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R Systems International Ltd.

BSE: 532735 | NSE: RSYSTEMS |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE411H01032 | SECTOR: Computers - Software Medium & Small

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Mar 05, 16:00
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Annual Report

For Year :
2016 2015 2014 2013 2012 2011 2010 2009 2008

Chairman's Speech

Dear Stakeholders,

It gives me great pleasure to share with you that we have successfully completed another exciting year in R Systems journey. This past year has been a continuum of our transformation journey making us a robust digital transformation partner for our esteemed clientele and prospective customers. Your Company has further intensified its transformational process to make giant strides in the fast changing IT ecosystem.

As we step into our Silver Jubilee year, I look back to our humble beginning in 1993. Starting as an IT consulting company located in California, we moved ahead and expanded to be an offshore based product engineering company. From there, we continued our transformation journey and have strengthened & refined our competencies, insights, and offerings into the diverse industry verticals like Telecom & Digital Media, Banking & Finance, Healthcare, Manufacturing & Logistics, and Retail & E-Commerce. Over the last two years, our journey has moved into another exciting phase. We have partnered with businesses to mark their presence in the digital world.

Today, the businesses with a go-digital mandate cannot afford to leave the benefits of legacy systems. On top of this, they want to be further agile to adapt to futuristic technologies. Being equipped with product engineering DNA and the requisite digital competencies, your Company is currently placed in a favorable position to benefit from the digital opportunity wave.

I relate this amazing transformation journey with the Shakespearean Oyster in which the English writer saw a world of endless opportunities. Like an Oyster, we would continue on our principles of Caring, Innovating, and Transforming as we move into exciting times ahead.

R Systems Digital Transformation Partner

As a product engineering company, we are leveraging our engineering expertise to deliver industry-specific digital solutions. These solutions leverage our technology advancement and deliver tangible ROI to our customers in terms of revenue uptick and/or cost efficiency.

In 2016, we have strengthened our end-to-end digital media competencies in Over-The-Top content (OTT), Digital Video Broadcasting (DVB), and Internet Protocol Television (IPTV) space. We are a preferred technology partner for industry giants and have delivered state-of-the-art niche projects. Our solutions are being used by approximately 50 million end users across the globe. Our Computaris business unit is also working closely with leading telecom ISVs and telecom operators enabling them to enter new areas of the digital world like Internet of Things (IoT) and the Machine-to-Machine (M2M) communications. The team has delivered exciting projects last year using advanced technologies enabling our Telecom partners to be more agile, customer centric, and effective. We have been featured in Zinnov Zones - 2016 as an Emerging Product Engineering Company based on our R&D practice''s depth and maturity.

Our packaged solutions business units,

IBIZ and ECnet, continue to deliver industry specific solutions to SMEs and large corporations to empower them for a smooth transition in the digital age.

Foreseeing the digital opportunities, we continue to invest in building capabilities around Analytics, Digital Media, Cloud,

Mobile, and Internet of Things. R Systems Analytics practice plays a key role by leveraging advanced technologies to develop sophisticated analytics solutions that drive business transformation. Today, we possess robust analytics solutions, accelerators, and framework that address the key challenges around data and speech analytics.

We have nurtured R-Cloud, a Center of Excellence for our cloud offerings. R-Cloud covers capabilities and offerings around all key public cloud, such as Salesforce, Azure, and AWS. On the mobility side, we continue to work on key projects across all the market platforms like Android, iOS, hybrid, and other types. Our new initiatives for IoT include developing solutions for home automation and factory automation using IoT Technology.

R Systems in 2016

The year 2016 was another satisfying year for us as it reiterated our position as a seasoned player in the IT Services industry.

We reported revenue of '' 5,882 million (US$ 87.55 million) with EBITDA of '' 711 million (US$ 10.6 million) and the net profit of '' 537 million (US$ 7.99 million).

The revenue grew by about 7.5% excluding the impact sale of product business during 2015. This revenue growth was reinforced by 16 new logos, of which 5 have potential to be US$ million dollar plus customers. We have served 21 million US$ plus customers including 4 customers contributing US$ 3 million plus. Telecom and Digital Media continues to be our largest industry vertical contributing 29% of the revenue.

We are extremely excited with the traction towards our key industry verticals and digital capabilities.

During the year, even after making investments in building digital capabilities and expanding our sales & marketing bandwidth especially in the arena of digital marketing, we were able to clock EBITDA margin of 12.1% against 11.8% last year.

This was primarily driven by improved efficiency as average utilization for 2016 was 78%. Further, net profit has also increased by 15.3% over the previous year excluding the exceptional gain mainly on the sale of the Indus business unit. Our balance sheet continues to remain strong with shareholders'' funds of '' 2,780 million

(US$ 40.9 million) and cash reserves of '' 1,200 million (US$ 17.7 million).

We added 250 technical associates during the year 2016 to serve existing customers and encouraging pipeline. We have also expanded our infrastructure by adding a new state-of-the-art SEZ facility at Greater Noida to cater to our growth. We serve customers from 15 development and service centres located in India, North America, Europe, and the Far East, through a robust global delivery model. We are also exploring growth opportunities in other geographies with our strategic business expansion plans.

To Sum Up

The year 2017 started with certain geopolitical challenges, the outcomes of which are unexpected. We are cautiously monitoring the environment. Interestingly, these megatrends have not impacted the digital revolution. Digital transformation continues to be a driving force going forward.

Our team possesses deep technology expertise and requisite understanding of the industry landscape to serve our marquee customer base. As a preferred strategic partner, we are partnering in setting up digital ecosystems. Having focused on project engineering, we plan to intensify our investment in expanding competencies and offerings for digital and newer technologies. As we flourish into our Silver Jubilee year, we are well positioned to navigate legacy as well as born-digital businesses in their digital transformation journey.

I would like to express my gratitude to all our shareholders, customers, bankers, various government agencies, industry associations and all other organizations for their unwavering faith and continued support. I am equally thankful to all my colleagues worldwide at R Systems for their support and contribution in the Company''s transformation journey.

Yours Sincerely,

Satinder Singh Rekhi

Managing Director