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Directors Report of SQS India BFSI Ltd.

Mar 31, 2015

To the Members,

We are presenting herewith, the report on our business and operations for the year ended March 31,2015.

1. Financial Highlights for the year ended March 31, 2015 Consolidated

Rs. in Mn March 31, 2015 March 31, 2014

Total Revenue 2,159 2,046

Employee benefits expense 1,361 1,182

Depreciation and amortization expense 52 57

General, administrative and other expenses 410 365

Finance cost 16 20

Total expenses 1,839 1,624

Profits Before Taxes 320 422

Taxes 104 122

Profit for the year 216 300

Earnings per Equity share (Par value of Rs.10 each)

Basic 20.86 29.53

Diluted 20.57 28.66



Standalone

Rs. in Mn March 31.2015 March 31.2014 Total Revenue 2,159 2,031

Employee benefits expense 812 786

Depreciation and amortization expense 52 56

General, administrative and other expenses 998 799

Finance cost 16 20

Total expenses 1,878 1,661

Profits Before Taxes 281 370

Taxes 96 116

Profit for the year 185 254

Earning per Equlity share (Par value of Rs.10 each)

Basic 17.81 25.01

Diluted 17.56 24.27

2. Business and Operations Review:

Total Operating Revenues increased, in Rupee terms by 10%, to Rs.2,141.55 Mn during the 2014-2015 financial year, from Rs.1,944.44 Mn in the previous year. In US dollar terms this also amounts to an increase of 10%.

- During the year, repeat business from existing clients accounted for 91% of revenues, up from 79% the previous year. New client acquisition contributed 9% of revenues. New business is expected to grow as synergies within the SQS Group feed through the sales pipeline.

- Profit after tax at Rs.185 Mn, representing 8.6% of revenues as against Rs.254 Mn (13.1%) for the previous year. Currency fluctuations resulted in a loss for the year of Rs.37 Mn compared to a gain of Rs.62 Mn in the previous year.

- Geographically, 46.24% of revenues came from Europe (previous year 48.62%), 31.58% from India, Middle East, Asia and Australia Regions (previous year 31.76%), 22.18% from America (previous year 19.62%) and the proportion of onsite to offshore revenues stood at 55.34% /44.66% compared to 53.49% / 46.51% in the previous year. This is reflected in the increase of 14% onsite Revenue from Rs.1,040.04 Mn to Rs.1,185.21 Mn during the year under review.

- Employee expenses increased due to higher onsite deployments with onsite revenue increasing to 55% of the total Revenue (previous year 53%).

- Employee strength, as at March 31,2015 for the standalone entity was 767 (consolidated 907) compared to 803 as at March 31,2014 (consolidated 905). Women employees standalone count stood at 221 (29% of the total) compared to 223 (28%) in the previous year. For the consolidated group women employees stood at 250 (28%) compared to 252 (28%) in the previous year. The attrition rate remained at 17% for the year ended March 2015.

3. Capital Expenditure:

During the year, Rs.20.61 Mn of capital expenditure was added to a gross block comprising of Rs.14.86 Mn on technology infrastructure, Rs.1.95 Mn on physical infrastructure, Rs.1.44 Mn on Vehicles, Rs.2.36 Mn addition on intangible assets.

4. Liquidity:

The company continues to maintain sufficient cash to meet its strategic objectives. The liquid assets at the end of the year stood at Rs.1,034.72 Mn (as against Rs.878.70 Mn previous year). Year-end Account Receivables stood at Rs.549.81 Mn (94 days sales) as against Rs.517.86 Mn previous year (97 days sales). The increase in Accounts Receivables is mainly attributed to increased revenues.

5. Share Capital:

As at the end of the financial year the Company''s Equity Share Capital stands at Rs.105.45 Mn, consisting of 10,545,299 fully paid up Equity Shares of Rs.10 each.The exercise of employee share options granted under Thinksoft ESOP Scheme 2011 resulted in the allocation of 277,618 equity shares during the Financial Year 2014- 15 to employees. As a result, the paid-up capital of the company increased from Rs.102.68 Mn to Rs.105.45 Mn. The disclosure in compliance of Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 is attached to this report as Annexure I.

6. Net Worth:

The net worth of the Company moved to Rs.848.56 Mn as at March 31,2015 from Rs.946.32 Mn at the end of the previous fiscal. This reduction reflects the Proposed Final Dividend of Rs.20/- per share. This works out to a per share net worth of Rs.80.47.

7. Transfer to Reserves:

During the financial year, the Company has transferred Rs.18.48 Mn, (previous year Rs.25.44 Mn) to reserves, which represents 10% of the net profits of the Company. As a result, the total amount of General Reserve as on March 31,2015 was Rs.99.49 Mn (Rs.81.01 Mn as at the end of the previous year).

8. Dividend:

Based on the Company''s performance, the Net Cash Position of the Company and the first year anniversary of integration with the SQS Group, the Board of Directors is pleased to recommend a final Dividend of Rs.20/- per share (200% on face value of Rs.10/- each) for the financial year 2014-15. This consists of Rs.5 being the normal dividend and Rs.15 as a one-off special dividend. The Board had also declared an interim dividend of Rs.4/- per equity share (40% on face value of Rs.10/- each) on October 30, 2014.

The Final Dividend, if approved by the Shareholders in the General Meeting, would result in a total dividend of Rs. 24/- per equity share (240% on face value of Rs.10/- each) for the financial year ended March 31,2015. (Previous year 90% on face value of Rs.10/- each, i.e. Rs.9 /- per equity share).

9. Change of Name of the company:

As approved by the Shareholders in the Sixteenth AGM, the name of the Company has been changed from Thinksoft Global Services Limited to SQS India BFSI Limited.

The company continues to have a global presence through its subsidiaries, branches and places of business.

10. Subsidiaries:

a. Change of names of Subsidiaries:

During the year the names of the Wholly Owned Subsidiaries were changed to reflect the branding of the SQS Group, except for the subsidiary in Germany, which is being wound up. The company now has the following five wholly owned subsidiaries:

a) SQS BFSI Pte. Ltd (formerly Thinksoft Global Services Pte. Ltd.,), Singapore

b) SQS BFSI Inc. (formerly Thinksoft Global Services Inc.,), USA

c) Thinksoft Global Services (Europe) GmbH, Germany (being wound up)

d) SQS BFSI UK Ltd (formerly Thinksoft Global Services UK Ltd.,), UK

e) SQS BFSI FZE (formerly Thinksoft Global Services FZE.,), UAE

The names of overseas branches have also adopted the SQS BFSI identity. The Company has branches in Belgium, Malaysia, Australia, Hong Kong, UK and Cyprus. During the year the company initiated steps for the closure of the branch in Cyprus, due to uncertain economic and political conditions there.

b. Financial Statement of Subsidiaries:

A separate section on the salient features of the financial statements of subsidiaries, as prescribed under Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 can be found in Annexure II.

The Audited Annual Accounts and related information of subsidiaries, wherever applicable, will be made available to shareholders upon request and will also be available for inspection during normal business hours at the registered office of the company. The Audited Accounts shall also be available at the website of the Company.

11. Annual Return:

The Company filed its Annual Return for the year 2013-14 on September 09, 2014. It was filed in Form 20B as per the provisions of Companies Act, 1956. The extracts of the current Annual Return for the present financial year as prescribed under Section 92 read with Rule 12 of Companies (Management and Administration) Rules, 2014 is attached to this report as Annexure III.

