MIRA
INFORM REPORT
|
Report Date : |
13.01.2007 |
IDENTIFICATION
DETAILS
|
Name : |
PRITHVI
INFORMATION SOLUTIONS LIMITED |
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Registered Office : |
10Q3-A1, 10th Floor, Cyber Towers, Hitec
City, Hyderabad- 500081, Andhra Pradesh |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
24.07.1998 |
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Com. Reg. No.: |
01-29831 |
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CIN No.: [Company
Identification No.] |
L72200AP1998PLC029831 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
HYDP02586D |
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PAN No.: [Permanent
Account No.] |
AACCP5281F |
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Legal Form : |
Public
limited liability company. The
company’s shares are listed on the Stock Exchange. |
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Line of Business : |
Provider of customized solutions and software
services. |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory
capability for payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD
11500000 |
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Status : |
Good |
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Payment Behaviour : |
Regular
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Litigation : |
Clear |
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Comments : |
Subject
is a well established and reputed company having fine track. Company’s
initial public offer has been very much successful. Directors are reported as
experienced and respectable businessmen. Trade relations are reported as
fair. Business is active. Payments are usually correct and as per
commitments. The
company can be considered good for normal business dealings at usual trade
terms and conditions. |
LOCATIONS
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Registered Office & Head Quarters : |
10Q3-A1, 10th Floor, Cyber Towers, Hitec
City, Hyderabad- 500081, Andhra Pradesh, India |
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Tel. No.: |
91-40-66846017/66846018/66846019 |
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Fax No.: |
91-40-66846021 |
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E-Mail : |
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Website : |
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Overseas
Office : |
USA Pennsylvania
Foster Plaza 9, Suite 700, 750
Holiday Drive, Pittsburgh, PA - 15220. Ohio 2001, Aurora Ave, Lewis Center, OH-43035 Illinois 3009, Middle Bury Ct, E, Aurora,
IL-60504. North Carolina 803 Park Ridge Road, Durham, NC-
27713 Texas 14807, Horse Creek Lane, Sugar
Land, TX California 100 Reflections Dr. San Ramon, CA
98745 Virginia 7397, Stream Way, Springfield, VA
22152 Seattle 2677, 151 Place NE, Bldg #3,
Unit-4, Overlake Business Center, India (Global Delivery Centers) Hyderabad (HQ) 10Q3A1, 10th Floor, Cyber Towers,
HITEC City, Madhapur, Hyderabad - 500 081 Hyderabad 7004, Emerald House, S.D Road,
Secunderabad - 500 003 Bangalore 13, 1st A Main, S T Bed Layout,
Koramangala 4th Block, Bangalore - 560034 New Delhi 1st Floor, United Insurance
Building 20, F-Block Connaught Circus, UAE Dubai Office #1108, Al Shatha Tower,
TECOM, Dubai. Netherlands Amsterdam Postbus 3802, 1001 AP Amsterdam,
Pesetaweg 41 Singapore 19-04, High Street Center, 1 North
Bridge Road, Singapore 179094 |
DIRECTORS
|
Name : |
Mrs. V Madhavi |
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Designation : |
Chairperson
and Wholetime Director |
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Date of Birth/Age : |
35
Years |
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Qualification : |
MSBE |
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Experience : |
12
Years |
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Date of Appointment : |
24.07.1998 |
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Previous Employment |
Gateway
Resources Inc., Pittsburgh |
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Name : |
Mr. V.
Satish Kumar |
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Designation : |
Managing
Director |
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Date of Birth/Age : |
32
Years |
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Qualification : |
BE |
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Experience : |
9
Years |
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Date of Appointment : |
24.07.1998 |
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Name : |
Mr. G.
Srikanth Reddy |
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Designation : |
Wholetime
Director |
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Date of Birth/Age : |
32
Years |
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Qualification : |
BE |
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Experience : |
9
Years |
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Date of Appointment : |
01.06.2005 |
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Previous Employment |
South
Central Railway, India |
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Name : |
Dr. S.
P. Narang |
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Designation : |
Director |
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Date of Appointment : |
30.06.2005 |
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Name : |
Mr. Omkar
Srinivas Bhongir |
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Designation : |
Director
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Date of Appointment : |
30.06.2005 |
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Name : |
Mr. S.
Lalith Prasad |
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Designation : |
Director
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Date of Appointment : |
11.03.2006 |
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Name : |
Mr. P.
