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i-flex records net income increase of 38% QoQ on a revenue of US$88M for the quarter ended December 2005

Signs US$ 25M in License Fees; Highest ever in any quarter

Financials at a glance for the quarter ended December 2005

US GAAP Consolidated

US$88M (+10% QoQ; +30% YoY)

Operating Income
US$2.05M (+88% QoQ; +51% YoY)

Net Income
US$12.42M (+38% QoQ; +57% YoY)

Indian GAAP Consolidated

US$86.2M (+11% QoQ; +29% YoY)

Operating Income
US$17.53M (+85% QoQ; +37% YoY)

Net Income
US$10.71M (+26% QoQ; 6% YoY)

Highlights of the Quarter

Oracle Corporation completes the process of acquisition of the Citigroup stake in the company; now holds 43.1%; Oracle President Charles Phillips joins the i-flex Board of Directors.

Added 22 new customer relationships for the group; and 4 major relationships for other lines of business through cross sell. The total number of customers serviced crosses the 600 mark – increases to 617.

Overall robust revenue and bottom line growth in the quarter; quarter’s operating income grows 88% QoQ to US$18.28M

Gross addition of 662 employees in the quarter (excl KPO). The total staff strength of the group increases to 6,641 (inclusive of KPO business) – an increase of 56% (45% excluding KPO) over that in the period ending December 2004.

Solutions Portfolio

Products Business

Product Business registers 21% QoQ growth; Operating Income increases 75% QoQ

Registered the highest ever new license fee signings of US$ 25 Million in the quarter, wins include several top tier accounts; License fee signings in the nine month ended December 2005 increase 57% as compared to the corresponding nine-month period ended December 2004; Product Tank at the end of the quarter stands at US$ 72.5 million – a historic high, up from US$ 61 million at the end of September 2005.

Wins 20 new customers for various major product lines; FLEXCUBE leads the momentum with 14 customer wins.

FLEXCUBE customer country count crosses the century mark.

Allied Irish Bank, Ireland, one of the largest bank’s in Ireland decides to replace their core wholesale banking system with FLEXCUBE; FLEXCUBE gains two more prestigious customers in Western Europe; A leading Islamic banking organization in Middle East adopts FLEXCUBE for a multi country deployment; Five existing FLEXCUBE customers (four in Europe and one in Africa) sign up for license expansion for deployment in additional countries.

Reveleus Basel II wins three tier I banking customers; include Citigroup in North America; Lloyds TSB in UK; and another major tier I institution in US; Tower group and Gartner in separate reports rank Reveleus Basel II solution amongst the best solutions in this domain.

DayBreak gains a major consumer finance group in the USA as its customer Services Business

Services business registers revenue growth of 27% YoY for the quarter and 39% YoY growth on a nine month basis, with operating margins on nine-month basis showing 2% improvement.

• The Insurance CoE wins the first relationship with Tokio Marine Insurance in US, this will result in development and delivery of an insurance solution based on the Canada based Castek insurance solution framework, which we had acquired recently.

KPO Business

Revenues grow 51% QoQ; Acquisition of 4 new US clients in the quarter for Equinox;

The total staff strength in this business stands at 488 as at end of the quarter Awards and Accolades

• i-flex wins the Avaya GlobalConnect Customer Responsiveness Award 2005 in the IT

– Software industry vertical. This Award evaluates and rewards India’s topmost companies for their Customer Responsive Policies and Practices across 12 industry categories

i-flex wins award for “Best Software Product Company in Intellectual Driven Business” presented by IT-People at the “IT-People Awards for Excellence in Information Technology”.

Mumbai, January 30, 2006: The Board of Directors of i-flex solutions limited, a leading provider of IT solutions to the global financial services industry, has approved the results for the quarter ended December, 2005.

Speaking on the occasion, Rajesh Hukku, Chairman & Managing Director said, “We are very pleased with the all round growth and increasing business momentum; The product license fees signings have been the highest ever in any quarter, and have increased 57% on a nine-month basis. The Strategic partnership with Oracle and the close synergies of our sales, marketing and development engines position us strongly to gain market leadership”

R. Ravisankar, CEO, International Operations and Business Development added, “Our differentiated business model built on customer focus, vertical specialization, domain expertise, and global execution continues to deliver results. We are excited at the market opportunity in financial services and, with the strengthened relationship with Oracle, we are now even better positioned to capture a leadership position in this space.”

Commenting on the financials Deepak Ghaisas, CEO, India operations & CFO said, “i-flex has witnessed continued and unflagging momentum this quarter. At the same time, our efforts at improving the overall efficiency has resulted in 88% QoQ growth in the operating income.”