12. Number of meetings of the Board:

Eight Board Meetings were held during the year and the gap between any two meetings did not exceed 120 days. The dates on which the said meetings were held are as follows: April 03, 2014, April 23, 2014, June 02, 2014, June 13, 2014, June 21,2014, July 24, 2014, October 30, 2014 and January 22, 2015. The details of the same are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

13. Corporate Governance and Management Discussion Analysis Statement:

A separate section on Corporate Governance forming part of the Directors'' Report and the certificate from the Company''s auditors confirming compliance with Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE) is included in the Annual Report. The Company has taken adequate steps for strict compliance with the Corporate Governance guidelines, as amended from time to time.

A separate Management Discussion and Analysis Report is also attached and forms part of this report.

14. Declaration given by Independent Directors:

All the Independent Directors of the Company have given their declaration under Section 149 (6) of the Companies Act 2013, confirming that they are in compliance with the criteria as laid down in the above said Section for being an Independent Director of the Company.

15. Policy on Directors'' Appointment and Remuneration including criteria for determining qualifications, positive attributes, independence of a director:

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for the selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

16. The Board observed that there are no qualifications or reservations by the Auditors as well as by the Secretarial Auditor in their reports.

17. Particulars of loans, guarantees or investments:

The Company has not given any loan to any person or other body corporate, given any guarantee or provided security in connection with a loan to any other body corporate or person or acquired by way of subscription, purchase or otherwise, the securities of any other body corporate. As specified under Section 186 of the Companies Act 2013. The company has the following investments in its Wholly Owned Subsidiaries:

Particulars March 31,2015 Rs.

Unquoted equity instruments (in subsidiaries) 100.000 equity shares (Previous year -100,000 equity shares) of SGD 1/- each in SQSBFSI Pte. Ltd (formerly Thinksoft Global Services Pte. Ltd.,) Singapore 2,658,023

3.000 equity shares (Previous year -3,000 equity shares) of USD 0.01/- each in SQS BFSIInc. (formerly Thinksoft Global Services Inc.,) USA 4,625,400

EUR 50,000/- (Previous year - EUR 50,000) in Thinksoft Global (Europe) GmbH, Germany 2 714 774 350.000 equity shares (Previous year -350,000 equity shares) of GBP 1/- each in SQS BFSI UK Ltd (formerly Thinksoft Global Services UK Ltd.,)UK 24,168,000

24 equity shares ( Previous year - 24 equity shares) of AED 25,000/- each in SQS BFSIFZE (formerly Thinksoft Global Services FZE.,) UAE 8,696,000

Particulars March 31,2014 Rs.

Unquoted equity instruments (in subsidiaries) 100.000 equity shares (Previous year -100,000 equity shares) of SGD 1/- each in SQS BFSI Pte. Ltd (formerly Thinksoft Global Services Pte. Ltd.,) Singapore 2,658,023

3.000 equity shares (Previous year -3,000 equity shares) of USD 0.01/- each in SQS BFSIInc. (formerly Thinksoft Global Services Inc.,) USA 4,625,400

EUR 50,000/- (Previous year - EUR 50,000) in Thinksoft Global (Europe) GmbH, Germany 2,714,774

350.000 equity shares (Previous year -350,000 equity shares) of GBP 1/- each in SQSBFSI UK Ltd (formerly Thinksoft Global Services UK Ltd.,) UK 24,168,000

24 equity shares ( Previous year - 24 equity shares) of AED 25,000/- each in SQS BFSIFZE (formerly Thinksoft Global Services FZE.,) UAE 8,696,000

18. Particulars of contracts or arrangements with related parties:

During the year 2014-15 the contracts and arrangements entered by the Company with related parties were on an "arm''s length" basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interests of the Company at large. All Related Party Transactions are placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis for the transactions which are foreseen and repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are verified and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

The policy on materiality of Related Party Transactions as approved by the Board is uploaded on the Company''s website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

The details of contracts or arrangements with related parties entered during the year were given in a separate annexure to the report in Annexure IV.

19. Material changes and commitments, if any, affecting the financial position of the company:

There are no material changes or commitments 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.

20. Transfer to Investor Education and Protection Fund:

As required under the provisions of Section 205A and 205C and other applicable provisions of Companies Act, 1956 (the corresponding provisions in the Companies Act, 2013 have not been notified, and hence the earlier law is still applicable in respect of these provisions), the Company is required to transfer the dividends that remain unpaid/ unclaimed for a period of seven years, to an Investor Education and Protection Fund ("IEPF"), an account administered by the Central Government. On transfer of the amounts to IEPF, no claim shall lie in respect of those amounts against the Company. During the financial year 2014-15, no unpaid or unclaimed dividend was transferred to the IEPF. There is no requirement to transfer any funds to the Investor Education & Protection Fund during the year 2015-16.

All Members who have so far not encashed their dividend warrant(s) or those yet to claim their dividend amounts, may write to the Company/Company''s Registrar and Share Transfer Agent, Karvy Computershare Private Limited.

21. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo:

(A) Conservation of energy:

(i) The steps taken that impact on conservation of energy:

The Company continues its drive on ''going green'' and has initiated steps to conserve resources, reduce its carbon footprint and create sustainable alternatives wherever feasible. The Company''s current operations do not require high-energy consumption and the company continues its drive to adopt various measures to optimize energy usage.

The conservation steps include:

- Deployment of low power consuming desktops, reducing total power consumption.

- Managing business expansions without additional data centers.

- Deployment of human detector sensors to automatically switch off lights when no human presence is detected.

- Shutting down air conditioners on a budgeted hours basis.

- Switching to CFL lighting.

- Utilising more Video conferencing (VC) to reduce travel costs and improve energy savings.

- Continuing the disposal of e-waste generated in-house through vendors who adopt "Safe disposal practices", recycling and re-manufacture of printers, toners and cartridges.

All these initiatives are taken forward at a sustained pace.

(ii) The steps taken by the company for utilising alternate sources of energy - Nil

(iii) The capital investment on energy conservation equipment - Nil

(B) Technology absorption:

(i) The efforts made towards technology absorption:

SQS India BFSI Limited has absorbed appropriate technology advancements in providing the best services to its customers, with a focus of providing the same without any major financial implications to the organization. The company has invested in infrastructure which is compliant and has been certified under established standards including SSAE 16, ISAE 3402 and PCI-DSS.

(ii) The benefits derived in terms of product development and improvement, cost reduction, and import

substitution:

There has been a continuous effort towards improving the systems and hardware through local / procurement from national and local vendors, thereby reducing import dependency.

(iii) In case of imported technology (imported during the last three financial years):

(a) The details of technology imported;

(b) The year of import;

(c) Whether the technology been fully absorbed;

(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof;

(iv) The expenditure incurred on Research and Development

These sections (iii & iv) are not applicable.

For and on behalf of Board of Directors of SQS India BFSI Limited

(Formerly Thinksoft Global Services Limited)

Place : Chennai David Bellin Date : May 18, 2015 Chairman & Director


Mar 31, 2014

To the Members,

SQS Software Quality Systems AG Acquires Majority Stakes in Thinksoft:

SQS Software Quality Systems AG, entered into an agreement, on November 8, 2013, with the promoters of Thinksoft Global Services Limited, to acquire majority stakes in Thinksoft Global Services Limited and made an Open Offer to the public shareholders according to SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. As a result, SQS Software Quality Systems AG, had acquired majority stakes in the Company by acquiring up to 53.35% of the shares in Thinksoft Global Services Limited and the Company has become a subsidiary of SQS Software Quality Systems AG.

