Mumbai, January 17, 2003

The Board of Directors, at its meeting held here today, took on record the Audited Accounts of Sonata Software Ltd for the Quarter and Nine months ended 31st December 2002. The Board also welcomed Mr.Suresh N Talwar, Partner of the eminent Legal firm M/s Crawford Bayley & Co., as an Additional Director.

Highlights Sonata Software Ltd

Q3 ending 31 December 2002 - Year on Year Comparison    Revenues from operations at Rs 223.5 million vs Rs. 171.5 million, up by 30%    EBIDT at Rs. 61.5 million vs Rs. 24.8 million, an increase of 148 %    PAT at Rs 43.8 million against Rs. 15.6 million increased of 180%.    EBIDT of 27.51% versus 14.45 %    PAT of 19.59% versus 9.12 %

Q3 ending 31 December 2002 - Sequential Comparison    Revenues from operations at Rs. 223.5 million vs Rs. 213.3 million, up by 5%    EBIDT at Rs. 61.5 million compared to Rs. 61.9 million, a change of -1%    PAT at Rs. 43.8 million against Rs. 38.8 million, an increase of 13 %    EBIDT of 27.51% versus 29.02 %    PAT of 19.59% versus 18.21 %

Operating Highlights      5 new clients were added during the quarter under review    The geographical spread was USA 54.45%, Europe 44.21% and Rest 1.34%    The off-shore share was 62.88% while on-site was 37.12%    A new branch was opened at Manchester, U.K.    Cash generation from operations during the Quarter was Rs 70 million and for the nine months Rs 134 million.

Speaking on the occasion, Mr. B. Ramaswamy, President and Managing Director, stated, " This was a Quarter in which we consolidated the recovery achieved in the previous two quarters. The response of existing customers to Sonata's focus on increasing offshore capability was positive. Sonata was also able to leverage its palette of offerings to attract new enterprise customers. "

Having achieved Consolidated Revenues of Rs 1933 million and Profit after tax of Rs 113 million in the first 9 months of the year, the Company continues to maintain the guidance, given early this financial year, of Revenues of Rs 2600-2800 million and Profit after tax of Rs 160-180 million.