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Directors Report of Sasken Communication Technologies Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Report on the business and operations of the Company along with the Abridged Standalone and Unabridged Consolidated Audited Accounts for the financial year ended March 31,2015.

1. FINANCIAL PERFORMANCE

A summary of the Company's financial performance in 2015:

(Rs. in lakhs)

Consolidated for the year Particulars ended March 31

2015 2014

Revenue 42,800.99 45,802.93

Profit Before Interest and 5,418.34 8,491.72 Depreciation

Finance Charges 13.87 20.25

Gross Profit 5,404.47 8,471.47

Provision for Depreciation 1,119.76 1,254.22

Exceptional Items Income 17,333.30 - / (Expenses)

Net Profit Before Tax 21,618.01 7,217.25

Provision for Tax 9,661.57 2,070.08

Net Profit After Tax 11,956.44 5,147.17

Balance of Profit brought 25,970.49 28,977.32 forward Balance available for appropriation 37,926.93 34,124.49

Retained Earnings Adjustment 36.46 -

Proposed Dividend on Equity Shares 960.52 -

Interim dividend (including Special 4,797.42 6,807.81 dividend)

Dividend Tax 940.69 732.81

Transfer to General Reserve 1,587.90 613.38

Surplus carried to Balance Sheet 29,603.94 25,970.49

Particulars Standalone for the year ended March 31

2015 2014 Revenue 34,676.38 35,393.20 Profit Before Interest and Depreciation 4,705.87 9,583.67

Finance Charges - - Gross Profit 4,705.87 9,583.67 Provision for Depreciation 1,039.23 953.32 Exceptional Items Income / (Expenses) 21,716.10 (1,197.39)

Net Profit Before Tax 25,382.74 7,432.96 Provision for Tax 9,503.70 1,639.83 Net Profit After Tax 15,879.04 5,793.13 Balance of Profit brought forward 22,573.20 24,794.52 Balance available for appropriation 38,452.24 30,587.65 Retained Earnings Adjustment 35.89 - Proposed Dividend on Equity Shares 960.52 - Interim dividend (including Special dividend) 4,797.42 6,807.81

Dividend Tax 804.09 627.33 Transfer to General Reserve 1,587.90 579.31 Surplus carried to Balance Sheet 30,266.42 22,573.20

(Previous year's figures have been regrouped wherever necessary to conform to the current year's presentation)

On a consolidated basis, your Company's revenues from operation for the financial year 2014-15 have decreased by 6.55% in rupee terms, from Rs. 45,802.93 lakhs in 2013-14 to Rs. 42,800.99 lakhs in 2014-15. In the current year, Software Services, including Network Engineering Services contributed 96.71% to the revenues, while the Software Products revenues contributed 2.77%. The net profits increased from Rs. 5,147.17 lakhs in FY14 to Rs. 11,956.44 lakhs during the year, an increase of 232.29%. This has translated to a Basic Earnings Per Share of Rs. 56.11 in 2014-15 vs Rs. 24.36 in 2013-14.

There was no change in the nature of business of the Company, its subsidiaries and JV's.

2. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

3. DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs. 4.50 per equity share of face value of Rs. 10 each for the year under review. During the year, your Company paid an interim dividend of Rs. 2.50 per equity share and special dividend of Rs. 20 per equity share. The total dividend for the year ended March 31,2015 would be Rs. 27 per equity share.

4. BUY - BACK OF SHARES

In terms of decision of the Board of Directors (Board) dated April 23, 2015 and in accordance with the provisions of Companies Act, 2013 and the Securities and Exchange Board of India (Buy - back) Regulations, 1988 and with the approval of shareholders by Postal Ballot on June 25, 2015, the Company has offered to buy - back 41,57,000 fully paid up equity shares of Rs. 10 each, at a price of Rs. 260 per share for an aggregate amount of up to Rs. 10,808.20 lakhs from the existing shareholders of the Company under Tender Offer mechanism. The offer size represents 19.48% of the aggregate paid up capital and free reserves of the Company as at March 31,2015.

5. BUSINESS OUTLOOK, ECONOMIC & REGULATORY SCENARIO AND OPPORTUNITIES

The transformation of business operations across all industry - standard verticals has been buoyed by the platformization of businesses. This has meant traditional businesses coming under attack by new entrants. Enterprises that have embraced platforms have seen their valuation skyrocket irrespective of the vertical they operate in or the consumer segments they serve. This has been made possible by the evolution of information technology (IT) from being a passive infrastructure to becoming a strategic asset.

In order to better service the immense market opportunities that we see, we have revectored our go - to - market approach that judiciously combines a geo - focus in conjunction with customer engagement models. Our thrust areas include pursuing opportunities arising from Global In - House Centers (GICs) in India, proximity development centers of global OEMs, and delivering the work entrusted to us through a prudent choice of our global development centers.

At Sasken, we are continuing to build on our intended strategy of leveraging our deep expertise in product engineering and embedded systems to help transform the enterprise landscape. We have started making headway in this journey and have successfully engaged both entrenched companies and challengers in diverse areas such as retail, insurance, consumer and automotive electronics. Additionally with strong heritage in designing semiconductors, which form the substratum of products and networks, your Company is able to engage in the early phase of the product development lifecycle. Our ability to provide comprehensive services from stack2app (stack to application) combined with our semiconductor expertise, places us among forerunners who can help businesses profit from this wave of platformization.

The Internet of Things (IoT) has captured the imagination of industry leaders worldwide and has become the focal point of future development initiatives. Consensus industry estimates places the IoT to emerge from its current nascent state to become a multi - trillion dollar industry by 2020. Sasken has embarked upon several initiatives to develop distinct proof - of - concepts to demonstrate its ability to put together solutions that center around the IoT space.

For example, Sasken has designed an IoT - based energy management solution that aims to provide a simple and intelligent system. It combines sensing, communication, control, cloud and analytics to realize a reliable, efficient and cost effective solution to corporates and households. The board design, system integration, analytics, device communication protocol have been developed in - house by ConnectM (a Sasken and IDG Ventures company). In similar vein, we have built solutions that use a combination of wearable technology and IoT to address sports and retail industries. While the role of IoT in transforming our pursuits in the professional and personal space seems promising, the monetization opportunities will evolve over time.

In the cusp of embedded and IT, we have worked toward enabling independent software vendors (ISVs), who are using communication technologies, to transform the way logistic management can improve both efficient management of inventory and customer service. In our traditional embedded business, we have further strengthened our position of being a pioneer in providing product - engineering services by helping our customers launch a slew of products that are truly innovative. These include, among others, the services we have rendered to help smart devices leverage near - field communications (NFC) for micro payments; railway communication systems exploit the power of newer architectures for Base Transceiver Systems. In the coming years, we will endeavor to retain the momentum and enhance customer traction across both the embedded and IT markets.

For a more detailed discussion of our areas of business, please refer to the Technology and Markets section.

Litigation

Sasken received arbitration award in its favour on June 27, 2014. The award recognizes that the agreement between the parties is in full force and as a result, the Non - Indian Licensee was directed to pay Sasken royalties and interest on unpaid royalties as per the contract. Further, the Arbitrator had directed the said party to continue to provide royalty reports and pay the contracted royalties on an ongoing basis. During the financial year, Sasken collected around Rs. 276 crores against the contract pursuant to the award.

6. SHARE CAPITAL

The paid up equity share as on March 31,2015 was Rs. 21,34,48,730. During the year, your Company issued and allotted 67,300 equity shares to eligible employees on exercise of options granted under Employee Stock Option Plan - 2006. Consequently, the issued, subscribed and paid-up capital of the Company increased from 2,12,77,573 equity shares to 2,13,44,873 equity shares of Rs. 10 each.

6.1. Employees Stock Option Plan (ESOP) - 2006

The Company's ESOP continues with the philosophy of encouraging the employees to be partners in the growth of the organization.

As on March 31,2015, there were 54,000 options outstanding with the employees. There are 16,58,700 unissued options as on March 31,2015.

The details required under SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme), Guidelines 1999, as on March 31,2015, is annexed herewith as "Annexure A".

6.2. Warrants issued to Lahiri Family Trust

Based on the Special Resolution passed by the Company on November 8, 2013, your Company allotted on preferential basis 12,00,000 convertible warrants on November 18, 2013, to Ms. Ira Bhaduri in her capacity as Trustee of Lahiri Family Trust, of which Mr. Anjan Lahiri, former Whole Time Director and CEO of the Company, is the Managing Trustee. The allottee was entitled to one equity share of Rs. 10 each of the Company for each such warrant at a price of Rs. 120.25 each and 25% of the price amounting to Rs. 360.75 lakhs has been received as application money. The allottee exercised 10,40,000 options and paid Rs. 937.95 lakhs towards the balance 75% of the application money and as the proposed allotment / conversion was not to be proceeded with, this amount of Rs. 937.95 lakhs has been refunded and the stock exchanges have been informed about the non - conversion / allotment.

The Company has sought informal guidance from Securities and Exchange Board of India ("SEBI") on whether the 25% should be forfeited or can be refunded and if so, the procedural formalities in connection with that. SEBI vide its letter dated February 23, 2015 expressed its inability to issue any guidance in the matter as in its opinion, the matter for which guidance sought was not in compliance of para 8 of the Scheme. The Company was advised that since SEBI has not expressed any opinion despite having placed all the relevant facts and materials, the Company could proceed to effect the refund in its entirety. Accordingly the Board at its meeting held on April 13, 2015 approved refund of the application amount and the interest accrued and the same was paid on April 14, 2015.

7. DEPOSITS

Your Company has neither accepted nor renewed any deposit during the year. As such, no amount of principal and / or interest is outstanding as on the Balance Sheet date.

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 (the "Act") are given in the notes to the Financial Statements.

9. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure B".

10. RISK MANAGEMENT POLICY, INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Pursuant to the requirement of the Section 134 of the Act and Clause 49 of the Listing Agreement, your Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Report.

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are also discussed at the meetings of the Audit Committee and the Board of the Company.

The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.

The key business risks identified by the Company and its mitigation plans are detailed in the Management's Discussion and Analysis Report.

11. CORPORATE SOCIAL RESPONSIBILITY

Your Company has constituted a Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of the Act. The details of the CSR Policy and the annual report on CSR activities as prescribed under the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed herewith as "Annexure C".

