Sonata Software Ltd. — Interim / Quarterly Report 2021

Feb 4, 2021

4th February, 2021

National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Mumbai Kind Attn: Manager, Listing Department Email Id: neaps@nse.co.in Stock Code - SONATSOFTW

BSE Limited P.J. Towers, Dalal Street Mumbai Kind Attn: Manager, Listing Department Email Id: listing.centre@bseindia.com Stock Code - 532221

Dear Sir/Madam,

Sub: Outcome of Board Meeting

Ref: Disclosure under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

With reference to the captioned subject, we would like to inform that the Board of Directors of the Company inter-alia considered and adopted the Unaudited Financial Results of the Company (standalone and consolidated) for quarter and nine months ended 31st December, 2020 at the meeting held today i.e. 4th February, 2021.

In terms of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we hereby enclose a copy of the Unaudited Financial Results (Standalone and Consolidated) for quarter and nine months ended 31st December, 2020 together with Limited Review Report from our Statutory Auditors. A copy of the press release is enclosed for your reference.

The meeting of the Board of Directors of the Company commenced at 1.30 p.m. and concluded at 3.00 p.m.

Also note that the aforesaid information will be available on our website www.sonata-software.com

Kindly take the same on record.

Thanking you,

Yours faithfully For Sonata Software Limited Mangal Kulkarni MANGAL KRISHNARAO KULKARNI Digitally signed by MANGAL KRISHNARAO KULKARNI Date: 2021.02.04 15:02:05 +05'30'

Company Secretary, Compliance Officer and Head-Legal

Encl: as above

Deloitte Haskins & Sells LLP

Chartered Accountants Prestige Trade Tower, Level 19 46, Palace Road, High Grounds Bengaluru - 560 001 Karnataka, India

Tel: +91 80 6188 6000 Fax: +91 80 6188 6011

INDEPENDENT AUDITOR'S REVIEW REPORT ON REVIEW OF INTERIM STANDALONE FINANCIAL RESULTS

TO THE BOARD OF DIRECTORS OF

SONATA SOFTWARE LIMITED

• We have reviewed the accompanying Statement of Standalone Unaudited Financial Results of $1.$ SONATA SOFTWARE LIMITED ("the Company"), for the quarter and nine months ended December 31, 2020 ("the Statement"), being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.
• This Statement, which is the responsibility of the Company's Management and approved by the $2.$ Company's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.
• We conducted our review of the Statement in accordance with the Standard on Review 3. Engagements (SRE) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity', issued by the Institute of Chartered Accountants of India (ICAI). A review of interim financial information consists of making inquiries, primarily of the Company's personnel responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing specified under section 143(10) of the Companies Act, 2013 and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
• Based on our review conducted as stated in paragraph 3 above, nothing has come to our attention 4. that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.

For Deloitte Haskins and Sells LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Gurvinder Singh

(Partner) (Membership No. 110128) (UDIN: 21110128AAAAAN2275)

Place: Bengaluru Date: February 4, 2021

SONATA SOFTWARE LIMITED

Registered Office: 208, T.V. Industrial Estate, S.K. Ahire Marg, Worli, Mumbai - 400 030

Corporate Office: 1/4, A.P.S Trust Building, Bull Temple Road, N.R. Colony, Bangalore - 560 019

CIN - L72200MH1994PLC082110

www.sonata-software.com, Tel : +91-080-67781999 Fax : +91-080-26601387, investor@sonata-software.com