This acquisition will create a platform for accelerated growth with the potential to increase sales and shareholder returns.

We are presenting herewith, the report on our business and operations for the year ended March 31, 2014.

1) Financial Highlights for the year ended March 31, 2014.

Consolidated Standalone Rs. Millions (Mns) March 31, 2014 March 31, 2013 March 31, 2014 March 31, 2013

Total Revenue 2,046 1,639 2,031 1,601

Employee benefits expense 1,182 946 786 607

Depreciation and amortization expense 57 46 56 46

General, administrative and other expenses 365 367 799 704

Finance cost 20 15 20 14

Total expenses 1,624 1,374 1,661 1,371

Profits Before Taxes 422 265 370 230

Taxes 122 70 116 67

Profit for the year 300 194 254 163

Earnings per Equity share (Par value of Rs.10 each)

Basic 29.53 19.32 25.01 16.20

Diluted 28.66 19.03 24.27 15.95

2) Business and Operations Review:

Total Operating Revenues increased, in Rupee terms by 20 %, to Rs. 1944.44 Mns this year, from Rs. 1614.43 Mns in the previous year (In US dollar terms this amounts to an increase in revenues of 8% ).

- While the existing customers continue to support us, Revenues from new business increased from 7% in the previous year to 19% in the current year.

- Profit after tax at Rs. 300 Mns constituted 15.4% of revenues as against Rs. 194 Mns (12.0 %) for the previous year. Exchange Gain contributed Rs. 77 Mns during this year compared to Rs. 10 Mns in the previous year.

- Geographically, 48.62% of the revenues came from Europe (previous year 35.09 %), 31.76% from India, Middle East, Asia and Australia Regions (Previous year 37.53%), 19.61% from America (Previous year 27.38%) and the proportion of onsite to offshore revenues stood at 53.49 % /46.51 % compared to 47.54%/52.46% in the previous year. This is reflected in an increase of 35 % in onsite Revenue from Rs. 767.57 Mns to Rs. 1040.04 Mns during the current year.

- Employee expenses increased due to increase in the number of employees from 782 from March 31, 2013 to 905 by end of March 31, 2014. Onsite revenue increase from 47% in the previous year to 53% increase in the current year and consequent increase in salary cost. There was a one-time payment of Rs. 50 Mns (previous year - nil), towards severance pay to two of the Whole Time Directors during the current year.

- The general administrative and other overheads marginally decreased due to consolidation of facility centres to owned facilities resulting in savings in rent and other associated costs.

- Employee strength was 905 (women 27.8%) at the end of the year compared to 782 (women 26.0%) previous fiscal. The attrition rate increased to 17.4% for the year ended March 2014, compared to 15.9% during the previous year.

3) Capital Expenditure:

During the year, we spent an amount of Rs. 19.25 Mns adding to our gross block comprising of Rs. 9.03 Mns on technology infrastructure, Rs. 1.95 Mns on physical infrastructure, Rs. 8.27 Mns addition on intangible assets.

4) Liquidity:

The company continues to maintain sufficient cash to meet its strategic objectives. The liquid assets at the end of the year stood at Rs. 1060.27 Mns (as against Rs. 800.53 Mns previous year). Year-end Account Receivables stood at Rs. 557.78 Mns (104 days sales) as against Rs. 413.23 Mns previous year (96 days sales). The increase in Accounts Receivables is mainly attributed to increase in volume of Revenue.

5) Share Capital:

As at the end of the financial year the Company''s Equity Share Capital stands at Rs. 102.68 Mns, consisting of 10,267,681 fully paid up Equity Shares of Rs. 10 each. In pursuance of exercise of options granted under Thinksoft ESOP Scheme 2011 by the employees, the company has allotted 144,000 equity shares during the Financial Year 2013-14 to the employees'', as a result of which the paid-up capital of the company increased from 101.24 Mns to 102.68 Mns. The disclosure in compliance with the Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, as amended is attached to this report as ANNEXURE 1.

6) Net Worth:

The net worth of the Company rose to Rs. 1082.36 Mns as at March 31, 2014 from Rs. 881.89 Mns at the end of the previous fiscal. This works out to a per share net worth of Rs. 105.41.

7) Dividend:

Based on the Company''s performance, the Directors are pleased to recommend a final Dividend of Rs. 4/- per share (40% on face value of Rs.10/- each) for the financial year 2013-14. The Board has also declared an interim dividend of Rs. 5/- per equity share (50% on face value of Rs.10/- each) on October 17, 2013.

The Final Dividend, if approved by the Shareholders in the General Meeting would result in a total dividend of Rs. 9/- per equity share (90 % on face value of Rs.10/- each) for the financial year ended March 31, 2014. (Previous year 60% on face value of Rs. 10/- each, i.e. Rs.6 /- per equity share).

8) Transfer to Reserves:

During the financial year, the Company has transferred Rs. 25.44 Mns, (previous year Rs. 16.40 Mns) which represents 10% of the net profits of the Company. As a result, the total amount of General Reserve as on March 31, 2014 is Rs.81.01 Mns (As at March 31, 2013 - Rs. 55.57 Mns).

9) Subsidiaries:

The company is having its global presence through its subsidiaries, branches and places of business. The company has the following five wholly owned subsidiaries

a) Thinksoft Global Services Pte. Ltd., Singapore

b) Thinksoft Global Services Inc., USA

c) Thinksoft Global Services (Europe) GmbH, Germany

d) Thinksoft Global Services UK Limited, UK

e) Thinksoft Global Services FZE, UAE

In view of meager/no direct Revenues flowing out of the German subsidiary and also since SQS Software Quality Systems AG has its headquarters located in Germany, it was felt there was no need to maintain a subsidiary and incur administrative expenses. Therefore action has been initiated for a voluntary winding up of the German subsidiary.

10) Financial Statement of Subsidiaries:

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors'' Report, Balance Sheet and Profit and Loss account of our subsidiaries. Ministry of Corporate Affairs vide its General Circular no. 02/2011 dated February 8, 2011, exempted Companies from attaching the Financial Statements of Subsidiary Companies. However, as per said circular the Companies are required to provide only the consolidated financial statement in the annual report, accordingly, the Annual Report contains the consolidated financial statements. Further the Ministry of Corporate Affairs vide General Circular 08/2014 dated April 4, 2014 has clarified that the financial statements, auditors report and Boards report in respect of financial year that commenced earlier than April 1, 2014 shall be governed by the relevant provisions/ Schedules/Rules of the Companies Act, 1956. The Audited Annual Accounts and related information of subsidiaries, wherever applicable, will be made available to shareholders upon request and will also be available for inspection during normal business hours at the registered office of the company. A Statement of Subsidiaries under Sec 212 of the Companies Act 1956 is attached to the report as ANNEXURE 2.

11) Directors:

During the year, Mr. Mohan Parvatikar, whole time Director resigned from the Board effective Dec 27, 2013. The Board places on record the special appreciation to Mr. Mohan Parvatikar for the valuable contribution he made during his tenure as Director of the Company.

With effect from March 01, 2014, Mr. A. V. Asvini Kumar and Ms. Vanaja Arvind stepped down as Managing Director and Executive Director of the Company respectively. The Board places on record its deep sense of appreciation to Mr. A. V. Asvini Kumar and Ms. Vanaja Arvind for promoting the Company and tremendous contribution made by them for the growth and success of the Company.

