Kale posts robust growth: Revenue up 33% in Q4

Brief Highlights:
	Kale wins the NASSCOM IT Innovation Award 2006
	Strong customer acquisition in Q4
	Net profit for FY 06-07 stood at Rs.80.46 million, up 24 %
	EPS for the quarter at Rs. 2.62 per share
	EPS for the year at Rs. 6.09 per share

Mumbai, April 24, 2007 - Kale Consultants Limited (Kale), the leading provider of software solutions and outsourced services to the Travel & Transportation industry, has recorded operating revenues of Rs. 237.83 million for the quarter ended March 31, 2007 as compared to Rs. 179.18 million for the corresponding quarter of the previous year, a growth of 33 %.

For the year ended March 31,2007, Kale has recorded total revenues of Rs. 808.27 million as compared to Rs. 637.19 million during the previous year, a growth of 27%. Operating profit stood atRs.206.42 million compared to Rs. 178.41 million during the previous year.

Commenting on the performance, Mr. Vipul Jain, CEO & Managing Director said, “We have had a strong customer acquisition in the last quarter and have a very healthy order book entering into FY 08. Our singular focus on the travel and transportation industry, deep domain knowledge, innovation and a solutions mind set continues to differentiate us. As we launch our new strategy later this year, we will accelerate growth both organic and inorganically.”

Highlights

Total Income

 