Part I ₹ in lakhs, except per share data

	Statement of unaudited standalone financial results for the quarter and nine months ended December 31, 2020
	Particulars	Quarter ended			Nine months ended	Year ended
Sl No.		December 31, 2020	September 30, 2020	December 31, 2019	December 31, 2020	December 31, 2019	March 31, 2020
		(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)
1	Revenue from operations	19,308	20,914	23,018	58,438	65,505	87,684
2	Other income	3,356	177	1,223	3,384	4,168	9,713
3	Total Revenue (1 + 2)	22,664	21,091	24,241	61,822	69,673	97,397
4	Expenses
	(a) Purchases of Stock-in-Trade	1,357	1,603	1,803	4,477	4,791	6,352
	(b) Employee benefits expense	10,874	9,947	11,898	30,129	34,626	46,706
	(c) Finance costs	240	244	259	734	802	1,090
	(d) Depreciation and amortization expense	472	476	521	1,428	1,533	2,060
	(e) Other expenses	1,352	1,924	3,154	5,255	9,907	14,314
	Total expenses	14,295	14,194	17,635	42,023	51,659	70,522
5	Profit before tax (3 - 4)	8,369	6,897	6,606	19,799	18,014	26,875
6	Tax expense
	(1) Current tax	1,233	1,832	1,890	4,627	4,971	6,001
	(2) Provision for tax relating to prior years (Refer Note 6)	1,564	-	-	1,564	-	-
	(3) Deferred tax	142	(148)	(197)	(380)	(176)	(252)
7	Profit for the period (5 - 6)	5,430	5,213	4,913	13,988	13,219	21,126
8	Other comprehensive income
	1 (a) Items that will not be reclassified to profit or (loss)	271	336	(52)	951	(228)	(846)
	(b) Income tax relating to items that will not be reclassified to profit or
	(loss)	(33)	(81)	10	(204)	61	180
	2 Items that will be reclassified to profit or (loss) (a) Exchange differences in translating the financial statements of
	foreign operations	106	10	181	130	42	34
	(b) Exchange differences on forward cover	201	1,352	(957)	2,613	(2,054)	(3,513)
	(c) Income tax relating to items that will be reclassified to
	profit or (loss)	24	(331)	198	(589)	536	741
	Total	569	1,286	(620)	2,901	(1,643)	(3,404)
9	Total Comprehensive Income for the period (7+ 8)	5,999	6,499	4,293	16,889	11,576	17,722
10	Paid-up equity share capital (Face Value ₹ 1/-)	1,039	1,039	1,039	1,039	1,039	1,039
13	Other equity (Refer Note 4)	36,289	36,289	52,276	36,289	52,276	36,289
14	Earnings per equity share (of ₹ 1/- each) (Refer Note 3)
	(a) Basic	5.23	5.02	4.73	13.46	12.72	20.33
	(b) Diluted	5.22	5.02	4.73	13.46	12.72	20.33
	See accompanying notes to the financial results

Notes to unaudited standalone financial results for the quarter and nine months ended December 31, 2020:

1 These quaterly and nine months ended unaudited standalone financial results prepared in accordance with Indian Accounting Standards applicable as per Sec 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 and amendments thereafter have been reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on February 4, 2021.

2 The Company publishes unaudited standalone financial results along with unaudited consolidated financial results. In accordance with Ind AS 108 Operating Segments, the Company has disclosed the segment information in the unaudited consolidated financial results.

3 EPS for quarter and nine months period ended is not annualised.

4 Balances for the quarter ended December 31, 2020, September 30, 2020, and December 31, 2019 represents balance as per the audited balance sheet for the year ended March 31, 2020 and March 31, 2019 respectively as required by SEBI (Listing and other disclosure requirements) regulations , 2015.

5 As the quarter and year-to-date figures are taken from the source and rounded to the nearest digits, the quarter figures in this results added up to the figures reported for the previous quarters might not always add up to the year-to-date figures reported in this results.

6 The Company had outstanding disputes with the Income Tax department in relation to certain matters for AY 1995-96, 2001-02 to 2005-06, 2011-12 & 2013-14 pending before High Court Mumbai and AY 2014-15 & 2016-17 which are pending before CIT (A), Mumbai . During the quarter, the Company has opted to apply for settlement of these disputes under Direct Tax Vivad Se Vishwas Act, 2020, and the necessary applications were filed on December 28 & December 29, 2020. Consequently, a provision of ₹ 1,564 lakhs has been created during the quarter. The applications have subsequently been accepted by the Principal Commissioner of Income Tax certifying the amounts payable. These amounts are to be settled by the Company on or before March 31, 2021.

7 The Board of Directors declared an interim dividend of ₹ 4/- (par value of ₹ 1/- each) per equity share on November 6, 2020 and the same was paid on November 26, 2020.The interim dividend declared in the

previous year was ₹ 5.75 per equity share.

