Infosys Technologies, in an disclosure to the Securities and Exchange Commission, the United States stock market regulator, has maintained that the current economic downturn, pricing pressure and rising wages in India have negatively impacted its revenues and operating results. 
 
Last year too, the company had made a similar statement in its SEC filing. 
 
The company has said that some of its clients have canceled, reduced or deferred expenditures for IT services. 
 
"Pricing pressures from our clients, wage pressures in India and an increase in our sales and marketing expenditures have also negatively impacted our operating results. For example, clients often expect that as we do more business with them, they will receive volume discounts. Additionally, clients may ask for fixed-price arrangements or reduced rates," Infosys has said. 
 
Infosys expects its growth to place significant demands on its management and other resources. 
 
Stating that this would require development and improvement of its operational, financial and other internal controls, both in India and elsewhere, the company adds, "Our growth strategy also relies on the expansion of our operations to other parts of the world, including Europe, Australia and other parts of Asia." 
 
Infosys has substantially increased its research and development expenses for the year ended March 31, 2004 to $ 9.4 million, when compared to $ 2.9 million in the previous fiscal. 
 
In its filing to the US SEC, the company has said that it has established concept centres for several advanced technologies and have a performance-testing center to develop solutions for a number of our development projects. 
 
The company adds that its research and development efforts focus on developing and refining our methodologies, tools and techniques, implementing metrics, improving estimation processes and adopting new technologies. 
 
Infosys has engaged several groups in its research and development activities. These include education and research group, software engineering and technology labs and domain competency group.