V. R. Rajendra Prasad |
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Designation : |
Director
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Date of Appointment : |
11.03.2006 |
KEY EXECUTIVES
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Technology : |
Sridhar Chilumala - CTO |
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Hari Goud - Practice manager –
AND |
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Darren Hughes - Practice manager – SAP |
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Anupama Gajavada- Practice manager – Oracle |
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Kailash Murthy Practice manager – BI |
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Ganesh Mani - Practice manager – KPO |
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Pankaj Vashisht - Practice manager – RF |
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Finance
: |
P. S. Shastry -CFO |
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Chitranjan Das – VP Finance |
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A. N.
Sarma - Head [Legal] and Company
Secretary |
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Sales : |
Mohan Ramani – Senior VP
[Europe] |
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Venu
Mulpuri – Senior – S & M |
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Jack
Ruggerio – VP - East Coast |
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Patricia
Addington – Senior VP - West Coast |
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Kartik
Sarwade – Assi. VP - India |
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Dwight
Dietrich – VP Sales – KPO |
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Human
Resources : |
Jamie
Ross – Senior Manager HR [USA] |
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Deepu
Dawson – Senior Manager Recruit – India |
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Anil Pandey
– Senior Manager Recruit – USA |
MAJOR SHAREHOLDERS
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Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Promoter Group |
7323697 |
40.51 % |
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Bodies Corporate |
3158817 |
17.48 % |
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Banks/FI/FII/MF/Trusts |
3455250 |
19.11 % |
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NRI/OCB/FFI |
143990 |
0.80 % |
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Resident
Individuals |
3995246 |
22.10 % |
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Total |
18077000 |
100.00 % |
BUSINESS DETAILS
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Line of Business : |
Provider of customized solutions and software
services. |
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Products : |
Software
Development |
GENERAL
INFORMATION
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Bankers : |
UCO
Bank UTI
Bank Limited |
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Facilities : |
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Banking Relations : |
Satisfactory
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Auditors : |
Patwari
and Company Chartered
Accountants 3-6-659,
St. No. 9, Flat 5B, Anuksha Enclave, Himayath Nagar, Hyderabad – 500029 |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
2,00,00,000 |
Equity shares |
Rs. 10/- each |
Rs. 200.000 Millions |
Issued,
Subscribed & Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
1 ,80,77,000 |
Equity shares |
Rs. 10/- each |
Rs. 180.770 Millions |
FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
180.770 |
104.770 |
60.800 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
2750.227 |
942.376 |
655.500 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
2930.997 |
1047.146 |
716.300 |
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LOAN FUNDS |
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1] Secured Loans |
204.088 |
0.000 |
0.100 |
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2] Unsecured Loans |
0.000 |
0.000 |
9.300 |
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TOTAL BORROWING |
204.088 |
0.000 |
9.400 |
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DEFERRED TAX LIABILITIES |
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TOTAL |
3135.085 |
1047.146 |
725.700 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
289.684 |
11.784 |
14.000 |
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Capital work-in-progress |
0.000 |
0.000 |
0.000 |
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INVESTMENT |
635.735 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Sundry Debtors |
2068.362
|
971.521 |
692.100 |
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Cash & Bank
Balances |
107.398
|
5.454 |
1.900 |
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Other Current
Assets, Loans and Advances |
339.714
|
5.323 |
50.900 |
|
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Unbilled Revenue |
102.012
|
84.931 |
0.000 |
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Total Current Assets |
2617.486
|
1067.229 |
744.900 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
399.120
|
31.785 |
25.400 |
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Provisions |
8.700
|
0.082 |
8.700 |
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Total Current Liabilities |
407.820
|
31.867 |
34.100 |
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Net Current Assets |
