Sonata Software Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2021

1. These quarterly and year ended standalone financial results prepared in accordance with Indian Accounting Standards applicable as per Sec 133 of the Companies Act, 2013 have been reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on May 12, 2021.

2. The figures for the quarter ended March 31, 2021 and March 31,2020, are balancing figures arrived based on audited results of the full financial year and published year to date unaudited figures for nine months ended December 31, 2020 and December 31, 2019 respectively. The statutory auditors have performed a limited review on the results for the quarter ended March 31, 2021.

3. The Board of Directors recommended a final dividend of Rs. 10/- (1000% on par value of Rs. 1/-) per equity share for the financial year ended March 31, 2021. The payment is subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company.

4. The Company also publishes consolidated financial results in addition to standalone financial results. In accordance with Ind AS 108 Operating Segments, the Company has disclosed the segment information in the consolidated financial results.

5. The other equity with respect to quarter and nine months represents balance as per the audited Balance Sheet of the previous year as required by SEBI (Listing and Other Disclosure Requirements) Regulations, 2015

6. EPS for quarterly periods is not annualised.

7. 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 previous 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 Rs. 1,564 lakhs has been created during the previous quarter.
The applications have subsequently been accepted by the Principal Commissioner of Income Tax certifying the amounts payable. This liability has been settled by the company during the current quarter.

8. During the quarter the company had received a favourable judgement from Honourable Supreme Court of India on purchase of software products from non-resident is not taxable as 'Royalty' and withholding tax is not applicable as per the Income-tax Act, 1961. Consequently on account of this favourable judgement, contingent liability of the company has reduced by Rs. 2,842 lakhs for financial years 1999-00, 2000-01 and 2001-02.

9. The management has considered the possible effects of the pandemic relating to COVID-19 on the carrying amounts of receivables and goodwill as at March 31, 2021. 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.

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 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.

P SRIKAR REDDY
MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER