SIFY Reports U.S. GAAP Results for the Fourth Quarter and Fiscal Year Ended 31st March 2006; Sify Reports Net Profit for the Quarter of $ 0.47 Million; Annual Revenues Grow 29.6% to $105.3 Million

Q4 2005-06 Performance Highlights:

-- Sify reported revenues of $ 28.9 million for the quarter ended 31st March 2006, 24.9% higher than the quarter ended 31st March 2005. The sequential growth in revenues over the previous quarter was 7%.

-- Sify's cash profit, in Adjusted EBITDA terms, for the quarter was $2.65 million, an increase of $2.07 million compared to the same quarter last year. See below for a reconciliation of Adjusted EBITDA to Sify's U.S. GAAP operating results.

-- Sify's net profit for the quarter under U.S. GAAP was $ 0.47 million, compared to a net loss of $2.51 million for the fourth quarter in the previous fiscal year.

-- Sify ended the year with a cash balance of $ 63 million after capital expenditures of $ 2.8 million during the fourth quarter.

2005-06 Performance Highlights:

-- Sify reported revenues of $105.3 million for the fiscal year ended 31st March 2006, 29.6% higher than the previous fiscal year.

-- Sify's cash profit, in adjusted EBITDA terms, for the year was 6.47 million, an increase of 28% compared to the year ended 31st March 2005. See below for a reconciliation of Adjusted EBITDA to Sify's U.S. GAAP operating results.

-- Sify's net loss for the year under U.S. GAAP was $ 3.35 million, a decrease of 51.5% compared to a net loss of 6.91 million for the previous fiscal year.

Mr. R Ramaraj, Managing Director and CEO, Sify Limited, said, "Weare extremely pleased to report a net profit for the fourth quarterwith consistent growth across businesses. Initiatives in our portalsbusiness during the year resulted in revenue growth of 74% over theprevious year. We continue to lead the market for infrastructuremanaged services such as VPNs, and have established leadership in thebroadband access to home segment. The iWay cyber cafe chain continuesto grow, with over one million subscribers using the 3300 iWay cybercafes across 153 cities in the last quarter."

"Sify is well positioned to continue growth across all ourbusinesses in a nascent Internet & network services market in India,cutting edge IP expertise, and the active involvement of our majoritystakeholder in accelerating our growth with internationalrelationships and alliances."

Mr. Durgesh Mehta, Chief Financial Officer, Sify Limited, said,"We have consistently invested in growth with the belief that thiswill lead to sustained revenue growth, market leadership andprofitability, and are now beginning to see the benefits of thisstrategy. The markets in India continue to hold great potential forgrowth, as does our international services in the infrastructuremanagement and security space. Our intention is to continue to investin these opportunities to build the value of the company and maximizestakeholder value."
Summarized Results (In $ million, all
translated at $1 = Rs. 44.48)


Quarter Year Year
Description Quarter ended ended ended ended
31-Mar 31-Dec 31-Mar 31-Mar
---------------------------------------
2006 2005 2005 2006 2005
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Enterprise services 15.68 13.08 14.50 56.90 45.49
Access Media 10.81 8.90 10.42 40.79 31.59
Portals 1.27 0.68 1.08 4.03 2.32
Others 1.14 0.48 1.03 3.54 1.85
---------------------------------------
Sales revenue 28.91 23.14 27.02 105.26 81.24
Cost of Revenues (15.06) (13.63) (14.01) (56.99) (45.50)
Selling, general and admin
expenses (11.67) (9.56) (11.23) (43.98) (33.01)
EBITDA share of affiliates 0.17 0.53 0.24 1.38 1.86
Other Expenses incl forex gain
(loss) 0.30 0.10 0.26 0.79 0.48
---------------------------------------
Adjusted EBITDA (1) 2.65 0.58 2.27 6.47 5.07
Reconciliation items:
Depreciation & amortization (2.77) (3.24) (2.58) (10.71) (12.76)
Below EBITDA share for
Affiliates (0.05) (0.19) (0.11) (0.47) (0.72)
Profit - business / assets
sold 0.00 0.00 0.00 0.00 0.35
Net interest 0.64 0.34 0.17 1.36 1.14
---------------------------------------
Net income / (loss) 0.47 (2.51) (0.23) (3.35) (6.91)

Adjusted EBITDA (1) / loss $
/ADR 0.06 0.02 0.06 0.18 0.14
Net Income / (loss) $/ ADR 0.01 (0.07) (0.01) (0.09) (0.20)


(1)Adjusted EBITDA represents net income (loss) before interest,
income tax, depreciation and amortization, impairment of intangible
assets, and results involving discontinued operations or
non-operating assets. Please see "Non-GAAP Financial Information"
below.

