquisition of shares of a company
listed on an Indian stock exchange beyond certain threshold amounts is subject
to regulations governing takeovers of Indian companies. Although clauses 40A
and 40B and such regulations will not apply to the equity shares so long as
they are represented by ADSs, holders of ADSs may be required to comply with
such notification and disclosure obligations pursuant to the provisions of the
Depositary Agreement to be entered into by such holders, the company and a
depositary.

Disclosure of ownership interest

Section 187C of the Indian Companies Act requires beneficial owners of shares
of Indian companies who are not holders of record to declare to the company
details of the holder of record and the holder of record to declare details of
the beneficial owner. Any person who fails to make the required declaration
within 30 days may be liable for a fine of up to Rs. 1,000 for each day the
declaration is not made. Any lien, promissory note or other collateral
agreement created, executed or entered into with respect to any share by the
registered owner thereof, or any hypothecation by the registered owner of any
share, pursuant to which a declaration is required to be made under Section
187C, shall not be enforceable by the beneficial owner or any person claiming
through the beneficial owner if such declaration is not made. Failure to
comply with Section 187C will not affect the obligation of the company to
register a transfer of shares or to pay any dividends to the registered holder
of any shares pursuant to which such declaration has not been made. While it
is unclear under Indian law whether Section 187C applies to holders of ADSs of
the company, investors who exchange ADSs for the underlying equity shares of
the company will be subject to the restrictions of Section 187C. Additionally,
holders of ADSs may be required to comply with such notification and
disclosure obligations pursuant to the provisions of the Deposit Agreement to
be entered into by such holders, the company and a depositary.

Audit and Annual Report

At least 21 days before the annual general meeting of shareholders, the
company must distribute a detailed version of the company's audited balance
sheet and profit and loss account and the reports of the board and the
auditors thereon. Under the Indian Companies Act, the company must file the
balance sheet and annual profit and loss account presented to the shareholders
within 30 days of the conclusion of the annual general meeting with the
Registrar of Companies. The company must also file an annual return containing
a list of the company's shareholders and other company information, within 60
days of the conclusion of the meeting.

Company acquisition of equity shares

Under the Indian Companies Act, the company may not acquire its own equity
shares because of the resulting reduction in the company's capital. Such a
reduction in capital is permitted only in certain circumstances and requires
compliance with specific buy-back regulations, a special resolution passed by
the shareholders and approval by the High Court of the state in which the
registered office of the company is situated. A company may, under some
circumstances, acquire its own equity shares without seeking the approval of
the High Court. However, a company would have to cancel the shares it has so
acquired within a prescribed time period. A company is not permitted to
acquire its own shares for treasury operations. An acquisition by a company of
its own shares that does not rely on an approval of the High Court must comply
with prescribed rules, regulations and conditions of the Indian Companies Act.
In addition publicly listed Indian companies must comply with the provisions
of the Securities and Exchange Board of India (Buy-back of Securities)
Regulations, 1998.

Liquidation rights

Subject to the rights of creditors, employees and the holders of any shares
entitled by their terms to preferential repayment over the equity shares, if
any, in the event of the winding-up of the company, the holders of the equity
shares are entitled to be repaid the amounts of paid up capital or credited as
paid up on such equity shares. All surplus assets after payments due to the
holders of any preference shares at the commencement of the winding-up shall
be paid to holders of equity shares in proportion to their shareholdings.

Voting rights of deposited equity shares represented by ADSs

Under Indian law, voting of the equity shares is by show of hands unless a
poll is demanded by a member or members present in person or by proxy holding
at least one-tenth of the total shares entitled to vote on the resolution or
by those holding an aggregate paid up capital of at least Rs. 50,000. A proxy
may not vote except on a poll.

As soon as practicable after receipt of notice pursuant to the Deposit
Agreement of any meeting of holders of equity shares or other deposited
securities, the Depositary shall fix a record date for determining the holders
entitled to give instructions for the exercise of voting rights, if any, as
provided in the Deposit Agreement and shall mail to the holders a record
notice which shall contain: (i) such information as is contained in such
notice of meeting; (ii) a statement that the holders of record at the close of
business on a specified record date will be entitled, subject to any
applicable provisions of Indian law and of the MOA and AOA of the company
governing the deposited securities represented by their respective ADSs
evidenced by their respective ADRs; (iii) a brief statement as to the manner
in which such instructions may be given including (a) an express indication
that the Depositary should demand a poll or instruct the chairman of the
meeting (the "Chairman") or a person designated by the Chairman to demand a
poll in the event that a poll is not otherwise demanded pursuant to Indian law
and (b) an express indication that instructions may be given to the Depositary
to give a discretionary proxy to a person designated by the company; and (iv)
a statement that if the Depositary does not receive instructions from a
holder, such holder may under certain circumstances be deemed to have
instructed the Depositary to give a discretionary proxy to a person designated
by the company to vote such deposited securities. Upon the written request of
a holder on such record date, received on or before the date established by
the Depositary for such purpose, the Depositary shall endeavor, insofar as is
practicable and permitted under the applicable provisions of Indian law and of
the MOA and AOA of the company governing the deposited securities, to vote or
cause to be voted the