Self Employed Women's Association (SEWA) is an organization in Ahmedabad that supports self - employed women workers to obtain work security, income security, food security and social security. For self - employed rural women engaged in the unorganized sector, various District Associations in the State of Gujarat, owned and managed by SEWA members, provide suitable financial services for socio - economic empowerment and self - development.

SEWA requested your Company for the development of an application and support system that would facilitate SEWA members in automating their savings and credit management activity. Based on the requirement of SEWA members to automate its existing manual processes in the savings and credit management activity, your Company using its software development expertise decided to support SEWA by independently developing the solution to make a difference to the rural women groups in Gujarat who are members of SEWA, thus fulfilling its Corporate Social Responsibility as well. Accordingly, your Company has started developing a solution known as KenSEWA that would include an Android smartphone application and associated server application ("Solution") and financing the Project.

In July 2014, the pilot phase of the Project was started for 21 groups in Anand District of Gujarat. All manual processes related to the Project would be ceased and the Solution alone would be used by end of July, 2016. The financial support both in cash or in kind shall be provided by your Company till December 2015 under its CSR activities.

Your Company had allocated Rs. 91.81 lakhs towards CSR for the year 2014-15 and spent Rs. 69.86 lakhs as above, thus utilized 76% of the amount. Your Company is in the process of identifying suitable projects and will carry out the CSR activities once this is firmed up. During the year, your Company had participated in other charitable events, contributed to a Research Project as well as to the local welfare association. As these expenditures were not part of the items detailed in the CSR Policy, your Company has not recognized the same in its reporting.

12. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism for Directors and employees to report their genuine concerns, details of which have been given in the Corporate Governance Report annexed to this Report.

13. DIRECTORS

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Clause 49 of the Listing Agreement.

Mr. Anjan Lahiri, Whole Time Director & CEO, resigned from the Board of your Company on September 23, 2014 and Mr. Deepak Harlalka, Independent Director, resigned from the Board on January 12, 2015.

Dr. G. Venkatesh, ceased to be a Whole Time Director with effect from January 19, 2015 and continues on the Board as a Non - Executive Director.

In accordance with the provisions of the Act and in terms of the Memorandum and Articles of Association of the Company, Mr. J.B. Mody and Dr. G. Venkatesh retire by rotation and are eligible for re - appointment.

13.1 Board Evaluation

The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India under Clause 49 of the Listing Agreement.

A comprehensive questionnaire was sent to all the Directors seeking inputs from them on various aspects and the performance of the Board was evaluated by the Board accordingly.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of non - independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and Non - Executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

13.2 Board independence

Our definition of 'Independence' of Directors is derived from Clause 49 of the Listing Agreement with Stock Exchanges and Section 149(6) of the Act. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Directors are Independent in terms of Clause 49 of the Listing Agreement and Section 149(6) of the Act : -

1. Dr. Ashok Jhunjhunwala

2. Mr. Bansi S. Mehta

3. Mr. Bharat V Patel

4. Mr. Kiran S. Karnik

5. Prof. J. Ramachandran

6. Mr. Sanjay M. Shah

Details of the familiarization programme of the Independent Directors is available on the website of the Company (www.sasken.com/investors/corPorate-governance).

13.3 Nomination & Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178(3) of the Act. The Remuneration Policy and the composition of the Nomination and Remuneration Committee have been stated in the Corporate Governance Report.

13.4 Meetings of the Board and its Committees

The details of the meeting of the Board and its Committees are detailed in the Corporate Governance Report.

13.5 Committees of the Board

During the year, in accordance with the Act, the Board re - constituted some of its Committees and also formed a Corporate Social Responsibility Committee and Risk Management Committee. The composition and terms of reference of all the Committees are detailed in the Corporate Governance Report.

13.6 Code of conduct

The Board has approved a Code of Business Conduct which is applicable to the Members of the Board and all employees. The Code has been posted on the Company's website (www.sasken.com/investors/corporate-governance). The Code lays down the standard of conduct which is expected to be followed by the Directors and the employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code.

Details of the Committees along with their charters, composition and meetings held during the year, are provided in the Corporate Governance Report.

14. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Act that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) accounting policies have been selected and applied consistently and, judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2015 and of the profit of the Company for the year ended March 31,2015;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis;

e) proper internal financial controls to be followed by the company were in place and that such internal financial controls were adequate and were operating effectively with no material defects; and

f) systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

15. SUBSIDIARY COMPANIES & JOINT VENTURES

The Company has one wholly owned subsidiary in India and four wholly owned subsidiaries overseas and one Joint Venture viz. ConnectM Technology Solutions Pvt. Ltd. During the year, Sasken Network Solutions Inc., the wholly owned subsidiary of Sasken Network Engineering Ltd. was liquidated on April 17, 2014.

There has been no change in the nature of business of the subsidiaries or the joint venture, during the year under review. In accordance with Section 129(3) of the Act, the Company has prepared a consolidated financial statement of the Company and all its subsidiary companies and joint venture, which is forming part of the Annual Report. A statement containing salient features of the financial statements of the subsidiary companies and joint venture is also included in the Annual Report.

In accordance with third proviso of Section 136(1) of the Act, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company (www.sasken.com/investors). Further, as per fourth proviso of the said section, audited annual accounts of each of the subsidiary companies and joint venture have also been placed on the website of the Company (www.sasken.com/investors). Shareholders interested in obtaining a copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company's registered office.

The Audit Committee of the Board reviews the consolidated financial statements of the Company and the investments made by its unlisted subsidiary companies. The minutes of the board meetings along with a report on significant developments of the unlisted subsidiary companies are periodically placed before the Board of the Company.

The Company does not have any material non - listed Indian subsidiary companies. The Company has a policy for determining 'material subsidiaries' which is disclosed on its website.

16. AUDITORS

16.1. Statutory Auditors

The Company's Auditors, M/s. S.R. Batliboi & Co., LLP, were appointed for a period of three years at the last Annual General Meeting held on September 22, 2014. However, vide letter dated July 20, 2015 they have expressed their inability to continue as auditors of your Company, in view of the internal restructuring by them. The Board has appointed M/s. S.R. Batliboi & Associates, LLP as auditors of your Company. They have confirmed their eligibility under Section 141 of the Act and the Rules framed thereunder for appointment as Statutory Auditors of the Company. Both M/s. S.R. Batliboi & Co. LLP and M/s. S.R. Batliboi & Associates LLP are members of the same network of firms of S.R. Batliboi & Affiiliates. As required under Section 139 of the Act, a resolution is being placed before the shareholders at this Annual General Meeting for their appointment.

16.2. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. J. Sundharesan & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Practicing Company Secretaries have submitted their report of the Secretarial Audit conducted by them which is annexed herewith as "Annexure D".

17. COMMENTS ON AUDITORS' REPORT

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. S.R. Batliboi & Co. LLP, Statutory Auditors, in their report and by M/s. J. Sundharesan & Associates, Practicing Company Secretaries, in their secretarial audit report.

18. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

The Company is committed to maintaining the highest standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, shareholders information together with Corporate Governance Compliance Certificate, forms an integral part of this Report which is annexed herewith as "Annexure E".

19. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

The Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is given separately, forming part of this Annual Report.

20. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business.

The Company has developed a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions. This policy has been approved by the Board and is available on the website of the Company (www.sasken.com/investors/corporate- governance).

None of the Directors has any pecuniary relationships or transactions with the Company.

The particulars of contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC - 2, of the rules prescribed under Chapter IX relating to Accounts of Companies under the Act, is annexed herewith as "Annexure F".

21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are certain on - going litigations / disputes in the normal course of business. However, there are no significant and / or material orders passed by the courts against your Company. No orders were passed by the Regulators against your Company during the year under review.

22. AWARDS

In terms of global rankings, Zinnov - a leading independent consultant - in its Global Service Provider Rating - 2014, has placed Sasken in the Established zone. Sasken stands amongst the leading providers in automotive and consumer electronics with headway in industrial automation, outsourced software product development in consumer software. According to the rankings, Sasken is a market leader in semiconductors and telecommunications verticals.

As forerunners in bringing innovative solutions to the market, Sasken's latest patent uses a combination of pattern and unique code, which provide a method to identify and authenticate shipment of goods. While this will go a long way in making transactions more transparent and easy to execute, it will also help Sasken and others in creating relevant solutions for retail, manufacturing and shipping industries.

Sasken has been awarded by Tektronix Communications for Service Excellence. This award recognizes Sasken's outstanding performance throughout the engagement with Tektronix and their view of Sasken as a trusted partner.

23. PATENTS

US India

Applied# 58 29

Granted 35 11

Abandoned 10 8

Pending 9 13

Sold 4 -

Granted since last report 1 1

# includes divisional patents

24. QUALITY CERTIFICATIONS ISO 14001:2004

Sasken is certified for ISO 14001:2004 [Environment Management System Standard]. Sasken is committed to contribute towards environment management, being a responsible corporate member of the communities in which it operates. This reaffirms our Company as a responsible corporate citizen.

ISO/IEC 27001:2005

Sasken is certified for ISO/IEC 27001:2005 [Information Security Management System Standard]. This is important for assuring our stakeholders (like Customers, Partners, Vendors, Investors and Employees) of our commitment in protecting their information assets and Intellectual Properties (IPs), as well as sensitizing all employees about importance of confidentiality, integrity and availability of information assets of our stakeholders.

TL 9000 R5.5/R5.0 (including ISO 9001:2008)

Sasken is certified for Quality Management System Standards - TL9000 R5.5/R5.0 which by definition includes the ISO 9001:2008 (QMS - Quality Management System) requirements and in addition telecom domain specific measurement and documentation requirements which helps to maintain consistent quality of deliverables within agreed timelines and budget to its valued customers.

CMMI - Dev - V1.3 - ML3

Sasken's quality management system is formally assessed at CMMI - Dev - V1.3 - ML3 in May - 2014. This provides the infrastructure and stability necessary to deal with an ever - changing world and to maximize the productivity of people and the use of technology to be competitive.

25. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) issued by the Institute of Chartered Accountants of India form part of this Annual Report.

26. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT - 9 is annexed herewith as "Annexure G".

27. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as "Annexure H1".