2209.666
|
1035.362 |
710.800 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.900 |
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TOTAL |
3135.085 |
1047.146 |
725.700 |
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PROFIT
& LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Sales Turnover [including other
income] |
4560.697 |
3054.652 |
2467.700 |
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Profit/(Loss)
Before Tax |
535.790 |
288.470 |
182.100 |
|
Provision
for Taxation |
2.360 |
1.572 |
0.100 |
|
Profit/(Loss)
After Tax |
533.430 |
286.898 |
182.000 |
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Export
Value |
4506.852 |
3011.797 |
NA |
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Total
Expenditure |
4024.907 |
2766.182 |
2285.600 |
QUARTERLY
RESULTS
|
PARTICULARS |
|
30.06.2006 |
30.09.2006 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales
Turnover |
|
1398.200 |
1698.800 |
|
Other
Income |
|
40.100 |
00.000 |
|
Total
Income |
|
1438.300 |
1698.800 |
|
Total
Expenditure |
|
1233.400 |
1446.900 |
|
Operating
Profit |
|
204.900 |
251.900 |
|
Interest |
|
06.600 |
14.400 |
|
Gross
Profit |
|
198.300 |
237.500 |
|
Depreciation |
|
11.800 |
15.200 |
|
Tax |
|
01.700 |
00.800 |
|
Reported
PAT |
|
184.800 |
221.500 |
Notes
200606 Quarter 1 –
Expenditure Include Software Development Expenses Rs
982.973 million General Administrative Expenses Rs 172.647 million Selling
& Distribution Expenses Rs 77.790 million EPS is Basic & Diluted Status
of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending
at the beginning of the quarter Nil Complaints Received during the quarter 13
Complaints disposed off during the quarter 13 Complaints unresolved at the end
of the quarter Nil 1. The above unaudited results were reviewed by the Audit
Committee and taken on record by the Board of Directors of the Company at its
meeting held on July 19, 2006. 2. Sales and net profit for the quarter ended on
June 30, 2006 have increased by 42.35% and 80.64% respectively compared to
corresponding period last year. 3. The utilisation of IPO proceeds as at June
30, 2006 is as follows a. Spent towards IPO expenses 10 million b. Working Capital
induction of Rs 200 million and c. Spent on offshore Development Centre Rs 570
million Balance is being utilised in due course. 4. Per Shares Data given above
in respect of the period up to June 30, 2005 relates to pre-IPO shares
prevailing at those dates. 5. Previous year/quarter figures are regrouped
/reclassified wherever necessary. 6. The company has only one segment.
200609 Quarter 2 –
Expenditure Include Software Development Expenses Rs 1229.519
million General Administrative Expenses Rs 118.009 million Selling &
Distribution Expenses Rs 96.072 million EPS is Basic & Diluted Status of
Investor Complaints for the quarter ended September 30, 2006 Complaints Pending
at the beginning of the quarter Nil Complaints Received during the quarter 01
Complaints disposed off during the quarter 01 Complaints unresolved at the end
of the quarter Nil 1. The above unaudited results were reviewed by the Audit
Committee and taken on record by the Board of Directors of the Company at its
meeting held on October 31, 2006. 2. Sales and net profit for the quarter ended
on September 30, 2006 have increased by 68.17% and 85.39% respectively compared
to corresponding period last year. 3. The utilisation of IPO proceeds as at
September 30, 2006 is as follows (a) Spent towards IPO expenses 100 million (b)
Working Capital induction - Rs 200 million and (c) Spent on offshore
Development Centre - Rs 660 million Balance is being utilised in due course. 4.
Per Shares Data given above in respect of the period up to September 30, 2005
relates to pre-IPO shares prevailing at those dates. 5. Previous year/quarter
figures are regrouped/ reclassified wherever necessary after completion of
limited review audit. 6. The Company has only one segment viz. Software.
KEY
RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt-Equity
Ratio |
0.05 |
0.01 |
0.01 |
|
Long
Term Debt-Equity Ratio |
0.00 |
0.01 |
0.01 |
|
Current
Ratio |
5.39 |
16.49 |
13.64 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
26.07 |
126.35 |
119.50 |
|
Inventory |
0.00 |
0.00 |
159.72 |
|
Debtors |
2.98 |
3.67 |
3.98 |
|
Interest
Cover Ratio |
38.73 |
241.42 |
102.17 |
|
Operating
Profit Margin(%) |
12.58 |
9.61 |
7.57 |
|
Profit Before
Interest And Tax Margin(%) |
12.15 |
9.49 |
7.45 |
|
Cash
Profit Margin(%) |
12.22 |
9.52 |
7.49 |
|
Adjusted
Net Profit Margin(%) |
11.78 |
9.40 |
7.38 |
|
Return
On Capital Employed(%) |
26.58 |
33.53 |
29.24 |
|
Return
On Net Worth(%) |
27.12 |
33.37 |
29.12 |
STOCK PRICES
|
Face
Value |
Rs.10.00/ |
|
High |
Rs.382.00/- |
|
Low |
Rs.360.00/- |
LOCAL AGENCY
FURTHER INFORMATION
FIXED
ASSETS
- Furniture &
Fixtures
- Computers &
Other Assets
- Vehicles
- Plant &
Machinery
HISTORY
Incorporated in 1998 as Prithvi Information Solutions
Private Limited in Hyderabad, later the company has got converted into public
limited in the year 2000.The company has started its business in 1998 with
outsourcing contracts for offshore software development and has, over the
years, evolved into an outsourcing service provider with a number of services
that meet most of its clients' outsourcing requirements. Prithvi is now a
global provider of customized solutions and software services to the clients in
USA. It provides software solutions across a host of technologies and
platforms.
