NetSol Technologies and The Innovation Group Sign Agreement to Form New Company

NetSol Technologies, Inc. (NASDAQ: NTWK), a developer of proprietary software applications and provider of information technology (IT) services, today announced that it has signed an agreement with UK-based The Innovation Group plc (LSE: TIG) expanding a relationship announced May 2004. Under the terms of this agreement, TIG-NetSol (Pvt) Ltd. will provide support services enabling TiG to scale solution delivery operations in key growth markets. TIG-NetSol will build a "Center Of Excellence" in NetSol's IT Village in Lahore, Pakistan, with a full back up facility in Bangalore, India. NetSol will own 50.5 percent of the new venture, with TiG owning the remaining 49.5 percent.

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"The creation of TIG-NetSol will allow us to create an extended enterprise to support our technology business with its growing community of customers and take advantage of a significantly lower offshore cost base," said Hassan Sadiq, Chief Executive of The Innovation Group. "Combined with TiG's vertical business expertise, NetSol's knowledgeable people and a CMM Level 4 development facility will provide TiG attractive alternatives for customer support and other initiatives."

Sadiq went on to note that before selecting NetSol as their partner for this venture, TiG conducted an in depth study comparing infrastructure, capabilities and pricing models between several companies in India and Pakistan. According to Sadiq, "NetSol's seasoned management team, its unique blend of outstanding services, and inherent ability to understand TiG's target market were key benefits in the selection."

"Being selected to partner with an industry leader such as The Innovation Group is a major accomplishment for NetSol," said NetSol CEO Naeem Ghauri. "We strongly believe that our recent Carnegie Mellon SEI CMM Level 4 Assessment demonstrated to TiG the desire and persistence of our Lahore team to improve the quality and efficiency of every product and service provided by NetSol. Over the next several months we will see a gradual increase in the revenues and expect a significant contribution from TIG-NetSol in the future."

About TIG-NetSol (Pvt) Ltd.

TIG-NetSol (Pvt) Ltd. will have dedicated floor space at the NetSol IT village in Lahore, Pakistan. During the first twelve months, NetSol will provide all resources and infrastructure support at a cost to TIG-NetSol. It is expected that over the second 12-month period TIG-NetSol will build its own infrastructure within the NetSol IT village. As NetSol Technologies, Inc. has majority ownership, the parent company will consolidate the top line revenues of the venture and its proportionate profits.

About The Innovation Group plc

The Innovation Group (London: TIG.L) delivers profit improvement solutions for the insurance and associated industries through a mix of technology and specialized business process outsourcing (SBPO) solutions. TiG's policy, claims and conversion technology solutions are recognized as robust and advanced, providing efficiency and costs benefits resulting in a 5 to 20 percent profit improvement. TIG had global annual group revenues of over $115 million last year. TiG technology is proven in many of the world's leading insurance carriers. Some of TIG's global customers include AVIVA, RAC, Zurich UK and Halifax General Insurance. For more information, visit the company's web site at www.tigplc.com.

About NetSol Technologies, Inc.

NetSol Technologies is a leading end-to-end solution provider for the lease and finance industry. Headquartered in Calabasas, CA, NetSol Technologies, Inc. operates on a global basis with locations in the U.S., Europe, East Asia and Asia Pacific. NetSol helps its clients identify, evaluate and implement technology solutions to meet their most critical business challenges and maximize their bottom line. By utilizing its worldwide resources, NetSol has been delivering high-quality, cost-effective IT services ranging from consulting and application development to systems integration and outsourcing for years. NetSol's commitment to quality is demonstrated by its achieving both ISO 9001 and SEI (Software Engineering Institute) CMM (Capability Maturity Model) Level 4 assessment. For more information, visit NetSol Technologies' web site at www.netsoltek.com

Securities Exchange Act of 1934

This release is comprised of inter-related information that must be interpreted in the context of all the information provided; accordingly, care should be exercised not to consider portions of this release out of context. This release is provided in compliance with Commission Regulation FD and contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumption or future events or performance, are not statements of historical fact and may be "forward-looking statements." Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through the use of words such as "expects," "will," "anticipates," "estimates," "believes," or statements indicating certain actions "may," "could," or "might" occur. Such statements reflect the current views of NetSol Technologies with respect to future events and are subject to certain assumptions, including those described in this release. Should one or more of the underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed or expected. NetSol Technologies does not intend to update these forward-looking statements prior to announcement of quarterly or annual results.