A statement containing names of employees employed throughout the financial year and in receipt of remuneration of Rs. 60 lakhs or more, employees employed for part of the year and in receipt of Rs. 5 lakhs or more per month, pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as "Annexure H2".

28. ACKNOWLEDGEMENTS

Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co - operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

For and on behalf of the Board of Directors

Place : Bengaluru Rajiv C. Mody Date : July 20, 2015 Chairman & Managing Director




Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Report on the business and operations of the Company along with the Abridged Standalone and Unabridged Consolidated Audited Accounts for the financial year ended March 31, 2014.

Result of Operations (Consolidated) - Extract

(Amount in Rs lakhs) Year ended Year ended Particulars March 31,2014 March 31,2013

Revenues 45,802.93 47,483.08

Expenses 41,718.40 45,232.57

Net Operating Profit 4,084.53 2,250.51

Interest Expenses 20.25 41.34

Non - operating Income,net 3,152.97 1,763.70

Profit before Income Taxes 7,217.25 3,972.87

Income Taxes Expense, net 2,070.08 776.94

Profit after Tax 5,147.17 3,195.93

Appropriation:

Proposed Equity Dividend 319.16 939.61

Interim Dividend 1,168.89 601.11

Special Dividend 5,310.00 -

Dividend Tax 731.15 257.21

(Previous year''s figures have been regrouped wherever necessary to conform to the current year''s presentation).

Your Company''s revenues from operation for the financial year 2013 - 14 have decreased by 3.54% in rupee terms, from Rs.47,483.08 lakhs in 2012 - 13 to Rs.45,802.93 lakhs in 2013 - 14. In the current year, Software Services, including Network Engineering Services contributed 95.33% to the revenues, while the Software Products revenues contributed 4.20%. The net profits increased from Rs.3,195.93 lakhs in FY13 to Rs.5,147.17 lakhs during the year, an increase of 61.05%. This has translated to a Basic Earnings Per Share of Rs.24.36 in 2013 - 14 vs. Rs.13.26 in 2012-13.

Dividend

In celebration of its 25th year since incorporation, your Company paid a Special Dividend of 250% (Rs.25 per equity share) in two tranches, viz. 25% (Rs.2.50 per equity share) in October 2013 and 225% (Rs.22.50 per equity share) in January 2014. Your Company had also paid two interim dividends of 25% (Rs.2.50 per equity share) in October 2013 and 30% (Rs.3 per equity share) in April 2014. The Board has now recommended a final dividend of 15% (Rs.1.50 per equity share), thus making the total dividend of 320% (Rs.32 per equity share) for the year.

Industry Structure and Developments

Sasken continues to operate in the embedded research and development space, addressing verticals such as semiconductor, mobile devices, network equipment, data communication equipment, satellite, automotive and consumer electronics.

Building on our undisputed leadership in understanding mobility related technologies and track record of successfully executing several product development projects, we have made a modest but significant entry in the IT Services segment. The changing landscape in the IT world provides us an excellent opportunity to bring in fresh perspectives in the form of a productized approach to several areas including application development, data services and infrastructure management. The entire gamut of enterprises spanning from retail, insurance, independent software vendors among others are in the midst of piloting or implementing their digital strategies.

With effect from April 2014, Sasken has reorganized its business unit structure to better align with the market. It will now focus on two key business segments, Communication & Devices and IT Services and four practices consisting of ER&D Practice, Testing Practice, Applications and Data Services Practice and the Infrastructure Practice.

The Communication & Devices Business Unit will not only continue to focus on its traditional business of embedded communications through the ER&D practice capability, but expand the addressable market by bringing the capabilities of the new practices to this customer segment. This business unit will work with Tier 1 Device OEMs, Network OEMs, Semiconductor vendors and other enterprises in the communications and devices ecosystem.

The IT Services Business Unit will leverage Sasken''s deep entrenchment in building products and devices and bring product development capability to the enterprise IT customers with cutting edge technology capabilities, particularly the tremendous depth in mobile technologies, combined with industry domain knowledge. This business unit will focus on the BFSI and Retail industry segments.

The ability to connect all the dots in complex product design, backed by our comprehensive range of hardware R&D services covering all lifecycle stages of the product development is unparalleled. These capabilities have been built and refined over two decades and enriched with partnerships to provide spec - to - product engineering services to customers. Sasken''s customers have been able to reduce time - to - market and accelerate product development cycles and derive greater value from their ER&D outsourced dollars. We will continue to relentlessly focus on growing our domain knowledge to retain our technology leadership and the ability to offer the most comprehensive suite of ER&D services. For a more detailed discussion of our areas of business, please refer to the Technology and Markets section.

Litigation

Sasken partnered with a Chinese chipset company, to jointly develop a TDSCDMA protocol stack under an Agreement signed in 2005 (''Agreement''). The TDSCDMA protocol stack is a vital software subsystem that manages the core communication aspects of mobile phones. This TDSCDMA stack was largely developed using the W - CDMA protocol stack, which is Sasken''s IPR, and was very critical for the timely and successful development of the TDSCDMA protocol stack. This has resulted in significant time - to - market advantage, huge revenue and profitability for the customer. Pursuant largely to this contribution by Sasken, the customer has become a market leader with a significant portion of its business coming from the TDSCDMA chipset space. The company was acquired by a China state owned enterprise at a valuation of $ 1.7bn.

The contractual arrangement between the parties required the customer to pay agreed royalties for every chipset sold. Accordingly, royalties were paid to Sasken from 2009 onwards; however the payments were abruptly stopped from the beginning of 2012. Whilst the customer contended that it no longer used TDSCDMA protocol stacks in the chipsets being sold, Sasken believed that the customer continued to rely on our software. Left with no option of recovering the royalty payments, Sasken was forced to tread the arbitration route to seek relief.

Sasken approached the American Arbitration Association''s (AAA) International Centre for Dispute Resolution and the matter was heard by a single arbitrator appointed by the Parties before the AAA. The hearings have now been concluded on February 26, 2014 and Sasken is expecting to receive a favorable award.

Employees Stock Option Plan (ESOP)

The Company''s ESOP continues with the philosophy of encouraging the employees to be partners in the growth of the organization.

ESOP 2006 Scheme

As on March 31, 2014, there were 1,88,800 options outstanding with the employees including Directors. There are 15,91,200 unissued options as on March 31, 2014.

The details required under SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme), Guidelines 1999, as on March 31, 2014 are given in Annexure 1 forming part of this Report. The said Annexure 1 also includes new grants made under the Scheme during the year ended March 31, 2014.

Corporate Social Responsibility (CSR)

Sasken has been sensitive to the needs of the community and the importance of being a good corporate citizen. For a number of years, Sasken has embarked upon several initiatives that support local communities in various spheres. Additionally, Sasken employees have on their own volition, worked towards ameliorating the quality of life and living conditions in the communities we work in.

The areas that we have actively engaged in, during the last year include supporting Non - Government Organizations in initiatives targeted to the welfare of child care, differently abled and victims of natural calamities and disasters. Recognizing the need for providing timely help to those in need of blood, we have organized site - wide blood donation drives. We have also put in place, a mechanism to respond and fulfill in a timely manner, any urgent requirements for blood. Some of the initiatives where we have made a difference include:

- Uttarakhand relief fund in association with Goonj: We drove a collection drive at our premise for clothing, footwear, food grains and medical supplies. This was sent to the victims of the recent floods in Uttarakhand.

- Uttarakhand on - the - ground support: A team of volunteers was sponsored by the Company to visit lood hit areas and provide timely and much needed assistance for rehabilitation of the victims.

- We participated in an ''Under the stars'' in support of raising awareness and attracting funds towards several hundreds of homeless fellow citizens.

- In partnership with Sambhav Foundation and Karunalaya Social Welfare Society, we organized a week long initiative called ''Wish a Tree''. This initiative helped make dreams come true for orphan children by employees providing them with books, toys and clothes. Our employees also spent quality time interacting with these children.

- Sasken sponsored a cultural program for Snehadeep, an NGO for the visually challenged.

Our exuberant and youthful workforce participated in several public initiatives in support of various causes. They also raised substantial funds towards noble causes. Some of the initiatives include:

- At the TCS World 10K 2013, Sasken supported Vathsalya, an NGO which focuses on foster care for abandoned children.

- Employees participated in the Chennai Walkathon with National Federation of the Blind, to raise awareness of the needs of the visually challenged.

- At the Contour run, Sasken demonstrated its support to ASHA, a not-for-proit organization dedicated to supporting the education of underprivileged children.

- Our employees in Chennai participated in the Chennai Wipro Marathon and partnered with United way of Chennai, an organization that promotes volunteerism in community and social development projects.

Sasken continues to run the ''Prakruti Mela'' through the year. This event provides a platform for environment friendly product vendors to showcase sustainable, eco - friendly and ethically produced products.

As a responsible Corporate Citizen, Sasken is committed to contributing to the society, environment and community. We committed to continuing the same and making a difference in a humble way.

Awards

Sasken is always striving to be best in its category! We at Sasken cherish all our triumphs, be it internal or external, individual victories or those as an entire organization. One of the signiicant win in the year is that of Mr. Swami Krishnan, our Chief Marketing Oficer was named one of India''s 50 Most Talented CMO''s, instituted by The Chief Marketing Officer (CMO) Council'', India along with the World Brand Council.

Yet again, Sasken''s Annual Report 2012 - 13 was recognized by the League of American Communications Professionals (LACP). Your Annual Report bagged the Platinum Award and was rated at number two, globally.

Patents

US India Other Countries Acquired Applied# 58 29 9 -

Granted 34 11 1 1

Abandoned 8 7 4 -

Pending 12 11 4 -

Sold 4 - - -

Owned 27 11 1 1

Granted since last report 1 1 - -

- Includes divisional patents

Corporate Governance

Your Company is committed to maintaining the highest standards of Corporate Governance. Your Directors adhere to the standards set out by the Securities and Exchange Board of India''s (SEBI) Corporate Governance practices and accordingly have implemented all the major stipulations prescribed. Your Company''s Corporate Governance Compliance Certificate dated April 25, 2014 in line with Clause 49 of the Stock Exchange Listing Agreement is given in Annexure 2 forming part of this Report.

Directors'' Responsibility Statement

As stipulated in Section 217(2AA) of the Companies Act 1956, your Directors subscribe to the ''Directors'' Responsibility Statement'' and confirm that:

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

- The Directors have taken proper and suficient care of the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- The Directors have prepared the annual accounts on a going concern basis.