amount of deposited securities represented by such ADSs evidenced by such
ADRs in accordance with the instructions set forth in such request. In the
event that the Depositary receives express instructions from holders to
demand a poll with respect to any matter to be voted on by holders, the
Depositary may notify the Chairman or a person designated by the Chairman of
such instructions and request the Chairman or such designee to demand a poll
with respect to such matters and the company agrees that the Chairman or such
designee will make their reasonable best efforts to so demand a poll at the
meeting at which such matters are to be voted on and to vote such equity
shares in accordance with such holders' instructions; provided, however, that
prior to any demand of a poll or request to demand a poll by the Depositary
upon the terms set forth herein, the company is required, at its own expense,
to use its best efforts to obtain and deliver to the Depositary an opinion of
Indian counsel, reasonably satisfactory to the Depositary, stating that such
action is in conformity with all applicable laws and regulations and that
such demand for a poll by the Depositary or a person designated by the
Depositary will not expose the Depositary to any liability to any person. The
Depositary shall not have any obligation to demand a poll or request the
demand of a poll if the company shall not have delivered to the Depositary
the local counsel opinion set forth in this paragraph.

The Depositary agrees not to, and shall ensure that the custodian and each of
their nominees does not vote, attempt to exercise the right to vote, or in
any way make use of, for purposes of establishing a quorum or otherwise, the
equity shares or other deposited securities represented by the ADSs evidenced
by an ADR other than in accordance with such instructions from the holder or
as provided below. The Depositary may not itself exercise any voting
discretion over any equity shares. If the Depositary does not receive
instructions from any holder with respect to any of the deposited securities
represented by the ADSs evidenced by such holder's ADRs on or before the date
established by the Depositary for such purpose, such holder shall be deemed,
and the Depositary shall deem such holder, to have instructed the Depositary
to give a discretionary proxy to a person designated by the company to vote
such deposited securities; provided that: (i) no such discretionary proxy
shall be given with respect to any matter as to which the company informs the
Depositary (and the company agrees to provide such information as promptly as
practicable in writing) that (a) the company does not wish such proxy given,
(b) substantial opposition exists or (c) the rights of the holders of equity
shares will be adversely affected; and (ii) the Depositary shall not have any
obligation to give such discretionary proxy to a person designated by the
company if the company shall not have delivered to the Depositary the local
counsel opinion and representation letter set forth in the next paragraph.

Prior to each request for the delivery of a discretionary proxy upon the
terms set forth herein, the company shall, at its own expense, deliver to the
Depositary: (i) an opinion of Indian counsel, reasonably satisfactory to the
Depositary, stating that such action is in conformity with all applicable
laws and regulations; and (ii) a representation letter from the company
(executed by a senior officer of the company) which (a) designates the person
to whom any discretionary proxy should be given, (b) confirms that the
company wishes such discretionary proxy to be given and (c) certifies that
the company has not and shall not request the discretionary proxy to be given
as to any matter as to which substantial opposition exists or which may
adversely affect the rights of holders of equity shares.

10.C Material contracts

None.

10.D Exchange controls

Prior to June 1, 2000, foreign investment in the Indian securities, including
the acquisition, sale and transfer of securities in Indian companies, was
generally regulated by the Foreign Exchange Regulation Act, 1973 ("FERA").
After June 1, 2000, foreign investment in and divestment from Indian
securities have been regulated by the provisions of the Foreign Exchange
Management Act, 1999 ("FEMA") and the rules and regulations issued by the
Reserve Bank of India thereunder, and the notifications issued by the
Ministry of Finance of the Government of India. A summary of the regulatory
environment for foreign investment is provided below.

Under Section 6 of the FEMA, the Reserve Bank of India has the power to
regulate, restrict or prohibit any capital account transaction, including the
transfer or issue of any foreign security by a person resident in India, the
purchase of the shares of any company carrying on trading, commercial or
industrial activity in India and the transfer or issue of any security by a
person resident outside India. Pursuant to the above powers, the Reserve Bank
of India has promulgated the Foreign Exchange Management (Transfer or Issue
of Security by a Person Resident Outside India) Regulations, 2000,
hereinafter the "Transfer of Securities Regulations" and the Foreign Exchange
Management (Transfer or Issue of any Foreign Security) Regulations, 2000,
hereinafter the "Foreign Securities Regulations" dealing with the issue,
purchase and transfer of securities.

