R Systems Announces Plans to Acquire a US Technical Support

New Delhi, May 20, 2006: R Systems International Ltd. one of the leading providers of outsourced product development and customer support services today announced that it signed a letter of intent to acquire a technical support company serving software companies in the US. The company provides outsourced solutions for technical support, help desk and customer care. The completion of the transaction is subject to definitive agreements and obtaining appropriate regulatory and corporate approvals and it is estimated that it will take 3 months to complete the transaction. The target company achieved revenues of $5.1 million in calendar year 2005. The estimated value of the acquisition will be a maximum of $10.7 million inclusive of cash of $1.17 million and the balance maximum amount of $9.53 million proposed to be paid by earn-out payments and redeemable non-convertible preference shares depending on certain performance targets.

"We believe that the proposed acquisition by R Systems will create an excellent opportunity to further strengthen our technical support capabilities for the technology sector ," said Rekhi Singh, CEO of R Systems. "Our customers will benefit from this combination, providing them the benefits of a blended, onshore & offshore delivery model and a more powerful end-to-end solution. We are both highly committed to the technology sector and the acquisition will position the combined organisation for even greater success in the future."

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.

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)