Subsidiary Companies

During the year, (a) Sasken Communication Technologies Oy, was merged with its wholly owned subsidiary, viz. Sasken Finland Oy effective April 1, 2014 and (b) Sasken Japan KK was liquidated on November 18, 2013.

As required under Accounting Standard 21, Consolidated Financial Statements incorporate the results of the following subsidiary companies, viz. (a) Sasken Network Engineering Limited (b) Sasken Network Solutions Inc., USA (c) Sasken Communication Technologies Mexico S.A. de C.V. (d) Sasken Communication Technologies (Shanghai) Co. Ltd., (e) Sasken Finland Oy and (f) Sasken Inc., USA.

In terms of the general permission granted by the Central Government to all companies vide General Circular No. 3 / 2011 dated February 21, 2011, the audited Financial Statements along with the reports of the Board of Directors and the Auditors pertaining to the above subsidiaries have not been attached to this Report. The Financial Statements of the said subsidiaries will be kept for inspection by any investor at the registered office of your Company and that of the subsidiary companies. Investors who want to have a copy of the above may write to the Company Secretary at the registered office.

Directors

Mr. Pranabh D. Mody and Mr. Krishna J. Jhaveri retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re - appointment.

Remuneration payable to Executive Directors is detailed in the notice convening the Annual General Meeting for members'' approval.

It is also proposed to appoint Mr. Bansi S. Mehta, Prof. J. Ramachandran, Mr. Bharat V. Patel, Dr. Ashok Jhunjhunwala, Mr. Sanjay M. Shah and Mr. Kiran S. Karnik as Independent Directors under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement to hold office for 5 consecutive years for a term up to the 31st Annual General Meeting of the Company to be held in the calendar year 2019.

Conservation of Energy, Technology Absorption and Foreign Exchange Outgo

Annexure 3 forming part of this Report gives information in accordance with the provisions of Section 217(1)E of the Companies Act, 1956 and with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo.

Directors'' Report (Contd.)

ISO 14001:2004

Sasken is Environmental Management System Standard - ISO 14001:2004 certified. Sasken is committed to contribute towards environment management, being a responsible corporate member of the communities in which it operates. This reaffirms your Company as a responsible corporate citizen.

ISO / IEC 27001:2005

Sasken is Information Security Management System - ISO / IEC 27001:2005 certified. This is important for assuring our stakeholders (like Customers, Partners, Vendors, Investors and Employees) of our commitment in protecting their information assets and Intellectual Properties (IPs), as well as sensitizing all employees about importance of confidentiality, integrity and availability of information assets of our stakeholders.

TL 9000 R5.0 / R4.5 (including ISO 9001:2008)

Sasken is certified for Quality Management System Standards - TL9000 R5.0 / R4.5 which by definition includes the ISO 9001:2008 (QMS - Quality Management System) requirements and in addition telecom domain specific measurement and documentation requirements which helps to maintain consistent quality of deliverables within agreed timelines and budget to its valued customers.

Particulars of Employees

We present abridged accounts under Section 219 of the Companies Act, 1956. Pursuant to the Rules and Forms read with Section 219 of the Companies Act, 1956, the particulars of employees, as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 have not been provided. However, these particulars are available for inspection at the Registered Ofice of the Company and upon written request from a shareholder, we will arrange to mail these details. It may be noted that such particulars will not include details of employees of the Company posted and working outside India as per the relevant rules.

Deposits

Your Company has neither accepted nor renewed any deposits during the year. As such, no amount of principal and / or interest is outstanding as on the Balance Sheet date.

Auditors

M/s. S.R. Batliboi & Co. LLP, retire at the forthcoming Annual General Meeting and have confirmed their eligibility for re - appointment.

Acknowledgement

Your Directors place on record their appreciation of co - operation and support extended by customers, shareholders, vendors, bankers and all governmental and statutory agencies. Your Directors thank the employees for their valuable contribution during the year and look forward to their continued support.

For and on behalf of the Board of Directors

Place : Bangalore Rajiv C. Mody Date : April 25, 2014 Chairman & Managing Director


Mar 31, 2013

The Directors have pleasure in presenting the Report on the business and operations of the Company along with the Abridged Standalone and Unabridged Consolidated Audited Accounts for the financial year ended March 31, 2013.

Result of Operations (Consolidated) - Extract

(Amount in Rs.lakhs) Year ended Year ended

Particulars March 31, 2013 March 31, 2012

Revenues 47,483.08 51,995.83

Expenses 45,233.20 46,581.67

Net Operating Profit 2,249.88 5,414.16

Interest Expenses 41.34 60.36

Non - operating Income, net 1,764.33 2,640.99

Profit before Income Taxes 3,972.87 7,994.79

Income Taxes Expense, net 776.94 1,593.99

Profit after Tax 3,195.93 6,400.80

Appropriation:

Proposed Equity Dividend 939.61 1,170.51

Interim Dividend 601.11 644.39

Dividend Tax 257.21 294.43

(Previous year''s figures have been regrouped wherever necessary to conform to the current year''s presentation)

The economic uncertainty of the preceding years coupled with tremendous changes in the communications industry continued to pose challenges to us in the fiscal year. Our resilience has been tested to the fullest extent as we had to rebuild revenues lost on account of ramp downs that we witnessed in some of our major customer engagements. While we won business that helped compensate for the decline in revenue, we are yet to post year on year growth. Consequent to this we have also seen a decline in margins and the management is taking all action in its control to address the need for profitable growth.

Your Company''s revenues from operation for the financial year 2012 - 13 have decreased by 8.68% in rupee terms, from Rs.51,995.83 lakhs in 2011 - 12 to Rs.47,483.08 lakhs in 2012 - 13. In the current year, Software Services, including Network Engineering Services contributed 93.74% to the revenues, while the Software Products revenues contributed 5.78%. The net profits decreased from Rs.6,400.80 lakhs in FY12 to Rs.3,195.93 lakhs during the year, a decline of 50.07%. This has translated to a Basic Earnings Per Share of Rs.13.26 in 2012 - 13 vs. Rs.24.82 in 2011 - 12.

Industry Structure and Developments

We operate in a wide range of industry verticals including, semiconductor, mobile handsets (Smartphones and devices), network equipment, data communication equipment, satellite, automotive and consumer electronics. In addition to these verticals, we are now capitalizing on the increasing adoption of SoLoMo (Social, Location, Mobile) by retail, healthcare, manufacturing, logistics and Machine - to - Machine communication markets.

R&D investments continue to be under pressure as we are still facing economic uncertainty that has resulted in low growth in key markets such as the US and Europe. Emerging markets are becoming increasingly attractive for most corporations to focus their efforts to try and bolster their revenue growth. A review of the industry carried out by Booz in conjunction with NASSCOM estimates that sectors like automotive and hi - technology verticals such as computer electronics and computing systems will drive moderate growth in engineering R&D spends. Countries like India and China are the preferred destinations for outsourcing engineering R&D services. This is driven partly by the attractiveness of domestic markets and the ability to serve African and Latin American markets.

The areas in which we operate are witnessing intense competition, high churn in technology, reconstitution of market segments and dramatic change in consumer preferences. These changes result in rapid product obsolescence, fuelling the need for OEMs to constantly innovate. OEMs struggle to keep pace with these changes in the light of tightening of R&D budgets and the demands to increase the return on every R&D dollar spent. OEMs therefore seek both capacity and capability support from the vendors they outsource services to. Capacity continues to be a problem as the supply of qualified engineers capable of working on cutting edge technologies remains limited. Augmenting capability is critical as no company can keep pace with the multitude of changes that is impacting its product development process.

Booz - NASSCOM estimate of global R&D outsourcing stands at $90 billion per annum, expected to be reached by 2020 with about 50% of this expected to be serviced out of India. Automotive, consumer electronics and telecommunications will constitute over one half of this R&D spend. Despite the strong entrenchment of global innovation centers, OEMs are expected to adopt a hybrid model and will continue to partner those who have demonstrated vertical specialization.

Zinnov, a reputed independent consultant, has in its Global Service Provider Rating - 2012 placed Sasken in the leadership zone in the Telecommunications vertical. On an overall basis, Sasken has been rated as being an established service provider of niche services and is also acknowledged to be well positioned in other verticals like Consumer Electronics and SemiconductoRs.

Opportunities

Growth in the telecommunications industry is driven by the adoption of mobile wireless as a predominant means of communication for both narrow band and broad band services. Industry researches estimate that the mobile subscriptions should touch 7 million globally. Despite several pressures, telecommunications carrier revenue is expected to top $2 trillion driven by the increased adoption of mobile broadband services.

After a few years of sluggish capital spend by the telecommunication service providers, we are likely to see a modest growth in investments which are expected to cross the $300 billion mark. The sale of mobile devices including feature phones and smartphones are a shade under 2 billion. The fierce competition in this area combined with the rapid evolution of hardware and mobile OSs is increasing the R&D intensity among handset vendoRs.

We see opportunities in providing in-car infotainment systems that offer enhanced connectivity and seamless integration of multiple smart devices carried by driver and passengeRs. Low power design that enhance battery life, support for multi core processors that segregate applications based on computing intensity need are fueling the growth in Semiconductor area. Feature phone manufacturers are driving down costs to never-before levels, which is driving the need for cost effective R&D.

The battle for supremacy in mobile operating systems for Smartphones will only intensify due to the new entrants, like Tizen from the Linux foundation and B2G from Firefox. We will be able to consolidate on our leadership position in the Android and Windows OS environment and extend the same to cover the open systems players as well.

Corporate ER&D spend is based on ER&D spend of top 2000 firms globally from verticals included in deep dives; accounts for approximately 55-60 percent of total corporate spend

Note: Additional verticals not included here are retail, pharmaceuticals, chemicals, biotechnology, software, agriculture, finance/ services, consumer/household goods, mining, forestry, etc.