INITIAL PUBLIC OFFER OF SHARES:
Pursuant to a Prospectus dated 12th October, 2005, the company made an Initial
Public Offer (IPO) of 5,000,000 equity shares of Rs.10 each at a price of
Rs.270 aggregating to Rs.1350.00 million. The IPO was oversubscribed
heavily.
The amount of Rs.1350.00 million realised by the company has been utilized in
part for setting up of a Offshore Development Centre and other objects as set
out in the Prospectus. Subsequent to the IPO, the company's Paidup Share
Capital has increased to Rs.180, 770,000 and its securities premium increased
to Rs. 1326.41 million after deduction of issue expenses.
OPERATING RESULTS AND BUSINESS:
For the year ended 31st March, 2006 the company earned total
revenues of Rs.4560.70 million. The Unites States of America continued to be
the largest contributor to our revenues for the year ended 31st
March, 2006 with a contribution of nearly 99.88 per cent of the revenue.
However, the company made an encouraging beginning in Europe and Middle East
also.
During the year, the company earned Profit before Interest, Depreciation, and
Taxes of Rs.875.27 million representing 19.19 per cent of total revenue.
The net profit for the year was Rs.533.43 million representing 11.70 per cent
of the total revenue for the year ended March 31, 2006. A Cash Flow Statement
for the financial year ended 31st March, 2006 is enclosed.
The company's areas of operation include Consulting, Application Software
development, Maintenance & Enhancement, Enterprise Solutions
Implementation, IT Enabled Services.
The company continued to add customers in all the countries in which it is
doing business. Aiming to be a global player, the company has considerable
number of non-Indian employees across its international development centers and
offices. This number is slated to increase as the company expands
geographically.
During the year, the company has entered into MOU's with the prestigious
educational institutes like the International Institute of Information
Technology (IIIT), Hyderabad, etc., for setting up academic centers of
excellence in their campuses for computational engineering. The work in
relation there to is yet to begin.
CHANGES IN SHARE CAPITAL:
During the period under report, the following changes have
occurred in the Authorized and the Paid-up share capital of the company:
i) The Authorized Share Capital of the company was increased from 18,000,000 to
20,000000 equity shares of Rs.10 each of the company on 30.06.2005.
ii) The Authorized Share Capital of the company was increased from 20,000,000
to 30,000,000 equity shares of Rs.10 each of the company on 29.04.2006.
AWARDS AND RECOGNITION:
During the year, the Chief Promoter and Chairperson of the company Mrs. V.
Madhavi has been awarded by the Federation of Andhra Pradesh Chamber
ENTREPRENEUR' for the Year 2005.The award has been presented to her by the
Hon'ble Chief Minister of Andhra Pradesh.
Mrs. Madhavi is one of the few distinguished invitees for a personal
interaction with His Excellency Mr. George W. Bush, the President of USA during
his visit to Hyderabad on 4th March, 2006. The President of USA has appreciated
the discussions and expressed that USA and India share a vital economic agenda
and her entrepreneurial spirit will help to shape its future.
SUBSIDIARY COMPANIES:
The company has invested nearly Rs.34 million for equity stake in Walking Stick
Solutions Private Limited, Kolkata. The allotment of shares is yet to be made.
Therefore, the aforesaid company will become a subsidiary in due course.
Walkingstick is a start up company promoted by persons of rich experience in
peoplesoft technologies.
Accordingly, the company does not have any subsidiaries for the year under
report.
MANAGEMENT DISCUSSION AND ANALYSIS
Global Industry Overview:
The role of technology has evolved from, supporting corporations to
transforming them. The changing economic and business conditions and the rapid technological
innovations have necessitated fundamental changes in the way companies operate.