8 The management has considered the possible effects that may result from COVID-19 in the preparation of these standalone financial results including the recoverability of carrying amounts of financial and nonfinancial assets. In developing the assumptions relating to the recoverability of these assets, the management has considered the global economic conditions prevailing at the date of approval of these financial results

9 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective. and has used internal and external sources of Information including credit reports to the extent determined by it. The eventual outcome of impact of the global health pandemic may be different from those estimated

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS P SRIKAR REDDY Place: Bengaluru MANAGING DIRECTOR SRIKAR PALEM REDDY Digitally signed by SRIKAR PALEM REDDY Date: 2021.02.04 15:00:44 +05'30'

Date: February 4, 2021 & CHIEF EXECUTIVE OFFICER

Deloitte Haskins & Sells LLP

Chartered Accountants Prestige Trade Tower, Level 19 46, Palace Road, High Grounds Bengaluru - 560 001 Karnataka, India

Tel: +91 80 6188 6000 Fax: +91 80 6188 6011

INDEPENDENT AUDITOR'S REVIEW REPORT ON REVIEW OF INTERIM CONSOLIDATED FINANCIAL RESULTS

TO THE BOARD OF DIRECTORS OF SONATA SOFTWARE LIMITED

• We have reviewed the accompanying Statement of Consolidated Unaudited Financial Results of 1. SONATA SOFTWARE LIMITED ("the Parent") and its subsidiaries (the Parent and its
  subsidiaries together referred to as "the Group"), for the quarter and nine months ended
  December 31, 2020 ("the Statement") being submitted b of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.
• This Statement, which is the responsibility of the Parent's Management and approved by the $2.$ Parent's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.
• We conducted our review of the Statement in accordance with the Standard on Review $\overline{3}$ . Engagements (SRE) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Institute of Chartered Accountants of India (ICAI). A review of interim financial information consists of making inquiries, primarily of Parent's personnel responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing specified under Section 143(10) of the Companies Act, 2013 and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
• The Statement includes the results of the Parent and subsidiaries as given in the Annexure of this 4. report.
• Based on our review conducted and procedures performed as stated in paragraph 3 above, nothing 5. has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.

For Deloitte Haskins and Sells LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)

r

Gurvinder Singh Partner (Membership No. 110128) (UDIN: 21110128AAAAAO9714)

Place: Bengaluru Date: February 4, 2021

Deloitte Haskins & Sells LLP

Annexure to the Auditor's Report:

List of Subsidiaries:

• 1. Sonata Information Technology Limited
• 1. Sonata Software Solutions Limited
• 1. Sonata Software North America Inc.
• 1. Interactive Business Information Systems Inc.
• 1. Sonata Software FZ LLC
• 1. Sonata Software (Qatar) LLC
• 1. Sonata Europe Limited
• 1. Sonata Software GmbH
• 1. Scalable Data Systems Pty Ltd
• 1. Sopris Systems LLC
• 1. GAPbuster China Co. Ltd
• 1. GAPbuster Europe Limited
• 1. GAPbuster Inc.
• 1. Gapbuster Limited
• 1. GAPbuster Worldwide Malaysia Sdn Bhd
• 1. GAPbuster worldwide Pty Limited
• 1. Kabushiki Kaisha GAPbuster Japan

SONATA SOFTWARE LIMITED

Registered Office: 208, T.V. Industrial Estate, S.K. Ahire Marg, Worli, Mumbai - 400 030

Corporate Office: 1/4, A.P.S Trust Building, Bull Temple Road, N.R. Colony, Bangalore - 560 019

CIN - L72200MH1994PLC082110 www.sonata-software.com, Tel : +91-080-67781999 Fax : +91-080-26601387, investor@sonata-software.com