During the year Mr. David Bellin and Mr. Ulrich Bäumer were appointed as Independent Directors of the Company. Pursuant to execution of shareholders agreements with the existing promoters for acquisition of shares, SQS has nominated Mr. Gireendra Kasmalkar, Mr. René Gawron, Mr. Ralph Gillessen and Mr. Riccardo Brizzi as the Non - Executive Directors of the Company and Dr. Martin Müller as the Executive Director of the Company. The Members have approved the aforesaid appointments through Postal Ballot on March 17, 2014.

In accordance with Articles 142 and 143 of the Articles of Association of the Company and the provisions of the Companies Act, 2013, Mr. Gireendra Kasmalkar, Non-Executive Director is liable to retire by rotation in the ensuing Annual General Meeting and is eligible for re-appointment. Mr. K. Kumar, Dr. S. Rajagopalan, Mr. Rajiv Kuchhal and Mr. Ulrich Bäumer, Directors of the Company, are being appointed as Independent Directors for a term of 5 consecutive years up to March 31, 2019 as per the provisions of Section 149 and other applicable provisions of the Companies Act, 2013.

12) Auditors:

M/s. PKF Sridhar & Santhanam, Chartered Accountants, Chennai retire as the Auditors of the Company at conclusion of the ensuing Annual General Meeting and being eligible offers themselves for re-appointment to hold office from the conclusion of this Annual General Meeting, until the conclusion of third consecutive Annual General Meeting, subject to ratification by the shareholders annually. The Auditors have also confirmed that the appointment, if made, shall be in accordance with the provisions of Companies Act, 2013. The Audit Committee and the Board of Directors in their meeting held on April 23, 2014 has recommended the reappointment of M/s. PKF Sridhar & Santhanam, Chartered Accountants, Chennai.

13) Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo:

The Company has taken initiatives on automating its testing methodologies and also taken initiatives towards building products. During the year 2013-14, the company has spent an amount of Rs. 6.60 Mns and the same has been capitalized in the books of the company. The company also has taken initiatives to build an automated framework for its offering.

The particulars as prescribed under Sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the ANNEXURE 3 of this report.

14) Particulars of employees:

In accordance with the provisions of Section 217(2A) of the Companies Act 1956 and the rules framed there under, the required information is annexed and forms part of this Report. (Please refer ANNEXURE 4)

15) STPI status:

During the current year, the company has exited from the STPI, by filing necessary documents with them. We have received official communication from STPI Chennai Directorate confirming our exit from STPI. Similar letter is yet to be received from STPI Bangalore.

16) Human Potential:

The Company strongly believes that the organizational effectiveness can be significantly enhanced by focusing on the human side of the enterprise.

As part of its ongoing regular training programs, during the year, about 140 training programs were conducted for the employees, clocking an average of 37 hours training per employee per year.

New programs on Technical skills, Business analysis, Leadership and Managerial skills were launched to align the employee competencies with the business growth avenues.

The overall employee strength increased from 782 to 905 during the end of the year.

17) Quality, Technology and Systems:

Enterprises Resource Planning (ERP):

The plan of an Enterprise platform implementation at Thinksoft was initiated in November, 2011 and is successfully deployed. During the year the working in the ERP package was stabilized and is working fine.

PCI DSS (Payment Card Industry Data Security Standard):

Business requires information that is suitably protected and it is critical for the company in maintaining the credibility of such stored information. Considering this Thinksoft''s offshore TCoE (Testing Centre of Excellence) in Prince Infocity II, Chennai is compliant with ISAE 3402 (International Standard on Assurance Engagements) / SSAE 16 (Statement on Standards for Attestation Engagements), this compliance goes to demonstrate third-party assurance, providing coverage to users of outsourced services.

PCI DSS, (worldwide data security standard defined by the Payment Card Industry Security Standards Council). This implies Complete Secured Physical/Logical Work Environments, Multilayer Encryption for data at Receipt, Processing and Storage, Comprehensive Privacy Framework, Detailed Risk and Governance Framework, Wireless Intrusion and Prevention System, Enhanced HR Security Controls, Intensive Vulnerability Management Program by Authorized Scan Vendors (ASV), Business Continuity Program meeting ISO 22301 standards.

Thinksoft also is certified compliant of ISO 27001 and ISO 9001.

18) Environmental awareness:

The Company continues its drive on ''going green'' and has initiated steps to conserve resources and also reduce its carbon footprint and create sustainable alternatives wherever feasible.

The conservation steps include;

- Continuing to deploy less power consuming desktops reducing total power consumption.

- Deployment of Human detector sensors across the facility to auto power off lights when no human presence is detected. Video conferencing (VC) usage has increased steadily during the last couple of years, which in turn has reduced the travel cost and improved energy savings.

- Continuing to dispose the e-waste generated in-house through vendors who adopt ''Safe disposal practices'', recycle and re- manufacture the used e-waste like printers, toners and cartridges.

All these initiatives are taken forward at a sustained pace.

19) Corporate Governance and Management Discussion Analysis Statement:

A separate section on Corporate Governance forming part of the Directors'' Report and the certificate from the Company''s auditors confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE) is included in the Annual Report. The Company has taken adequate steps for strict compliance with the Corporate Governance guidelines, as amended from time to time.

A separate Management Discussion and Analysis Report are also attached and forms part of this report.

20) Risk Management:

Risk Management at Thinksoft includes identification, assessment, monitoring and mitigation of various risks that the company may face in its business. The Company''s enterprise Risk Management approach consists of identifying major risk categories - Operations, Industry, Resources and Regulatory environment to effectively manage its Operational, Financial, Clients and Market risks with a view to achieve a balance between acceptable levels of risk and reward.

As part of Risk Management approach, during the year the company had undertaken various activities, including the following, to identify, monitor and mitigate the risks:

- Quarterly Internal Audits by an independent firm;

- Regular Process Compliance audits for ISO 9001 and ISO 27001 Standard;

- Periodic audits of compliance to other regulatory frameworks;

- Annual Capital and Revenue Budget Planning followed by monthly reviews;

- Annual Sales Planning with Monthly / Periodic Monitoring;

- Annual Perspective and Strategic Planning exercise with yearly update;

- Conservative approach to funds planning.

21) Status of Application money refund:

As on date an amount of Rs.72,000/- is lying unpaid in the account. The members who had not availed the refund may please write to "The Registrar and Transfer Agent" of the Company.

22) Fixed deposits:

The Company has not accepted any fixed deposits and as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

23) Corporate Social Responsibility:

For Thinksoft, Corporate Social Responsibility (''CSR'') is about how we manage our impact on society and the environment. The activities under the Corporate Social Responsibility are given below:

Involvement:

- Thinksoft works closely with Vidya Sagar (formerly known as the Spastic Society of India), an NGO dedicated to the welfare and development of differently abled Children.

- Of particular importance is our association with the Toda tribe in Nilgris and our endeavour to make a difference in their general well-being by promoting their crafts and thus making an impact in the preservation of their Tribal heritage.

Contributions:

As a part of Corporate Social Responsibility during the year the company contributed

- Rs. 1.12 Mns Vidhya Sagar''s Spastics society, an NGO dedicated to the welfare and development of differently abled Children.

- Rs. 0.20 Mn to Ability Foundation, Chennai NGO working for the betterment of people with disabilities, sponsoring part of the costs for the India International Disability Film Festival.