The need for more dynamic technology solutions and the inherent complexity,
cost and risk related to change have created the need for specialists with
experience in leveraging technology to help drive business strategy. The IT
departments of many companies have emphasized on lowering cost and improving
performance by making use of the latest technology expertise and accelerating
the delivery of new systems and solutions.
According to the Worldwide Services Spending Forecast, a report published by
International Data Corporation (IDC), in May 2005, the global IT services
market is estimated to grow from approximately US$383 billion in 2003 to
approximately US$512 billion by 2008. ITES-BPO (IT Enabled Services-Business
Process Outsourcing) is expected to grow at a significantly higher CAGR of over
11 per cent over the same period.
Growing Trends:
The need to cut costs and increase competitiveness has forced companies across
the world to turn to outsourcing from technology service providers. An increase
in the number of companies opting for outsourcing and offshoring their non-core
business activities has been the primary driver of the IT ITES industry.
To derive the maximum benefits, companies, have chosen to outsource a large
part of their work as they do not have to compromise on quality. These factors
have brought the offshore technology service providers to the fore and they
have capitalized on the opportunity and in the process have grown in
recognition and sophistication.
Effective outsourcing provides various benefits which include:
- Lower total cost of
ownership of IT infrastructure
- Better productivity from
IT
- Converting a portion of
fixed costs into variable costs
- Quick access to the latest
technology
- Fast delivery of technology
solutions and enhanced flexibility in scheduling
According to Gartner's Global Offshore Sourcing Predictions report published in
June 2004, less than 3 per cent of global corporate IT services spending are
being globally sourced. By 2007, Gartner expects that the globally sourced
component of IT services spending will be 7 per cent of total global IT
services spending.
Worldwide IT outsourcing spending is expected to rise to US$ 260 billion by
2009 (Source: Gartner's Forecast: IT Outsourcing, Worldwide 2004-2009
Update)
Indian Industry Overview:
The Indian economy is in a robust expansion phase. India has become one of the
leading destinations for foreign investments due to its positive growth
indicators such as the stable 8 per cent annual growth, rising foreign exchange
reserves of close to US $152 billion. The CMIE estimates GDP growth at 8.1 per
cent, with the services sector recording the highest growth, at 10 per cent.
The services sector has contributed about 65 per cent to the GDP growth during
the six year period between 2001-02 and 2005-06.
The addressable market for global outsourcing is expected to rise above the US
$300 bn mark of which US $110 bn is expected to be offshored.
India is expected to maintain the leadership in MITES and grow at a compounded
annual rate of over 25 per cent. At this rate of growth, the sector will
generate export revenues of over US $60 bn by the year 2010, without taking
into account the revenues generated by software services. If the industry can
provide innovative solutions they can generate an additional US$15-20 bn.
The Indian IT sector has proved to be the country's fastest-growing segment. A
major component of India's IT sector has been the software and services
industry. This segment has shown major momentum which has been greater than
that of any other industry in the country.
Prithvi Information Solutions Limited:
Prithvi Information Solutions Limited is a global provider of customized IT
solutions and software services. Incorporated in 1998, it is led by Mrs. V.
Madhavi and Mr. V. Satish Kumar. The company provides software solutions across
a host of technologies and platforms. The company has recorded a CAGR of growth
of 76.37 per cent in revenues and 46.08 per cent in profits over the last five
years, making it one of the fastest growing domestic companies.
The company has a unique business model and has core competencies in providing
on-site, off-site and off-shore solutions. This model allows the company to
calibrate the response time and offer consistently high levels of services.
Prithvi's strict adherence to quality standards have resulted in its being re
certified four times for ISO 9001:2000 with zero non compliances. The company
is also in the process of obtaining the CMMI certification. The company works
towards delivering high economic and strategic value to its clients.
The company is listed on the National Stock Exchange and Bombay Stock Exchange
since November 2005.
Services:
Its range of IT services include consulting, development, testing, maintenance,
migration, re-engineering and integration services. It has recently ventured
into network solutions offering Radio Frequency Identification (RFID)
technology.
Business Segments:
Prithvi has a structured and well-diversified business model which includes
offering services in business consulting, intelligence solutions, process
outsourcing and technology outsourcing.
