R Systems and Aisel Corporation Announce Plans For A Strategic Alliance To Serve Japanese Market

Noida, October 31, 2006: R Systems International Ltd. (NSE: RSystems) one of the leading provider of outsourced product development and customer support services today announced that it signed a letter of intent with Aisel Corporation, an independent systems development and business solutions provider, in Tokyo, Japan. The proposed transaction would involve R Systems taking up to 15% equity stake in Aisel and Aisel taking up to 5% equity stake in R Systems through issuance of new shares at Rs. 250 per share, subject to the applicable pricing guidelines. In addition the proposed transaction includes both parties collaborating exclusively for delivery of certain services to each others customers. R Systems would serve Aisel for all its offshore software development needs and Aisel would serve R Systems with onsite project management and coordination needs. The transaction is subject to definitive agreements and regulatory and other corporate approvals and it is estimated that it will take approximately 4 months to complete all documentation and close. For more information on Aisel please visit http://www.aisel.ne.jp

"Our proposed strategic alliance will help R Systems and Aisel to complement our respective strengths and capabilities to offer integrated seamless global delivery to our clients in Japan," said Rekhi Singh, CEO of R Systems. "Both R Systems and Aisel customers will benefit from this unique strategic alliance as it will provide them with the benefits of a blended, onshore & offshore delivery model and reduce the cost of ownership of solutions. We look forward to a nurturing a long and deep relationship with the Aisel team."

"We welcome this proposed partnership with R Systems to increase our capacity and offer hybrid onshore and offshore solutions to our customers," said Sadao Kusakawa, representative director and founder of Aisel. "The relationship will help us to innovate and develop solutions faster and at a lower cost for the benefit of our customers."

Upon signing the letter of intent, Mr. Rekhi Singh and Mr. Sadao Kuakawa concluded, "This alliance is for our customers in Japan. Together we will be able to do more, faster and at a lower cost for our very valued customers."

About R Systems International Ltd

R Systems International Ltd. founded in 1993, is one of the leading provider of outsourced product development and customer support services. We help companies accelerate the speed to market for their products and services with a high degree of time and cost predictability by using our proprietary pSuite execution framework. Clients can choose services specific to their needs from R Systems iPLM suite of services. We help companies build scalable, configurable and secure products and applications; and help our clients support their customers for products and services using our global delivery model. R Systems rapidly growing customer list includes a variety Fortune 1000, government and mid-sized organizations across a wide range of industry verticals including Banking and Finance, High Technology and Independent Software Vendors,
Government, HealthCare, Manufacturing and Logistic Industries. R Systems maintains five centers for Software Excellence, and using our global delivery model we serve customers in the US, Europe, South America, the Far East, the Middle East and Africa.

About Aisel Corporation.

AISEL Corporation established in 1989, is an independent systems development and business solutions provider in Japan. The company provides consultation in system design, program development and systems implementation, often in conjunction with the actual operation and maintenance of client systems. Services within the solutions area include e-commerce, embedded systems, internet media, enterprise applications, logistics and production management systems. Aisel's ubiquitous network solutions and services enable clients to customize systems used in cellular phones, PHS and on-board vehicle telecommunications, and to develop network infrastructures. Aisel's list of clients includes a broad range of electronics manufacturers and global and mid-sized consumer goods and service companies. Aisel maintains solution centers in Tokyo and Osaka, a system center in Hiroshima and a branch office in Nagoya.

Safe Harbor:

This press release contains forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT and consulting services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology and consulting services, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. We may, from time to time, make additional written and oral forward-looking statements, and we do not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company.

For further information please contact:
Nand Sardana (Tel No. 0120 - 430 3506)