Part I	₹ in lakhs, except per share data
Statement of unaudited consolidated financial results for the quarter and nine months ended December 31, 2020
		Quarter ended			Nine months ended	Year ended
Sl No.	Particulars	December 31, 2020	September 30, 2020	December 31, 2019	December 31, 2020	December 31, 2019	March 31, 2020
		(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Audited)
1	Revenue from operations	139,616	80,377	123,688	315,237	281,458	374,326
2	Other income	325	244	859	882	4,621	5,840
3	Total Revenue (1 + 2)	139,941	80,621	124,547	316,119	286,079	380,166
4	Expenses
	(a) Purchases of Stock-in-Trade	107,549	50,731	89,037	224,821	182,684	241,579
	(b) Employee benefits expense	16,516	14,922	16,697	45,749	49,019	66,031
	(c) Finance costs (d) Depreciation and amortization expense	462 992	378 1,005	430 913	1,183 3,019	1,164 2,729	1,518 3,654
	(e) Other expenses	4,459	5,996	6,987	17,040	20,775	29,435
	Total expenses	129,978	73,032	114,064	291,812	256,371	342,217
5	Profit before tax (3 - 4)	9,963	7,589	10,483	24,307	29,708	37,949
6	Tax expense
	(1) Current tax	2,292	2,553	2,763	7,596	8,422	10,603
	(2) Provision for tax relating to prior years(Refer Note 6)	2,183	-	-	2,183	-	-
	(3) Deferred tax	109	(684)	134	(1,562)	(230)	(347)
7	Profit for the period (5 - 6)	5,379	5,720	7,586	16,090	21,516	27,693
8	Other comprehensive income
	1 (a) Items that will not be reclassified to profit or (loss)	295	303	(42)	917	(191)	(865)
	(b) Income tax relating to items that will not be reclassified to profit or (loss)	(70)	(73)	10	(228)	53	232
	2 Items that will be reclassified to profit or (loss) (a) Exchange differences in translating the financial statements
	of foreign operations and on goodwill reinstatement	724	1,320	824	824	395	323
	(b) Exchange differences on forward cover	739	2,378	(965)	3,985	(2,095)	(3,511)
	(c) Income tax relating to Items that will be
	reclassified to profit or (loss)	(346)	(942)	46	(1,194)	471	854
	Total	1,342	2,986	(127)	4,304	(1,367)	(2,967)
9	Total Comprehensive Income for the period (7+ 8)	6,721	8,706	7,459	20,394	20,149	24,726
	Of the Total Comprehensive Income above, total comprehensive income
	attributable to: Owners of the parent	6,721	8,706	7,459	20,394	20,149	24,726
	Non - controlling interest	-	-	-	-	-	-
		6,721	8,706	7,459	20,394	20,149	24,726
	Of the Total Comprehensive Income above, Profit for the period
	attributable to:
	Owners of the parent	5,379	5,720	7,586	16,090	21,516	27,693
	Non - controlling interest	- 5,379	- 5,720	7,586	- 16,090	- 21,516	- 27,693
	Of the Total Comprehensive Income above, Other Comprehensive Income
	for the period attributable to:
	Owners of the parent	1,342	2,986	(127)	4,304	(1,367)	(2,967)
	Non - controlling interest	-	-	-	-	-	-
		1,342	2,986	(127)	4,304	(1,367)	(2,967)
10	Paid-up equity share capital (Face Value ₹ 1/-)	1,039	1,039	1,039	1,039	1,039	1,039
11	Other equity (Refer Note 8)	65,928	65,928	75,787	65,928	75,787	65,928
12	Earnings per equity share (of ₹ 1/- each) (Refer Note 7) (a) Basic	5.18	5.50	7.30	15.48	20.70	26.66
	(b) Diluted	5.18	5.50	7.30	15.48	20.70	26.66
	See accompanying notes to the consolidated financial results

