MphasiS To Acquire Kshema Technologies

Bangalore, April 2, 2004

The MphasiS BFL Group, a leading provider of system integration technology and BPO solutions for customer-focused corporations, announced today that it has entered into a definitive agreement to acquire Kshema Technologies, a Bangalore based software solutions company, for approximately $21 million through a combination of stock and cash. The cash component is about $6.8 million. The transaction is expected to be EPS accretive in the very first year.

Kshema Technologies Limited is a high-end IT services company established in 1997. An SEI CMM Level 5 and ISO 9001:2000 certified company, Kshema’s growth has been exponential since inception. The company provides world-class software solutions in Industrial Automation & Embedded Technologies, Healthcare & Life Sciences and Enterprise Applications.

Kshema has over 400 employees and services an impressive list of Global 1000 customers in the US, Canada and Europe. The company was rated among the “top 20 Indian companies that would globally succeed” by Business Today in 2003 and the 19th Best IT Employer in India in 2002 by IDC DataQuest. Kshema won the prestigious ‘Ramakrishna Bajaj National Quality Commendation Certificate’ in the service category for 2003.

Commenting on the acquisition, Mr. Jerry Rao, Chairman & CEO, MphasiS BFL said, "We believe this acquisition will be a strong catalyst for growth by offering additional world class solutions and creating better customer value. It will provide a fillip to our service offerings in the embedded solutions and industrial automation space and help us stay ahead of our competitors in a challenging global market.”

Mr. Anant Koppar, Kshema’s CEO, said, “With MphasiS’ strong quality processes,
Global Delivery Model, and outsourcing capabilities, we will be able to deliver enhanced value to our clients. We are excited at the prospect of becoming part of a strong, global Group.”

Mr. Anant Koppar will take over as President of the Technology Group of the combined organization. In addition he will also be a Director on the Board of MphasiS Corporation, USA.

The transaction is subject to Indian regulatory approvals and is expected to be completed in the quarter ending 30 June 2004.