- Rs. 0.03 Mn to Nathan Academy of Dance, Bangalore, aiding Navchetana Trust to support mentally challenged children.

- Rs. 0.18 Mn towards Uttarakhand Flood Relief.

24) Directors'' responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956:

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

(i) they accept responsibility for the integrity and objectivity of these accounting statements.

(ii) the financial statements are prepared in accordance with the guidelines and standards of the ICAI and the Companies Act 1956, to the extent applicable. There are no material departures from the above mentioned standards.

(iii) such standard accounting policies have been applied consistently, except as otherwise stated.

(iv) the judgments and estimates have been made on a reasonable and prudent basis so that the financial statements provide a true and fair view of the state of affairs of the Company at the end of the financial year.

(v) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(vi) the Annual Accounts are prepared on a going concern basis and on an accrual basis.

25) Acknowledgments:

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We thank the governments of various countries where we have operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Customs and Excise Departments, the Income Tax Department, the Ministry of Corporate Affairs, the Ministry of Commerce, the Ministry of Finance, the Reserve Bank of India, the State Governments, the Madras Export Processing Zone (MEPZ), the Software Technology Parks (STPs) and other Government Agencies for their support and look forward to their continued support in the future.

For and on behalf of Board of Directors

of Thinksoft Global Services Limited

Place : Chennai David Bellin

Date : April 23, 2014 Chairman & Director


Mar 31, 2013

To the Members,

The are presenting herewith, the report on our business and operations for the year ended March 31, 2013.

1) Financial Highlights for the year ended 31st March 2013:

(INR In Millions) Consolidated Stand Alone

Description 2012-13 2011-12 2012-13 2011-12 Current Year Previous Year Current Year Previous Year

Export Revenue 1,513.03 1,121.27 1,476.92 1,025.84

Domestic Revenue 101.40 93.15 101.40 93.15

Total Revenue 1,614.43 1,214.42 1,578.32 1,118.99

Delivery expenses 955.42 813.28 1104.68 852.74

Gross profits 659.01 401.14 473.64 266.24

Selling and Marketing expenses 161.75 147.81 39.29 51.06

General and Administrative expenses 195.35 126.28 166.61 110.31

Profit before Interest, Depreciation & Taxes 301.91 127.05 267.74 104.87

Less: Depreciation 46.42 37.40 46.20 37.17

Less: Interest 14.94 0.26 14.18 0.26

Operating Profit Before Taxes 240.55 89.39 207.36 67.43

Other Income 24.26 95.61 22.47 88.91

Net profit before taxes 264.81 185.00 229.83 156.34

Provision for taxation 75.90 65.88 72.31 60.28

Deferred Tax (5.50) 5.35 (5.50) 5.35

Net Profit after tax 194.41 113.77 163.02 90.71

Profit brought forward from previous year 466.64 420.34 408.00 384.76

Profit available for appropriation 661.05 534.11 571.02 475.47

Appropriations : Interim Dividend 30.16 20.10 30.16 20.10

Transfer to General Reserve 16.40 9.10 16.40 9.10

Proposed Final Dividend 30.37 30.16 30.37 30.16

Tax on Dividend 9.82 8.11 9.82 8.11

Profit carried to Balance sheet 574.30 466.64 484.27 408.00

EPS basic 19.32 11.32 16.20 9.03

EPS diluted 19.03 11.30 15.95 9.01

2) Business and Operations Review:

Total revenues increased, in Rupee terms by 33%, to INR 1,614.43 million this year, from INR 1,214.42 million in the previous year (In US dollar terms this amounts to an increase in revenues of 17%).

Distribution of Revenue by Geography

- Profit after tax at INR 19441 million constituted 1204% of revenues as against INR 11377 million (937%) for the previous year ''Exchange Gain'' contributed to INR 1049million

- Geographically 3509 % of the revenues came from Europe (previous year 4269 %) 3753% from IMEA (last year 3424%) 2738 % from America (last year 2307%) and the proportion of onsite to offshore revenues stood at 4754% /5246 % compared to 5054%/4946% in the previous year This is reflected in an increase of 25 % in onsite Revenue from INR 61374 Million to INR 76757 Million during the current year

- Delivery expenses have decreased to 5918 % of Revenue as against 6697% in the previous year This is a result of better utilization compared with previous year The overall utilization increased to 6837 % compared to 654% in the previous year

- The Gross Profit at INR 65901 million worked out to 4082 % of total revenues (excluding other income) compared with 3303% during the previous year while the PBITDA was at 1870 % as against 1046% for the previous year After Tax profits (including other income increased to 1204 % (previous year 937%)

- General and Admin Expenses registered an increase in absolute terms It was INR 19535 million at 1210 % during the current year as against INR 12628 million at 1040 % previous year

- The company increased its investments in S&M activity consequently sales and marketing costs increased in absolute terms to INR 16175 million at 1002 % of revenue as against INR 14781 million at 1217% recorded during the previous year

- Revenues from repeat business marginally increased to 93 % compared to 87% in the previous year

- Employee strength was 782 (Women 2600 %) at the end of the year compared to 742 (Women 278%) last fiscal The attrition rate decreased to159 % for the year ended March 2013 compared to 172% during the previous year

3) Capital Expenditure:

During the year we capitalized INR 25069 million to our gross block comprising of INR 1758 million on technology infrastructure INR 232.33 million on physical infrastructure INR 078 million addition on intangible assets

4) Utilization of IPO proceeds:

Out of INR 153151 Lakhs(net of issue expenses) raised through IPO INR 67923 Lakhs has been utilized for setting up the testing facility at TIDEL Park and MEPZ Chennai and INR 85228 Lakhs utilized for normal capital expenditure During the year Company has utilized the IPO proceeds fully for the purposes as approved

5) Liquidity:

The company continues to maintain sufficient cash to meet its strategic objectives The liquid assets at the end of the year stood at INR 80053 million (as against INR 63642 million previous year) Year end Account Receivables stood at INR 41323 million (96 days sales) as against INR 23577million previous year (71 days sales) The increase in Accounts receivables is mainly attributed to increase in volume of Revenue

6) Share Capital:

As at the end of the financial year the Company''s Equity Share Capital stands at INR 10124 million consisting of 1 01 23 681 fully paid up Equity Shares of INR 10 each In pursuance of exercise of options granted under Thinksoft ESOP Scheme 2011 by the employees the company has allotted 72 100 equity shares on 24th January 2013 to the employees'' as a result of which the paid-up capital of the company increased from 10052 million to 10124 million The disclosure in compliance with the Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 as amended is attached to this report as Annexure III

7) Net Worth:

The net worth of the Company rose to INR 88189 million as at 31st March 2013 from INR 75509 million at the end of the previous fiscal This works out to a per share net worth of INR 8711

8) Dividend:

For the financial year ended 31st March 2013 your Board has recommended a final dividend of Rs 3/- per equity share (30% on face value of Rs 10/- each) subject to the approval of the Shareholders in the ensuing Annual General Meeting

Your Board has also declared an interim dividend of Rs.3/- per equity share (30% on face value of Rs.10/- each) on 25th October 2012. This would result in a total dividend of Rs.6/- per equity share (60% on face value of Rs.10/- each) for the financial year ended 31st March 2013. (Previous year Rs.5/- per equity share of face value of Rs.10/- each).

