Good day, ladies and gentlemen. Thank you for standing by. Welcome to the NetSol Technologies’ 2013 Second Quarter Earnings Results Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) I would now like to turn the conference over to Patti McGlasson, General Counsel and Corporate Secretary. Please go ahead.

Okay. Good afternoon, everyone, and thank you for joining us today to discuss NetSol Technologies fiscal 2013 second quarter results. On the call today are Najeeb Ghauri, Chairman and Chief Executive Officer; Boo-Ali Siddiqui, Chief Financial Officer; Naeem Ghauri, President, Global Sales and CEO of NetSol Europe and Vroozi; and Shaz Khan, COO and Co-Founder of Vroozi. Following the review of the company’s business highlights, financial results and discussions of the company’s strategy, we will open up the call for questions. First some housekeeping issues before we start. Earlier today, NetSol issued a news release announcing the company’s financial results for the second quarter of 2013. If you have not received this news release and if you would like to be added to NetSol’s email list to receive company information or if you would like to change your contact information, please contact NetSol Investor Relations at investors@netsoltech.com. In addition, I’d like to remind everyone that today’s call is being webcast at www.netsoltech.com. Following the conclusion of the call, the webcast may be accessed on the NetSol website, where it will be archived for 90 days. Please note that all of the information discussed on today’s call is covered under the Safe Harbor provisions of the Litigation Reform Act. The company’s discussion may include forward-looking information reflecting management’s current forecast of certain aspects of the company’s future. And our actual results could differ materially from those stated or implied. These forward-looking statements are qualified by the cautionary statements contained in NetSol’s press releases and SEC filings, including its Annual Report on Form 10-K and the quarterly reports on Form 10-Q. I would also like to point out that NetSol will be discussing certain non-GAAP measures. And the release issued earlier today contains a reconciliation of these non-GAAP financial results to their most comparable GAAP measures. With that said, let me now turn the call over to Najeeb Ghauri. Najeeb?

Thank you, Patti, and thank you, all, for joining us today. I am once again very pleased to report record second quarter revenue, having previously reported a record first quarter and 2012 fiscal year numbers. Our net income for the quarter was very strong at $2.2 million, which for the six months – first six months already exceeds the total of the last fiscal year. Earnings per share came in at $0.28 which exceeded our own internal projections. I commend my entire team across the world for their hard work and determination, especially as we mark our 15th year as a public company. Our strong results this quarter reflect the various initiatives throughout the world from China to North America, to Europe and South East Asia to Middle East. Across NetSol, we have focused on execution and doing those things that bring us to the next stage of growth and add value for our shareholders. So, let’s start with China, which, by geography, accounts for our largest percentage of total revenue. It is a bit difficult to tamper my excitement for the growth of NetSol in China and for the growth we expect to experience there in the future. As you may know, China is once again the top auto market outselling the U.S. In January, according to data from the China Association of Automobile Manufacturers, auto sales and production grew by 51% to 2 million vehicles over the same month last year. Vehicle sales also grew to 2.3 million units and increased 46% over January, 2012 and up 12% over December’s figures. Now according to the latest projections, China’s market of auto consumption finance is set to exceed RMB1 trillion or $161 billion in the next 10 years. So why is this important to NetSol? As I have previously…

Thank you, Najeeb. Once again our results indicate that the strategies we put in place a year ago are now bearing fruits. We’re always proud to have recorded our best second quarter to-date. Total revenue for the second quarter of fiscal 2013 was $11.8 million, up from $8.6 million in the comparable period last year. License revenue was $3.5 million compared with $2 million in the last year’s second quarter, stemming from the addition of three new NFS customers. These three new customers represent more than $5 million in combined license, maintenance and services billing. Maintenance revenue remained steady at $2.7 million, up from $2.1 million in the same period of last fiscal year. With two NFS clients going live in China combined with select price increases to bring certain European-based customers up to the market, our maintenance revenue would continue to improve. Services reached $5.6 million from 4.4 million a year ago. Services revenue increased as a result of customization and enhancement projects of the company’s NFS solution with Asia-based clients. We expect services revenue mix to improve going forward as we add additional revenue from our Virtual Lease Services subsidiary in the UK as a result of their recent contract. Gross margin for the fiscal second quarter was 57%, compared with 55% as reported in the comparable period of last year. Total operating expenses for the second quarter of fiscal 2013 were $3.8 million sequentially equal to the first quarter, although up from $3.5 million in the first quarter of fiscal 2012. The year-over-year difference primarily reflects increased SG&A. The increase is related to hiring of new sales and marketing staff both at Vroozi and the NFS division and a larger head count as a result of the VLS acquisition. Moving on to the net income, we reported…

