<PAGE>

________________________________________________________________________________
                                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.......
<PAGE>

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.

                                       2
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                                   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:

<TABLE>
<CAPTION>
  -----------------------------------------------------------------------------------
  Fiscal year ended March 31,        Period end/1/   Average/1,2/    High       Low
  -----------------------------------------------------------------------------------
  <S>                                <C>             <C>             <C>        <C>
  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
  -----------------------------------------------------------------------------------
</TABLE>

  /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:

<TABLE>
<CAPTION>
    -----------------------------------------------------------
    Month                       High                      Low
    -----------------------------------------------------------
    <S>                         <C>                   <C>
    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
    -----------------------------------------------------------
</TABLE>

3.B  Capitalization and indebtedness

  Not applicable.

3.C  Reasons for the offer and use of proceeds

  Not applicable.

                                       3
<PAGE>

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,

                                       4
<PAGE>

  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

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<PAGE>

  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

                                       6
<PAGE>

  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.

                                       7
<PAGE>

  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

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<PAGE>

  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

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<PAGE>

  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.

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<PAGE>

  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:

<TABLE>
  ----------------------------------------------------------------------
  Year ended March 31,                  2001          2000          1999
  ----------------------------------------------------------------------
  <S>                           <C>           <C>           <C>
  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
  ======================================================================
</TABLE>

  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

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<PAGE>

  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

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<PAGE>

  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

                                       13
<PAGE>

  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:

                                       14
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
Location                                                  Approximate    Ownership      Type of facility
                                                               sq.ft.
-------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>           <C>            <C>
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
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
/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.

                                       15
<PAGE>

 /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

  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
  hereby incorporated herein by reference.

  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

  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.

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.

                                       16
<PAGE>

5.D  Trend information

  5.D.1  Management's Discussion and Analysis

  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.

  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:

<TABLE>
<CAPTION>
  ----------------------------------------------------------------------------------------------------------------------------------

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

  <S>                                         <C>   <C>
  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
  ----------------------------------------------------------------------------------------------------------------------------------

</TABLE>
  /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

                                       17
<PAGE>

  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

                                       18
<PAGE>

  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.

                                       19
<PAGE>

  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

                                       20
<PAGE>

  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.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                            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)
---------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>       <C>      <C>      <C>        <C>     <C>       <C>        <C>              <C>
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       -
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Employed for part of the year

6.C.1  Board practices
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
Name                         Expiration of current     Term of office
                             term of office
---------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                       <C>              <C>                           <C>
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
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       21
<PAGE>

  /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.

                                       22
<PAGE>

  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.

                                       23
<PAGE>

  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.

<TABLE>
<CAPTION>
  -----------------------------------------------------------------------------------------------------
  Class of securities                    Total securities     Exercise price/1/        Expiration dates
  -----------------------------------------------------------------------------------------------------
  <S>                                    <C>                  <C>                     <C>
  Equity shares                                   153,720              $107.07        Nov 2003-Feb 2010
  American Depositary Shares                      320,260              $ 36.26        Mar 2003-Feb 2010
  -----------------------------------------------------------------------------------------------------
</TABLE>
  /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.

<TABLE>
<CAPTION>
  ------------------------------------------------------------------------------------------------------
  Name                                         Shares   % of shares      Shares  Exercise  Expiration
                                         beneficially  beneficially  underlying     price
                                                owned         owned     options
                                                                        granted
  ------------------------------------------------------------------------------------------------------
  <S>                                    <C>           <C>           <C>         <C>       <C>
  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/                             -             -           -         -           -
  ------------------------------------------------------------------------------------------------------
</TABLE>
  /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.

                                       24
<PAGE>

  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

                                       25
<PAGE>

  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.

<TABLE>
<CAPTION>
  ------------------------------------------------------------------------------------------------------------------------------
  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
  ------------------------------------------------------------------------------------------------------------------------------
  <S>                                       <C>              <C>            <C>     <C>          <C>       <C>          <C>
  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
  ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
  * 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.

                                       26
<PAGE>

  /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.

                                       27
<PAGE>

  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.

                                       28
<PAGE>

  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.

<TABLE>
<CAPTION>
  ------------------------------------------------------------------------
               Year ended March 31,      Dividend paid per equity share/1/
  ------------------------------------------------------------------------
                      Indian rupee                                      $
  ------------------------------------------------------------------------
  <S>          <C>                       <C>
  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
  ------------------------------------------------------------------------
</TABLE>
  /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.

                                       29
<PAGE>

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
<TABLE>
<CAPTION>
  ---------------------------------------------------------------------------------------------
                      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
  ---------------------------------------------------------------------------------------------
  <S>           <C>       <C>       <C>       <C>      <C>       <C>        <C>        <C>
  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           -         -
  ---------------------------------------------------------------------------------------------
</TABLE>
  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
<TABLE>
<CAPTION>
  ----------------------------------------------------------------------------------------------------------------------
                                                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
  ----------------------------------------------------------------------------------------------------------------------
  <S>                                     <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
  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
  ----------------------------------------------------------------------------------------------------------------------
</TABLE>
  /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.
             -----------------

                                       30
<PAGE>

Monthly high-low price history for previous six months
<TABLE>
<CAPTION>
   ----------------------------------------------------------------------------------------------------------------
                                     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
   ----------------------------------------------------------------------------------------------------------------
   <S>                        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
   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
   ----------------------------------------------------------------------------------------------------------------
</TABLE>
   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.

                                       31
<PAGE>

   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.

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   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.

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<PAGE>

  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.

  Register of shareholders; record dates; transfer of shares

  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.

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  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

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<PAGE>

   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.

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<PAGE>

   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.

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   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

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<PAGE>

   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

                                       39
<PAGE>

   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.

                                       40
<PAGE>

  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

                                       41
<PAGE>

  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.

                                       42
<PAGE>

  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.

                                       43
<PAGE>

   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
                                  -----------
   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.

                                       44
<PAGE>

                                    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
<TABLE>
<CAPTION>
  -----------------------------------------------------------------------------------------------------------
  Exhibit number   Description of document
  -----------------------------------------------------------------------------------------------------------
  <S>              <C>
        **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
  -----------------------------------------------------------------------------------------------------------
</TABLE>
  *    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

                                       45