Note: the company reports the summarized results for every Quarter
based on the exchange rates prevailing on the last day of the Quarter
under review. The results presented above reflect results in Indian
Rupees translated at $1= Rs 44.48 At the end of the last Quarter the
rate at which the Rupee results were translated was $1= Rs 44.95.

Enterprise Services:

New Business wins: Sify's new business wins during the quarterinclude managed VPN services for Bombay Dyeing, Celebrity Fashions,Crompton Greaves, Eureka Forbes, GVK Biosciences, Hyundai Motors,Indraprastha Gas, McDowells, Travel Corporation of India and Internetservices for Aker Kvaerner. Customer wins from international alliancepartners include orders from Borgwarner, Microchip technology and SonyPictures.

New Level 4 Data Centre at Bangalore: Sify is setting up a datacenter in Bangalore to cater to the rising demand for hosting primaryand disaster recovery data centers. This will be Sify's third datacenter in the country after Mumbai and Chennai. New customer wins forhosting services in the existing data centers include Audatex (an ADPGroup Company), Bombay Dyeing, Flex Industries, ILFS and TransportCorporation of India.

SifyAssure: Sify's Information Assurance and Consultancy businessstarted the second phase of the multi phase detailed risk assessmentfor a large carrier in the Middle East. Other significant assignmentsincluded the BS7799 engagements from Quest and Jet Airways, SecurityAudit from Pepsi, and infrastructure implementation orders fromVeriSign and I-flex Solutions.

Application Services: During the quarter, a managed platform fordocument management and messaging services in an ASP form aimed at theSME segment was launched. Significant successes included thedevelopment of a customized Net application for the Fortune Park Hotelchain and Diageo, besides orders for Document Management from BajajAllianz, Dell and ICICI Prudential.

Safescrypt, the digital security practice of SifyComm, a Sifysubsidiary, saw a surge in its mass market digital certificatebusiness due to the Director General of Foreign Trade mandatinge-filing. In another significant development that will enhanceproliferation and use of digital certificates, the Ministry of CompanyAffairs launched the MCA21 initiative that mandates the signingauthorities of companies, registered Chartered Accountants and Companysecretaries to digitally sign documents. This aggressive initiativeintends to mandate digital certification by all the Registrars ofCompanies in India in the near future.

Remote IT Infrastructure Management Services: A five year remoteinfrastructure management contract was awarded to provide services toa legal services company in the United States. This contract isexpected to generate revenues of approximately $5 million during theterm of the contract. Another multi-year, multi-service remoteinfrastructure management contract from a large broadband servicesprovider in the United States is expected to generate revenues ofapproximately $6 million over the next five years.

Recognition by Gartner: The Gartner report "Comparison of IP VPNService Providers in India" placed Sify, "Among the more far sightedplayers in terms of its early entry into the IP VPN market and itsfocus on managed services". The report also stated "Sify has the mostextensive portfolio of managed service offerings, that include managedfirewall, hosted e-mail and management of desktop and desktopapplications."

Access Media:

iWay Cyber-cafe Growth: The iWay chain grew to reach 3,300 cafes(of which 34 are owned by Sify and the rest franchised) with theservice being extended to 153 cities and towns. Growing at the rate of200 cafes in the last quarter, Sify added cafes at the rate of alittle more than two new cafes per day.

Online Games: Active promotion of online games, CD, LAN based andMMORPG continues to grow the online games community in India, withgames like Counter Strike becoming quite popular in iWays. Sify'sMMORPG game 'A3 India' is also gaining in popularity. These games cannow be played in more than 1400 iWays across the country.

Sify Broadband Growth: Subscribers to Sify's high speed Internetaccess to homes grew to 183,000 subscribers with the service expandedto 91 cities. Sify now has the largest high-speed subscriber baseamongst private players in India, and is geographically the mostwidely present private player across the country. There are now morethan 1600 Cable Television Operators who are Sify franchisees forbroadband service delivery across these 91 cities & towns.

Portals:

Revenues: grew approximately 18% on a sequential basis and 86%over the same quarter last year, driven by revenues from advertising,sponsorships and ecommerce.