Thank you, Boo-Ali. Indeed, we’re very pleased with our results and are on track to achieve our growth objectives. To share more detail about one of those initiatives, I’d like to now turn the call to Shaz Khan, the CEO and co-founder of Vroozi. Shaz?

Thank you, Najeeb, and good morning, everyone. As Najeeb described earlier, Vroozi recently launched a self-service online business shopping platform, allowing business organizations to quickly and efficiently optimize their purchasing processes within their existing ERP systems via the cloud. The new framework is equipped with a consumer-like interface and easy-to-use web-based content manager, allowing users from all over the world to publish catalogs for products and services that include attachments such as specification sheets and rate cards, as well as search and source offering from multiple suppliers and on the open market, allowing both buyers and sellers to quickly and efficiently build dynamic marketplaces and access a digital suitcase of content and purchasing data anywhere. The platform requires a monthly subscription fee which is purchased in 12-month increment based on the number of users and the size of the company. This platform with a consumer-like experience where content can be managed as easy as using a spreadsheet document and comparison shopping can be done with a simple point and click of the mouse is something truly unique in the marketplace. We have received great feedback from both customers and prospects on our system and we’re excited about the opportunity ahead. To learn more about the product, the pricing model and the management team, I would like to encourage everyone to explore www.vroozi.com. In addition, our product demo can be viewed on the website under the January 30 blog post. In the near future, we also plan to hold the demo specifically for our shareholders and the investment community, so that you can learn more about our solutions. With that, I would now like to turn the call back over to Najeeb.

Thank you, Shaz. Indeed Vroozi has a capacity to create additional value for our shareholders and we look forward to updating you on our progress in coming months. Along with marketing of our products and solutions throughout the world, we’re also preparing for the launch of our next-generation NFS solution, particularly in the U.S. market, where we believe we will be the first to market with such a robust solution. In order to prepare for this, we are continuing to build out our service and delivery capability as well as our sales team in key regions throughout the world. I look forward to providing more details on the launch, which will take place over the next few months. As we move forward for the remainder of the year, we are focused on execution and are very excited about the road ahead and opportunities before us. Whether you are new to NetSol or had been with us for a while, I’d like to thank you for your continued support. You all have your vested stake in the company and our priority is to continue to enhance the long-term value. With that, I’d like to open the call for the questions. Operator?

(Operator Instructions) And our first question is from the line of Howard Halpern with Taglich Brothers. Please go ahead, sir. Howard Halpern – Taglich Brothers: Congratulations. Great quarter. Great quarter, guys.

Thank you, Howard. Howard Halpern – Taglich Brothers: I’ll start out with something I saw in the press release. What type of – what will the cost be and for what type of opportunity is there for the development of the mobile applications for your clients?

Yeah. I think Shaz and Naeem can jump into answer this question.

With the what NFS? Are we – Howard, this is Naeem. Are we referring to our NFS platform or you are referring to our Vroozi platform? Howard Halpern – Taglich Brothers: I guess both actually, because in the press release you highlight that you are beginning development of mobile applications for clients. So, I’m assuming it’s all encompassing?

