MIRA
INFORM REPORT
|
Report Date : |
04.12.2008 |
IDENTIFICATION DETAILS
|
Name : |
HEXAWARE TECHNOLOGIES LIMITED |
|
|
|
|
Registered Office : |
152, Millennium Business Park, Sector – III, A Block, TTC Industrial
Area, Mahape, New Mumbai – 400 710,
Maharashtra |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
31.12.2007 |
|
|
|
|
Date of Incorporation : |
20.11.1992 |
|
|
|
|
Com. Reg. No.: |
11-69662 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L72900MH1992PLC069662 |
|
|
|
|
TAN No.: (Tax Deduction & Collection Account No.) |
BLRH02137C CHEH03372F |
|
|
|
|
PAN No.: (Permanent Account No.) |
AABCA3203F AAACH1474L |
|
|
|
|
Legal Form : |
A Public Limited Liability Company. The company’s shares are listed on
the stock exchanges. |
|
|
|
|
Line of Business : |
The company is engaged in providing Software Services and Consultancy. |
RATING & COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
|
|
|
|
|
Maximum Credit Limit : |
USD 34000000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is an old, well established reputed and leading software
service provider. The company offers powerful process-driven, high quality
solutions specialising in Application Management, EAI, e-Commerce, ERP and
embedded systems. The company’s business is growing extremely well. Trade relations are
fair. Payments are correct and as per commitments. The company can be considered good for business dealings at usual
trade terms and conditions. Subject company is creditworthy. |
LOCATIONS
|
Registered Office : |
152, Millennium Business Park, Sector – III, A Block, TTC Industrial
Area, Mahape, New Mumbai – 400 710,
Maharashtra, India |
|
Tel. No.: |
91-22-67919595 |
|
Fax No.: |
91-22-67919500 |
|
Website : |
|
|
|
|
|
Head Office : |
51/3, G N Chetty Road, T Nagar, Chennai – 600 017, Tamilnadu, India |
|
Tel. No.: |
91-44-42001600 |
|
Fax No.: |
91-44-42044444 |
|
|
|
|
Corporate Office 1 : |
Elite Auto House, 54-A, Sir M. Vasanji Road, Andheri (East), Mumbai -
400 093, Maharashtra, India |
|
Tel. No.: |
91-22-26902675/28389831 - 36/28213180 |
|
Fax No.: |
91-22-28389828/28392514 |
|
|
|
|
Corporate Office 2 : |
96-97, Mittal Chambers, Nariman Point, Mumbai – 400 021, Maharashtra,
India |
|
Tel. No.: |
91-22-66542682 / 83 |
|
Fax No.: |
91-22-22872939 |
|
|
|
|
Branch Office : |
Located at ·
Chennai ·
Pune ·
Gurgaon |
|
|
|
|
Overseas Office : |
Located at ·
Canada ·
Mexico ·
United Kingdom ·
Germany ·
Singapore ·
Japan ·
France ·
Australia ·
Netherlands ·
Scandinavia ·
Dubai |
DIRECTORS
|
Name : |
Mr. Atul K. Nishar |
|
Designation : |
Executive Chairman |
|
|
|
|
Name : |
Mr. Rusi Brij |
|
Designation : |
Vice Chairman |
|
|
|
|
Name : |
Mr. Dr. K. K. Anand |
|
Designation : |
Director |
|
|
|
|
Name : |
Dr. Alka A. Nishar |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. L. S. Sarma |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. P. G. Kakodkar |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. A. P. Kurian |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Harshad Shah |
|
Designation : |
Executive Director |
|
|
|
|
Name: |
Mr. P. K. Sridharan |
|
Designation: |
President and Executive Director |
|
Qualification: |
M. Tech. |
|
Date of Appointment : |
01.04.2001 |
|
|
|
|
Name: |
Mr. Harshad Shah |
|
Designation: |
Executive Director |
|
Qualification: |
B. Com., ACA |
|
Date of Appointment : |
01.01.1997 |
|
|
|
|
Name: |