''Includes industrial automation and construction/infrastructure, which account for 1 per cent each of corporate ER&D spend Source: Bloomberg data, Booz & Company Innovation 1000 database, Booz IC, Booz & Company Analysis

R&D spending by vertical

We are addressing the engineering R&D outsourcing needs for four out of the top eleven segments which contribute to almost 50% of the global R&D outsourcing budgets. The investments we have made in creating competencies in the areas of semiconductor design, wireless technologies including protocol stacks, multimedia subsystems, middleware and firmware will favourably position us as a partner of choice in these verticals. We will continue to enjoy good traction in automotive, consumer electronics, telecommunications, semiconductor segments and make inroads into new segments like retail and healthcare.

We continue to execute our strategy of broad basing our market coverage by successfully winning and delivering business from market adjacencies where mobile and wireless are becoming a critical component of the product / services portfolio. We have made investments that have enabled the creation of a robust and scalable internal training engine which helps us continuously deepen the technology quotient of our engineeRs.

In this, our 25th year since incorporation, we are confident that the marquee customers we partner with and the single minded focus we have maintained will be an asset in positioning as the preferred engineering R&D service provider across the entire product development lifecycle.

Dividend

Your Company paid an interim dividend of 25% (72.50 per equity share) in November 2012 and the Board recommends a final dividend of 45% (74.50 per equity share) thus making the total dividend of 70% (77.00 per equity share) for the year.

Buy - back of Shares

Pursuant to the decision of the Board of Directors dated February 16, 2012 and with the approval of shareholders by Postal Ballot on April 23, 2012, and in accordance with the provisions of the Companies Act, 1956 and the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998, the Company offered to buy - back its equity shares of face value of 710 each, up to a maximum amount of 78,648 lakhs at a maximum price of 7180 per share from open market through Stock Exchanges. The Company commenced the buy - back on May 21, 2012 and as of March 31, 2013, had bought back 51,41,975 equity shares at an average price of 7125.07 (excluding brokerage and other taxes), utilizing a sum of 76,431.00 lakhs.

During the period April 1, 2013 to April 22, 2013, your Company purchased 1,35,903 equity shares at an average price of 7143.96 (excluding brokerage and other taxes), utilizing a sum of 7195.65 lakhs. Due to efflux of time and at the end of one year from the date of shareholders'' approval for buy - back, the buy - back was closed on April 22, 2013.

Overall, your Company bought back 52,77,878 equity shares at an average price of 7125.56 per share (excluding brokerage and other taxes), utilizing a sum of 76,626.65 lakhs. The amount paid towards buy-back of shares, in excess of the face value, has been appropriated out of Securities Premium Account. In terms of the provisions of Section 77A of the Companies Act, 1956 and SEBI (Buy Back of Securities) Regulations 1998, all the shares bought back have been extinguished.

Employees Stock Option Plan (ESOP)

The Company''s ESOP continues with the philosophy of encouraging the employees to be partners in the growth of the organization.

ESOP 2006 Scheme

As on March 31, 2013, there were 8,30,800 options outstanding with the employees including DirectoRs. There are 13,49,600 unissued options as on March 31, 2013.

The details required under SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme), Guidelines 1999, as on March 31, 2013 are given in Annexure 1 forming part of this Report. The said Annexure 1 also includes new grants made under the Scheme during the year ended March 31, 2013.

ESOP 2000 Scheme

No new grants were made under this Scheme during the year ended March 31, 2013. 10,242 options that were outstanding with employees lapsed during FY 2013.

Corporate Social Responsibility (CSR)

As a responsible Corporate Citizen, Sasken is committed to contributing to the society, environment and community. The focus areas in which we strive to ‘Make a Difference to Everyone'' are service to community, environment, differently abled citizens, children, underprivileged and academia. Sasken translates this into action by providing financial and non - financial support, as well as extending and encouraging volunteer participation in CSR initiatives.

For over several years, your Company has supported Vathsalya Charitable Trust, an NGO, working for the welfare of orphan children. Sasken supports their monthly medical expenses. Besides, we also extend our support to other non - governmental voluntary organizations on a case - to - case basis.

In the last year, many Sasians have become involved in fitness and marathons and now this interest is manifesting itself into CSR efforts on their part. So far, a considerable number of employees have been involved in marathon events organized country - wide and helped raise money and other resources for NGOs and independent initiatives.

At Sasken, we attempt and often succeed in our concentrated efforts of "Making a Difference" in all of our activities and initiatives. Most recently, we organized a Walkathon with a group of Visually Challenged as part of "Joy of Giving", helping the NGO - Snehadeep Trust promote themselves and gain visibility for the cause. We also organized a daylong event at our premises for children from "Bubbles Centre for Autism", with an aim to create awareness on autism. At our facility in Hyderabad, we invited a group of under privileged children from Saraswatii Shishu Mandir for a half day program where we organized several engaging activities for them. In Pune, as part of our CSR activities, a group of employees visited Prerana Bhavan a home for HIV infected kids, mentally challenged people and destitute women and spent time interacting with them.

As a contribution towards the environment, we had also conducted a "Car Free Day" and witnessed a substantial response for the campaign. On a regular basis, we host Blood Donation Camps and awareness programs on AIDS and Cancer.

Prakruti Community'' is another unique program that your Company has been committed to. The community consists of a group of 20 people, constituted by key stakeholders from the IT, Facilities and Marketing (from a communications perspective) who focus on specific environment centric activities and how we can become more sustainable. Once a quarter, Prakruti holds initiatives and effective campaigns and provide continuous improvement through regular design reviews. The team is constantly involved in conceiving innovative ways in which the organization can move towards becoming socially more responsible. We also host the ‘Prakruti Mela'', during which we invite environment friendly product vendors to our corporate facility in Bangalore and organize a fair.

Awards

Your Company is always striving to be the best in its category! We at Sasken cherish all our triumphs, be it internal or external, individual victories or those as an entire organization. A significant win in the year was Sasken''s Annual Report 2012 won the Gold Award at the League of American Communications Professionals in the Global Communications Category.

Patents

Your Company owns several patterns in the sphere of its activities. Following is a snapshot:

US India Other Countries Acquired

Applied# 55 28 9

Granted 32 11 1 1

Abandoned 7 4 3 -

Pending 12 13 5

Sold 4

Owned 27 11 1 1

Granted since last report 11



- Includes divisional patents

Corporate Governance

Your Company is committed to maintaining the highest standards of Corporate Governance. Your Directors adhere to the standards set out by the Securities and Exchange Board of India''s (SEBI) Corporate Governance practices and accordingly have implemented all the major stipulations prescribed. Your Company''s Corporate Governance Compliance Certificate dated April 27, 2013 in line with Clause 49 of the Stock Exchange Listing Agreement is given in Annexure 2 forming part of this Report.

Directors'' Responsibility Statement

As stipulated in Section 217(2AA) of the Companies Act 1956, your Directors subscribe to the Directors'' Responsibility Statement and confirm that:

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

- The Directors have taken proper and sufficient care of the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- The Directors have prepared the annual accounts on a going concern basis.

Subsidiary Companies

As required under Accounting Standard 21, Consolidated Financial Statements incorporate the results of the following subsidiary companies, viz. (a) Sasken Network Engineering Limited (b) Sasken Network Solutions Inc., (c) Sasken Communication Technologies Mexico S.A. de C.V. (d) Sasken Communication Technologies (Shanghai) Co. Ltd., (e) Sasken Communication Technologies Oy (f) Sasken Finland Oy (g) Sasken Inc. and (h) Sasken Japan KK.

In terms of the general permission granted by the Central Government to all companies vide General Circular Nos. 2/2011 and 3/2011 dated February 8 and 21, 2011 respectively, the audited Financial Statements along with the reports of the Board of Directors and the Auditors pertaining to the above subsidiaries have not been attached to this Report. The Financial Statements of the said subsidiaries will be kept for inspection by any investor at the registered office of your Company and that of the subsidiary companies. Investors who want to have a copy of the above may write to the Company Secretary at the registered office.

Directors

Dr. G. Venkatesh, Ms. Neeta S. Revankar and Mr. Kiran S. Karnik retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re - appointment. The Governance & Nomination Committee of the Board of your Company has recommended their re - appointment for consideration of the ShareholdeRs.

Remuneration payable to Executive Directors is detailed in the notice convening the Annual General Meeting for members'' approval.

Conservation of Energy, Technology Absorption and foreign Exchange Outgo

Annexure 3 forming part of this Report gives information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 and with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo.

Compliance with International Standards Organization

ISO 14001:2004

Sasken is compliant with the Environmental Management System Standard - ISO 14001:2004. Sasken is committed to contribute towards environment management, being a responsible corporate member of the communities in which it operates. This reaffirms your Company as a responsible corporate citizen.

ISO / IEC 27001:2005

Sasken adheres to the Information Security Management System - ISO / IEC 27001:2005. This is important for assuring our stakeholders (like Customers, Partners, Vendors, Investors and Employees) of our commitment in protecting their information assets and Intellectual Properties (IPs), as well as sensitizing all employees about importance of confidentiality, integrity and availability of information assets of our stakeholdeRs.

TL 9000 R5.0 / R4.5 (including ISO 9001:2008)

Sasken is compliant with the telecom industry specific Quality Management System Standard - TL 9000 R5.0 / R4.5 which by definition includes the ISO 9001:2008 (QMS - Quality Management System) requirements and in addition telecom domain specific measurement and documentation requirements which helps to maintain consistent quality of deliverables within agreed timelines and budget to its valued customeRs.

Particulars of Employees

We present abridged accounts under Section 219 of the Companies Act, 1956. Pursuant to the Rules and Forms read with Section 219 of the Companies Act, 1956, the particulars of employees, as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 have not been provided. However, these particulars are available for inspection at the Registered Office of the Company and upon written request from a shareholder, we will arrange to mail these details. It may be noted that such particulars will not include details of employees of the Company posted and working outside India as per the relevant rules.

Deposits

Your Company has neither accepted nor renewed any deposits during the year. As such, no amount of principal and / or interest is outstanding as on the Balance Sheet date.

Auditors

M/s. S.R. Batliboi & Co. auditors of the Company have informed that their firm has been converted into a Limited Liability Partnership with effect from April 1, 2013 and they are now known as M/s. S. R. Batliboi & Co. LLP.

M/s. S.R. Batliboi & Co. LLP, retire at the forthcoming Annual General Meeting and have confirmed their eligibility for re - appointment.

Acknowledgement

Your Directors place on record their appreciation of co - operation and support extended by customers, shareholders, vendors, bankers and all governmental and statutory agencies. Your Directors thank the employees for their valuable contribution during the year and look forward to their continued support.

