BFL Software Turns Profitable Ahead of Target - MphasiS-BFL Consolidated Revenues up 80 Per Cent

Bangalore, July 14, 2000: The Board of Directors of MphasiS-BFL today announced the return of BFL Software to profitability one quarter ahead of target after showing two consecutive quarters of losses. The synergies obtained from the MphasiS-BFL merger have been instrumental in the turnaround and have additionally resulted in an increase in the BFL Software manpower utilization rate, which is up 3 percentile points.

The Board also announced an 80 per cent increase in the proforma consolidated unaudited US GAAP revenues to USD 14.41 million for the first quarter of FY2000-2001, over the previous corresponding period. This growth has seen a significant contribution from MphasiS Corp. of the US, which has reported healthy top line growth with Q1 revenues up to USD 5.3 Million as against a figure of USD 1.1 Million in the corresponding quarter last year.

Announcing the first quarter results, Jerry Rao, Chairman, MphasiS-BFL, said, "It is heartening for us to note the return of BFL Software to profitability one quarter ahead of target on a trajectory that leaves us ahead of the operating plan; we have every reason to be cautiously optimistic about the future."

The Board confirmed the appointment of Mr. Jaithirth (Jerry) Rao as the Chairman. The Board approved the appointment of Mr. K.R. Krishnamoorthy as an Executive Director. The Board approved the appointment of Mr. Jeroen Tas as a Non-Executive Director with Mr. C. Kapse as his alternate.

The Board confirmed the appointment of Mr. K. Venkatesh as alternate in place of Mr. Richard Braddock and Ms. Aditi Malik as an alternate in place of Jose de la Torre.

Mr. R. Mohan, the Managing Director, reported to the Board that the important milestone of completion of legal formalities associated with the integration of BFL Software and MphasiS was reached on June 15, 2000.

BFL Software, which has been through a difficult period for sometime now, has emerged in the black under Mr.Mohan's stewardship. He was also responsible for conceiving and completing the MphasiS transaction. He felt that this was the appropriate point in time for him to move on. He requested the Board to relieve him of his responsibilities as the Managing Director effective August 15, 2000.

The Board put on record their sense of appreciation for the outstanding, exemplary and resilient performance put in by Mr. Mohan as the leader in a very trying period for the Company. The emergence of BFL Software from the difficulties is a tribute to his fortitude and leadership, the Board noted. The Board wished him well and expressed its strong desire for a continued association with him, keeping in mind the objective of leveraging his six-year association with the Company.