Regulation 5 of the Transfer of Securities Regulations, sets out the
conditions under which a person resident outside India, a Foreign
Institutional Investor ("FII"), a Non-Resident Indian ("NRI") or an Overseas
Corporate Body - an overseas corporate body where at least 60% of the
beneficial interest therein is held by NRIs ("OCB") can purchase the shares
of any company carrying on any trading, commercial or industrial activity in
India. Specific approval of the Reserve Bank of India will have to be
obtained for:

(a) any renunciation of rights in the underlying equity shares in favor of a
person resident in India; and

(b) the sale of the underlying equity shares by a person resident outside
India to a person resident in India.

In such cases, the foreign investor would have to apply to the Reserve Bank
of India by submitting Form TS1, which requires information as to the
transferor, the transferee, the shareholding structure of the company whose
shares are to be sold, the proposed price and other information. Exceptions
to this requirement of Reserve Bank of India approval include sales made in
the stock market through a registered Indian broker, through a recognized
stock exchange in India at the prevailing market rates, or if the shares are
offered in accordance with the terms of an offer under the Securities and
Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997. The proceeds from any sale of the underlying equity shares
by a person resident outside India to a person resident in India may be
transferred outside India after receipt of Reserve Bank of India approval (if
required), and the payment of applicable taxes and stamp duties. Under
Regulation 9 of the Transfer of Securities Regulations, a person resident
outside India may transfer by way of sale, the securities of an Indian
company to any other person resident outside India only when the transfer is
confirmed by the RBI upon application filed by the transferee. Under
Regulation 9, a NRI or an OCB may transfer by way of sale, the securities of
an Indian company to any other person resident outside India only to another
NRI or OCB.

10.D.1 General

Pursuant to recent changes in Indian policy, and subject to the fulfillment
of certain conditions, Indian companies issuing ADSs are no longer required
to obtain approval of the Ministry of Finance or the Reserve Bank of India
under the Issue of Foreign Currency Convertible Bonds and Equity Shares
(through Depositary Receipt Mechanism) Scheme, 1993 (the "1993 Regulation"),
as modified from time to time, promulgated by the Government of India.
Provided that the issuing Indian company furnishes full particulars of the
ADS offering to the Ministry of Finance and Reserve Bank of India within 30
days following the completion of the offering and furnishes the details of
the status of the ADSs to the RBI on a quarterly basis within 15 days from
the close of each calendar quarter. The 1993 Regulation is distinct from
other policies or facilities, as described below, relating to investments in
Indian companies by foreign investors. The issuance of ADSs pursuant to the
1993 Regulation also affords to holders of the ADSs the benefits of Section
115AC of the Indian Income Tax Act, 1961 for purposes of the application of
Indian tax law.

10.D.2 Fungibility of the ADSs

In March 2001, the Reserve Bank of India amended the Transfer of Securities
Regulations, 2000 whereby a registered broker in India may purchase shares
of an Indian company which has issued ADSs, on behalf of a person resident
outside India, for the purpose of converting the shares so purchased into
ADSs. Such a purchase may be done only with the permission of the Custodian
to the ADS offering of the Indian company. Additionally the shares so
purchased for conversion into ADSs shall not exceed the number of equity
shares which were released by the Custodian pursuant to conversions of ADSs
into equity shares under the Depositary Agreement.

10.D.3 Foreign direct investment

In July 1991, the Government of India raised the limit on foreign equity
holdings in Indian companies from 40% to 51% in certain high priority
industries. The RBI gives automatic approval for such foreign equity
holdings. The Foreign Investment Promotion Board (the "FIPB"), currently
under the Ministry of Industry, was thereafter formed to negotiate with large
foreign companies wishing to make long-term investments in India. Over time,
the Government of India has relaxed the restrictions on foreign investment
considerably. Currently, subject to certain exceptions, foreign direct
investment by individuals of Indian nationality or origin residing outside
India, or NRIs or OCBs, up to 49% in most sectors of industry do not require
the prior approval of the FIPB. Foreign equity participation in excess of 51%
in high priority industries is currently allowed only with the approval of
the FIPB. Proposals involving the public sector and other sensitive areas
require the approval of Cabinet Committee on Economic Affairs. These
facilities are designed for direct foreign investments by non-residents of
India who are not NRIs, OCBs or FIIs ("Foreign Direct Investors"). The
Department of Industrial Policy and Promotion, a part of the Ministry of
Industry, issued detailed guidelines in January 1997 for consideration of
foreign direct investment proposals by the FIPB (the "Guidelines"). Under the
Guidelines, sector specific guidelines for foreign direct investment and the
levels of permitted equity participation have been established. In February
2000, the Department of Industrial Policy and Promotion, issued a
notification that foreign ownership of up to 50%, 51%, 74% or 100%, depending
on the category of industry, would be allowed without prior permission of the
RBI. The issues to be considered by the FIPB, and the FIPB's areas of
priority in granting approvals are also set out in the Guidelines. The basic
objective of the Guidelines is to improve the transparency and objectivity of
the FIPB's consideration of proposals. However, because the Guidelines are
administrative guidelines and have not been codified as either law or
regulations, they are not legally binding with respect to any recommendation
made by the FIPB or with respect to any decision taken by the Government of
India in cases involving foreign direct investment.

