Bangalore, January 18, 2001.

The Board of Directors of Sonata Software Limited who met in Mumbai today, took on record the audited results for the Quarter ended 31 December 2000.

Performance Highlights - Sonata Software Limited - Q3-FY 2001

  Total Income was up by 40% at Rs.295.93 million as compared to Rs.210.83 million during the same period last year for International Operations.

  Of the Total Income, Rs 7.4 million was contributed by favourable foreign exchange fluctuation and another Rs 2.3 million comprised income from Sonata's deployment of its surplus funds.

  5 new customers were added during the quarter.

  The E-Commerce area was unchanged at 52 % of the total revenue ; however the share of dot-coms continued to be contained at less than 3 %.

  EBIDTA at Rs.94.14 million grew by 34% over the corresponding period last year.

  Profit After Tax before providing for bad/doubtful debts at Rs. 94 million grew by 59% over the corresponding period last year. After such provisions of Rs.10.59 million, Profit After Tax registered a 42% growth over the previous year.

Mr. B Ramaswamy, President and Managing Director, stated that Sonata continues to forge its way with its steady and consistent progress in building a strong 0ff-shore based services model.. He felt that the Company's strategy of being very selective regarding business has proved to be prudent. Thus, the predominance of e-commerce projects from product companies and brick-and-mortar outfits have resulted in quality revenues for Sonata, albeit at some cost to the rate of growth.

During the quarter, Sonata acquired a strategic stake of 26 % (8.33 million Fully Convertible Preferred stocks) in SpinAway eBusiness Solutions Inc., a USA corporation. The amount of $ 2 million was funded entirely from internal resources. In addition, Sonata has the option to buy a further 8.33 million shares in the company over the next 3 years. SpinAway has appointed Sonata its sole provider of development services, both onshore and off-shore.

Mr. B.Ramaswamy, President and Managing Director remarked that with this, Sonata has secured the benefits of the domain expertise and track record that characterizes SpinAway's Management Team. Of immediate advantage is the fact that Sonata now has access to a 30 strong, experienced, marketing team with established links in the US software industry.

In view of the hive off of the Indian Operations of the company to a 100% subsidiary called Sonata Information Technology Ltd with effect from July 1, 2000, the figures are not directly comparable with the previous year's published figures. To facilitate comparison therefore, the corresponding audited divisional figures of the International Operations for the same period last year are indicated below.

However for the 9 months ended 31 December 2000, SSL Income was at 1035.12 million while SITL declared an Income of Rs 643.78 million for the six months ended 31 December 2000. PAT for the same periods for SSL was Rs 250.52 million and for SITL Rs 7.13 million. The combined SSL and SITL figures for the period ending 31 December 2000 was Income Rs 1678.90 million and PAT Rs 257.65. This reflects a growth of 36 % in Income and 61 % in Profit after Tax on the erstwhile combined basis.