2002 COGNIZANT ANNUAL REPORT Cognizant’s vertical expertise, domain and client knowledge, and top position as an IT and MBA recruiter bolster its ability to support and build business applications that provide meaningful change, supporting our clients’ top- and bottom-line growth objectives. Unlike the traditional outsourcing model, our 4th Generation model is flexible and relationship driven, rather than driven by a contract or discrete project. This means that Cognizant acts as a strategic partner, extending and leveraging the strength of the client organization. Unlike most of its offshore competitors, Cognizant makes large investments in client partners, executive management, proj- ect heads and practice leaders who are located close to clients in the U.S. and Europe and who are empowered to make key decisions, greatly enhancing our responsiveness and the speed of decision making. Moreover, clients commend Cognizant’s unique, people-centric, non-hierarchi- cal, global business culture and “can-do” spirit. The extensive U.S. and European experience of our management in India and our proven soft-skills programs bridge the cultural divide between our clients and our offshore team members to achieve seamless integration, maximum efficiency and outstanding results.  The broad market acceptance of offshore in key industries and the success of our 4th Generation services model – which we believe has only just begun to tap its potential – both contributed significantly to Cognizant’s growth in 2002. We signed 16 new strategic clients in 2002. Strategic clients are those with the potential to achieve an annual run rate of $5 million to $30 million or more. In addition, we expanded our relationship with many of our established clients. Cognizant’s Financial Advantage 1st Generation ST AFFING •Recruit offshore, staff on client’s site •Little cost or value impact •Business results focused •Client partnership oriented •Help client perform while transforming 4t Generation C OGNIZANT’S ONSITE/OFFSHORE •No local client interface •Limited to well-defined projects •Communication and quality issues 2nd Generation OFFSHORE C ODE F A CTORY •Integrated onsite/offshore teams •Integrated processes, networks and tools •High-quality for a wide range of projects 3r Generation ONSITE/OFFSHORE The Four Generations of Offshore Outsourcing 2