In May 1994, the Government of India announced that purchases by foreign
investors of ADSs as evidenced by ADRs and foreign currency convertible bonds
of Indian companies will be treated as direct foreign investment in the
equity issued by Indian companies for such offerings. Therefore, offerings
that involve the issuance of equity that results in Foreign Direct Investors
holding more than the stipulated percentage of direct foreign investments
(which depends on the category of industry) would require approval from the
FIPB. In addition, in connection with offerings of any such securities to
foreign investors, approval of the FIPB is required for Indian companies
whether or not the stipulated percentage limit would be reached, if the
proceeds therefrom are to be used for investment in non-high priority
industries. In August 2000, the Department of Industrial Policy and Promotion
removed all limitations on Foreign Direct Investment in the information
technology sector.

10.D.4 Investment by NRIs and OCBs

A variety of special facilities for making investments in India in shares of
Indian companies is available to individuals of Indian nationality or origin
residing outside India, NRIs and to OCBs. These facilities permit NRIs and
OCBs to make portfolio investments in shares and other securities of Indian
companies on a basis not generally available to other foreign investors.
These facilities are different and distinct from investments by Foreign
Direct Investors described above.

10.D.5 Investment by Foreign Institutional Investors

In September 1992, the Government of India issued guidelines which enable
FIIs, including institutions such as pension funds, investment trusts, asset
management companies, nominee companies and incorporated/institutional
portfolio managers, to invest in all the securities traded on the primary and
secondary markets in India. Under the guidelines, FIIs

are required to obtain an initial registration from the SEBI and a general
permission from the RBI to engage in transactions regulated under FEMA. FIIs
must also comply with the provisions of the SEBI Foreign Institutional
Investors Regulations, 1995. When it receives the initial registration, the
FII also obtains general permission from the RBI to engage in transactions
regulated under FERA. Together, the initial registration and the RBI's
general permission enable the registered FII to buy (subject to the ownership
restrictions discussed below) and sell freely securities issued by Indian
companies, to realize capital gains on investments made through the initial
amount invested in India, to subscribe or renounce rights offerings for
shares, to appoint a domestic custodian for custody of investments held and
to repatriate the capital, capital gains, dividends, income received by way
of interest and any compensation received towards sale or renunciation of
rights offerings of shares.

10.D.6 Ownership restrictions

SEBI and RBI regulations restrict investments in Indian companies by Foreign
Direct Investors. Under current SEBI regulations applicable to the company,
subject to the requisite approvals of the shareholders in a general meeting,
Foreign Institutional Investors in aggregate may hold no more than 49% of the
company's equity shares, excluding the equity shares underlying the ADSs, and
NRIs and OCBs in aggregate may hold no more than 10% of the company's equity
shares, excluding the equity shares underlying the ADSs. Furthermore, SEBI
regulations provide that no single FII may hold more than 10% of the
company's total equity shares and no single NRI or OCB may hold more than 5%
of the company's total equity shares.

There is uncertainty under Indian law about the tax regime applicable to FIIs
which hold and trade ADSs. FIIs are urged to consult with their Indian legal
and tax advisers about the relationship between the FII guidelines and the
ADSs and any equity shares withdrawn upon surrender of ADSs.

More detailed provisions relating to FII investment have been introduced by
the SEBI with the introduction of the SEBI Foreign Institutional Investors
Regulations, 1995. These provisions relate to the registration of FIIs, their
general obligations and responsibilities, and certain investment conditions
and restrictions. One such restriction is that the total investment in equity
and equity-related instruments should not be less than 70% of the aggregate
of all investments of an FII in India. The SEBI has also permitted private
placements of shares by listed companies with FIIs, subject to the prior
approval of the RBI under FERA. Such private placement must be made at the
average of the weekly highs and lows of the closing price over the preceding
six months or the preceding two weeks, whichever is higher.