Mr. Mark Dzialga |
|
Designation: |
Director |
|
|
|
|
Name: |
Dr. Bakul Dholakia |
|
Designation: |
Director |
|
|
|
|
Name: |
Mr. Shailesh Haribhakti |
|
Designation: |
Director |
|
|
|
|
Name: |
Ms. Preeti Mehta |
|
Designation: |
Director |
|
|
|
|
Name: |
Mr. S. K. Mitra |
|
Designation: |
Director |
|
|
|
|
Name: |
Mr. Sunish Sharama |
|
Designation: |
Alternate Director to Mark Dzialga |
KEY
EXECUTIVES
|
Name : |
Mr. P. R. Chandrasekar |
|
Designation : |
Global Chief Executive Officer and Vice-Chairman |
|
|
|
|
Name : |
Mr. Prateek Aggarwal |
|
Designation : |
Chief Finance Officer |
|
|
|
|
Name : |
Mr. Bhagwant P. Bhargawe |
|
Designation : |
Head - Legal and Company Secretary |
|
Address : |
152, Millennium Business Park, Sector–III, “A” Block,
TTC Industrial Area, Mahape, Navi Mumbai – 400 710, Maharashtra, India |
|
Tel No.: |
91-22-67919595 |
|
Fax No.: |
91-22-67919578 |
|
E-Mail : |
|
|
|
|
|
Name : |
Mr. Rajesh Ghonasgi |
|
Designation : |
Chief Finance Officer |
|
|
|
|
Name : |
Mr. Naishadh P. Desai |
|
Designation : |
Company Secretary |
|
|
|
|
Name: |
Mr. Abhay Sinha |
|
Designation: |
Executive Vice President |
|
Qualification: |
B. E., MBA |
|
Date of Appointment : |
19.06.200 |
|
|
|
|
Name: |
Mr. R. V. Ramanan |
|
Designation: |
Chief Software Architect and Head – Global Delivery |
|
Qualification: |
B. Tech. |
|
Date of Appointment : |
21.10.2002 |
|
|
|
|
Name: |
Mr. Sunil Surya |
|
Designation: |
President – Europe Operations |
|
|
|
|
Name: |
Mr. Ashok Bildikar |
|
Designation: |
President – BPO |
|
|
|
|
Name: |
Mr. Yogendra Shah |
|
Designation: |
Senior Vice President – Asia Pacific |
|
|
|
|
Name: |
Mr. Moorthi Chokkanathan |
|
Designation: |
Executive Vice – President and Head – India Operations |
|
|
|
|
Name: |
Mr. G. R. Raju |
|
Designation: |
Chief Technology Officer and Head – Insurance Practice |
|
|
|
|
Name: |
Mr. Deependra Chumble |
|
Designation: |
Chief People Officer |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
(As on 30.09.2008)
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Shareholding of Promoter and Promoter Group |
|
|
|
Indian |
|
|
|
Individuals/ Hindu Undivided Family |
556840 |
0.42 |
|
Bodies Corporate |
33313824 |
25.05 |
|
|
|
|
|
Public shareholding |
|
|
|
Institutions |
|
|
|
Mutual Funds/ UTI |
2139089 |
1.61 |
|
Financial Institutions / Banks |
265889 |
0.20 |
|
Insurance Companies |
5248199 |
3.95 |
|
Foreign Institutional Investors |
54410996 |
40.91 |
|
|
|
|
|
Non-institutions |
|
|
|
Bodies Corporate |
10744570 |
8.08 |
|
Individuals |
|
|
|
Individuals -i. Individual shareholders holding nominal
share capital up to Rs 0.100 Million |
21498045 |
1.83 |
|
ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100
Million |
2429603 |
9.11 |
|
|
|
|
|
Any Other (specify) Individual – Rusi Brij / NRI |
969948 |
0.73 |
|
NRI-NON-REP |
502229 |
0.38 |
|
NRI-REP |
806764 |
0.61 |
|
Trust |
110754 |
0.08 |
|
Overseas Corporate Bodies |
5 |
0.00 |
|
|
|
|
|
Shares held by Custodians and against which Depository
Receipts have been issued |
10645480 |
- |
|
|
|
|
|
Total |
143642235 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
The company is engaged in providing Software Services and Consultancy. |
||||
|
|
|
||||
|
Products / Services : |
Software Consultancy
|
GENERAL INFORMATION
|
No. of Employees : |
7068 |
||||
|
|
|
||||
|
Bankers : |
·
IDBI Bank ·
Bank of India ·
