Sonata Annual Report FY03-04

Sonata Net Shoots Up By 48%; Declares Final Dividend Of 30%
Bangalore, April 14, 2001

The Board of Directors of Sonata at a meeting held here today adopted the audited accounts for the quarter ended 30th June 2001.

Announcing the results, Mr. B.Ramaswamy, President & Managing Director of Sonata said, "In view of the slowdown in the U.S. market the Company has adopted a three pronged strategy - Increased focus in Europe, Revamping of offerings and Thrust on enterprise solutions. The first strategy has started showing results in as much as 39% of the revenue in the current quarter came from Europe as compared to 20% in the same quarter last year and 25% in the quarter 4 of financial year 2001. Revamping of offering and the thrust on enterprise solutions will show positive results in the next couple of quarters."

Performance for the quarter ended 30th June 2001

		(Figures in Rs. Million)
	SITL PERIOD ENDED ON 31.03.2001	SONATA YEAR ENDED ON 31.03.2001	SONATA AND SITL FOR THE YEAR ENDED 31.03.2001	SONATA YEAR ENDED ON 31.03.2000
1. Sales & Services
International Operations	-	1,070.02	1,070.02	785.62
Indian Operations	1,004.97	183.90	1,188.87	957.87
Total Sales & Services	1,004.97	1,253.92	2,258.89	1,743.49
2. Other Income	1.46	35.26	36.72	18.25
3. Total Income	1,006.43	1,289.18	2,295.61	1,761.74
4. Expenditure
a) Purchase of traded items	895.71	129.12	1,024.83	776.98
b) Increase/Decrease in stock in trade	(60.75)	20.39	(40.36)	(0.68)
c) Staff Cost	44.34	220.43	264.77	222.11
d) Other Operating Expenses	105.34	540.86	646.20	474.34
Total Expenditure	984.64	910.80	1,895.44	1,472.75
5. Profit before Interest, Depreciation & Tax	21.79	378.38	400.17	288.99
6. Interest	2.07	0.90	2.97	4.10
7. Gross Profit after Interest but before depreciation and tax	19.72	377.48	397.20	284.89
8. Depreciation	1.63	35.07	36.70	32.76
9. Provision for taxation	6.50	9.07	15.57	18.17
10.NET Profit	11.59	333.34	344.93	233.96

(The Indian Operations of Sonata Software Limited was spun off into a wholly owned subsidiary w.e.f. from 29th June 2000. On account of this, the figures of Sonata for 9 months from 1st July 2000 to 31st March 2001, will pertain only to the International Operations. The performance of Indian operations is reflected in SITL for these 9 months. For the previous year ended March 2000, Sonata figures will include both Indian and International operations.)

International Operations:

1. Revenue for the year ended March 2001 has increased by 38.45% over the previous year
2. EBIDT for the year ended March 2001 was 33.73%. Growth in EBIDT was 38.18% over the same period last year.
3. Profit After Tax for the year ended March 2001 at Rs.327.47 millions, increased by 47.80% over the previous year.

Indian Operations:

4. Revenue for the year increased by 20.74% over the previous year.
5. EBIDT for the year ended March 2001 increased by 42.51% over the same period last year.
6. PAT grew at 40.77% over the previous year.

Highlights of the performance during the QUARTER ended March 2001

		(Figures in Rs. Million)
	SITL QUARTER ENDED ON 31.03.2001	SONATA QUARTER ENDED ON 31.03.2001	SONATA AND SITL FOR THE QUARTER ENDED 31.03.2001	SONATA QUARTER ENDED ON 31.03.2000
1. Sales & Services
International Operations	-	249.40	249.40	209.68
Indian Operations	361.69	-	361.69	309.21
Total Sales & Services	361.69	249.40	611.09	518.89
2. Other Income	0.96	4.66	5.62	9.13
3. Total Income	362.65	254.06	616.71	528.02
4. Expenditure
a) Purchase of traded items	320.61	-	320.61	239.45
b) Increase/Decrease in stock in trade	(18.50)	(1.52)	(20.02)	13.69
c) Staff Cost	15.34	50.48	65.82	57.06
d) Other Operating Expenses	36.61	111.32	147.93	128.89
Total Expenditure	354.06	160.28	514.34	439.09
5. Profit before Interest, Depreciation & Tax	8.59	93.78	102.37	88.93
6. Interest	0.72	0.75	1.47	(0.27)
7. Gross Profit after Interest but before depreciation and tax	7.87	93.03	100.90	89.20
8. Depreciation	0.59	8.13	8.72	9.26
9. Provision for taxation	2.80	2.07	4.87	6.07
10.NET Profit	4.48	82.83	87.31	73.87

(The Indian Operations of Sonata Software Limited was spun off into a wholly owned subsidiary w.e.f. from 29th June 2000. On account of this, the figures of Sonata for quarter ended 31st March 2001 will pertain only to the International Operations. The performance of Indian operations is reflected in SITL for this quarter. For the previous quarter ended March 2000, Sonata figures include both Indian and International operations.)

International Operations:

7. Revenue for the quarter ended March 2001 has increased by 16.32% over the same quarter last year.
8. EBIDT for the quarter ended March 2001 was 36.91%. Growth in EBIDT was 17.57% over the same quarter last year.
9. Profit After Tax for the quarter ended March 2001 at Rs.82.83 millions, increased by 27.47% over the same quarter last year.

Speaking after the Board Meeting, Mr. B Ramaswamy, President and Managing Director said that, "The slow down in US has impacted the IT budgets of customers, though to varying degrees. To effectively cope with this we are focusing on health care sector in the US as well as increasing our focus and investment in marketing in Europe."

During the financial year, Sonata made two significant strategic decisions:
In December 2000, it invested $ 2 million, from its own cash surpluses, to acquire a 26 % stake in SpinAway eBusiness Solutions Inc. a California Corporation. The marketing strength of this US Corporation should start benefiting Sonata in the ensuing financial years.

In March 2001, Franklin Templeton, USA, one of the acclaimed giants on the world Mutual Funds Stage, decided to take a 4.9% stake in Sonata by way of a preferential allotment at Rs 53.40 per share. This should benefit the company, not only through the infusion of Rs 27.5 crores, but also by virtue of the association itself.