Pentasoft Technologies Limited First Quarter Results for the Year 2002-03

Chennai , India, July 24, 2002

Financial Overview:

   Pentasoft Technologies Limited recorded a turnover of Rs.119.19 Crores for the First Quarter ended 30th June 2001 as against Rs.155.45 Crores for the corresponding period last year.

   The operating profit of the Company for the current quarter is Rs.49.30 Crores as against Rs.61.90 Crores for the corresponding period last year. Other income during the First Quarter amounted to Rs. 0.82 Crores. Net profit during the current quarter amounted to Rs 12.02 Crores, as against Rs.32.69 Crores achieved during the corresponding period last year.

   During this quarter, overseas accounted for 93%, domestic sales 7% - out of these subsidiaries accounted for 24%. In the domestic segment, Training contributed 7%. In the export segment, Business Software Services contributed 74%, Engineering 18% and International Learning Services 8%.

   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 6 new customers to the existing customer base.

BUSINESS SOFTWARE SEGMENT:

1.The Enterprise Division:

ERP and Other Projects:

   A project for the Financial Women’s Association, a powerful body of lady CEOs, CFOs and CIOs in the US , is nearing completion. This internet based project addressing the operations of this august association, has been widely appreciated by the members, and will lead to opportunities in their respective companies for Pentasoft.

Chrysler: Part of the Dialmer Chrysler Group, Chrysler the US Automotive giant is building a futuristic Stock control system. This system deals with second and third tier suppliers of automotive parts. The software being built by Pentasoft professionals, will assist Chrysler’s purchasing team to have better vendor control with focus on delivery schedules and parts utilisation patterns during seasonal swings.

ComForce: COMFORCE is a New York based human resources solution provider focused on four niche sectors: Information Technology, Telecommunications, Financial Services and Supplemental Staffing Services. Pentasoft is working with ComForce in the development of an e-enabled HR outsourcing application.

State of Nebraska : Pentasoft is building for the State of Nebraska an E-Procurement solution, aimed at cutting down the cost of procurement of the State Government departments. This application will also assist the State of Nebraska in evaluating vendor performance on counts such as delivery schedules, rejection rates, service levels, response times, etc.

Anthem Technologies: Anthem Technologies is a New York based provider of solutions for E-Business Solution CRM Implementation ERP Implementation Datawarehousing Wireless Application Development High-End Database Implementation . Pentasoft is working with Anthem Technologies in the development of websites and eCommerce portals for clients of Anthem Technologies.

Bank of Sudan has entrusted the development of its Enterprise Management System to Pentasoft. The project involves Financial, Administrative and Human Resources areas, and is being developed using multi-tier architecture. It is bilingual (English and Arabic), and supports multi-currency, multi-location implementations.

   A project is being implemented for Sudan National Library. This is a Digital Library application for Content Administration of eBooks, eJournals and eNews in English and Arabic, providing User Role Management, Registration, Book View and Search/Query over the net.

   The Ministry of Petroleum, Sudan, has awarded the project for preparation of its IT Road Map covering the next 5 years, to Pentasoft. With the high level of activity expected following successful prospecting for Oil and Gas, the Ministry of Petroleum, Sudan , is geared to substantially increase its IT utilization to ensure productivity and efficiency. Pentasoft has been retained as the consultant for this IT introduction and utilization.

   The Abu Dhabi Company for Onshore Oil Operations (ADCO) has engaged the services of Pentasoft in building applications for their ERP requirements. This is customized software for their onshore oil exploration activities, being developed specifically for their requirements, since none of the standard ERP products meet their requirements.

2.Insurance Sector:

   ICAT USA , has been provided services for its Insurance Policy Printing solution. This has been an ongoing association over the last one-year.

   Hong Leong Assurance Berhad, Malaysia (HLA), a licensed composite insurance company listed in KL Stock Exchange, has awarded Pentasoft the order for supply and implementation of PENTALIFE, Pentasoft’s Life Insurance Solution. Valued at over USD 2.3M, this order is currently under implementation.