Okay. I will pick up the NFS piece, maybe then Shaz can jump in. For our NFS offering there is an increased demand for our clients to be able to provide mobile solutions to their sales force, to their back office staff as well. So we are at the moment in the process of not only developing, but doing quite a few proof of concept and beta releases of our mobile app. So some of our clients are already using those applications and we believe this to be a quite a strong growth area over the next 6 to 12 months, where I say typically any client that has a dealer network or have people on the road either doing proposals, quotations, or collecting data or doing audit, they are going to have a need for a mobile app. So that is very much part of the strategy and we have full blown capabilities to develop those types of apps, not just for the phones or smartphones, but as well also for the tablets. Howard Halpern – Taglich Brothers: Shaz, anything on Vroozi?

Yes. Howard. So, in terms of the mobile strategy for Vroozi, it’s very much an important initiative for us as our customers are starting to demand the applications on smaller form factors, including our purchasing network. So what you’ll be seeing in the next six to nine months within Vroozi is applications of surrounding purchasing and the Vroozi supplier network to be delivered on to tablets and smartphones. Howard Halpern – Taglich Brothers: Can you talk a little bit about the pipeline that you see and the backlog that you have as you head into the second half of the year?

Yeah. Naeem, you will be the best one to give the updated...

Yeah.

Yeah. Go ahead.

Yeah. Sure. Yeah, Howard, I mean, as you can see from our quarterly earnings that we are now tracking almost twice as much in maintenance and services revenue as we were 12 months ago. The reason for that is not only are clients asking for more services, they are paying more for those services. So, we have a double dip here that as these businesses grow, as these portfolios grow, they need additional services, they need to enhance the product and they need to – they also start to pay a higher daily rate for our resources. Now that builds up our backlog in the sense that this is committed work. But we get a very strong visibility from our clients that, what do they want to do over the next 12 to 24 months? And that sort of visibility helps us to adjust our delivery capability accordingly and also the prices accordingly, but we see more demand. We are able to adjust our prices accordingly. So, where the backlog and the pipeline is coming from these two areas, one is additional revenue from services. And two, is just pure new opportunities where you’re talking to new prospects, and essentially we have seen that at least triple in size in the last 12 months to (inaudible) we were looking at a $1 in pipeline; we have $3 in the pipeline now. So that’s tripled. That gives us very strong indication that there is good activity in the market especially in the Australia, Asia-Pacific market, APAC and gradually catching up in the U.S. and the U.K., Europe are last to follow. But certainly in the APAC, our business opportunities have tripled in the last 12 months and the pipeline is indeed the healthiest it’s ever been. Howard Halpern – Taglich Brothers: All right. And just in terms of, I guess, the current quarter that you’re in, does that get impacted at all by the Chinese New Year at all, or is that just a minor blip?

Okay. The way it works is that, this quarter is anyway in the past not 31 December. So, in this current – so you are talking about this current quarter which ends 31 March. Howard Halpern – Taglich Brothers: Yeah.

On a typical Chinese Year quarter, we maximum, we lose a week in terms of engaging with the client. But what the Chinese are very good at is that when they do take this break, they already have agreed meetings right when they come back. So we have another six weeks of the quarter left. So, I believe there is no material impact... Howard Halpern – Taglich Brothers: Okay.

...of the Chinese Year. We’ve never had in the past and I don’t see it happening this year. Howard Halpern – Taglich Brothers: Okay. And, yeah, what – for the U.S. and North America, you’re talking about launching in the next couple of months. What would you just on a very preliminary basis estimate that the initial sales cycle and then implementation process would be for first couple of clients that received the new software?

Well, (inaudible).

Yeah, sorry. Our approach is that we are not doing a full blown launch, but to do a soft launch speaking to existing clients who would upgrade to the next platform. Our approach to new clients is very opportunistic in terms of first understanding what is it that they need, because our existing platform continues to sell well and where we have an opportunity to sell the existing product it is for us the preferred approach, because we deploy very quickly, it’s very robust. And the profit margins are very, very attractive because of how quickly we can deploy and we’ve been in and out of project. So, we have to be very opportunistic with our existing clients where we can sell the current platform, which is still very relevant in terms of technology and as you can see, the pipeline I shared with you in Asia Pacific, it’s very much built upon the existing platform. For the next generation, our approach is to get up a few pilots with existing clients and upgrade them, take any teething problems out, get the platform up and running and then start to build up the reference sites. It’s a very sort of detailed exercise that we have gone through in our planning on how we launch the product. So you will hear about the launch, but it is not the type of launch where we essentially just go do a huge marketing blip. It will be more a soft launch. Howard Halpern – Taglich Brothers: Okay. And...

