Sasken may take $1.59M hit in Q3
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Sasken may take $1.59M hit in Q3

By agencies   |   Tuesday, 27 December 2005, 08:00 Hrs
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NEW DELHI: After having lost a case to one of its customers 3G.com in an international tribunal, Sasken Communications is likely to take a hit of $1.59 million in its profit for the current quarter ending December 2005 and ruled out any further impact on margin.

Informing to the Bombay Stock Exchange, the Bangalore-based company said, “The amount of the award and expenses, totalling about $1.59 million, is likely to be charged against the profits of the current quarter. There will be no further impact on margins or EPS (Earnings Per Share) on account of this award.”
Even if the company has insurance cover for such eventualities, however, in the present instance, the insurer has cited technicalities for non-fulfillment of the claim, it said, adding that the company is in dialogue with the insurer.

"However, the company does not expect this to be conclusively resolved in the short term, and hence could take this charge in the accounts for the quarter ending December 31 2005.

Sasken had an outstanding litigation with a semiconductor Company 3G.Com. When the company went public earlier this year Sasken was in the midst of arbitration proceedings, in connection with a contract with the said semiconductor firm.

This contract was entered into during 2001, for the supply of a single mode UMTS protocol stack. This was the only customer for this product. Further analysis of the market conditions in 2002 constrained the company to recast its product roadmap in favour of dual mode stacks over single mode stacks.

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