US Slowdown to Impact Sonata in Next two Quarters

US Slowdown to Impact Sonata in Next two Quarters
Bangalore, November 13, 2001..

While releasing the results for the Half Year ended September 30, 2001, we had mentioned that the business situation worldwide, and, particularly in the US had deteriorated and hence the visibility was unclear. In continuation of that, we would like to communicate the expected impact on the revenue and profits of the company.

As against the previous quarter, revenue is expected to be lower by 50-60%, and profits by about 60-75%.

The company believes that its increased focus in Europe, and, particularly in the UK, would help ensure continued profitability. That, together with its heightened focus on cash conservation through stringent cost control measures, will help the company survive the difficult period ahead.

The Company continues to take measures to strengthen its customer relationships in USA and realign its offerings towards emerging opportunities. This should provide the springboard for growth when the market upturn finally happens. In keeping with this, the Company is restructuring its operations to realize the above strategy.

While September 11, and its aftermath have created this inimical business environment, the company's business has shown its ability repeatedly over the last 15 years to withstand the vicissitudes of fortune and emerge stronger and ever more successful. We believe that this would stand the company in good stead in dealing with the current and emerging challenges.