Citi Bank ·
ICICI Bank ·
Kotak Mahindra Bank |
||||
|
|
|
||||
|
Facilities : |
|
|
|
|
|
Banking
Relations : |
Satisfactory |
|
|
|
|
Auditors : |
Deloitte Haskins and Sells |
|
Qualification: |
Chartered Accountants |
|
|
|
|
Subsidiaries : |
·
Hexaware Technologies Inc. USA 5, Independence Way, Princeton, New
Jersey, USA Tel No.:
609 9519195 ·
Specsoft Consulting Inc., USA 2290 N. First Street No. 310, San Jose,
CA-95131 Tel No.: 408 353 1452 ·
HTI Europe Limited 2nd Floor, Buckingham Court, Buckingham
Gardens, SL1, 1 HP UK Tel No.: 1753 773023 ·
Hexaware Technologies Canada Limited, Canada 1100 South Service Road, West Oakville
Ontario, L6L 5T7 Tel No.: 905 4694375 ·
Hexaware Technologies Asia Pacific Pte. Limited, Singapore 180 Cecil Street, No. 09-03, Bangkok Bank
Building, Singapore – 0659546 Tel No.: +653253025 ·
Hexawere Technologies GmbH, Germany ·
Hexawere Technologies Europe Limited, UK ·
Aptech Technologies Pty. Limited, Australia ·
FocusFrame Inc, United States of America ·
FocusFrame Mexico S de RL De CV *, Mexico ·
Hexaware Technologies UK Limited,
United Kingdom ·
FocusFrame UK Limited *, United Kingdom ·
FocusFrame Europe BV *, Netherland ·
Hexaware Technologies Gmbh., Germany ·
Caliber Point Business Solutions Limited, India ·
Risk Technology International Limited (from 27-7-2007),
India ·
Risk Technology International Limited **(from 24-10-2007), United States of America ·
Risk Technologies (UK) Limited** (from 20-9-2007),
United Kingdom ·
Specsoft Technologies India Limited ***, India *
Subsidiaries of Focus Frame Inc, USA **
Subsidiaries of Risk Technology International Ltd - India *** Subsidiary of Hexaware Technologies Inc. |
CAPITAL STRUCTURE
(As on 31.12.2007)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
175000000 |
Equity Shares |
Rs.2/- each |
Rs.350.000 Millions |
|
3000000 |
Preference Shares |
Rs.100/- each |
Rs.300.000 Millions |
|
1100000 |
Series “A” Preference Share |
Rs.1421/- each * |
Rs.1563.100 Millions |
|
|
Total |
|
Rs.2213.100 Millions
|
* (See Note II below)
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
143616485 |
Equity Shares |
Rs.2/- each |
Rs.287.230 Millions |
Notes:
I) Of the above Equity Shares:-
·
11134625 Equity Shares of Rs. 2/- each have been allotted as fully paid
up without receiving consideration in cash in accordance with the Composite
scheme of Reconstruction and Arrangement.
·
36188870 Equity Shares of Rs. 2/- each have been allotted as fully paid
up by way of Bonus Share by capitalisation of
General Reserve/Securities Premium Account.
·
10452965 Equity Shares of Rs. 2/- each fully paid up have been allotted
against Global Depository receipts issued by the
·
Company.
·
50000000 Equity Shares of Rs.2/- each fully paid up issued to the
shareholders of erstwhile subject without receiving consideration in cash in
accordance with the Composite scheme of Reconstruction and Arrangement.
·
3863060Equity Shares of Rs.2/- each fully paid up have been allotted to
employees under ESOP 1999.
·
8136475 Equity Shares of Rs.2/- each fully paid up have been allotted to
employees under ESOP 2002.
·
10555700 (Nil) Equity Shares of Rs.2/- each fully paid up have been
allotted against unregistered American Depository Receipts (ADR) issued by the
Company on conversion of Series “A” Redeemable and/ or optionally convertible
Preference Shares at a premium of Rs. 140.10 each as per the terms of issue.