For and on behalf of the Board of Directors

Place : Bangalore Rajiv C. Mody

Date : April 27, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors have pleasure in presenting the Report on the business and operations of the Company along with the Abridged Standalone and Unabridged Consolidated Audited Accounts for the financial year ended March 31, 2012.

Result of Operations (Consolidated) - Extract

Amount in Rs lakhs

Particulars Year ended Year ended March 31,2012 March 31,2011

Revenues 51,995.83 54,637.97

Expenses 46,581.67 48,249.36

Net Operating profit 5,414.16 6,388.61

Interest Expenses 60.36 113.35

Provision for diminution in the value of investment, net - (45.30)

Non-operating Income, net 2,640.99 1,800.22

Profit before Income Taxes 7,994.79 8,120.78

Income Tax Expense, net 1,593.99 792.59

Profit After Tax 6,400.80 7,328.19

Appropriation:

Proposed Equity Dividend 1,170.51 1,154.96

Interim Dividend 644.39 690.46

Dividend Tax 294.43 303.69

(Previous year's figures have been regrouped wherever necessary to conform to the current year's presentation)

Your Company's revenues from operations for the financial year 2011 -12 have decreased by 4.84% in rupee terms, from Rs54,637.97 lakhs in 2010-11 to Rs51,995.83 lakhs in 2011 -12. In the current year, Software Services, including Network Engineering Services contributed 91.4% to the revenues, while the Software Products revenues contributed 7.6%. The net profits decreased from Rs7,328.19 lakhs in FY11 to Rs6,400.80 lakhs during the year, a decline of 12.66%. This has translated to a Basic Earnings Per Share of Rs24.82 in 2011-12 vs. Rs26.89 in 2010-11.

Industry Structure and Developments

We operate in the R&D services industry that caters to a wide range of industry verticals including semiconductor, mobile handsets (Smart phones and devices), network equipment, data communication equipment, satellite, automotive and consumer electronics. In addition to the traditional verticals listed above, the proliferation of mobile wireless technologies makes it possible for us to address R&D service opportunities in segments such as retail, healthcare and Machine to Machine communication markets.

Hyper competition in today's markets places enormous pressure on global players to maximize returns on their R&D investments that are essential to keep them competitive. The maturity of the outsourcing industry, access to highly qualified engineering resources, attractive cost structures have led to greater decentralization of product life cycle management activities. NASSCOM, the industry body in collaboration with Booz & Co opines that R&D services is one of the fastest growing areas in IT outsourcing and is estimated to top US $90 Billion by 2020 globally. The report projects that India is likely to service about one half of this outsourced spend.

The rapid pace of change of technology has shortened development times and places immense challenges on device and equipment manufacturers to seek ways to hasten time to market by using a decentralized development approach. This has necessitated the building of a robust ecosystem of distributed self and partner owned development centers across the globe taking advantage of regional clusters. Manufacturers increasingly focus their energies on core technology development while depending on the partner ecosystem for peripheral technology enhancement and sustenance activities. As partner ecosystems are mostly located in emerging markets, they also double as localization centers for custom development of products that can target price sensitive and potentially large markets. In addition, the partner ecosystem provides access to highly qualified and skilled engineering talent which is in short supply in most developed markets.

We have with single minded focus worked to provide product design and engineering sen/ices to global leaders across the development value chain starting from semiconductors, to customer owned and managed equipment and network gear. This has enabled us to be one of the leaders whose domain competency and breadth of development experience is much sought after by manufacturers who are market leaders in their respective areas.

Opportunities

The telecommunication service provider revenue is upwards of US $1.5 Trillion and constitutes about 2.5% of world GDP. The annual sales of semiconductors, smart devices and network gear that go to build / attach telecom networks is about US $400 Billion with an estimated R&D expenditure of US $40 Billion. In addition to the telecommunications vertical, segments such as automotive, consumer electronics, retail, healthcare etc., increasingly rely on wireless connectivity and make considerable investments in company owned and outsourced development activities.

As shown in the chart extracted from the NASSCOM Booz & Co report, the projected market for R&D services that will be serviced out of India will be in the excess of US $40 Billion by 2020. Smart phones are projected to constitute 50% of all shipments by 2017 making it an attractive market for providing design and engineering services. The battle for supremacy in mobile operating systems for Smartphones will intensify

Directors' Report (contd.)

over the next few years thereby presenting us an opportunity to consolidate on our leadership position in Android and make further inroads building on the early success in the Windows mobile ecosystem. We have already executed our strategy of broad basing our market coverage by successfully winning and delivering business obtained from automotive and consumer electronics segments. We also continue to build on our white space strategy by embarking on opportunities to provide enterprise mobility solutions in particular to segments such as healthcare and retail who are early adopters of wireless technologies.

(Source: NASSCOM and Booz & Co data)

From the above data it is evident that the market opportunities for R&D services remain buoyant and attractive in the foreseeable future and we are well positioned to take advantage of the same and achieve continued growth in both our revenues and profitability.

For a more detailed discussion of our business environment, growth opportunities, outlook and plans for the business lines we operate, kindly refer to the MD&A section of this report.

Dividend

Your Company paid an interim dividend of 25% (Rs2.50 per equity share) in November 2011 and the Board recommends a final dividend of 45% (Rs4.50 per equity share) thus making the total dividend of 70% (Rs7.00 per equity share) for the year.

Buy-back of Shares

In terms of decision of the Board of Directors dated October 21,2010 and in accordance with the provisions of the Companies Act, 1956 and the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998, the Company offered to buy-back its equity shares of face value of Rs10 each, up to a maximum amount of Rs3,454 lakhs at a maximum price of Rs260 per share from open market through Stock Exchanges. The Company commenced the buy-back on December 02, 2010 and closed the same on May 26,2011 buying back 21,62,000 equity shares at an average price of Rs159.26 per share (excluding brokerage and other taxes), utilizing a sum of Rs3,443.25 lakhs. On account of buy-back of shares, the Company has created Capital Redemption Reserve towards the face value by way of appropriation against General Reserve. The amount paid towards buy-back of shares, in excess of the face value, has been appropriated out of Securities Premium Account. In terms of the provisions of Section 77A of the Companies Act, 1956 and SEBI (Buy Back of Securities) Regulations, 1998, all the shares bought back have been extinguished.

In terms of decision of the Board of Directors dated February 16, 2012 and in accordance with the approval of shareholders by Postal Ballot on April 23, 2012, the Company has offered to buy-back its equity shares of face value of Rs10 each, up to a maximum amount of Rs8,648 lakhs at a price not exceeding Rs180 per share from the open market through Stock Exchanges. The offer size represents 22% of the aggregate of the Company's paid-up equity capital and free reserves as on March 31, 2011. As stated in the Public Announcement dated April 25, 2012, the buy-back is proposed to commence on May 21, 2012, subject to the approval of Securities and Exchange Board of India and the Stock Exchanges.

Employees Stock Option Plan (ESOP)

The Company's ESOP continues with the philosophy of encouraging the employees to be partners in the growth of the organization.

ESOP 2006 Scheme

As on March 31, 2012, there were 12,87,700 options outstanding with the employees including Directors. There are 10,10,900 aniseed options as on March 31, 2012.

ESOP 2000 Scheme

No new grants were made under this Scheme during the year ended March 31,2012. There were 10,242 options outstanding with employees as on March 31, 2012.

The details required to be disclosed under SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme), Guidelines, 1999, as on March 31, 2012 are given in Annexure 1 forming part of this Report. The said Annexure 1 also includes new grants made under the Scheme during the year ended March 31, 2012.

Corporate Social Responsibility (CSR)

As a responsible Corporate Citizen, your Company is committed to contributing to the society, environment and community. The focus areas in which we strive to 'Make a Difference to Everyone' and our endeavors are to serve the community, environment, differently able citizens, children, underprivileged and academia. Sasken translates this into action by providing financial and non-financial support, as well as extending and encouraging volunteer participation in CSR initiatives.

For over several years, your Company has supported Vathsalya Charitable Trust, an NGO, working for the welfare of orphan children. Sasken bears all their medical expenses, on monthly basis subject to a pre-fixed limit. Besides, we also extend our support to other non-governmental voluntary organizations on a case-by-case basis.

Recently, the CSR team organized an initiative where Sasians were given the opportunity to contribute anything between Rs100 and Rs1,000 from their salary which would later be used for contributions to NGOs and so on. Over Rs3 lakh was collected at the end of the program. Contributions were made to FAME India as well as APSA (Association for Promoting Social Action).

On the non-financial front, your Company in partnership with a popular Bangalore based NGO called 'The Ugly Indians' have commenced a series of cleaning up activities in different parts of the city. As a pilot, over 30 Sasians came together to tidy up the area around Sasken's Corporate Headquarters situated in Domlur, Bangalore. The second round took place during the month of March and we are looking forward to more participation and making a bigger difference in the coming months.

During the last year, many Sasians have become involved in fitness and marathons and now this interest is manifesting itself into CSR efforts on their part. So far, a considerable number of employees have been involved in city and country-wide organized marathon events and helped raise money and other resources for NGOs and independent initiatives.

At Sasken, we attempt and often succeed in our concentrated efforts of Making a Difference in all of our activities and initiatives. Most recently, we launched an Employee - Satisfaction Survey Program called 'Speak Your Mind', open to the entire organization aimed at gauging satisfaction levels of employees as well as working on areas that require change and / or development. As part of this program, Sasken will contribute Rs100 for every survey completed, towards Project NanhiKali, a foundation endeavoring to work towards the education of the girl child.

On a regular basis, we host Blood Donation Camps and awareness programs on AIDS and Cancer.

'Prakruti Community' is another unique program that your Company has been committed to. The community is a group of 20 people, constituted by key stakeholders from the IT, Facilities and Marketing (from a communications perspective) who focus on specific environment centric activities and how we can become more sustainable. Once a quarter, Prakruti holds a review and designs activities, initiatives and other effective campaigns. The team is constantly involved in conceiving innovative ways in which the organization can move towards becoming socially more responsible. We also host the 'Prakruti Mela', during which we invite environment friendly product vendors to our corporate facility in Bangalore and organize a fair.