Technology outsourcing:
The company has developed strong technology competencies along with a deep
understanding of how organisations around the world discharge their
functions.
This enables the company to customise services and solutions as per an
organizations' need. The company's consultants work in close conjunction with
its clients and critically analyse the various challenges faced by the
organisation.
Prithvi provides a wide range of technology solutions which focus on the
following:
- Application
development/migration/integration
- E-business
solutions
- Product
development Enterprise solutions
Business Intelligence solutions:
Business processes and transactions generate massive amounts of information
which can be utilized effectively to improve performance. Storing data in the
desired format makes it easy to analyse and retrieve for use in customer
loyalty and profitability programs.
Business Intelligence applications make available tools which assimilate and
analyse data for informed decision making.
Business Intelligence Solutions are used for:
Financial and profitability analysis
Analysis of marketing and sales effectiveness
Customer and vendor analysis
Market and competitive intelligence
Corporate strategy and business planning
Process outsourcing:
India has emerged as the preferred destination for outsourcing as it
provides skilled manpower at low costs. The company offers its clients high
quality offshore process management by capitalizing on the domain expertise and
programme management capabilities. The company has adopted modern operations
management by practicing Six Sigma and Kaizen.
Prithvi focuses its efforts towards Business Continuity planning and disaster
recovery to protect against any unforeseen event, which may lead to service
disruptions.
Prithvi has comprehensive portfolio enabling it to serve various industries
with its innovative offerings.
Across Industry: * Digitization* Transcription Services* Customer
Interaction Services* Technical Support/Helpdesk* Data Analysis and Knowledge
Services* R & D Services* H R Services* Accounting Services
Network solutions:
Prithvi offers its clients solutions and services for effective and efficient
operation especially in the fields of RF engineering:
Increase systems effectiveness
Increasing efficiency
Operational Overview:
Prithvi is well poised to leverage the opportunity rich landscape for
technology companies worldwide. It is one of the few companies to have
successfully established the outsourcing business with a predominant onsite
component, in a relatively short time frame of 5 years. Prithvi is now
concentrating on increasing the offshoring part of its business and is
investing in facilities in India, in line with its Global Delivery
Model to steadily deliver superior results in the future.
Prithvi has 85 client relationships. These clients have already outsourced
their core IT software projects to the company. Prithvi is now keen to offshore
their non core operations too. Besides aiming to convert a substantial portion
of the core IT solutions to offshore, Prithvi has also laid out an aggressive
roadmap for adding new clients.
Initial Public Offer:
Prithvi transformed into a publicly held company in 2005-06. This was an
important part of its strategic blueprint for the future. In the initial public
offer, 5 million equity shares of Rs.10 each at a premium of Rs.260 were
issued, and the issue received an overwhelming investor response. The company's
securities were listed on the Bombay Stock Exchange (BSE) and the National
Stock Exchange (NSE) in the month of November 2005. The company raised Rs.1350
million through the issue and this amount is being utilised for setting up the
Global Delivery Centre at Hyderabad with a capacity of about 2,500 seats. The
company will also further strengthen its working capital base by fresh
induction of balance IPO funds for this purpose.
Focus on off-shoring:
Prithvi has majority of its clients located in the USA, therefore, major share of
the company's business has been on-site until now. The company has started
increasing the share of offshore in its revenue mix in line with its long-term
strategy. For the 2005-06 offshoring accounted for about 8 per cent of its
total revenue. The company targets to achieve 15 per cent offshore by 2006-07
and 20 per cent by 2007-08.
Clients:
Prithvi's clients include Fortune 500 companies and government organizations.
Prtihvi has 60 active clients at the end of 2005-06. The company has adopted a
practice of turning each client into an anchor client. This enables the company
to offer its full bouquet of services which it has. Prithvi has built strong
relations through rendering world class services to government organisations
for their e-governance requirements. The wide market of government contracts
offers opportunities to the company to strengthen its capabilities, especially
relating to large, end-to-end, critical projects. The company's foray into
research outsourcing under the KPO part of Process outsourcing sector and
increased focus on the RF engineering in Telecom and RFID are going to further
increase its client base going forward.
Prithvi has focused on building network with alliances for business development
as well as accessing clients. Some of the company's major partnerships are with
Micro strategy, Teradata, Sybase, Microsoft, Pervasive, Silvermark and
Oracle.