Notes :Notes: 100,000.00

• 1 These quarterly and nine months ended unaudited consolidated financials results prepared in accordance with Indian accounting standards applicable as per Sec 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 and amendments thereafter have been reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on February 4, 2021.
• 2 Unaudited consolidated financial results include financial results of subsidiaries i.e, Sonata Information Technology Limited, Sonata Software North America Inc. (SSNA), Interactive Business Information Systems Inc. (IBIS), Sonata Software GmbH, Sonata Europe Limited, Sonata Software FZ-LLC, Sonata Software (Qatar) LLC, Scalable Data Systems Pty Ltd, Sopris Systems LLC, Sonata Software Solutions Limited, GAPbuster China Co. Ltd, GAPbuster Europe Limited, GAPbuster Inc., Gapbuster Limited, GAPbuster Worldwide Malaysia Sdn Bhd, GAPbuster worldwide Pty Limited, and Kabushiki Kaisha GAPbuster Japan.
• 3 The Board of Directors declared an interim dividend of ₹ 4/- (par value of ₹ 1/- each) per equity share on November 06, 2020 and the same was paid on November 26, 2020.The interim dividend declared in the previous year was ₹5.75/- per equity share.
• 4 Sonata Europe Limited, a wholly-owned subsidiary of Sonata Software Limited has acquired 100% stake in GAPbuster Ltd, a UK registered Company on April 20,2020 for an investment of USD 4.8 million (approximately ₹ 3,632 lakhs) (net of working capital) including USD 0.5 million (approximately ₹ 378 lakhs) which is deferred consideration payable on the completion of one year.
• 5 The management has considered the possible effects that may result from COVID-19 in the preparation of these consolidated financial results including the recoverability of carrying amounts of financial and non-financial assets. In developing the assumptions relating to the recoverability of these assets, the management has considered the global economic conditions prevailing at the date of approval of these financial results and has used internal and external sources of Information including credit reports to the extent determined by it. The eventual outcome of impact of the global health pandemic may be different from those estimated as on the date of approval of these financial results.
• 6 The Group had outstanding disputes with the Income Tax department in relation to certain matters for AY 1995-96, 2001-02 to 2005-06, 2011-12 & 2013-14 pending before High Court Mumbai and AY 2014-15 & 2016-17 which are pending before CIT (A), Mumbai in Sonata Software Limited and for AY 2004-05 to 2006-07 which are pending before High court, Mumbai in Sonata Information Technology Limited. During the quarter, the group has opted to apply for settlement of these disputes under Direct Tax Vivad Se Vishwas Act, 2020, and the necessary applications were filed on December 28 & December 29, 2020. Consequently, a provision of ₹ 1,564 lakhs in Sonata Software Limited and ₹ 618 lakhs in Sonata Information Technology Limited has been created during the quarter.

The applications have subsequently been accepted by the Principal Commissioner of Income Tax certifying the amounts payable. These amounts are to be settled by the Group on or before March 31, 2021.

• 7 EPS for quarter and nine months ended is not annualised.
• 8 Balances for the quarter ended December 31, 2020, September 30, 2020, and December 31, 2019 represents balance as per the audited balance sheet for the year ended March 31, 2020 and March 31, 2019 respectively as required by SEBI (Listing and other disclosure requirements) regulations , 2015.
• 9 As the quarter and year-to-date figures are taken from the source and rounded to the nearest digits, the quarter figures in this statement added up to the figures reported for the previous quarters might not always add up to the year-to-date figures reported in this results.
• 10 The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Group will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.

The consolidated segment wise revenue and results are as follows :

11 (a) (₹ in lakhs) Year ended December 31, 2020 September 30, 2020 December 31, 2019 December 31, 2020 December 31, 2019 March 31, 2020 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) 1. Segment revenue a. India 94,786 43,561 79,589 191,714 164,331 223,491 b. Other than India 45,251 37,596 44,594 125,179 118,913 152,997 Total 140,036 81,157 124,183 316,893 283,244 376,488 Less : Inter segment revenue (420) (780) (495) (1,656) (1,786) (2,162) Revenue from operations 139,616 80,377 123,688 315,237 281,458 374,326 2. Segment results Profit before tax and interest a. India 2,583 1,394 1,942 5,376 5,047 7,166 b. Other than India 7,308 5,989 8,668 18,528 24,410 30,673 Total 9,891 7,383 10,610 23,904 29,457 37,839 Less: Finance costs (462) (378) (430) (1,183) (1,164) (1,518) Add: Unallocable income net of unallocable expenditure 534 584 303 1,586 1,415 1,628 4. Profit before tax 9,963 7,589 10,483 24,307 29,708 37,949 Particulars Quarter ended Nine months ended

