• Sales decline by 6%: The sales were down by 6% YoY to Rs 284.84 crore which includes other operating income Rs 2.15 crore (up by 43%) for quarter ended March 2013. Also, Operating profit margins turned to negative 17.2% (compared to positive 13.4%) on the back of sharp rise in staff cost (up by 1150 bps YoY), other expenses (870 bps YoY), Service Charge (400 bps YoY) and consumption cost (400 bps YoY) as percentage to sales and net of stock adjustments. As a result, it posted operating loss of Rs 48.93 crore compared to the operating profit of Rs 40.70 crore in the corresponding previous period. After the sharp 75% growth in other income to Rs 4.32 crore, PBIDT posted loss of Rs 44.61 crore (as against the profit of Rs 43.16 crore).
• PAT posted loss of Rs 67.38 crore: With the sharp 239% jump in interest cost to Rs 11.05 crore and 1% decline in depreciation to Rs 4.35 crore, PBT before EO posted loss of Rs 60.01 crore (as against profit of Rs 35.50 crore). With no EO loss (as against EO gain of Rs 0.07 crore), PBT posted loss of Rs 60.01 crore as against profit of Rs 35.57 crore. Further, after the lower provision for the taxation (down by 37% YoY to Rs 7.36 crore), PAT posted loss of Rs 67.38 crore compared to the profit of Rs 23.96 crore in the corresponding previous quarter.

Consolidated Yearly Performance:

The sales grew by moderate 6% YoY to Rs 1067.13 crore for the year ended March 2013 despite difficult economic environment and challenging market conditions. However, it posted Operating profit of mere 0.28 crore as against profit of Rs 108.75 crore in the corresponding previous period. After the sharp jump in other income (up by 885% YoY to Rs 42.33 crore), PBIDT was down by 62% YoY to Rs 42.61 crore. With the sharp rise interest cost (up by 325% YoY to Rs 36.22 crore) and after flat growth in depreciation to Rs 16.26 crore, PBT before EO posted loss of Rs 9.87 crore as against the profit of Rs 88.29 crore in the corresponding previous period. With no EO loss compared to Rs 1.95 crore in the corresponding previous period, PBT posted loss of Rs 9.87 crore (as against of profit of Rs 86.34 crore). With the lower provision of taxation (down by 47% YoY to Rs 12.02 crore) PAT posted loss of Rs 21.89 crore compared to the profit of Rs 63.53 crore in the corresponding previous period.

Other Highlights:

• The international business environment though competitive provides opportunities in the markets of USA, the Middle East and Africa. The Company is investing in business development in these select markets.
• The Stronger foothold in North American market through strategic acquisition of the business of Transcend United Technologies LLC("Transcend"), North America helping augment AGC Networks technology offerings. Transcend provides global IT systems integration focused on Unified communications, Data Center Infrastructure and Managed Services.
• The Strategic investments in building capabilities like State-of-the-art Customer Experience Centre in North America, in order to sustain growth momentum. The company incurred initial set up and establishment costs of Rs 27 crore for the year for its foray and business development in the US Market.
• The H2'13 witnessed customer wins in key verticals of BFSI, GPD, Automobiles and IT / ITes highlighting the core expertise of offering integrated technology solutions across quadrants.

Other Information:

• The Consolidated other operating income includes write back of provisions/Liabilities aggregating to Rs 1.37 crore for the quarter ended March 2013 and Rs 7.26 crore for the year ended March 2013.
• The Standalone and Consolidated other income for the year ended 31^st March 2013 includes profit on sale of investment aggregating to Rs 26.25 crore towards sale of investment in holding Company i.e. Aegis Ltd.
• The Consolidated other expenses includes provision for doubtful debt of Rs 16.52 crore for the quarter ended March 2013 and Rs 33.54 crore for the year ended March 2013, which also includes provisions on account of deferred collection receivables on specific identification basis.
• The Consolidated employee benefit expenses includes Rs 10.53 crore and other expenses includes Rs 1.20 crore of expenses aggregating to Rs 11.73 crore for the quarter ended 31^st March 2013 and Rs 22.44 crore and Rs 5.20 crore aggregating to Rs 27.64 crore for the year ended 31^st March 2013 incurred by AGC network Inc USA towards expenses for setting up office in USA.
• The Standalone and Consolidated tax expense for the quarter/year ended 31^st March 2013 includes reversal of Rs 12.54 crore of deferred tax assets and Rs 4.78 crore write back of excess tax provision on completion of assessment relating to earlier years.

Sharing his perspective Mr. S K Jha, Managing Director & CEO at AGC Networks said, "The current macro-economic scenario has kept services across industries globally in a challenging situation. With our strong focus on building capabilities across key technology segments catering to the customized needs of our customers, AGC Networks as a company will continue to help customers across the globe by introducing innovative solutions."

Mr. Kunjal Mehta, Vice President and Head - Finance said: "The global economic situation has been uncertain and this has impacted the Indian ICT industry as well. With our continued efforts to optimize costs and control expenditures our challenge going forward is to bring the company back on high growth path and to reap on the investments made to increase the business and profitability."