Under the Securities and Exchange Board of India (Substantial Acquisition of
shares and Takeovers) Regulations, 1997 approved by the SEBI in January 1997
and promulgated by the Government of India in February 1997 (the "Takeover
Code"), which replaced the 1994 Takeover Code (as defined herein), upon the
acquisition of more than 5% of the outstanding shares of a public Indian
company, a purchaser is required to notify the company and all the stock
exchanges on which the shares of the company are listed. Upon the acquisition
of 15% or more of such shares or a change in control of the company, the
purchaser is required to make an open offer to the other shareholders
offering to purchase at least 20% of all the outstanding shares of the
company at a minimum offer price as determined pursuant to the rules of the
Takeover Code. Upon conversion of ADSs into equity shares, an ADS holder will
be subject to the Takeover Code.

Open market purchases of securities of Indian companies in India by Foreign
Direct Investors or investments by NRIs, OCBs and FIIs above the ownership
levels set forth above require Government of India approval on a case-by-case
basis.

10.E Taxation

10.E.1 Indian taxation

10.E.1.1 General

The following summary is based on the provisions of the Income Tax Act, 1961
(the "Indian Tax Act"), including the special tax regime contained in Section
115AC (the "Section 115AC Regime") and the 1993 Regulation. The Indian Tax
Act is amended every year by the Finance Act of the relevant year. Some or
all of the tax consequences of the Section 115 AC Regime may be amended or
changed by future amendments of the Indian Tax Act.

THE SUMMARY SET FORTH BELOW IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS
OF THE INDIVIDUAL TAX CONSEQUENCES TO NON-RESIDENT HOLDERS UNDER INDIAN LAW
FOR THE ACQUISITION, OWNERSHIP AND SALE OF ADSs AND EQUITY SHARES BY NON-
RESIDENT HOLDERS. PERSONAL TAX CONSEQUENCES OF AN INVESTMENT MAY VARY FOR
INVESTORS IN VARIOUS CIRCUMSTANCES AND POTENTIAL INVESTORS SHOULD THEREFORE
CONSULT THEIR OWN TAX ADVISERS ON THE TAX CONSEQUENCES OF SUCH ACQUISITION,
OWNERSHIP AND SALE, INCLUDING SPECIFICALLY THE TAX CONSEQUENCES UNDER THE LAW
OF THE JURISDICTION OF THEIR RESIDENCE AND ANY TAX TREATY BETWEEN INDIA AND
THEIR COUNTRY OF RESIDENCE.

10.E.1.2 Residence

For purposes of the Indian Tax Act, an individual is considered to be a
resident of India during any financial year if he: (i) is in India in that
year for a period or periods amounting in all to 182 days or more; or (ii) is
in India in that year for

60 days or more and, in case of a citizen of India or a person of Indian
origin, who, being outside India, comes on a visit to India, is in India in
that year for more than 182 days effective April 1, 1995 and in each case as
specified in (ii) above, within the four preceding years has been in India
for a period or periods amounting to 365 days or more. A company is resident
in India if it is formed and registered in India or the control and the
management of its affairs is situated wholly in India.

10.E.1.3 Taxation of distributions

Pursuant to the Finance Act, 1997, dividends received by a shareholder from a
domestic company are exempt from tax. Consequently, withholding tax on
dividends paid to shareholders no longer applies. Companies will be required
to pay tax on distributed profits on any amount declared, distributed or paid
by way of dividends, whether interim or otherwise on or after June 01, 1997.
Distributions to non-resident Holders of additional ADSs or equity shares; or
rights to subscribe for equity shares ("Rights") made with respect to ADSs or
equity shares are not subject to Indian income tax.

10.E.1.4 Taxation of capital gains

Any gain realized on the sale of ADSs by a non-resident holder to another non-
resident holder outside India is not subject to Indian capital gains tax.
However, as Rights are not expressly covered by the Indian Income Tax Act,
1961, it is unclear, as to whether capital gain derived from the sale of
Rights by a non-resident holder (not entitled to an exemption under a tax
treaty) to another non-resident holder outside India will be subject to Indian
capital gains tax. If such Rights are deemed by the Indian tax authorities to
be situated within India, the gains realized on the sale of such Rights will
be subject to customary Indian taxation as discussed below.

Since the issuance of the ADSs has been approved by the Government of India
under the Section 115AC Regime, non-resident holders of the ADSs will have the
benefit of tax concessions available under the Section 115AC Regime. However,
the 1993 Regulation provides that if the equity shares are sold on an Indian
Stock Exchange against payment in Indian rupees, they will no longer be
eligible for such concessional tax treatment. The Section 115AC Regime is
unclear as to whether such tax treatment is available to a non-resident who
acquires equity shares outside India from a non-resident holder of equity
shares after receipt of the equity shares upon surrender of the ADSs. If
concessional tax treatment is not available, gains realized on the sale of
such equity shares will be subject to customary Indian taxation as discussed
below.