Awards Received

Your Company is always striving to be the best in its category! We at Sasken cherish all our triumphs, be it internal or external, individual victories or those as an entire organization. A few of the significant wins in the year that passed are listed below:

- ISA (Indian Semiconductor Association) Techno vat ion Awards, 2011: Sasken won the ISA Techno vat ion Award 2011 in the Embedded System House Indian Enterprise category. The award identifies Intellectual Property created in India and the companies behind them. It honors semiconductor driven research which recognizes and motivates role models in India.

"The standard of competition at the ISA Techno vat ion Awards was very high. Sasken's win truly reflects its competence and reiterates that innovation is in its DNA", said PVG Menon, President, ISA.

- Gold Award, LACP Spotlight Awards, 2011: Sasken's Annual Report 2011 won the Gold Award at the League of American Communications Professionals in the Global Communications Category.

- Sony Ericsson Communications (SEMC) Supplier Award: Sasken won the SEMC Supplier Award for the second time in the last four years. The award recognizes consistent quality of delivery of Sasken's engagement with SEMC and their view of Sasken as a trusted partner.

-An easy-to-work-with supplier that acts in a professional way while showing great flexibility and diversity in adapting to SEMC needs. Sasken has provided world class in-time-delivery, ramp-up speed and a good ability to build trust" was the prime motivation behind SEMC's decision to award Sasken during the supplier conference once again.

- Mr. Swami Krishnan, Head - Marketing was chosen to be part of the Top-50 Marketing Gurus in the MITR 50 List - By IBM Connect 2012. IBM and Paul Writer recognize CMOs who have adopted technology to enhance customer experience and engage with the market in order to drive business results.

- Ms. Ramya Venkateswaran was the First Runner-up in the Young Woman Achiever Award at the Women Leaders in India 2011 Conference, organized by iiGlobal.

Patents

The following table gives details of various patent applications made by your Company, till date:

US India Other Countries Acquired

Applied* 53 27 9 -

Granted 33 11 1 1

Abandoned 6 4 3 -

Pending 14 12 5 -

Sold 4 - - -

Owned 2 11 1 1

Granted since last report 3 - - -

# Includes divisional patents Corporate Governance

Your Company is committed to maintaining the highest standards of Corporate Governance. Your Directors adhere to the standards set out by the Securities and Exchange Board of India's (SEBI) Corporate Governance practices and accordingly have implemented all the major stipulations prescribed. Your Company's Corporate Governance Compliance Certificate dated April 26, 2012 in line with Clause 49 of the Stock Exchange Listing Agreement is given in Annexure 2 forming part of this Report.

Directors' Responsibility Statement

As stipulated in Section 217(2AA) of the Companies Act, 1956, (the Act) your directors subscribe to the Directors' Responsibility Statement and confirm that:

- The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

- The Directors have taken proper and sufficient care of the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- The Directors have prepared the annual accounts on a going concern basis.

Subsidiary Companies

As required under Accounting Standard 21, Consolidated Financial Statements incorporate the results of the following subsidiary companies and a joint venture company viz. (a) Sasken Network Engineering Limited (b) Sasken Network Solutions Inc. (c) Sasken Communication Technologies MexicoS.A. deC.V.(d) Sasken Communication Technologies (Shanghai) Co. Ltd.,(e)Sasken Communication Technologies Oy(f) Sasken Finland Oy (g) Sasken Inc. (h) Sasken Japan KK and (i) Connect M Technology Solutions Pvt. Ltd.

In terms of the general permission granted by the Central Government to all companies vide General Circular No. 3/2011 dated February 21, 2011, the audited Financial Statements along with the reports of the Board of Directors and the Auditors pertaining to the above subsidiaries have not been attached to this Report. The Financial Statements of the said subsidiaries will be kept for inspection by any investor at the Registered Office of your Company and that of the subsidiary companies. Investors who want to have a copy of the above may write to the Company Secretary at the Registered Office.

Directors

Dr. Ashok Jhunjhunwala, Mr. Jyotindra B. Mody and Mr. Sanjay M. Shah retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Governance & Nomination Committee of the Board of your Company has recommended their re-appointment for consideration of the Shareholders.

Remuneration payable to Executive Directors is detailed in the notice convening the Annual General Meeting for shareholders' approval. Conservation of Energy, Technology Absorption and Foreign Exchange Outgo

Annexure 3 forming part of this Report gives information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors), Rules, 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo.

ISO 14001:2004

Sasken is compliant with the Environmental Management System Standard - ISO 14001:2004. Sasken is committed to contribute towards environment management, being a responsible corporate member of the communities in which it operates. This reaffirms your Company as a responsible corporate citizen.

ISO/IEC 27001:2005

Sasken adheres to the Information Security Management System - ISO / IEC 27001:2005. This is important for assuring our stakeholders (like Customers, Partners, Vendors, Investors and Employees) of our commitment in protecting their information assets and Intellectual Properties (IPs), as well as sensitizing all employees about importance of confidentiality, integrity and availability of information assets of our stakeholders.

TL 9000 R5.0 / R4.5 (including ISO 9001:2008)

Sasken is compliant with the telecom industry specific Quality Management System Standard - TL 9000 R5.0 / R4.5 which by definition includes the ISO 9001:2008 (QMS - Quality Management System) requirements and in addition telecom domain specific measurement and documentation requirements which helps to maintain consistent quality of deliverables within agreed timelines and budget to its valued customers.

Particulars of Employees

We present abridged accounts under Section 219 of the Companies Act, 1956. Pursuant to the Rules and Forms read with Section 219 of the Companies Act, 1956, the particulars of employees, as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 have not been provided. However, these particulars are available for inspection at the Registered Office of the Company and upon written request from a shareholder, we will arrange to mail these details. It may be noted that such particulars will not include details of employees of the Company posted and working outside India as per the relevant rules.

Deposits

Your Company has neither accepted nor renewed any deposits during the year. As such, no amount of principal and / or interest is outstanding as on the Balance Sheet date.

Auditors

M/s. S.R. Batliboi & Co. (Firm Registration Number: 301003E), Auditors of the Company retire at the forthcoming Annual General Meeting and have confirmed their eligibility for re-appointment.

Acknowledgement

Your Directors place on record their appreciation of co-operation and support extended by customers, shareholders, vendors, bankers and all governmental and statutory agencies. Your Directors thank the employees for their valuable contribution during the year and look forward to their continued support.

For and on behalf of the Board of Directors

Place : Bangalore Rajiv C. Mody

Date : April 26, 2012 Chairman & Managing Director


Mar 31, 2010

The Directors recommend the appointment and shareholders approval is sought for the same.

Directors Report

Your Directors have pleasure in presenting the report on the business and operations of the Company along with the Audited Accounts for the financial year ended March 31, 2010.

Result of Operations (Consolidated) - Extract

Amount in Rs. lakhs Particulars Year ended Year ended March 31, 2010 March 31, 2009 Revenues 57,419.31 69,781.33 Cost of Revenues 42,919.14 47,228.54 Gross Profit 14,500.17 22,552.79 Non-operating Income (net) 2,446.58 (3,539.51) Exceptional Item - 1,519.70 Profit before Income taxes 9,292.23 7,082.68 Income Taxes Expense, net (including FBT) 1,740.50 2,852.27 Profit after Tax 7,551.73 4,230.41 Appropriation: Proposed Equity Dividend 1,084.44 1,084.44 Interim Dividend 542.22 - Dividend Tax 276.45 184.30

(Previous years figures have been regrouped wherever necessary to conform to the current years presentation)

Your Companys performance in the financial year may be summed by what George S. Clason, the well known US writer said,"Opportunity is a haughty goddess who wastes no time with those who are unprepared".

During the turbulent period in this financial year, your Company has proactively taken several measures to ensure that there is sufficient growth in bottom line despite challenges in maintaining top line growth. In parallel the management team has ensured that, going forward your Company emerges stronger and is poised for growth. This will be by a two pronged strategy of leveraging on its deep competencies to grow existing business and tap into market adjacencies, consumer electronics, defense, aerospace and satellite communications.

A few notable achievements that we are proud of in the current year include the path breaking development of the "IsatPhone Pro", a handheld satellite phone for Inmarsat pic, UK, the leader in global mobile satellite communications services. Inmarsat completed its first call from Hawaii and this unique phone is set for a planned global launch in June 2010.

One of the most important elements of the IsatPhone Pro development has been the contribution of your Company in the R&D of this phone. Our global multi-site teams have successfully delivered on all key milestones in the last 13 months of this engagement. We were entrusted with the responsibility for end-to-end development of this satellite phone, which has been made possible through the coordinated efforts of multiple global centers of excellence spanning India, Finland and Germany. Saskens global footprint, multifaceted capability and access to the best talent across the world place it in a unique position to deliver at optimal and cost- effective solutions to its customers.

During the year under review your Company joined the "Open Handset Alliance", a group of 65 technology and mobile companies who have come together to accelerate innovation in mobile devices and offer consumers a richer, affordable, and superior mobile experience. As a member of the Open Handset Alliance, your Company will work with other member companies to enable our customers to launch differentiated customer owned equipment like phones and other communication devices/appliances. The ability to enhance the user experiences through its unique combination of consultancy and services in both hardware and software is a key and critical determinant of "market acceptance" for such products. Sasken is able to integrate its software products to platforms such as Android and service a burgeoning market for devices that intersperse mobile communication and web technologies.

Your Company is privileged to be part of the Open Handset Alliance as it brings its extensive experience and leadership in helping build differentiated applications and solutions to the Android platform. Android provides the ideal platform for rich media consumption and a differentiated user experience, which is already shaping the nature of these devices. Our work with leading members of this

community and the membership to the Open Handset Alliance strengthens our position to service customers in their quest to provide an enhanced quality of service.

During the year your Company acquired certain product portfolio, assets as well as certain customers of Ingenient Technologies Inc. USA. This has enabled your Company to offer turn key solutions to consumer electronics, security & surveillance, enterprise, infrastructure and automotive electronics markets. This has also helped in having a foothold in Korea as well as expanding its business operations in Japan.

Opportunities are opening up in the semiconductors and handset space while networks business remains a challenge. Your Company is working on re-vectoring network capabilities towards the satellite infrastructure space. While we strike the right balance in keeping the business profitable and in protecting the interests of your Company, we have seen challenging times and our conviction is that things will improve from here onwards.We have expanded our engagements within the areas of modem development and testing, leveraging our deep expertise and experience in communication protocol stacks.

