Infotech reports an excellent quarter ended June 30, 2001

Hyderabad, India - July 25, 2001
Infotech Enterprises Limited (BSE: INFOENT, NSE: INFOTECENT) has announced that the unaudited financial results for the quarter ended June 30, 2001 were taken on record by the board at it's meeting held today

Highlights:

• Total Income was Rs. 21.12 crore for the first quarter ended June 30, 2001, an increase of 98% over total income of RS 10.69 crore for the corresponding quarter in the previous year
• Profit After Tax before extraordinary item grew at 125% to RS 6.97 crore compared to RS 3.10 crore in the corresponding quarter of previous year
• Basic Earning per share (before extraordinary item) for the quarter is RS 11.39 compared to RS 5.42 in corresponding quarter last year
• 6 new customers have been added during the quarter

Results for the quarter ended June 30, 2001*

The unaudited financial results, for the Quarter ended June 30, 2001 were taken on record by the board at its meeting held on July 25, 2001.

The Profit and Loss account is summarized below : (In RS Lakhs except per share data)

*The financial figures for the quarter ended June 30, 2001 and March 31, 2001 are inclusive of its erstwhile subsidiary M/s Cartographic Sciences Ltd. since merged. The figures for the Quarter ended June 30, 2000 dose not include figures of M/s Cartographic science limited.

First Quarter Results

Quarter to Quarter
The total Income was RS 21.12 crore for the quarter ended June 30, 2001, an increase of 97.56% over RS 10.69 crore for the corresponding quarter in the previous year. Net profit after tax was reported at RS 6.97 crore - an increase of 124.83% over RS 3.10 crore in the corresponding period last year.

Extraordinary item pertains to optionally fully convertible debentures issued to GE Capital, which were due for conversion on or before 12th May, 2001, the conversion price of which was fixed at Rs.350 per share. GE Capital has chosen not to convert the optionally convertible debentures. This extraordinary item of RS 3.13 crore represents the one time lumpsum interest component in full & final settlement and which is non-recurring in nature.

The other income includes an amount of RS 0.52 crore towards forfeiture of warrants issued to other investors.

Quarter on Quarter
The total income was RS 21.12 crore for the quarter ended June 30, 2001, an increase of 15.60% over RS 18.27 crore for the 4th quarter ended March 31,2001. Net profit after tax was reported at RS 6.97 crore - an increase of 66% over RS 4.20 crore in the 4th quarter ended March 31, 2001.

The profit before interest and tax reported at Rs.7.55 crore registering a growth of 72.77% over RS 4.37 crore in the 4th quarter ended March 31, 2001.The profit after tax and extraordinary item was RS 3.84 crore compared to Rs.4.20 crore in the 4th quarter ended March 31, 2001.

Earnings per share
The Earning per share (before extra ordinary item) was reported at RS 11.39 (on par value of RS 10 per share) grew by 110.15% compared to RS 5.42 for the corresponding quarter of FY2001.

Profit Before Depreciation and Taxation
The company has reported profit after interest but before depreciation and taxes at RS 9.72 crore for the quarter showing an impressive growth of 151.16% over the previous year's corresponding quarter figure of RS 3.87 crores. Operating expenses were RS 11.34 crore for the quarter ended June 30,2001 as against RS 6.80 crore for the corresponding period last year, showing an increase of 66.76%.

Profit Margin
Infotech Enterprises have reported impressive growth in its operating profit margin by 9.92% to 46.31% on quarter-to-quarter basis. Net profit margin has increased by 3% at 33% higher than the 30% reported in corresponding quarter last year.

Goodwill
The charge to profit and loss accounts includes an amount of RS 0.17 crore towards goodwill written off on account of the merger of its fully owned subsidiary, Cartographic Sciences Limited, Mumbai during the previous year.

Revenue Mix
The revenue mix for the company from its three main divisions are as below:

Data Conversion Services Division contribution has grown by 77.46% to RS 13.54 crores as compared to RS 7.63 crores in the corresponding quarter of previous year. But as percentage of total sales contribution has declined to 67% from 75% compared to corresponding quarter of previous year.

E-Solution Division Software revenues grew by 62.5% to RS 4.03 crores as compared to RS 2.48 crores in the corresponding quarter of previous year. As a percentage of total sales contribution has declined to 20% from 24% in the corresponding quarter last year.

Engineering Services Division Contribution zooms up at RS 2.60 crores as compared to RS 0.12 crore in the Previous year first quarter. As a percentage of total sales contribution has gone up by 13% from 1% of corresponding quarter last year.

Geographical Mix The company derives its revenue from three main geographical markets namely North America, Europe, Domestic and others.

The Analysis of revenues from these markets is as follows:

The revenue from North America was RS 14.73 crore compared to RS 7.82 crore during the corresponding quarter in previous year. But as a result of de-risking strategy implemented during the last year percentage of total sales has declined to 73% from 77% in the same period last year.

The revenue from Europe was RS 3.34 crore compared to RS 1.99 crore in the corresponding quarter of previous year. As a percentage of total sales it has declined to 17% from 19% in the corresponding quarter last year.