Profit Before Tax

Profit After Tax

Operational Highlights for the Quarter ended March 31, 2006
	SAS Cargo, Scandinavia’s largest cargo carrier, signed up for Kale’s CSP-AMBER® - cargo revenue accounting solution. Kenneth Marx, President and CEO of SAS Cargo said, “In order to remain competitive we have gone through a process where we examined every aspect of our business - and this included back-office functions such as revenue accounting. To justify change we needed a solution that would offer substantial improvements in terms of operational cost savings and financial accuracy and flexible enough to support the varied accounting demands of our affiliated carriers and partners. We also wanted a solution that was proven in the marketplace and supplied by a company that we felt would deliver on its promise. For these reasons we chose CSP-AMBER® from Kale Consultants.”
	A North African Airline has selected Kale for Outsourced Passenger Revenue Accounting solution and Outsourced Cargo Revenue Accounting Solutions.
	An Indian International Airport has selected Kale for consultancy on their infrastructure restructuring.
	One of the largest Middle Eastern Airlines has signed on Kale for its Cargo Audit Services. The same airline has also outsourced its proration services to Kale MPS®.
	A major Indian Airport has awarded Kale the contract to develop and deploy a web-based custodian system.
	A large Middle Eastern airline has signed on Kale for the in-house implementation of Passenger (REVERA®) and Cargo Revenue Accounting Solution (CSP-AMBER®).
	An Airline in the Indian Sub-continent has awarded Kale the contract for implementing REVERA®, Passenger Revenue Accounting solution, in a hosted environment.
Operational Highlights for the Year ended March 31 2007
	Kale won the NASSCOM IT Innovation Award 2006. Mr. Vipul Jain received the award from the Hon'ble Prime Minister of India - Dr. Manmohan Singh on 9th February 2007. This Award recognizes Kale as being a pioneer in providing Platform-based BPO services to the global airline industry. This business model is a disruptive innovation that allows customers to meet their revenue accounting needs better, faster and at lesser cost. Kale was also profiled in NASSCOM's Showcase of Innovation Book 2006.
	IIT Kanpur honoured Mr. Narendra Kale, Chairman Kale Consultants Ltd. with "The Distinguished Alumnus Award" for the year 2006-07. This is the highest award given by the institute to its alumni in recognition of their achievements of exceptional merit. Having reviewed Mr. Kale's contribution to the IT industry and his exemplary vision and leadership skills, he is being conferred the award for 'Excellence in Entrepreneurship'.
	Indian (earlier Indian Airlines), one of the largest regional airlines in Asia went live with CSP®- the Enterprise-Wide Cargo Solution. Indian Airlines has signed the contract with Kale for the complete suite of CSP® solutions, provided on a hosted basis.
	EVA Air has signed a five year contract with Kale for APEX®, Kale’s industry standard proration solution. With APEX®, EVA Air will be able to implement industry best practices in proration and bring about substantial improvements in accuracy and efficiency of proration process.
	SkyTeam, the global airline alliance, selected Kale’s APEX® as a Neutral Fare Proration (NFP) engine for IATA’s First & Final (F&F) Billing Service. With this development, Kale added the entire global airline alliance of SkyTeam including Air France, KLM, Korean Air, Alitalia, CSA, Aeromexico, Aeroflot to its customer list. Continental Airways, NorthWest Airlines and Delta are existing Kale customers. All SkyTeam alliance members will now use Kale’s APEX® for their F&F settlement. Mr Henri Dillies, Vice President - Revenue Accounting, Air France, and official spokesperson for SkyTeam Revenue Accounting business said, “We have no doubt that Kale, with its delivery experience and commitment to the airline industry, has the mettle to be our strategic partner for proration. We selected Kale’s APEX® as we believe it is a good proration engine and will provide accurate results which will have a positive impact on our cash flows and will improve the efficiency of the interline process.”
	TAP Portugal, the national airline of Portugal signed a contract with Kale to implement Kale’s fully integrated enterprise-wide cargo solution, known as CSP®. This contract further cements the already strong relationship between TAP Portugal and Kale. For over 5 years TAP Portugal has been using Kale’s highly regarded passenger proration solutions. With the signing of this contract, both companies will extend their long term and mutually beneficial relationship. Travel Technology Solutions group continues to surge ahead. The travel group has signed up for the next phase development of NetProfile, with BCD Travel (erstwhile TQ3), the leading provider of global business travel logistics.
	Kale has added another milestone in its journey of Information Security compliance. Kale cleared the ISO 27001 registration audit for all Indian sites and has been recommended for the issuance of new certificate. Worldwide, BS7799 is getting replaced by ISO 27001, and Kale is one of the few early movers on this.
	This year as part of our marketing efforts for promoting and positioning Kale and CSP® within the air cargo fraternity, we sponsored the award for 'Best Cargo Airline to the Indian Sub-Continent' at the 'Cargo Airline of the Year' award ceremony organized by Air Cargo News.
	One of the leading Gulf carriers has signed a multi-year contract with Kale for complete and comprehensive suite of Revenue Recovery and Protection Services. These services will include Sales Audit (both passenger and cargo), Interline Audit (passenger and cargo), RBD Audit, BIDT Audit as well as GDS Billing Audit. This is a truly remarkable achievement by Kale as this will be the first time an airline has contracted for such a comprehensive set of audit services from a single vendor.
	Kale's industry-standard proration solution – APEX®, has once again proved itself to be the best-of-breed proration solution globally. One the leading Asian carrier has selected APEX® for automating passenger ticket proration. The carrier has signed a five year contract with Kale, and Kale has commenced the implementation project.
	Kale & the International Air Transport Association (IATA) announced that they will work together to bring e-freight to India. IATA has selected Kale to be the nodal agency to coordinate activities required to implement e-freight in India.
	Kale has made a foray into the Logistics space by signing on Direct Logistics, the multinational freight-forwarding & logistics group,. Direct Logistics chose Kale to develop a web-enabled solution to automate their ocean, air and multi-modal freight operations. The solution will encompass various functions including sales, export, import and tracking. The solution will also provide on-demand as well as routine management information to better manage operations.
	Apollo LogiSolutions Limited, a subsidiary of Apollo International Limited, has chosen Kale to develop a web-enabled solution to automate their Container Freight Station Operations.
Future Outlook
The airline industry is seeing robust growth, both in passenger and cargo business and this growth is likely to continue. The Travel and Hospitality industry, similarly is growing in both business and leisure segments as is the logistics industry. But along with this growth are lower yields and therefore pressure on profitability, increased competition and huge change in distribution channels driven by internet and e-commerce. In summary a time of opportunity as well as challenges and certainly one of far reaching change in industry structure and players. In response to these trends, customers are looking for IT and outsourcing solutions that help them enhance yields, manage and protect revenue and reduce costs. They are also looking at how to simplify the business and leverage the growth of ecommerce. There is growing acceptance of outsourcing – both IT and Business Processes. Customers are also preferring solution providers who understand their business and can provide the benefits of both outsourcing and transformation. Kale is seeing increasing traction on all its solution areas – revenue accounting and management, air cargo management, travel and hospitality technology and logistics solutions. Kale has also won respect and industry acceptance for its solutions and passion for innovation. All of these provide confidence that Kale will be able to accelerate growth and sustain profitability in the coming years.

Investor Relations
Kale Consultants Ltd is committed to create long-term sustainable shareholder value through successful implementation of its growth plans. The company’s investor relations mission is to maintain an ongoing awareness of its performance among shareholders and financial community.

For additional information, please contact:
Mr. Sumeet Nadkar
Chief Financial Officer
Kale Consultants Ltd.
Tel: 91-22-28272500
Email: Sumeet_Nadkar@kaleconsultants.com

Mr. Parag Someshwar / Mr. Manoj Bagadia
Equicorp.
Tel: 91-22-25121528
Email: equicorp@vsnl.net

Safe Harbor
Certain statements in this release concerning our future growth prospects are forward-looking statements which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. The company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company.