9) Subsidiaries:

The company is having its global presence through its subsidiaries, branches and places of business. The company has the following five wholly owned subsidiaries

a) Thinksoft Global Services Pte. Ltd., Singapore

b) Thinksoft Global Services Inc., USA

c) Thinksoft Global Services (Europe) GmbH, Germany

d) Thinksoft Global Services UK Limited, UK

e) Thinksoft Global Services FZE, UAE

10) Financial Statement of Subsidiaries:

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors'' Report, Balance Sheet, and Profit and Loss account of our subsidiaries. Ministry of Corporate Affairs vide its General Circular no. 02/2011 dated 8th February 2011, exempted Companies from attaching the Financial Statements of Subsidiary Companies. However, as per said circular the Companies are required to provide only the consolidated financial statement in the annual report, accordingly, the Annual Report contains the consolidated financial statements. The Audited Annual Accounts and related information of subsidiaries, where ever applicable, will be made available to shareholders upon request and will also be available for inspection during normal business hours at the registered office of the company.

11) Directors:

Mr. K. Kumar, Director, who was appointed as Director on 17th September, 2008 is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment as Director.

12) Auditors:

M/s. PKF Sridhar & Santhanam, Chartered Accountants, Chennai retire as the Auditors of the Company at conclusion of the ensuing Annual General Meeting and being eligible offers themselves for re-appointment. The Audit Committee in their meeting held on 25th April, 2013 has recommended the reappointment of M/s. PKF Sridhar &Santhanam, Chartered Accountants, Chennai.

13) Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo:

The particulars as prescribed under Sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the Annexure 2 to the Directors'' Report section.

14) Particulars of employees:

In accordance with the provisions of Section 217(2A) of the Companies Act 1956 and the rules framed there under, the required information is annexed and forms part of this Report. However, as per the provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the Directors Report is being sent to all the Shareholders of the Company excluding the said annexure. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

15) Human Potential:

The overall employee strength increased from 742 to 782 during the end of the year.

The Company strongly believes that the organizational effectiveness can be significantly enhanced by focusing on the human side of the enterprise.

As part of its ongoing regular training programs, during the year, about 183 training programs were conducted for the employees, clocking an average of 30 hours training per employee per year. The company further endeavors through its special talent management initiatives, to make its key employees result oriented and business savvy.

The individual practices are mandated with the task of optimizing the deployment of resources across practices and geographies, based on the business needs.

16) Quality, Technology and Systems:

Enterprises Resource Planning (ERP):

The plan of an Enterprise platform implementation at Thinksoft was initiated in November, 2011, towards streamlining and integrating activities & processes across departments and enables collaborative working. After due approvals from the Board, the process of defining organization-wide requirements, floating an RFP and selecting the right vendor was kicked off.

After a detailed process of evaluating options, the cloud-based ERP, Netsuite, was selected. The ERP is intended to support the global planning, operational and reporting needs of the Finance & Accounting, Purchasing and Asset Management functions, and also well-suited to handle the end- to-end requirements of the Human Resources function.

ERP is being implemented in phases. While phase I, representing finance and Accounts, Human resources, Sales order tracking of the ERP implementations, went live during November, 2012, Phase 2, comprising Project Management, Customer service, Performance and Travel Management currently in progress and expected to be completed by middle of this financial year. ERP is expected to enhance productivity of operations, minimizing duplication of data, enabling consistent reporting, higher accuracy levels and enhanced controls in access to organization- level information.

PCI DSS (Payment Card Industry Data Security Standard):

Information is a valuable business asset and the key to the success and growth of any company. Hence it is essential that this business asset is suitably protected. In the modern networked world this becomes crucial for success and maintaining credibility. Considering this Thinksoft''s offshore TCoE (Testing Centre of Excellence) in PRINCE Info city, Chennai is compliant with PCI DSS and ISO 27001. PCI DSS is a worldwide Data security standard defined by the Payment Card Industry Security Standards Council.

Thinksoft''s compliance with PCI DSS implies Complete Secured Physical/Logical Work Environments, Multilayer Encryption for data at Receipt, Processing and Storage, Comprehensive Privacy Framework, Detailed Risk and Governance Framework, Wireless Intrusion and Prevention System, Enhanced HR Security Controls, Intensive Vulnerability Management Program by Authorized Scan Vendors (ASV), Business Continuity Program meeting BS 25999 standards.

Thinksoft Global is currently one of the few companies that can count this Information Security among its achievements. Through this compliance and certification the company has reinforced its commitment to its BFSI clients of its ability to meet the stringent global standards of information security, data privacy, data security and business continuity in its offshore delivery centers. As pioneers in Independent Testing services Thinksoft has proven that it is ahead of the market in proactively meeting client''s expectations in terms of Data/Information security.

17) Environmental awareness:

The Company continues its ''go green'' initiatives to conserve resources and also reduce its carbon footprint and create sustainable alternatives wherever feasible. All steps required for conserving power across all delivery centers are being undertaken. During the current year Thinksoft Delivery centers have been deployed with less power consuming Ultra Small form factor desktops which are likely to consume only ¼ th of the power consumed by regular desktops.

Human detector sensors have been deployed across the facility to auto power off lights when no human presence. Video conferencing (VC) usage has increased steadily during the last couple of years, which in turn has reduced the travel cost and improved energy savings. During the current year, Video conference facility has been extended to on hand held devices and PDA to reduce the travel time even to the nearest Thinksoft office.

Thinksoft will explore the opportunity of using alternative energy (Wind / Solar) during the course of the year to reduce the usage of electrical power.Towards contributing for Green IT for a safe environment, Thinksoft continues to dispose the e-waste generated in-house through vendors who adopt "Safe disposal practices", recycle and re-manufacture the used e-waste like printers, toners and cartridges. These initiatives are taken forward at a sustained pace.

18) Corporate Governance:

A separate section on Corporate Governance forming part of the Directors'' Report and the certificate from the Company''s auditors confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with National Stock Exchange of India (NSE) and BSE Ltd. (BSE) is included in the Annual Report.

The Company has taken adequate steps for strict compliance with the Corporate Governance guidelines, as amended from time to time. A separate Management Discussion and Analysis Report is also attached and forms part of this report.

19) Status of Application money refund:

Your company sent reminder for three times for the refund of application money. The money lying in the account as on 31st March 2013 is Rs. 72,000/- for 85 members. The members who had not availed the refund may please write to the Registrar and Transfer Agent.

20) Fixed deposits:

We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

21) Corporate Social Responsibility:

The activities under the Corporate Social Responsibility function have been explained in detail in another section in this report. Of particular importance is our association with the Toda tribe in their Nilgiris and our endeavor to make a difference in their general well-being.

22) Shifting of Registered Office:

During the current year, the Registered office of the Company has been shifted, to its own premises, situated at 6A, Sixth Floor, Prince Infocity II, No.283/3 & 283/4, Rajiv Gandhi Salai (OMR), Kandanchavadi, Chennai – 600 096.

23) Directors'' responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956:

Pursuant to Section 217(2AA) of the Companies Act, 2000, the Directors confirm that:

(i) They accept responsibility for the integrity and objectivity of these accounting statements

(ii) The financial statements are prepared in accordance with the guidelines and standards of the ICAI and Companies Act 1956, to the extent applicable. There are no material departures from the abovementioned standards.

(iii) Such standard accounting policies have been applied consistently, except as otherwise stated.