Subject to any relief provided pursuant to an applicable tax treaty, any gain
realized on the sale of equity shares by a non-resident will be subject to
Indian capital gains tax which is to be deducted at the source by the buyer.
For the purpose of computing capital gains tax, the cost of acquisition of
equity shares received in exchange for ADSs will be determined on the basis of
the prevailing price of the shares on any of the Indian Stock Exchanges on the
date that the Depositary gives notice to the custodian of the delivery of the
equity shares in exchange for the corresponding ADSs. A non-resident holder's
holding period (for purposes of determining the applicable Indian capital
gains tax rate) in respect of equity shares received in exchange for ADSs
commences on the date of the notice of the redemption by the Depositary to the
custodian. The Indo-U.S. Treaty does not provide an exemption from the
imposition of Indian capital gains tax.

Taxable gain realized on equity shares (calculated in the manner set forth in
the prior paragraph) for more than 12 months (long-term gain) is subject to
tax at the rate of 10%. Taxable gain realized on equity shares held for 12
months or less (short-term gain) is subject to tax at variable rates with a
maximum rate of 48%. The actual rate of tax on short-term gain depends on a
number of factors, including the legal status of the non-resident holder and
the type of income chargeable in India.

10.E.1.5 Stamp duty and transfer tax

Upon issuance of the equity shares, the company is required to pay a stamp
duty of 0.1% per share of the issue price of the underlying equity shares. A
transfer of ADSs is not subject to the Indian stamp duty. However, upon the
acquisition of equity shares from the Depositary in exchange for ADSs, the
holder will be liable for Indian stamp duty at the rate of 0.5% of the market
value of the ADSs or equity shares exchanged. A sale of equity shares, other
than in electronic mode, by a registered holder will also be subject to Indian
stamp duty at the rate of 0.5% of the market value of the equity shares on the
trade date, although customarily such tax is borne by the transferee.

10.E.1.6 Gift and Wealth tax

ADSs held by non-resident holders and the underlying equity shares held by the
Depositary as a fiduciary and the transfer of ADSs between non-resident
holders and the Depositary will be exempt from Indian gift tax and Indian
wealth tax. Although Indian gift tax was abolished effective October 1, 1998,
a gift tax may apply to transfers by way of gift of equity shares or ADSs in
the future. Investors are advised to consult their own tax advisers in this
context.

10.E.1.7 Estate duty

Under current Indian law, there is no estate duty applicable to a non-resident
holder of ADSs or equity shares.

10.E.2 United States federal taxation

The following is a summary of the material U.S. federal income and estate tax
matters that may be relevant with respect to the acquisition, ownership and
disposition of equity shares or ADSs. This summary addresses only the U.S.
federal income and estate tax considerations of holders that are citizens or
residents of the United States, partnerships or corporations created in or
under the laws of the United States or any political subdivision thereof or
therein, estates, the income of which is subject to U.S. federal income
taxation regardless of its source and trusts ("U.S. Holders") or are not U.S.
Holders ("Non-U.S. Holders") and that will hold equity shares or ADSs as
capital assets. This summary does not address tax considerations applicable to
holders that may be subject to special tax rules, such as banks, insurance
companies, dealers in securities or currencies, tax-exempt entities, persons
that will hold equity shares or ADSs as a

position in a "straddle" or as part of a "hedging" or "conversion" transaction
for tax purposes, persons that have a "functional currency" other than the
U.S. dollar or holders of 10% or more (by voting power or value) of the stock
of the company. This summary is based on the tax laws of the United States as
in effect and on United States Treasury Regulations in effect (or, in certain
cases, proposed), as well as judicial and administrative interpretations
thereof available on or before such date and is based in part on
representations of the Depositary and the assumption that each obligation in
the Depositary Agreement and any related agreement will be performed in
accordance with its terms. All of the foregoing are subject to change, which
change could apply retroactively and could affect the tax consequences
described below.

EACH INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE U.S.
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF ACQUIRING, OWNING AND
DISPOSING OF EQUITY SHARES OR ADSs.

10.E.2.1 Ownership of ADSs

For U.S. federal income tax purposes, holders of ADSs will be treated as the
owners of equity shares represented by such ADSs.