Particulars of options on unissued share capital
(Refer Note No. 3 of Schedule 12B)
II) Authorised
Preference Share Capital can be either cumulative or non cumulative with a
power to the Company to convert the same into equity shares at any time.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.12.2007 |
31.12.2006 |
31.12.2005 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
287.230 |
1763.920 |
238.700 |
|
|
2] Share Application Money |
1.020 |
3.440 |
0.000 |
|
|
4] Share Warrants |
0.380 |
0.410 |
0.000 |
|
|
5] Reserves & Surplus |
6517.100 |
5340.130 |
3020.200 |
|
|
6] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
6805.730 |
7107.900 |
3258.900 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
0.000 |
0.000 |
10.700 |
|
|
2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
|
|
TOTAL BORROWING |
0.000 |
0.000 |
10.700 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
6805.730 |
7107.900 |
3269.600 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
1080.680 |
905.990 |
759.400 |
|
|
Capital work-in-progress |
919.030 |
327.240 |
0.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
4344.660 |
4495.170 |
1059.900 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
0.000
|
0.000 |
0.000 |
|
|
Sundry Debtors |
1238.500
|
1152.970 |
1384.000 |
|
|
Cash & Bank Balances |
488.110
|
421.860 |
82.500 |
|
|
Other Current Assets |
3.950
|
2.450 |
0.000 |
|
|
Loans & Advances |
825.160
|
774.870 |
705.900 |
|
Total
Current Assets |
2555.720
|
2352.150 |
2172.400 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
1835.890
|
679.940 |
565.400 |
|
|
Provisions |
258.470
|
292.710 |
156.700 |
|
Total
Current Liabilities |
2094.360
|
972.650 |
722.100 |
|
|
Net Current Assets |
461.360
|
1379.500 |
1450.300 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
6805.730 |
7107.900 |
3269.600 |
|
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.12.2007 |
31.12.2006 |
31.12.2005 |
|
|
Software and Consultancy |
4687.960 |
4126.920 |
3557.900 |
|
|
Other Income |
269.450 |
490.120 |
143.000 |
|
|
Total Income |
4957.410 |
4617.040 |
3700.900 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
(63.280) |
1226.280 |
794.400 |
|
|
Provision for Taxation |
44.330 |
39.670 |
19.000 |
|
|
Profit/(Loss) After Tax |
(107.610) |
1186.610 |
775.400 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
|
Income from software solutions and
consulting services |
4437.770 |
3816.050 |
NA |
|
|
Interest Income |
4.270 |
9.100 |
NA |
|
|
Other Earnings |
0.270 |
0.200 |
NA |
|
Total Earnings |
4442.310 |
3825.350 |
NA |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Capital Goods |
143.560 |
78.920 |
NA |
|
Total Imports |
143.560 |
78.920 |
NA |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Software and Development Expenses |
994.910 |
948.440 |
0.000 |
|
|
Manufacturing Expenses |
0.000 |
0.000 |
431.900 |
|
|
Administrative Expenses |
630.440 |
580.720 |
421.200 |
|
|
Employee Cost |
0.000 |
0.000 |
1751.400 |
|
|
Miscellaneous Expenses |
0.000 |
0.000 |
60.200 |
|
|
Employment Expenses |
2199.480 |
1703.870 |
|
|
|
Interest |
0.040 |
1.030 |
10.400 |
|
|
Exceptional Loss on Foreign currency
transactions |
1029.950 |
0.000 |
0.000 |
|
|
Power & Fuel |
0.000 |
0.000 |
54.100 |
|
|
Depreciation & Amortization |
165.870 |
156.700 |
177.300 |
|
Total Expenditure |
5020.690 |
3390.760 |
2906.500 |
|
QUARTERLY RESULTS
|
PARTICULARS |
31.03.2008 |
30.06.2008 |
30.09.2008 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Sales
Turnover |
1206.300 |
1064.100 |
1345.500 |
|
Other
Income |
41.200 |
39.100 |
(191.800) |
|
Total
Income |
1247.500 |
1103.200 |
1153.700 |
|
Total
Expenditure |
1019.200 |
1019.100 |
972.000 |
|
Operating
Profit |
228.300 |
84.100 |
181.700 |
|
Interest |
0.000 |
0.300 |
0.000 |
|
Gross
Profit |
228.300 |
83.800 |
181.700 |
|
Depreciation |
45.300 |
51.100 |
50.200 |
|
Tax |
8.700 |
14.200 |
21.000 |
