Bangalore, January 12, 2002.

The Board of Directors at a meeting held here today took on record the Audited Accounts of Sonata Software Limited for the Quarter and Nine months ended 31.12.01. 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.

Sonata's net profit for the quarter was Rs.15.63 million and Rs.157.10 million for the Nine months.

Speaking on the occasion, Mr. B Ramaswamy, President and Managing Director stated that the results for the quarter are in line with the guidance issued earlier. He added "Owing to the downturn in business environment the decision cycles are getting elongated. However our focus is on customers who are looking at proven offshore project delivery capabilities in the Financial services, Banking and Insurance segments. Sonata, with its established capabilities in offshore delivery and reference customers is well positioned to take advantage of the growth opportunities once the downturn is reversed."

I. Sonata Software Limited - Financial Highlights :

     Revenue was Rs.171.48 million as compared to Rs.296.45 million for the quarter ended 31st December '00.

     Offshore revenues accounted for 53% of the total income. The breakup for the quarter ended 31st December '00 was 47%.

     Revenue from U.S. geographically accounted for 62% and Europe accounted for 38%.

     The Operating margin (EBIDT) was 14.45% as compared to 31.76% during the quarter ended 31st December '00.

     Net profit was 9.12% as compared to 28.14% during the quarter ended 31st December '00.

     One new customer was added during the quarter.
 

     Revenue was Rs.667.98 million as compared to Rs.849.17 million for the nine months ended 31st December '00.

    Offshore revenues accounted for 54% of the total income. The breakup for nine months ended 31st December '00 was 48%.

     Revenue from U.S. geographically accounted for 58% and Europe accounted for 42%.

     The Operating margin (EBIDT) was 27.72% as compared to 32.76% during nine months ended 31st December '00.

     Net profit was 23.52% as compared to 28.81% during the nine months ended 31st December '00.

     12 new customers were added during the nine months.
 

II. Consolidated Financial Highlights:
(Comparison for the previous year's quarter and nine months period is not given as the Consolidated Accounts are published only from Quarter 1 of the current financial year.)

     Revenue was Rs.493.88 million

     Revenue from U.S. geographically accounted for 25%, Europe accounted for 29% and Rest of the World accounted for 46%.

     The Operating margin (EBIDT) was 7.82%

     Net profit was 5.65%

     Revenue was Rs.1,618.81 million

     Revenue from U.S. geographically accounted for 28%, Europe accounted for 20% and Rest of the World accounted for 52%.

     The Operating margin (EBIDT) was 13.68%

     Net profit was 11.03%