10.E.2.2 Dividends

Distributions of cash or property (other than equity shares, if any,
distributed pro rata to all shareholders of the company, including holders of
ADSs) with respect to equity shares will be includible in income by a U.S.
Holder as foreign source dividend income at the time of receipt, which in the
case of a U.S. Holder of ADSs generally will be the date of receipt by the
Depositary, to the extent such distributions are made from the current or
accumulated earnings and profits of the company. Such dividends will not be
eligible for the dividends received deduction generally allowed to corporate
U.S. Holders. To the extent, if any, that the amount of any distribution by
the company exceeds the company's current and accumulated earnings and profits
as determined under U.S. federal income tax principles, it will be treated
first as a tax-free return of the U.S. Holder's tax basis in the equity shares
or ADSs and thereafter as capital gain.

A U.S. Holder will not be eligible for a foreign tax credit against its U.S.
federal income tax liability for Indian taxes paid by the company and deemed
under Indian law to have been paid by the shareholders of the company, unless
it is a U.S. company holding at least 10% of the Indian company paying the
dividends.

U.S. Holders should be aware that dividends paid by the company generally will
constitute "passive income" for purposes of the foreign tax credit. The
Internal Revenue Code applies various limitations on the amount of foreign tax
credit that may be available to a U.S. taxpayer. U.S. Holders should consult
their own tax advisors with respect to the potential consequences of those
limitations.

A Non-U.S. Holder of equity shares or ADSs generally will not be subject to
U.S. federal income tax or withholding tax on dividends received on equity
shares or ADSs unless such income is effectively connected with the conduct by
such Non-U.S. Holder of a trade or business in the United States.

10.E.2.3 Sale or exchange of equity shares or ADSs

A U.S. Holder generally will recognize gain or loss on the sale or exchange of
equity shares or ADSs equal to the difference between the amount realized on
such sale or exchange and the U.S. Holder's tax basis in the equity shares or
ADSs, as the case may be. Such gain or loss will be capital gain or loss, and
will be long-term capital gain or loss if the equity shares or ADSs, as the
case may be, were held for more than one year. Gain, if any, recognized by a
U.S. Holder generally will be treated as U.S. source passive income for U.S.
foreign tax credit purposes.

A Non-U.S. Holder of equity shares or ADSs generally will not be subject to
U.S. federal income or withholding tax on any gain realized on the sale or
exchange of such equity shares or ADSs unless: (i) such gain is effectively
connected with the conduct by such Non-U.S. Holder of a trade or business in
the U.S.; or (ii) in the case of any gain realized by an individual Non-U.S.
Holder, such holder is present in the United States for 183 days or more in
the taxable year of such sale and certain other conditions are met.

If dividends are paid in Indian rupees, the amount of the dividend
distribution includible in the income of a U.S. Holder will be in the U.S.
dollar value of the payments made in Indian rupees, determined at a spot
exchange rate between Indian rupees and U.S. dollars applicable to the date
such dividend is includible in the income of the U.S. Holder, regardless of
whether the payment is in fact converted into U.S. dollars. Generally, gain or
loss (if any) resulting from currency exchange fluctuations during the period
from the date the dividend is paid to the date such payment is converted into
U.S. dollars will be treated as ordinary income or loss.

10.E.2.4 Estate taxes

An individual shareholder who is a citizen or resident of the United States
for U.S. federal estate tax purposes will have the value of the equity shares
or ADSs owned by such holder included in his or her gross estate for U.S.
federal estate tax purposes. An individual holder who actually pays Indian
estate tax with respect to the equity shares will, however, be entitled to
credit the amount of such tax against his or her U.S. federal estate tax
liability, subject to certain conditions and limitations.

10.E.2.5 Backup withholding tax and information reporting requirements

Under current U.S. Treasury Regulations, dividends paid on equity shares, if
any, generally will not be subject to information reporting and generally will
not be subject to U.S. backup withholding tax. Information reporting will
apply to payments of dividends on, and to proceeds from the sale or redemption
of, equity shares or ADSs by a paying agent (including a broker) within the
United States to a U.S. Holder (other than an "exempt recipient", including a
corporation, a payee that is a Non-U.S. Holder that provides an appropriate
certification and certain other persons). In addition, a paying agent within
the United States will be required to withhold 31% of any payments of the
proceeds from the sale or redemption of equity shares or ADSs within the
United States to a holder (other than an "exempt recipient") if such holder
fails to furnish its correct taxpayer identification number or otherwise fails
to comply with such backup withholding requirements.

10.E.2.6 Passive foreign investment company

A non-U.S. corporation will be classified as a passive foreign investment
company (a "PFIC") for U.S. Federal income tax purposes if it satisfies
either of the following two tests: (i) 75% or more of its gross income for
the taxable year is passive income; or (ii) on average for the taxable year
(by value or, if the company so elects, by adjusted basis) 50% or more of its
assets produce or are held for the production of passive income.