Also, Howard, can I add one more comment here. I think what we are also noticing in the U.S., North America, the current NFS is also in high-end demand, and we’ve been busy with a few projects. So I think you’ll hear more about some very positive activity potentially at this quarter, which is Q3 that shows that it’s not only dependent on the next generation, it is also like Naeem said that there is enough demand for the current solution, not just in Asia, but also now we’re seeing the effect in the U.S. very positive way, and that’s why when I said repetitively in the previous call that we can achieve much stronger contribution from the North American market, 25%, 30% in next year or so. That is exactly why we feel that we can achieve those numbers because the U.S. market is bouncing back with auto sector. It’s really very healthy. So that’s really helping us to not rely totally on the next generation, but also on the current solution. Howard Halpern – Taglich Brothers: Okay. And one final question. I think you talked about it in the last call too, but do you have a plan in place to – or are approaching a plan to reduce deduction from the controlling interest?

Well, we actually did increased our ownership by almost 5% from the previous Q1 to the current Q2. So now you’re up to 65% from 60.5% for three months. That’s a one positive sign. Of course, company has to manage its cash very efficiently and our biggest opportunity is to really invest in the growth of this company and which really mean mainly lot of sales executives all over Asia and U.S. So he is keeping HR very busy to use the cash while deciding. Look, we want to earn more, but we have wait and see how we manage our cash flow and how we can quickly improve our holding. And that of course will help, without a doubt, the bottom line or EPS for the group. So, we’ll do that as and need be. Howard Halpern – Taglich Brothers: Okay. Well, congratulations. Keep up the good work, guys.

Thank you.

Thank you, Howard.

(Operator Instructions) Our next question is from the line of Greg Garner with Singular Research. Please go ahead. Greg Garner – Singular Research: Thank you for taking my question. Congratulations, gentlemen on a good quarter. Najeeb, you mentioned that you were surprised even from your internal projections that the earnings were even better than your internal projections, what I mean to say. Was there any particular order or a couple of orders that came in the quarter that you had expected to be – come later that might have caused that? Or can you point to one or two things or is it more kind of a general?

Yeah, sure. Great. First of all, most of the contribution of revenue was in line with our expectations for both our CFO and our head of sales. But I think one thing which really helped us was the $0.06 EPS contribution from our joint venture in Saudi Arabia, which really lifted to $0.28. So that to me was a – it’s a very positive thing that happened. And of course others pretty much we were expecting and, of course, we had projected – well, I’m happy to see that we beat the consensus and (inaudible). And nothing too dramatic, it’s just that there is a lot of activities with a lot of failures that Naeem mentioned about maintenance and services and a couple of licenses. Greg Garner – Singular Research: In the Saudi Arabia joint venture, is that, that’s more of a one-time consulting thing, but it seems to be have some reputation to it, is that the right way to look at that?

Well, the beauty of this joint venture is that we are deploying our team from our Lahore facility to work with these couple of new projects and there is a tremendous growth happening in the whole Saudi Arabia. If you look at infrastructure, education, IT, defense sector, Ministry of Interiors, lots going on there and NetSol being a partner of a very big group, it puts us in a very strong position to be sharing anything that comes to our partner Atheeb Group as a IT system integrator. So I’m really quite upbeat on the outlook in the coming years, because we’re building this business very patiently. We brought in a new CEO about a new year ago as I mentioned earlier. And I think it looks very promising the long-term the prospects for the whole, not just the Saudi Arabia, but the whole GCC nation or region rather where we can see some new channels of revenue of course a growth there. Greg Garner – Singular Research: Okay. Thanks. I appreciate that color. It really helps. And I just want to ask question about the Vroozi. I mean, last quarter I believe you mentioned that there was eight installed customers and five had signed up, as I remember is there any metrics you can provide as to how many installations there are, how many new customers are – and also regarding Vroozi with your new VP of Marketing, just want to see if there is anything comment on how this new person, is it Ivy? How she might be revamping, how it’s being done, or is there any change in how you are addressing the market or anything – flavor you can provide there?

