Results for the Quarter ended December 2002 under consolidated Indian GAPP

    PENTASOFT SURGES FORWARD WITH ITS NEW STRATEGIES

    Chennai, January 30,2003 – Pentasoft Technologies Limited , today announced its unaudited results approved by the Board of Directors for the Quarter ended December 2002.

HIGHLIGHTS:-

STRATEGIES IN PLACE:

1. Acceptance of orders after careful evaluation and ascertaining bottomline of minimum 20%

2. Revamping divisions within organization.

3. Identification of business which will provide regular income stream to take care of operational expenses on monthly basis.

4. Tie-up with groups which have similar ideologies for future growth.

   With the above, our Company has been successful in bettering the results of third quarter (Oct-Dec’2002) to that of second quarter (July-Sep’02)

   Under the changed scenario, the comparison of last year figures may not be relevant and may be mis-leading and hence avoided.

• Profit after tax of the parent company during the third quarter is higher at Rs 5.42 crores compared to Rs 1.04 Crores for the previous quarter.
• Despite increase in Share Capital by Rs 9.86 Crores in view of Bonus Shares @ 2:10, the Earning Per Share was higher compared to previous quarter due to improved bottomline.
• Operating Margin is at 39% compared to 41% in the second quarter of the year due to absorption of more cost towards one time settlement of employees.
• Consolidated turn over of Rs.68.68 Crores against second quarter Rs.85.45 Crores is due to the fact of leaving out orders which gives less than 20% net margin.
• 12 new customers added in the Global IT services during the period.
• Entry into BPO sector in the Finance and Maintenance areas and also planning for acquisition of companies in these areas in the short term.

   Mr.D.Kannan, Director & CEO on the occasion of the results stated .......

   As can be seen from the third quarter results, the Company is progressing well on quarterly basis by adopting new strategies and implementing cost control measure. We have been successful in the third quarter in furthering our relationship with value added partners in the areas of Software Services, Education & Training areas. Substantial progress has also been made in the setting up of BPO Centres and Intelligent Call Centres for overseas clients.

   As leader in the niche areas of providing Insurance Solutions in Life, General, Islamic and Other Insurance segments to various international clients, Pentasoft will ensure ways and means to improve its services and enter into new territories in the coming quarters. Our Company is also making all out efforts to become a debt free by March 31st, 2003. Future business growth is planned by setting up of development centres in strategic countries across the globe to attract business opportunities from the near by regions. To sight an example, the Government of Mauritius will be allotting 10 acres of land in Mauritius before March 2003 and this park will be constructed and will be used for software development and training related activities. Partnership arrangement with Universities from Australia, India, UK will be made to offer degree level courses in IT. This IT park will cater to the business requirements of Africa, Middle East & Europe segments.

   With the above said activities, we are sure Pentasoft will once again come out with outstanding success using its pioneering efforts underway in select overseas territories.

Financial Overview

   Pentasoft Technologies Limited recorded a turnover of Rs.68.67 Crores for the third Quarter ended 31st December 2002 as against Rs.85.45 Crores for the quarter ending 30th September 2002. The operating profit of the Company for the current quarter is Rs.23.02 Crores as against Rs35.37 Crores for the quarter ending 30th September 2002. Other income during the third Quarter amounted to Rs.1.95 Crores. Net profit during the current quarter amounted to Rs.7.14 Crores, as against Rs.6.97 Crores achieved during the quarter ending 30th September 2002.

   During this quarter, overseas accounted for 95 %, domestic sales 5 % out of these subsidiaries accounted for 37 %. In the domestic segment, Training contributed 5 %. In the export segment, Business Software Services contributed 74 %, Engineering 15% and International Learning Services 11%.

   Pentasoft continues to expand its client base across the globe by having both repeat customers as well as new customers. This quarter saw an addition of 3 new customers to the existing customer base.

Our Global IT Business:

Banking & Insurance:

Malaysia - With several successful implementation in Malaysia and Thailand, Pentasoft Malaysia is marching towards entering new territories in South East Asia.

   Recently Pentasoft has concluded an Order from a leading Insurance Company in Indonesia.

   This is addition to the on-going project for a Insurance major in Malaysia, which is under execution.

   Pentasoft also has plans for offering the solution on a long term Lease basis for SME Insurance companies in the region.

Middle East- In continuation with MOU singed with Raqmyiat , Pentasoft is in the Final stages of concluding Trade finance and Banking solutions implementation for 2 major banks in Dubai.

   After the successful implementation of our PentaBank solution for EBS Sudan, EBS has requested Pentasoft to provide AMC support to all their installation.

   Pentasoft continues to explore opportunities in the Persian & Arab markets for its Banking suite of products.

   In the Domestic market Pentasoft has successfully bagged repeat orders from West Bengal State Co-operative Bank (WBSCB) and Vayanad Co-operative bank for Total Banking solution. In addition WBSCB has confirmed Treasury solution for Pentasoft.

ERP and Internet Projects

   Pentasoft USA bagged a major order from AYSO, California for providing total enterprise solution.

   Delegates from Sudan Petroleum Corporation had visited Pentasoft for the finalisation of their priority areas for software implementation. The scope of work also covers CAD/CAM and GIS.

   The Company has won a Major repeat order from GPIC, Bahrain for Providing Mainframe Related solution.

    Sarcheshmeh Copper Company , Iran has contracted Pentasoft to provide Business Consulting for Implementing an ERP solution. Pentasoft is also planning to Implement Its ERP product at couple of Pilot sites to show case it to the local market.

   Pentasoft along with Business Partner in Korea (SKCC) has been short-listed for stage II Bidding to provide e-Governance solution to the Ministry of Finance, Mongolia.

Education & Training Business

   Last quarter had seen consolidation completed in all the areas of operations of E&T. The growth in the operational revenue from the previous quarters is seen at around 65% and almost 80% from the same quarter last year.

   In the Domestic front, IBM and Multimedia technologies have seen growth in terms of students joining for those courses.

   Opportunities coming from the Ministry of Education and Ministry of Labour in Bahrain for Schools and Colleges. Also E-learning for the all the University students.

   IVTB,Mauritius has chosen PSTL as the partner to run the IT Schools in Mauritius for which MOU will be signed in Jan'03.

   In the pipeline E&T has the opportunities in South Korea, Indonesia and Srilanka which should get materialised by end of March'03

General

   The Company is focused to foray into Call Centres, BPO and strategic alliance with business partners on projects, both onsite and offshore on an equitable profit sharing basis. The new ventures will bring in more revenues apart from the existing projects whose bottomline is expected to be good. In addition, the company has restructured the employees into permanent and contract on a project to project basis. This approach will bring-down the operating costs and will also increase the bottom line.