Global Delivery Model:
The Global Delivery Model is a well-developed methodology that lets clients
benefit from geographical differences in skill-sets and input costs. Prithvi
deploys the Global Delivery Model which is based on the principle of
dividing a project into components that can be logically separated and executed
at various geographic locations, where the execution creates maximum value. The
Global Delivery Model is able to innovative solutions in lesser time and lower
costs.
Additionally, it proves beneficial in freeing resources that can be put to use
in research, solution definition and new initiatives that add to competitive
advantages. The critical challenge in deploying the Global Delivery Model is
managing distributed execution across geographies and time-zones, which Prithvi
has perfected over the years. The company combines the Global Delivery Model to
meet client concerns and provide them with innovative solutions.
Outlook:
The world over, companies are seeking outsourcing of IT operations to offshore
technology service providers. This is important to reduce costs and focus on
core competencies. Prithvi Information Solutions Limited, has already built its
reputation as a high-end, reliable technology service provider to its clients,
and has put in place a strategy to improve the company's delivery capabilities
and increase the share of offshoring in its revenues. The setting up of the
Global Delivery Centre will further enable the company to bid for larger and
longer term contracts with a greater delivery assurance.
Liquidity risk:
As the company is involved in one of the fastest changing and constantly
evolving industries across the world, it has to re-invent on a continual basis
and have a liquid balance sheet.
Risk mitigation:
It is the company's desire to retain liquid assets at 55 per cent of revenues
and 80 per cent of Balance Sheet.
The Companies debt stands at Rs.204 million as at 31st March 2006, with no
borrowings during the year 2004-2005. As the company has increased its networth
through the recent public offering, the company is better placed to raise funds
at competitive rates.
The Accounts of the
Liaison Office of the company at Pittsburgh, PA, USA for the year ended 31ST March, 2006 were audited by M/s. Herbein +
Company, Inc., Certified Public Accountants and the report there to be
attached.
AS PER
WEBSITE
Founded in 1998, they have consistently achieved a
high-growth rate and expanded globally.
Prithvi has offices in USA, Canada, United Kingdom,
Singapore, and India. Headquartered in Hyderabad, India, they have a strong
team of Professionals both in Technology and Functional Domain expertise.
Prithvi has set the standard for quality services
while evolving to meet the needs of emerging markets. It is their endeavor to
deliver comprehensive solutions to suit the IT needs of their clients. They
provide reliable services matching the best in the industry at reasonable cost,
and within the stipulated time. They recognize that their success in helping
their clients achieve their objectives determines their path to success.
History
1998
Founded
in 1998.
2000
Among top 40 companies from the state of Andhra
Pradesh.
First
Overseas Office in USA.
2001
Stood as the 6th Largest Exporter in State of AP for
the year 2001-02(As Per STPI).
Crossed Rs.1000 Millions in revenues.
First
Govt. Order in the State of Ohio.
2002
ISO 9001:2000 certified.
Receiver
of Business Initiative Directions Quality Summit Award for Excellence and
Business prestige in Gold Category for the Year 2003.
2003
Stood as the 19th largest exporters in India for the
year 2002-03(As Per STPI).
Stood among Top 10 Service Providers in Pennsylvania
by Pittsburgh Technology Council (PTC).
Partners with Micro Strategy.
Crossed
Rs.2000 Millions.
2004
Partnered
with Market leaders in their respective areas like Microsoft, Sybase, Teradata,
Novel., etc.
2005
Crossed Rs. 3000 Millions.
Initial
Public Offering.
CMT REPORT [Corruption, Money
laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION
ON DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist organization
or whom notice had been received that all financial transactions involving
their assets have been blocked or convicted, found guilty or against whom a
judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the subject of any
formal or informal allegations, prosecutions or other official proceeding for
making any prohibited payments or other improper payments to government
officials for engaging in prohibited transactions or with designated parties.
3] Asset
Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal
Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation
with Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation
Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions that
could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.44.61 |
|
UK
Pound |
1 |
Rs.86.80 |
|
Euro |
1 |
Rs.57.54 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
61 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit
history (10%) Market
trend (10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution
needed for credit transaction. It has above average (strong) capability for
payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory
capability for payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry
similar weight in credit consideration. Capability to overcome financial
difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
|
<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |
|
NR |
In view of the lack of information, we
have no basis upon which to recommend credit dealings |
No Rating |
|