Yes. I think great to have Shaz, of course. He is very busy with his team, so he will give you a color to answer all your questions, okay? Go Shaz. Greg Garner – Singular Research: Okay.

Hello, good morning. So in terms of the Vroozi strategy there is a sea change in how we are approaching the market, and one of the first fundamental changes that we’ve done is hire a dedicated marketing expert, Ivy Montgomery, who happened to join us from SAP. The focus of Vroozi is always been to deliver consumable applications in the cloud and really focus on a self-service model. So, over the next month, you’ll be seeing a change in which customers will be coming directly to the website for Vroozi registering and then consuming the software without any intervention from our organization, which provides obvious benefits, not only from a customer perspective, but also from our own internal support perspective, and, of course, generating monthly subscription revenue upfront, so lowering the sales cycle in addition. In terms of the customer base that we have right now, we are up to 12 customers, 10 are implemented using our network daily. In some cases, thousands of transactions running through certain customers network using our marketplace technology. And we look to grow that footprint and really increment the revenue per user per month over the next three to six months. Greg Garner – Singular Research: So, when a new customer comes in and they don’t need to go through the sales force, they can start using your system online. Do they still commit to a 12-month contract then?

Yeah. Greg Garner – Singular Research: Okay.

Yeah. Correct. So they’re on a – customers have the option of taking a trial, which is 30 days. And as you mentioned sales force – sales force has 12-month minimum increments, we do the same. Greg Garner – Singular Research: Okay. Well, thank you. I will get back in the queue, let somebody else come in. Thanks.

Thank you, Greg.

Thank you. Our next question is from the line of Daniel Nye with CIM Investments Management. Please go ahead. Daniel Nye – CIM Investment Management: Good morning gentlemen. How are you?

Fine. How are you, Daniel? Daniel Nye – CIM Investment Management: I’m well. I’m well and congratulations on a fantastic quarter.

Thank you. Daniel Nye – CIM Investment Management: Just a follow-up question on your license revenues, its – so I’m really happy to see the increase. Do you think this is a trend that will continue or is it some seasonality to the numbers? And can you let me know what geographies are buying the product?

Well, one comment I want to make and Naeem will jump in. I think as you know, second half is typically or traditionally the stronger of the first half. So, we are in the second half now, Q3. So that is quite historical, I think the numbers. So let’s hope, we can continue and I’m sure Naeem has a lot to say about the geography, and Naeem, why don’t you come in.

Yeah. Hi. Daniel. Actually the license projections and how they’re tracking is quite bullish for the next 12 months. I look down, 12 months down at least in terms of visibility and they can come in any time essentially in the sales cycle. It’s difficult to predict when they will kick in. But certainly in terms of visibility that I have, that I shared with the earlier caller is that our pipeline, which is treble in size where we had a significant license element. So we expect to close some of these deals in the next two quarters, before the end of the fiscal. What is also very encouraging, Daniel, is that our recurring revenue streams are growing better than 30% a year, so where we used to have recurring revenues in the $1 million to $10 million now we are looking at $15 million to $20 million, just purely in recurring revenue, which is – again these are new benchmark for the company. License revenue is always welcomed and one, we work very hard for in terms of making sure that they represent quite a big percentage of the overall contracts. So, I believe that in the next six weeks and in the following three months, we will track as projected in our guidance, and our license to services mix is very much on forecast, if not better. Daniel Nye – CIM Investment Management: Okay, great. That’s great. Thank you.

Thank you.

Thank you.

Thank you. And we have no further questions at this time. I’ll turn it back to management for any closing remarks.