11(b) Consolidated segment wise assets and liabilities (₹ in lakhs)

Particulars	December 31, 2020	September 30, 2020	December 31, 2019	March 31, 2020
5. Segment assets
a. India	67,408	74,581	71,183	63,425
b. Other than India	73,047	80,375	81,018	74,779
c. Unallocable	52,411	28,939	21,473	23,442
Total Assets	192,866	183,895	173,674	161,646
6. Segment liabilities
a. India	56,365	52,173	62,905	52,474
b. Other than India	33,102	30,433	26,012	30,010
c. Unallocable	20,259	20,726	4,189	12,195
Total Liabilities	109,726	103,332	93,106	94,679
Capital Employed	83,140	80,565	80,568	66,967

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Place : Bengaluru P SRIKAR REDDY & CHIEF EXECUTIVE OFFICER SRIKAR PALEM REDDY Digitally signed by SRIKAR PALEM REDDY Date: 2021.02.04 15:01:16 +05'30'

Date : February 4, 2021 MANAGING DIRECTOR

Sonata Software - Consolidated Q3 FY 21 EBIDTA at ₹ 114 Crores, QoQ growth of 27%

Bengaluru, February 04, 2021

Sonata Software, a global IT services and technology solutions company, today reported its unaudited financial results for its 3rd quarter ended and nine months ended 31st December 2020.

								in ₹ Crores
Description	For the Quarter ended					For the nine months ended
	31-Dec-20	30-Sep-20	31-Dec-19	QoQ	YoY	31-Dec-20	31-Dec-19	YoY
Revenues
International IT Services	300.9	288.1	329.8	4%	-9%	864.8	946.8	-9%
Domestic- Products & Services	1,099.4	523.5	912.0	110%	21%	2,304.1	1,885.2	22%
Consolidated	1,396.2	803.8	1,236.9	74%	13%	3,152.4	2,814.6	12%
EBITDA
International IT Services	87.1	70.4	91.6	24%	-5%	222.3	265.5	-16%
Domestic- Products & Services	27.3	19.6	27.0	39%	1%	63.8	71.9	-11%
Consolidated	114.2	89.7	118.3	27%	-3%	285.1	336.0	-15%
PAT before VsVs *
International IT Services	57.0	43.6	57.8	31%	-1%	138.9	167.3	-17%
Domestic- Products & Services	18.6	13.6	18.1	36%	3%	43.8	47.8	-8%
Consolidated	75.6	57.2	75.9	32%	0%	182.7	215.2	-15%
PAT after VsVs *
International IT Services	41.4	43.6	57.8	-5%	-28%	123.3	167.3	-26%
Domestic- Products & Services	12.4	13.6	18.1	-9%	-32%	37.6	47.8	-21%
Consolidated	53.8	57.2	75.9	-6%	-29%	160.9	215.2	-25%

* During the quarter provision for income tax settlement under Vivad se Vishwas Scheme("VsVs") is made ₹ 15.6 Crores for International IT Services (Sonata Software Limited), ₹ 6.2 Crores for Domestic Products & Services (Sonata Information Technology Limited) and ₹ 21.8 Croresfor Consolidation financials. Consequently, contingent liability (based on the original demand as per order) has been reduced by ₹ 33.7 Crores for International IT Services (Sonata Software Limited), ₹ 15.3 Crores for Domestic Products & Services (Sonata Information Technology Limited) and ₹ 49 Crores for Consolidation financials.

Mr. Srikar Reddy, Managing Director & CEO of the Company said-

The results for the quarter reflect all round growth across different segments of the business, growth especially in the digital business resulting in highly profitable growth. This is a clear indication that our overall strategy of building digital enterprises by creating platforms through our unique PlatformationTM methodology is more relevant in the current context with greater reliance and investments by enterprises in digitization and automation. We have become a much stronger organization in the quality of clients, relationships, and internal investments, in creating world class competencies aligned to PlatformationTM across platform engineering, cloud transformation, data analytics and Microsoft Dynamics. Specifically, we would like to mention the GBW

investment made which is focussed on delivering platform based CX (customer experience) is holding premise and differentiation to our digital offering.