(iv) The judgments and estimates have been made on a reasonable and prudent basis so that the financial statements provide a true and fair view of the state of affairs of the Company at the end of the financial year. (v) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(vi) The Annual Accounts are prepared on a going concern basis and on an accrual basis

24) Acknowledgments:

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We thank the governments of various countries where we have operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Customs and Excise Departments, the Income Tax Department, the Ministry of Corporate Affairs, the Ministry of Commerce, the Ministry of Finance, the Reserve Bank of India, the state governments, the Madras Export Processing Zone (MEPZ), the Software Technology Parks (STPs) and other Government Agencies for their support, and look forward to their continued support in the future.

For and on behalf of Board of Directors of

Thinksoft Global Services Limited

Place: Chennai A V Asvini Kumar Vanaja Arvind

Date: April 25, 2013. Managing Director Executive Director


Mar 31, 2012

We are presenting herewith, the report on our business and operations for the year ended March 31, 2012.

1) Financial Highlights for the year ended March 31, 2012

(INR In Million) Consolidated Stand Alone

Description 2011-12 2010-11 2011-12 2010-11 Current Year Previous Year Current Year Previous Year

Export Revenue 1,121.27 775.39 1,025.84 559.25

Domestic Revenue 93.15 53.88 93.15 53.88

Total Revenue 1,214.42 829.27 1,118.99 613.13

Delivery expenses 813.28 557.10 852.74 432.50

Funds from Operations 401.14 272.17 266.24 180.63

Selling and Marketing expenses 147.81 119.16 51.06 44.31

General and Administrative expenses 126.28 125.64 110.31 109.11

Profit before Interest, Depreciation & Taxes 127.05 27.37 104.87 27.21

Less: Depreciation 37.40 27.88 37.17 27.56

Less: Interest 0.26 - 0.26 -

Operating Profit Before Taxes 89.39 (0.51) 67.43 (0.35)

Other Income 95.61 32.55 88.91 26.44

Net profit before taxes 185.00 32.04 156.34 26.09

Provision for taxation (65.88) (12.30) (60.28) (7.62)

Deferred Tax (5.35) (1.02) (5.35) (1.02)

Net Profit after tax 113.77 18.72 90.71 17.45

Profit brought forward from previous year 420.34 413.34 384.76 379.02

Profit available for appropriation 534.11 432.06 475.47 396.48

Appropriations : Interim Dividend 20.10 - 20.10 -

Transfer to General Reserve 9.10 - 9.10 -

Proposed Final Dividend 30.16 10.05 30.16 10.05

Tax on Dividend 8.11 1.67 8.11 1.67

Profit carried to Balance sheet 466.64 420.34 408.00 384.76

EPS basic 11.32 1.86 9.03 1.74

EPS diluted 11.30 1.86 9.01 1.74

2) Business and Operations Review

- Total revenues increased, in Rupee terms by 46%, to INR 1214.42 million during the current year, from INR 829.27 million in the previous year (In US dollar terms this amounts to an increase in revenues of 38%).

Distribution of Revenue by Geography

- Profit after tax at INR 113.77 million constituted 9.37% of revenues as against INR 18.72 million (2.26%) for the previous year. 'Exchange Gain' contributed to INR 48.86 million.

- Geographically, 42.69% of the revenues came from Europe (previous year 53.64%), 34.24% from IMEA (previous year 31.11%), 23.07% from America (previous year 15.25%) and the proportion of onsite to offshore revenues stood at 50.54% / 49.46% compared to 44.35% / 55.65% in the previous year. This is reflected in an increase of 67% in onsite Revenue from INR 367.78 million to INR 613.74 million during the current year.

- Delivery expenses have marginally decreased to 66.97% against 67.18% in the previous year. This is a result of a combination of higher proportion of revenues from onsite projects and also lower offshore utilization factors. The overall utilization decreased to 65.4%, compared to 66.9% in the previous year.

- The Gross Profit (Funds from Operations) at INR 401.14 million worked out to 33.03% of total revenues (excluding other income) compared with 32.82% in the previous year, while the PBITDA was at 10.46% as against 3.30% for the previous year. After Tax profits (including other income) increased to 9.37% (previous year 2.26%).

- General and Admin Expenses registered a marginal increase in absolute terms. It is INR 126.28 million and 10.40% during the current year as against INR 125.64 million and 15.15% in the previous year.

- The company increased its investments in S&M activity, consequently, sales and marketing costs increased in absolute terms at INR 147.81 million and 12.17% versus INR 119.16 million and 14.37% recorded in the previous year.

- Revenues from repeat business marginally decreased to 87% compared to 90% in the previous year.

- Employee strength was 742 (women 27.8%) at the end of the year compared to 661 in the previous fiscal. The attrition rate decreased to 17.2% for the current year ended March 2012, compared to 31.2% during the previous year.

3) Capital Expenditure

During the current year, we capitalized INR 61.82 million to our gross block comprising of INR 13.69 million on technology infrastructure, INR 46.39 million on physical infrastructure, INR 1.74 million addition on intangible assets.

4) Utilization of IPO proceeds

Out of INR 1531.51 lakhs (net of issue expenses) raised through IPO, INR 679.23 lakhs has been utilized for setting up the testing facility at TIDEL Park and MEPZ, Chennai as on March 31, 2012 and INR 632.80 lakhs utilized for normal capital expenditure and balance INR 219.48 lakhs is available in bank as fixed deposits.

5) Liquidity

The company continues to maintain sufficient cash to meet its strategic objectives. The liquid assets at the end of the current year stood at INR 636.42 million (as against INR 629.29 million in the previous year). Year end Account Receivables stood at INR 235.77 million (71 days sales) as against INR 228.96 million in the previous year (101 days sales).

6) Share Capital

As at the end of the financial year the Company's Equity Share Capital stands at INR 100.52 million, consisting of 10,051,581 fully paid up Equity Shares of INR 10 each. During the year, the Company has granted 339,000 options under Thinksoft ESOP Scheme 2011. The disclosure in compliance with the Clause 12 of the SEBI (Employee Stock Option Scheme And Employee Stock Purchase Scheme) Guidelines 1999, as amended is attached to this report as Annexure 3.

7) Net Worth

The net worth of the Company rose to INR 755.09 million as at 31st March 2012 from INR 699.68 million at the end of the previous fiscal. This works out to a per share net worth of INR 75.12.

8) Dividend

For the financial year ended 31st March 2012, your Board has recommended a final dividend of Rs. 3/- per equity share (30% on face value of Rs.10/- each), subject to the approval of the Shareholders in the ensuing Annual General Meeting.

Your Board has also declared an interim dividend of Rs.2/- per equity share (20% on face value of Rs.10/- each) on 3rd November 2011. This would result in a total dividend of Rs.5/- per equity share (50% on face value of Rs.10/- each) for the financial year ended 31st March 2012. (Previous year Rs.1/- per equity share of face value of Rs.10/- each).

9) Subsidiaries

The company is having its global presence through its subsidiaries, branches and places of business.

The company has the following five wholly owned subsidiaries

a) Thinksoft Global Services Pte. Ltd., Singapore

b) Thinksoft Global Services Inc., USA

c) Thinksoft Global Services (Europe) GmbH, Germany

d) Thinksoft Global Services UK Limited, UK

e) Thinksoft Global Services FZE, Sharjah, UAE

10) Financial Statement of Subsidiaries

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors' Report, Balance Sheet, and Profit and Loss account of our subsidiaries. Ministry of Corporate Affairs vide its General Circular no. 02/2011 dated 8th February 2011, exempted Companies from attaching the Financial Statements of Subsidiary Companies (refer Annexure 1). However, as per said circular the Companies are required to provide only the consolidated financial statement in the annual report, accordingly, the Annual Report contains the consolidated financial statements. The Audited Annual Accounts and related information of subsidiaries, whichever applicable, will be made available to shareholders upon request and will also be available for inspection during normal business hours at the Registered Office of the company.