The company does not believe that it satisfies either of the tests for PFIC
status. If the company were to be a PFIC for any taxable year, U.S. Holders
would be required to either: (i) pay an interest charge together with tax
calculated at maximum ordinary income rates on certain "excess distributions"
(defined to include gain on a sale or other disposition of equity shares); or
(ii) if a Qualified Electing Fund election is made, to include in their
taxable income their pro rata share of certain undistributed amounts of the
company's income.

10.G Statement by experts

The U.S. GAAP financial statements of Infosys Technologies Limited as of
March 31, 2001 and 2000, and for each of the years in the three-year period
ended March 31, 2001, have been included herein in reliance upon the report
of KPMG, India, independent accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in auditing and accounting.

10.H Documents on display

This report and other information filed or to be filed by the company can be
inspected and copied at the public reference facilities maintained by the SEC
at:

. Judiciary Plaza
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20529

. Seven World Trade Center
13/th/ Floor,
New York, New York 10048; and

. Northwestern Atrium Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60661-2511

Copies of these materials can also be obtained from the Public Reference
Section of the SEC, 450/th/ Street, N.W., Washington, DC 20549, at
prescribed rates.

The SEC maintains a website at www.sec.gov that contains reports, proxy and
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information statements, and other information regarding registrants that make
electronic filings with the SEC using its EDGAR system. As a foreign private
issuer, we are not required to use the EDGAR system, but currently intend to
do so in order to make our reports available over the Internet.

Additionally, documents referred to in this Form 20-F may be inspected at the
corporate offices of the company which are located at Electronics City, Hosur
Road, Bangalore - 561 229.

10.I Subsidiary information

Not applicable.

Item 11. Quantitative and Qualitative Disclosure About Market Risk

This information is set forth under the caption "Management's discussion and
analysis of financial condition and results of operations" on pages 99
through 110 of the Infosys Annual Report for fiscal 2001 and is incorporated
herein by reference.

Item 12. Description of Securities Other than Equity Securities

Not applicable.

Part II

Item 13. Defaults, Dividend Arrearages and Delinquencies

None.

Item 14. Material Modifications to the Rights of Security Holders and Use of

Proceeds

None.

Item 17

Not Applicable.

Part III

Item 18. Financial Statements

The following financial statements of the company included in Item 18 of this
Report on Form 20-F are hereby incorporated by reference from the Infosys
Annual Report for fiscal 2001, filed as Exhibit 13.1 to this Report on Form
20-F.

. Independent auditors' report.
. Balance Sheets as of March 31, 2001 and 2000.
. Statements of Income for the years ended March 31, 2001, 2000 and 1999 .
. Statements of Shareholders' Equity for the years ended March 31, 2001, 2000
and 1999
. Statements of Cash Flows for the years ended March 31, 2001, 2000 and
1999.
. Notes to financial statements.

Item 19. Exhibits

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Exhibit number Description of document
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**3.1 Articles of Association of the Registrant, as amended
**3.2 Memorandum of Association of the Registrant, as amended
*3.3 Certificate of Incorporation of the Registrant, as currently in effect
*4.1 Form of Deposit Agreement among the Registrant, Bankers Trust Receipts issued thereunder
(including as an exhibit, the form of American Depositary Receipt)
*4.2 Registrant's Specimen Certificate for Equity Shares
*10.1 Registrant's 1998 Stock Option Plan
*10.2 Registrant's Employee Stock Offer Plan
*10.3 Employees Welfare Trust Deed of Registrant Pursuant to Employee Stock Offer Plan
*10.4 Form of Indemnification Agreement
***10.5 Registrant's 1999 Stock Option Plan
13.1 Infosys Annual Report for fiscal 2001
23.1 Consent of KPMG, India
99.1 Proxy Information Statement to holders of American Depositary Shares
99.2 Proxy Information Statement to holders of Equity Shares
99.3 Proxy Form to holders of Equity Shares
99.4 Proxy Form to holders of American Depositary Shares
99.5 Audit committee charter
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* Incorporated by reference to exhibits filed with the Registrant's
Registration Statement on Form F-1 (File No. 333-72195) in the form
declared effective on March 10, 1999.
** Incorporated by reference to exhibits filed with the Registrant's
Quarterly Report on Form 6-K filed on January 21, 2000
*** Incorporated by reference to exhibits filed with the Registrant's
Quarterly Report on Form 6-K filed on August 4, 1999.

Signatures

The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this Annual Report on its behalf.

for Infosys Technologies Limited

/s/ Nandan M. Nilekani /s/ N. R. Narayana Murthy

Nandan M. Nilekani N. R. Narayana Murthy
Bangalore Managing Director, President Chairman
May 4, 2001 and Chief Operating Officer and Chief Executive Officer