Field-testing of wireless modems and handsets, both at the radio level and applications is an area of focus and expected growth. We are engaged with Tier 1 customers across multiple geographies, helping them test their products for launch in various countries and operators. Mobile Internet, broadly delivering web services on the mobile are other areas where we are focusing, though still in early stages.

Your Companys revenues have decreased by 17.7% in rupee terms, from Rs.69,781.33 lakhs in 2008-09 to Rs.57,419.31 lakhs in 2009-10. Software Services, including Network Engineering Services, dropped by 14.7%, contributing 95% to the revenues, while the Software Products revenues contributed 4%. The net profits grew from Rs.4,230.41 lakhs in FY09 to Rs.7,551.73 lakhs during the year, registering a growth of 78.5%. This has also translated to an Earnings Per Share of Rs.27.85 in 2009-10 vs. Rs.15.17 in 2008-09.

Dividend

Your Company paid an interim dividend of 20% in November 2009 and the Board recommends a final dividend of 40% (Rs.4 per equity share) thus making the total dividend of 60% for the year.

Scheme of Arrangement

Your Company had approached the Honble High Court of Karnataka for its sanction to create a Business Restructuring Reserve from out of the Securities Premium Account in terms of a Scheme under Section 391 / 394 of the Companies Act, 1956. The Scheme provides for the Business Restructuring Expenses to be directly adjusted against the said Business Restructuring Reserve. Pursuant to the Scheme and as approved by the Honble High Court of Karnataka, vide its order dated March 31, 2010, a sum of Rs. 14,578.08 lakhs has been transferred from the Securities Premium Account and credited to Business Restructuring Reserve Account. The Company has adjusted Rs.1,519.70 lakhs, being impairment loss on capitalized software, which was charged to Profit and Loss Account in the previous year, being considered as a Restructuring Expense incurred after the Appointed Date, i.e. April 1, 2008, has been credited to Profit and Loss Appropriation Account and adjusted against Restructuring Reserve Account.

Had the Scheme not prescribed the aforesaid treatment, the balance in Profit and Loss Account would have been lower by Rs.1,519.70 lakhs and Business Restructuring Reserve higher by Rs.1,519.70 lakhs, with no impact on overall reserves of the Company.

Employees Stock Option Plan (ESOP)

The Companys ESOP continues with the philosophy of sharing wealth with its employees and encourages the employees to be partners in the growth of the organization.

ESOP 2000 Scheme

No new grants were made under this scheme during the year under review. There were 28,696 options outstanding with employees as of March 31, 2010.

ESOP 2006 Scheme

New grants made under this scheme during the year are detailed in Annexure 1. The options outstanding with employees including Directors, as of March 31, 2010 are 2,125,000 options. There are 679,250 unissued options as on March 31, 2010.

The details required under SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme), Guidelines 1999, as on March 31, 2010 are given in Annexure 1 forming part of this Report.

Corporate Social Responsibility (CSR)

As a responsible Corporate Citizen, your Company is committed to contributing to the society, environment and community. The focus areas in which your Company strives to "Make a Difference Everyone" or "MaDE" and our endeavor is to serve the community, environment, differently abled citizens, children, underprivileged and academia. Sasken translates this into action by providing financial and non-financial support, as well as extending and encouraging volunteer participation in CSR initiatives.

Your Company has been supporting Vathsalya Charitable Trust over several years. Vathsalya is an NGO, working for the welfare of orphan children. Sasken bears all their medical bills, on monthly basis subject to a pre-fixed limit. Your Company also extends its support to other non-governmental voluntary organizations on a case-by-case basis.

Prakruti Mela is conducted every year at Sasken premises to promote sale of environmentally friendly products through partner vendors. Awareness programs on AIDS, Cancer and CSR are conducted at regular intervals. Support for setting up stalls is provided for non profit organizations for sale of their products to employees.

Patents

The following table gives details about the various patent applications made by your Company, till date.

US India Other Acquired Countries Applied 40 21 9 - Granted 26 8 1 1 Granted since last report 3 - - - Abandoned 5 7 2 Sold 4 - - - Pending 9 6 6 -

There has been a conscious effort on the part of the Company to obtain a return on investment on the patents. In this direction, the Company chose to sell four patents for a consideration of USD 450,000. However, the Company continues to retain the right to use these patents in its own products. Your Company will continue to actively explore various options for licensing the patents, through well established and credible Intellectual Property consultants.

Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors adhere to the standards set out by the Securities and Exchange Board of Indias (SEBI) Corporate Governance practices and accordingly have implemented all the major stipulations prescribed. Your Companys Corporate Governance Compliance Certificate dated April 22, 2010 in line with Clause 49 of the Stock Exchange Listing Agreement is given in Annexure 2 forming part of this Report.

Directors Responsibility Statement

As stipulated in Section 217(2AA) of the Companies Act 1956, your Directors subscribe to the "Directors Responsibility Statement" and confirm that:

- In the preparation of the annual accounts, the applicable accounting standards and in relation to the Scheme of Arrangement, the Order of the High Court of Karnataka have been followed. (Refer Note No.5 of the Abridged Financial Statements / Note No.4(a) of Notes forming part of the Consolidated Accounts for details of the same).

- The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.

- The Directors have taken proper and sufficient care of the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- The Directors have prepared the annual accounts on a going concern basis.

Subsidiary Companies

As required under Accounting Standard 21, Consolidated Financial Statements incorporate the results of the following subsidiary companies, viz. (a) Sasken Network Engineering Limited, (b) Sasken Network Solutions Inc., USA, (c) Sasken Communication Technologies Mexico S.A. de C.V., (d) Sasken Communication Technologies (Shanghai) Co. Ltd., (e) Sasken Communication Technologies Oy, (f) Sasken Finland Oy, (g) Sasken Inc. USA and (h) Sasken Japan KK.

In terms of the Central Government approval under Section 212(8) of the Companies Act, 1956, the audited Financial Statements along with the reports of the Board of Directors and the Auditors pertaining to the above subsidiaries have not been attached to this Report. The Financial Statements of the said subsidiaries will be kept for inspection by any investor at the registered office of your Company and that of the subsidiary companies. Investors who want to have a copy of the above may write to the Company Secretary at the registered office.

Directors

Mr. Sanjay M. Shah and Dr. G. Venkatesh retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Mr. Kiran S. Karnik was co-opted as an Additional Director on October 12, 2009 and as such he holds office upto the date of this Annual General Meeting. A notice under Section 257 of the Companies Act, 1956 has been received from a member signifying his intention to propose Mr. Kiran S. Karnik as a candidate for the office of Director and accordingly a resolution is placed before the members at the forthcoming Annual General Meeting.

At its meeting held on April 22, 2010, the Board of Directors considered the valuable contributions made by Ms. Neeta S. Revankar, CFO and Global Head HR, IT & Administration, ever since she joined the Company in 1995 and decided to elevate her to the Board with immediate effect as a Whole Time Director. Towards this end, the Board co-opted her as an Additional Director to hold office until the forthcoming Annual General Meeting. A notice under Section 257 of the Companies Act, 1956 has been received from a member signifying his intention to propose Ms. Neeta S. Revankar as a candidate for the office of a Whole Time Director and accordingly a special resolution is placed before the members at the forthcoming Annual General Meeting.

At the Annual General Meeting held on June 10, 2005, Mr. Rajiv C. Mody and Mr. Krishna J. Jhaveri were appointed as Chairman & Managing Director and Whole Time Director respectively for a period of five years and their term expired on March 31, 2010. The Board at its meeting held on April 22, 2010 re-appointed them for a further period of five years with effect from April 1, 2010.

The terms of appointment of Mr. Rajiv C. Mody and Mr. Krishna J. Jhaveri are detailed in the Notice convening the Annual General Meeting for members approval. The remuneration payable to Mr. Rajiv C. Mody as Chairman & Managing Director and the remuneration payable to Mr. Krishna J. Jhaveri, Dr. G. Venkatesh and Ms. Neeta S. Revankar as Whole Time Directors for the year 2010-11 are detailed in the Notice convening the Annual General Meeting for members approval.

Conservation of Energy, Technology Absorption and Foreign Exchange Outgo

Annexure 3 forming part of this Report gives information in accordance with the provisions of Section 217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors), Rules 1988 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo.

ISO 14001

Sasken is compliant with the Environmental Management System Standard - ISO 14001, an International Standard. Sasken is committed to be a responsible member of the communities in which it works. This reaffirms your Company as a responsible corporate citizen.

ISO 27001

Sasken adheres to the Information Security Management System - ISO 27001, an International Standard. This is important for assuring our customers of our commitment in protecting their IP as well as sensitizing all employees about confidentiality and integrity of information.

TL 9000 (including ISO 9001:2008)

Sasken is compliant with the telecom industry specific Quality Management System Standard - TL 9000 R5.0, an International Standard which by definition includes the ISO 9001:2008 requirements.

ISO/IEC 17025

Sasken Test Lab is compliant with the Test Lab specific Quality Management System Standard - ISO/IEC 17025, an International Standard. This is important for assuring quality and reliability of test lab reports as required by our customers to meet Global Communication Forum requirements.

Particulars of Employees

We present abridged accounts under Section 219 of the Companies Act, 1956. Pursuant to the Rules and Forms read with Section 219 of the Companies Act, 1956, the particulars of employees, as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 have not been provided. However, these particulars are available for inspection at the Registered Office of the Company and upon written request from a shareholder, we will arrange to mail these details. It may be noted such particulars will not include details of employees of the Company posted and working outside India as per the relevant rules.

Deposits

Your Company has neither accepted nor renewed any deposits during the year. As such, no amount of principal and/or interest is outstanding as on the balance sheet date.

Auditors

M/s. S.R. Batliboi & Co., auditors of the Company retire at the forthcoming Annual General Meeting and have confirmed their eligibility for re-appointment.

Acknowledgement

Your Directors place on record their appreciation of co-operation and support extended by customers, shareholders, vendors, bankers and all governmental and statutory agencies. Your Directors thank the employees for their valuable contribution during the year and look forward to their continued support.

For and on behalf of the Board of Directors Bangalore Rajiv C. Mody April 22, 2010. Chairman & Managing Director

 
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