11) Directors

Dr. S Rajagopalan, Director who was appointed as a director on 17th September 2008, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers for re-appointment as Director.

During the year under review Mr. C N Madhusudan, Non- Executive Independent Director had resigned from the Board of Directors with effect from 21st September 2011. The Board records its appreciation of the contribution made by Mr. C N Madhusudan during his tenure as a director of the Company.

During the year under review Mr. Rajiv Kuchhal, was inducted as Additional Director in your Board with effect from 21st September 2011. Mr. Rajiv Kuchhal's term expires on the date of the Annual General Meeting. The Company has received a Notice pursuant to the provisions of Section 257 of the Companies Act, 1956 for appointment of Mr. Rajiv Kuchhal as Director of the Company, liable to retire by rotation.

The Board of Directors recommends the appointment/re-appointment of Directors as mentioned above.

12) Auditors

M/s. PKF Sridhar & Santhanam, Chartered Accountants, Chennai retire as the Auditors of the Company at conclusion of the ensuing Annual General Meeting and being eligible offers themselves for re-appointment. The Audit Committee in their meeting held on 27th April 2012 has recommended the reappointment of M/s. PKF Sridhar & Santhanam, Chartered Accountants, Chennai.

13) Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under sub-section(1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the Annexure 2 to the Directors' Report section.

14) Particulars of employees

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956, and the rules framed there under, the required information is annexed and forms part of this Report. However, as per the provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the Directors' Report is being sent to all the Shareholders of the Company excluding the said annexure. Any shareholder interested in obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office of the Company.

15) Human Potential

The overall employee strength increased from 661 to 742 during the end of the year.

The Company strongly believes that organizational effectiveness can be significantly enhanced by focusing on the human side of the enterprise.

As part of its ongoing regular training programs, during the current year, about 137 training programs were conducted for the employees, clocking an average of 38 hours training per employee per year.

The company further endeavours through its special talent management initiatives, to make its key employees result oriented and business savvy.

A Resource Management group is mandated with the task of optimising the deployment of resources across practices and geographies.

16) Quality, Technology and Systems Enterprise Resource Planning (ERP):

The company plans to move towards a more structured, organization wide integrated application covering Finance, Sales, Order tracking, Customer service and Human resources.

The Company has selected and is in the process of implementing Netsuite, a cloud based Software-as-a-Service (SaaS) ERP system which would be completed during the financial year 2012-13. The enterprise applications are delivered over internet and managed as service by the application provider, and would be implemented to manage and co-ordinate all the resources information and functions from a shared data store. The Company already initiated the process towards implementation of an ERP system.

PCI DSS (Payment Card Industry Data Security Standard):

Thinksoft's offshore TCoE (Testing Centre of Excellence) in Tidel Park, Chennai is compliant of PCI DSS during the financial year 2011-12.

PCI DSS is a worldwide information security standard defined by the Payment Card Industry Security Standards Council. Thinksoft's compliance with PCI DSS implies Completely Secured Physical/Logical Work Environments, Multilayer Encryption for data at Receipt, Processing and Storage, Comprehensive Privacy Framework, Detailed Risk Assessment Methodology, Wireless Intrusion and Prevention System, Enhanced HR Security Controls, Intensive Vulnerability Management Program by Authorized Scan Vendors (ASV), Business Continuity Program meeting BS 25999 standards.

Thinksoft Global is currently one of the few companies that can count this among its achievements. Through this compliance and certification the company has reinforced its commitment to its BFSI customers of its ability to meet the stringent global standards on of information security, data privacy, data security and business continuity in its offshore delivery centres. As pioneer in Independent Testing services Thinksoft has proven that it is ahead of the market in proactively meeting client's expectations.

17) Environmental awareness

The Company continues its 'go green' initiatives to conserve resources and also reduce its carbon footprint and create sustainable alternatives wherever feasible.

All steps required for conserving power across all delivery centres are being undertaken. During the current year Desktop power management configuration has been extended to almost 50% of the desktops used in the delivery centres.

Video conferencing (VC) usage has increased steadily this year, which in turn has reduced the travel cost and improved energy savings.

Continues initiatives within its office buildings to reduce our electrical power, water and paper consumption.

Towards contributing for Green IT for a safe environment, the e-waste generated in-house are being discarded through vendors who adopt "Safe disposal practices", recycle and re-manufacture the used e-waste like printers, toners and cartridges. These initiatives will be taken forward at a sustained pace.

18) Corporate Governance

A separate section on Corporate Governance forming part of the Directors' Report and the certificate from the Company's auditors confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with National Stock Exchange of India (NSE) and Bombay Stock Exchange of India (BSE) are included in the Annual Report.

19) Status of Application money refund

Your company already sent three reminders for the refund of application money. The money lying in the account as on 31st March 2012 is Rs. 86,250/- for 90 members. The members who had not availed the refund may please write to the Registrar and Transfer Agent.

20) Fixed deposits

We have not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

21) Corporate Social Responsibility Involvement:

- Thinksoft works closely with Vidya Sagar (formerly known as the Spastic Society of India), an NGO dedicated to the welfare and development of Spastics Children

- The Company has been organizing Blood bank campaign in its premises in collaboration with Jeevan Blood Bank and Research Centre

- The Company has been working with the Premavasam, an orphanage for special and less fortunate children in which our employees were encouraged to participate and donate gifts.

Contributions:

As a part of Corporate Social Responsibility during the current year the company contributed

- INR 0.30 million to the 'Sadhya' Program & INR 0.48 Million to Vidhya Sagar's Spastics society, an NGO dedicated to the welfare and development of Spastics Children.

- INR 0.10 million to Ability foundation for India International Disability Film Festival.

- INR 0.025 million to Narthan Academy of Dance, Bengaluru for the Medical support of Musician and Dancer through Sumangali Seva Ashrama

- INR 0.01 million to Premavasam, an orphanage for special and less fortunate children.

- INR 0.028 million to Health First India to medical support for leprosy treatment.

22) Directors' responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

(i) They accept responsibility for the integrity and objectivity of these accounting statements.

(ii) The financial statements are prepared in accordance with the guidelines and standards of the ICAI and Companies Act 1956, to the extent applicable. There are no material departures from the above mentioned standards.

(iii) Such standard accounting policies have been applied consistently, except as otherwise stated.

(iv) The judgments and estimates have been made on a reasonable and prudent basis so that the financial statements provide a true and fair view of the state of affairs of the Company at the end of the financial year.

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

(vi) The Annual Accounts are prepared on a going concern basis and on an accrual basis.

23) Acknowledgments

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We thank the governments of various countries where we have operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Customs and Excise Departments, the Income Tax Department, the Ministry of Commerce, the Ministry of Finance, the Reserve Bank of India, the State Governments, the Madras Export Processing Zone (MEPZ), the Software Technology Parks (STPs) and other Government Agencies for their support, and look forward to their continued support in the future.

For and on behalf of Board of Directors of

Thinksoft Global Services Limited

Place: Bengaluru A V Asvini Kumar Vanaja Arvind

Date: June 15, 2012 Managing Director Executive Director

 
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