   PentaLife is built using Object Oriented Technology and is extensively parameterizable to meet requirements of large Insurance companies such as HLA. It has advanced features such as Plan Wizard, Riders Management, N-Tier Agency Management, Multiple Business Channels Management, Comprehensive Quotations Management, Fraudulent Claims Management, Blacklist Management, Roll-Back and Form Level Security, Automated Reminder and Lapse Notice Generation, etc.

   HLA is covering its entire network of offices and agencies using the PentaLife solution.

   Pentasoft has implemented Takaful Insurance at Bank Al-Jazira, Saudi Arabia . Takaful Insurance strictly follows Islamic principles, providing for a perfect mutual understanding between the Participant (Insurance Policy Holder) and the Takaful Company (Insurer). It provides for investment options strictly under the Islamic principles - such as Musyarakah (partnership of Capital and Effort), Ijarah (Rent for Use) and Bai Bithaman Ajil (Deferred Price Sale). More Islamic Insurance companies in Saudi, Bahrain , Kuwait and Qatar are expected to shift to Takaful Insurance following the successful installation at Bank Al-Jazira.

3.The Engineering Division:

Motion Picture Inc: Pentasoft is providing assistance in 2D - 3D Graphics and Multimedia content generation Los Angeles Motion Pictures Inc. Motion Pictures Inc. is a California entertainment corporation, founded in April, 1997 with its corporate headquarters the municipality of Hollywood , California . The scope of this association is to produce high quality material for motion pictures for theatrical, video, and television release, both within the US and abroad.

   Pentasoft has been working with AutoDesk, Switzerland on code testing and AUTOMAP localization. Now AutoDesk Inc., USA has signed a contract with Pentasoft to extend services to cover AutoDesk products in other languages such as French, Italian, Belgian, Chinese, Japanese and Korean. Also Pentasoft will now cover other products of AutoDesk such as MapSeries and Architecture Desktop in its testing and localization services to AutoDesk.

4.Training, eLearning:

IT Tracks: Pentasoft is working with IT Tracks in proving training on Mobile computing and M Commerce. Mobile Internet is a growing opportunity area, and since most internet usage in the coming decade is expected to be from mobile devices such as cell phones, PDAs, appliances and embedded ASIC based devices, this will provide Pentasoft and IT Tracks the expertise to deal with applications development for mobile commerce applications.

JAFMedia , Bahrain , a member of the Al-Matrook Group, has signed the agreement with Pentasoft to run training programmes in Manama under the project of the Ministry of Labour. Courses are commencing from mid July. The agreement with JAFMedia also covers Pentasoft’s services for development of multimedia software for the group and other companies in Bahrain .

   An agreement has been signed between the Chairman, Pentasoft and the Vice Rector, Plekhanov Russian Academy of Economics, in June 2002, to cooperate on Risk Management, Financial Service Solutions and eLearning in Russia and CIS countries.

   The Government of Mauritius has invited Pentasoft to establish an IT Park in 10 acres of land in Rose Belle, Port Louis , covering IT Education & IT Projects for the Franco-African region. Mauritius Government has approved the Detailed Project Report, and the construction activity is awaiting the finalization of the funding arrangements. Over 1500 students are to be trained over the first three-year period, and employment opportunities are to be generated for over 600 people in software development and services areas.

   Happy World, Mauritius , has entrusted its training requirements to Pentasoft. Happy World is a large retail chain in Mauritius , and this training is to equip all its staff in the effective utilization of IT in areas like front office management, Point of Sale Automation, Store Inventory Management, etc.

CEO speaks:
Mr.D.Kannan, on the occasion of the results stated..

   "The AGM has sought and obtained the approval of the shareholders towards hiving-off of the training division under the name of TEKIS. This entity will focus on international corporate education and high-end technical skills.

   Medium and high-end projects with reasonably good margins and credit period is putting the company back on the trajectory path enhanced by the re-alignment of the human resources. With emphasized focus on projects based on broadband wireless applications and security systems to reach to the common man we are confident that the company will reach deep into Europe, Africa and the Middle East laying a strong foot on education, enterprise and entertainment."