Bangalore, October 19, 2001.

The Board of Directors at a meeting held here today took on record the Audited Accounts of Sonata Software Limited for the Quarter and Half Year ended 30.09.01. The accounts prepared in accordance with all the new Accounting Standards prescribed by The Institute of Chartered Accountants of India, also included the Consolidated Accounts of Sonata and its Subsidiaries viz., Sonata Information Technology Limited, Abisko Development Limited, Cyprus and Offshore Digital Services Inc., California.

Noting that Sonata's net profits for the quarter was Rs.61.83 million and Rs. 141.47 million for the half year, the Board declared an Interim Dividend of 20%.

Speaking on the occasion, Mr. B Ramaswamy, President and Managing Director was pleased to note that the European Business had shown healthy growth and helped to counter the slowdown in the US. He added "Emphasis has been on deepening our customer relationships through alignment of offerings to the changing business realities of our customer base. On the Outlook for the business for the next two quarters he mentioned that after the September 11th incident, the business situation has deteriorated, especially in the US and hence, the visibility is unclear."

During the Quarter, Sonata Software Ltd was assessed at Level 5, the highest possible level, of Carnegie Mellon's, Software Engineering Institute's Capability Maturity Model/(SEI-CMM). It is the first company, globally to be assessed under the new regulations of SEI-CMM.

Highlights of the performance for the half-year ended 30th September 2001

     Revenue was Rs 238.79 million as compared to Rs.332.13 million for the quarter ended 30th September '00.

     Offshore revenues accounted for 58 % of the total income. The breakup for the quarter ended 30th September '00 was 44%.

     Revenue from U.S. geographically accounted for 50.25% and Europe accounted for 49.75%.

     The Operating margin (EBIDT) was 29.74% as compared to 29.50% during the quarter ended 30th September '00.

     Net profit was 25.90% as compared to 26.47% during the quarter ended 30th September '00.

     Five new customers were added during the quarter.

     Revenue was Rs 496.51 million as compared to Rs.552.46 million for the half year ended 30th September '00.

     Offshore revenues accounted for 54 % of the total income. The breakup for half year ended 30th September was 48%.

     Revenue from U.S. geographically accounted for 56 % and Europe accounted for 44%.

     The Operating margin (EBIDT) was 32.31% as compared to 33.31% during half year ended 30th September '00

     Net profit was 28.49% as compared to 29.18% during the half year ended 30th September '00.

     11 new customers were added during the half year.