With clear visibility and business opportunity in the immediate future, we are focused now on investing for long term growth, in talent acquisition and transformation, IP and competency development.

The company also announced compensation revision effective January 1st, 2021.

Performance Highlights for the quarter:

• Consolidated:

• Revenues at ₹ 1,396 Crores: growth of 74% QoQ and growth of 13% on YoY basis.
• EBITDA at ₹ 114 Crores: growth of 27% QoQ
• Net Profit at ₹ 75.6 Crores (Grossed up for income tax settlement under VsVs ₹ 21.8 Crores); sequential growth 32%
• Cash and equivalents (net of borrowings) approximately ₹ 604 Crores.

• International IT Services:

• Revenues at ₹ 300 crores; growth of 4% QoQ;
• Revenue in USD at 41 Million, QoQ revenue growth of 5.0% in USD terms and constant currency growth of 4.5%.
• Growth across all geographies (USA 7.1% , Europe 4.9% , Rest of World 1.4% ) .
• EBITDA at ₹ 87 Crores: growth of 24% QoQ;
• Net profit (PAT) at ₹ 57 Crores (Grossed up for income tax settlement under VsVs ₹ 15.6 Crores), QoQ growth of 31%
• Addition of 8 new customers during the quarter.
• Overall strategy of creating digital enterprises by creating platform through our unique Platformation methodology are yielding results.
• Strong growth from digital based competencies like Managed cloud services and Digital Platformation Services (Microsoft & Open source) and focused verticals like ISV, Retail (Essential) and Commodity Business & Service Industry.
• Strong cash and liquidity positions maintained. Improvement in DSO days from 47 days to 36 days.
• Our pipeline continues to be healthy and strong through multiple new digital wins from existing and new customers.

• Domestic Products & Services:

• Revenues at ₹ 1,099 crores: growth of 110% QoQ;
• Domestic business revenue driven by multiyear cloud-based annuity deals. More than 60% of revenue from cloud-based deals. Sustained growth ensured through strong customer retention, ~82% of gross margin from customers with turnover (customer's revenue) more than 1,000 Crores and more than 60% of gross margin earned from repetitive customers with more the 5 years of association.
• Domestic business measured on absolute Gross Margin. Gross margin for the Quarter at ₹ 38 crs vs Q2'21 ₹ 30 Crores, QoQ growth of 26%.
• EBITDA at ₹ 27 Crores: growth of 39% QoQ;
• Net profit (PAT) at ₹ 18.6 crores QoQ growth of 36% (Grossed up for income tax settlement under VsVs ₹ 6.2 Crores).
• DSO days improved from 63 days to 57 days.

About Sonata Software

Sonata is a global technology company, that enables successful platform based digital transformation initiatives for enterprises, to create businesses that are connected, open, intelligent and scalable. Sonata's Platformation™ methodology brings together industry expertise, platform technology excellence, design thinking-led innovation and strategic engagement models to deliver sustained long term value to customers. A trusted partner of world leaders in the Retail, Manufacturing & Distribution, Travel and Software industries, Sonata's solution portfolio includes its own digital platform such as Brick & Click Retail Platform©, Modern Distribution Platform©, Rezopia Digital Travel Platform©, RAPID DevOps Platform©, Kartopia E-commerce Platform©, Halosys Mobility Platform©, and Commodity CTRM Platform©, best-in-class capabilities on ISV digital technology platforms such as Microsoft Dynamics 365, Microsoft Azure, SAP Hybris, Cloud Engineering and Managed Services, as well as new digital applications like IoT, Artificial Intelligence, Machine Learning, Robotic Process Automation, Chatbots, Block Chain and Cyber Security. Sonata's people and systems are nurtured to bring together the depth of thought leadership, customer commitment and execution excellence to make a difference to business with technology.

For further information, please contact:

Nandita Venkatesh Sonata Software Limited CIN- L72200MH1994PLC082110 A.P.S. Trust Building, Bull Temple Road, N.R. Colony Bangalore 560019, India Tel: +91 80 67781999 nandita.v@sonata-software.com