Sonata Software Limited Chairman's Speach: On behalf of my colleagues on your Board and on my own behalf, I am pleased to welcome you to this, the 6th Annual General Meeting of your company. We meet at a time when the milieu is extremely disturbed. The largest economy in the world, USA, has stumbled after an unprecedented growth of 8 years. And yet the performance of your company during the financial year nder review has been strong enough to provide cause for optimism for the future. Results The year ended March 001 has seen your company maintaining its steady organic growth with revenue growing by 38.41% and Operating Profit by 38.18% over the previous year (excluding the hived-off domestic operations of SITL). Strong cash management continues to be the mainstay of the fiscal discipline practice in your company, which augurs well for the challenging period ahead. We have recommended a final Dividend of 30%, which together with the interim dividend of 20% raises the toal dividend for the year to 50%, the highest dividend ever declared by your company. STRATEGIC ACHIEVEMENTS During the year under review, your company hived off its Indiani operations into a 100% subsidiary called Sonata Inforamtion Technology Limited with effect from 1st July 2000. This was done in view of the fact that the domestic business had shown strong revenue growth and required appropriate management focus. The results of this subsidiary for the 9 months of this year are attached and substantiate the validity of the decision. In July, 2000 your company also decided to split the face value of shares from Rs 10/- per share to Re 1/- per share. This with a view to provide more liquidity in the market and widen the ratail base. The investments have responded extremely with the number of shareholders shooting up from pre-split level of 9000 to almost 25000 as of 31st March 2001 after the split. In the 3rd quarter of the year under review, your company made a strategic investment of $2 million to secure 26% in Spain Away e-business Inc., USA. This provided ready access to Spain Aways's 30 strong Industry-Savvy marketing set up. Spin Away also contracted with your company so that your company is the sole purveyor of software to Spin Away and its clients. In March 2001, Franklin Templeton, one of the giants in the Mutual Fund business worldwide, decided to cement their 9-month business relationship with Sonata by taking a 4.9% stake in yuor company at a price of Rs.53.40 per share. The shares were freshly issued so that the Capital of your company has grown accordingly. TRENDS If one were to list th economic factors that are influencing the business of your company in a major way, one would have to start with the impact of slowdown of the US economy and the effect on other countries, particulary Europe and Japan. The simultaneous Telecom slowdown in US and Europe has further exacerbated the sitution The US conomy, which accounts for 70% of the worldls software market, has resortecl to its traditonal reaction to a slowdown; freezing of budgets. Thus new software initiatives are being placed on n the back burner at this time. However, spending on software for core activities, would continue, albeit at a slower pace. Your company has always believed in focusing its offerings in core areas of the clientls information requirements. It is believed therefre, that your company would. be able to withstand the adverse factors and emerge fram these challenges with stronger customer retionships. PEOPLE Corporate entities in the US tend to see the interest of their shareholders as paramount; while, in Europe, the traditional belief is that the stakeholders of the company occupy the premier position. In Sonata, my colleagues on the Board and all our Sonatians have believed that the two approaches need not be mutually exclusive. Our consistent commitment is towards both, shareholers and stakeholders. On behalf of my colleagues on the Board and myself, l would like to thank all of you for consistently endorsing this corporate philosophy that makes Sonata what it is. Sincerely, S B Ghia Date: 8-6-2001.