Sifymax.in (http://www.sifymax.in) The path breaking broadbandportal from Sify was the exclusive broadband partner for reality showssuch as Indian Idol 2, Business Baazigar and Saregamapa. Sify Max nowalso streams video content live 24 x 7 from TV channels such asCNN-IBN & CNBC, and hosts 15 radio stations offering Bollywood hits,the latest chart-busters, Indipop and international in multiplelanguages.

Event Webcasts: SifyMax is the official Internet partner for theLakme Fashion Week, with live webcasts, exclusive content andinterviews with designers and models and access to exclusive videocontent. The Union Budget, the Standard Chartered Mumbai Marathon andthe India Today Conclave were also webcast during the quarter.

Live webcast of cricket matches: SifyMax had the live streamingrights for all the seven One-Day Internationals between India andEngland, which was recently played in India. This is in addition toSifyMax's Video Scorecard that continues to delight cricket fans byinstant replay of catches, run outs, sixes and fours almost as soon asthey happen.

www.Bangalorelive.in: India's first city centric broadband website was launched during the quarter with original Bangalore centricvideo content, created exclusively for an online audience. The videosfocus on city news and events, entertainment, celebrities, lifestyle,commerce and politics.

Mobile Commerce: Enabled on SifyMall to enable GPRS mobile usersto shop on Sifymall using their mobile phones. SifyMall also launcheda magazine subscriptions store for both Indian and foreignpublications across multiple categories.

New Sify.com: The new version of the www.sify.com portal and itsmajor channels has been well received by users, marketers andadvertisers.

SifyMail Upgrade: A new, improved version of SifyMail was launchedwith unlimited mailbox capacity for users. Users can also compose andread mails in 11 Indian languages.

New advertisers: Sify signed on new advertisers such as Clickjobs,Colgate, GO Air, History Channel, Naukri.com, Reebok, Reliance MutualFund and SAP.

About Sify Limited:

Sify is among the largest Internet, network and e-Commerceservices companies in India, offering end-to-end solutions with acomprehensive range of products delivered over a common Internetbackbone infrastructure. This Internet backbone reaches 171 cities andtowns in India. A significant part of the company's revenue is derivedfrom Corporate Services, which include corporate connectivity, networkand communications solutions, security, network management servicesand hosting. A host of blue chip customers use Sify's corporateservice offerings. Consumer services include broadband home access,dial up connectivity and the iWay cyber cafe chain across 153 citiesand towns. The company's network services, data center operations andcustomer relationship management are accredited ISO 9001:2000.

For more information about Sify, visit www.sifycorp.com.

Non-GAAP Financial Information

Our presentation of financial information above includes apresentation of Adjusted EBITDA. Adjusted EBITDA is neither an IndianGAAP measure nor a U.S. GAAP measure and should not be considered inisolation or as an alternative to net income as an indicator ofoperating performance or as an alternative to cash flow as a measureof liquidity. Our presentation above also includes a reconciliation ofAdjusted EBITDA to net income/(loss), which we believe to be the mostcomparable financial measure under U.S. GAAP. Adjusted EBITDA ispresented because it is a basis upon which our management assesses ourfinancial performance and because we believe some investors find it tobe a useful tool for measuring a company's financial performance andability to fund operating obligations and capital expenditures.Investors evaluating our financial performance or analyzing ourdiscounted cash flows based on Adjusted EBITDA should considerfinancing activities and non-recurring charges that are not includedin the calculation. Also for the fiscal year ended March 31, 2005,Adjusted EBITDA excludes a gain on sale of land held for development($ 0.35 million). While EBITDA or derivations thereof are frequentlyreported by many companies as a supplemental measure of operations, itis not necessarily comparable to other similarly titled captions ofother companies due to potential inconsistencies in the method ofcalculation.

Forward Looking Statements:

This press release contains forward-looking statements within themeaning of Section 27A of the Securities Act of 1933, as amended, andSection 21E of the Securities Exchange Act of 1934, as amended. Theforward-looking statements contained herein are subject to risks anduncertainties that could cause actual results to differ materiallyfrom those reflected in the forward-looking statements. Sifyundertakes no duty to update any forward-looking statements.

For a discussion of the risks associated with Sify's business,please see the discussion under the caption "Risks Related to OurBusiness" in the company's report on Form 6-K for the quarter endedDecember 30, 2005 which has been filed with the United StatesSecurities and Exchange Commission and is available by accessing thedatabase maintained by the SEC at www.sec.gov.