Questions & Answers Mergers and acquisition activity in the industries that you serve acceler- ated towards the end of 2004, with strong indications that 2005 will see even more of this activity. Will this trend help Cognizant’s business? Offshore outsourcing has now been around at least a decade. Is there still rapid growth potential? Cognizant has seen a surge in new busi- ness as a result of this trend. Our newly launched Business Technology Consulting practice provides customers with high-end IT consulting solutions, which include change management and IT solutions strategy, or “technology road-mapping.” A significant portion of the companies that approach us for this set of services have mergers in their plans. They retain us to determine the impact of M&A on their IT plans. We help them to answer key ques- tions – such as whether the two companies combined have compatible technologies, and what strategy should be used for opti- mizing their combination on completion of the merger. A greater portion of companies’ IT budgets is now available to be spent with Cognizant as clients seek to do more off- shore. According to industry researcher IDC and NASSCOM, only $13 billion of the $600 billion in IT services spending has been moved to offshore providers. We anticipate continued robust growth in our traditional areas of strength – application outsourcing and application development, and have begun to experience rapid growth in new areas. Over the course of 2004, as in any year, our management received many insightful questions from customers and investors. (left to right) Gordon Coburn, Chief Financial Officer Francisco D’Souza, Chief Operating Officer Chandra Sekaran, Executive VP & Managing Director 12 COGNIZANT ANNUAL REPORT 2004