Well, thank you, everyone for listening to our Q2 results and...

Excuse me. We do have a follow-up question. Would you like to take it?

Yes. Please go ahead. Let’s do it quickly.

Okay. It is from Greg Garner with Singular Research. Please go ahead. Greg Garner – Singular Research: Thank you. I appreciate that. On the new North American SaaS product, when you’re marketing it to existing clients, we might understand in a very general way that license product is a higher revenue and higher profit and the SaaS product is a lower revenue say for that quarter, but highly profitable and you have a long tail to that. So, I’m just wondering how that might affect the revenues if your – and I understand how, introducing the products how you want to move it in slowly because until you get any kind of just operating bugs, they are just normal in a new release really cleaned up, but in addressing it to the current client base, I’m just wondering, does that mean there might be – if they move from a license product in-house installation to a SaaS product, how does that affect revenues and margins? Can you walk me through that or...?

Well, no – yes, Greg, in the U.S., we are really driving our core business whether it’s LeasePak or NFS on the traditional license model, pricing model, and I think that really works very well with not just in Asia, but also in the U.S., and of course in Europe. But then when you look at the Vroozi, a few thing we’re doing with cloud-based which is again a small, small part of our growth strategies, but I think overall scheme of things we believe there our license model is very good. Lot of customer wants that and because – it means their budgets and these are established bigger company and they can really manage to meet those kind of license value upfront. I mean, I am pretty comfortable with that model. I’m sure Naeem has the same take, but Naeem do you want to add some comments on?

Yeah. Yeah. Sure, sure. See what’s happening is that we are not, if you like, replacing existing clients who are on traditional license revenue to SaaS... Greg Garner – Singular Research: Okay.

…..because clients who already paid the license have paid it. Greg Garner – Singular Research: Okay.

And so, they are on a maintenance support contract now, so they’re not switching over, yeah. Greg Garner – Singular Research: Okay.

So that’s the first point. So that revenue stream is protected. Greg Garner – Singular Research: Okay. That’s – okay.

The second part – exactly, the second part is where we’re offering SaaS is to our non-traditional client, which is not the client that will spend $3 million, $4 million anyway. So we’re not pitching it to a big company like a Cisco or a Toyota, we’re pitching it to the very small to medium size companies which are initially not able to afford to pay a lump sum payment upfront. So we’re not cannibalizing our license business with the SaaS business, it is essentially complimenting our additional to our traditional license business. Greg Garner – Singular Research: Okay. Thanks. I appreciate that. Clears things up.

Thank you, Greg. Greg Garner – Singular Research: But with that still you’re seeing some opportunity even in the license in North America even though the majority of the opportunity obviously is in Asia, but your commentary about...

Well, we... Greg Garner – Singular Research: Go ahead.

Yes. And I’m sorry, yeah. And as Naeem said earlier, North America is starting to look really good now; I couldn’t say that six months ago. So, you’ll see in this quarter and the following quarter, we would secure new business and this is essentially going to rev things up for North America in terms of its top line and profitability. This hasn’t happened in several years by the way, because U.S. slowdown after 2008 and new business was hard to get, but we’re finding all of a sudden there is some new, if you like, interest and interestingly it’s on our NFS platform, which has been selling really well in Asia. Now there is interest on NFS not as much in LeasePak. So, we have opened up a new set of opportunities in the Americas I should say rather than just North America and the South America, Latin America. American countries as well, we’re starting to see interest in NFS. So, we’ll be able to share some news with you this quarter and then going forward next quarter North American business, NTNA is starting to grow as well. Greg Garner – Singular Research: Okay. All right. Great. Thank you.

Okay. Welcome.

Thank you.

Well, if we have no more questions, we will close the call. I thank everyone again for attending the call today and we look forward to see you in the Q3 in May sometime. Thank you and have a good day.

Ladies and gentlemen, this concludes the NetSol Technologies’ 2013 second quarter earnings conference call. We’d like to thank you for your participation. You may now disconnect.