The revenue from domestic market contributed RS 2.06 crore compared to RS 0.18 crore during the previous year first quarter. This represents 10% of total sales compared to 1.76% in the corresponding quarter last year.

The revenue from other regions was RS 0.04 crore compared to RS 0.24 crore in the corresponding quarter last year; the contribution has declined to 0.2% from 2.34%.

Receivables
As a result of improved receivables monitoring and control system implemented in the company during the last financial year receivables in number of days has shown continuous improvement. For the quarter the receivables days stand at 104 days compared to 108 days during the corresponding quarter last year.

Cash
The total cash receipt during the quarter was RS 27.77 crore out of which RS 7.60 crore was deployed in capital expenditure mainly on account of ramping up of our Engineering Services Division, RS 9.13 crore to GE Capital in part settlement of redeeming optionally fully convertible debentures and towards meeting operating expenses of RS 10.28 crore.

Commenting on results, BVR Mohan Reddy, Chairman & Managing Director of Infotech Enterprises said: " We are pleased at our first quarter performance. We believe that the current year's growth would exceed industry average. We continue to focus on enhancing quality systems & on time delivery to our customers. Our business model would continue to be offshore development with on site responsibilities."

Clients Details
During the quarter company has added 6 new customers namely Carrier corporation, MBE GmbH, Disc Map Sweden, Destefora Navigation, Stargate Events and Marsed Map Ltd. Infotech largest customer accounted for 24% of total revenue and top 10 customers accounted to 86% of total revenue for the quarter ended June 30, 2001. Some of the main customers billed during the current quarter are Analytical Survey Inc., Pratt & Whitney, ETAK Inc., Reliance Digital world Pvt. Ltd., Fugro Middle East B. V., Kinetic solution LLC. Triathlon ltd., Navionics, Hughes Telecom, Destefora Navigation etc.

Human Resource
Infotech had 1884 employees as of June 30, 2001 compared to 1251 in the corresponding quarter last year. Gross addition was 190 Associates during the Quarter, consequent to 202 separations (Both Voluntary and Compulsory) there was a net decline in the number of people by 12 as compared to March 31,2001.

Quality Policy
Infotech Data Conversion Services Division has obtained ISO 9001-2000 quality certification. Infotech has completed the CMM Level 4 pre assessment and expect the final assessment to be completed by August 2001 for its E-solutions line of business.

Summary of the consolidated results of Infotech and it's subsidiaries (unaided and provisional) in accordance with the accounting standard 21 issued by ICAI

Infotech has three subsidiaries namely Infotech Enterprises Europe (UK), Infotech Software Solution Inc. (USA) and Advance Graphic Systems GmbH (Germany).

Consolidated Unaudited Financial Results

Unaudited Provisional Financial Results for the quarter ended 30-Jun-01

Notes
Infotech Enterprises Limited, India has acquired 54.53 % of equity of AGS GmbH, Germany during the quarter.

Infotech Enterprises Europe Limited acquired 100 % equity of MapCentric, UK during the quarter.

Extraordinary item represents interest fully provided on OCD's, due to the decision by the investor during the quarter not to opt for conversion in to equity shares.

Consolidated First Quarter Results
The consolidated revenue of Infotech Enterprises Limited amounted to RS 28.68 crore during the first quarter ended June 30, 2001; the operating profit (PBDIT) amounted to RS 9.43 crore.

The Profit After tax but before extraordinary item amounted to RS 5.73 crore. It is due to Loss (RS 0.57 crore) incurred by subsidiaries and depreciation and amortization of goodwill to the extent of RS 3.09 crore written off during the quarter ended June 30, 2001.

The profit as a percentage of sales amounted to 20.78%. The Basic EPS for the group stands at RS. 4.24 for the quarter ended June 30,2001.

About Infotech
Infotech Enterprises Limited is among the top five software and services export companies located in Hyderabad. Infotech offers end-to-end solutions in the areas of GIS, CAD and E-Business. Its range of services include digitization of drawings/maps, photogrammetry, application software development, software product development, consulting and implementation. Infotech has a 130,000 sft. state-of-the-art software center in Infocity, Hyderabad. Its digitization center is the largest in India and is among the top three in the Asia Pacific Region. Infotech is an ISO accredited company covering all its lines of business. It has a track record for delivering high quality services to clients world over.Infotech's global customers include several fortune 100 companies in USA, Europe, Japan and Australia. Infotech has its fully owned subsidiaries in USA, UK and Mumbai. With over 1900 IT Professionals, Infotech has been a profit making company, since inception in 1992 and is growing consistently there on. Infotech is a public limited company with its stock being traded actively in all major stock exchanges in India.

Please note: Some statements contained within this report may be of a forward-looking nature and may involve risks and uncertainties. Actual future results and outcomes may differ materially from those discussed. Factors that may cause such differences include, but are not limited to, management of growth, market acceptance of Company’s products and services, risks associated with new product versions, dependence on third party relationships and the activities of competitors.