|
Reported
PAT |
174.300 |
18.500 |
110.500 |
KEY RATIOS
|
PARTICULARS |
|
31.12.2007 |
31.12.2006 |
31.12.2005 |
|
PAT / Total
Income |
(%) |
(2.17) |
25.70 |
20.95 |
|
|
|
|
|
|
|
Net Profit
Margin (PBT/Sales) |
(%) |
(1.35) |
29.71 |
22.33 |
|
|
|
|
|
|
|
Return on Total
Assets (PBT/Total Assets} |
(%) |
(17.40) |
37.64 |
27.10 |
|
|
|
|
|
|
|
Return on
Investment (ROI) (PBT/Networth) |
|
(0.01) |
0.17 |
0.24 |
|
|
|
|
|
|
|
Debt Equity
Ratio (Total Liability/Networth) |
|
0.31 |
0.14 |
0.22 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.22 |
2.42 |
3.01 |
LOCAL AGENCY FURTHER INFORMATION
Offshore
Development Centers
·
Unit No. 152, Millennium Business Park, TTC Industrial Area, Mahape,
Navi Mumbai – 400 709, Maharashtra, India
Tel. 91-22-55919595
·
Unit No. IT 1 and IT 2, Ground Floor, SDF – VII, Seepz, Andheri (East),
Mumbai – 400 096, Maharashtra, India
Tel. 91-22-56974444
·
Unit No. 128, SDF – V, Seepz, Andheri (East), Mumbai – 400 096,
Maharashtra, India
Tel. 91-22-28291649
·
6th Floor & 7th Floor, Janapriya Crest, 96,
Panthenon Road, Egmore, Chennai – 600 008, Tamilnadu, India
Tel. 91-44-28241970
·
4th Floor and 1st Floor, Temple Tower, No 476,
Anna Salai, Nandanam, Chennai, Tamilnadu, India
Tel. 91-44-24335761
·
5th Floor, Shakthi Tower, 766, Anna Salai, Chennai – 600 002,
Tamilnadu, India
Tel. 91-44-28552792
·
5th Floor, Prince Kushal Tower, 96, Anna Salai, Chennai – 600
002, Tamilnadu, India
Tel. 91-44-28604775
HISTORY
Subject was incorporated in 20th November of the year 1992 as a public limited
Company under the name Aptech Information Systems Limited. It is a leading
global provider of IT and BPO services, focusing on delivering real business
results from technology solutions and specializing in Business Intelligence,
Business Analytics, Enterprise Applications, Transportation, HR-IT and Legacy
Modernization. Industry focus is on Banking and Financial Services, Insurance,
Leasing and Transportation. The Company maintains six state-of-the-art
development centers, four in India and one each in Germany and Mexico, and
offices in North America, Europe and Asia Pacific. Subject is committed to
quality; all development centers are assessed at SEI CMMI Level 5 and also
certified ISO 9001:2000, BS 7799, TickIT and SAS 70 Type 1.
During the year 1993, the company added two new product lines called ARENA for
training in computer Graphics Animation, Publishing and Multimedia and ASSET
for Training engineers for software Export careers. As per the scheme of
Arrangement and Reconstruction between Apple Finance Limited and the company
the erstwhile Information Technology division of Apple Finance Limited was
transferred to the company with effect from 1st July of the year 1995. In the
same year 1995, Subject started its operations in North America and Europe. The
Company entered into a tie-up agreement with M/s. Forte Inc. USA to distribute
the range of Forte's products in India to provide systems Integrated Services
to the clients all over Asia. The name of the Company was changed to Aptech
Limited from Aptech Information System Limited effective from 5th August of the
year 1996. During the year 1997, the company established an Airlines Practice
and won the first client for Airlines Practice 'Air Canada' in the same period.
Development centers of the company were established at Mumbai and Chennai with
an overseas branch at Princeton during the year of 1998. Also in the same year,
overseas operations in the US expand to Chicago, Pleasanton in the USA and
Montreal in Canada, Shifted in focus to a more broad service spectrum that
included Enterprise Application Integration, Application Management and key
areas within e-Commerce and Partnerships established with global technology
giants like IBM, BEA Systems, Vitria, Constellar help Hexaware deliver a suite of
innovative technology solutions, business platforms and tools to clients,
enhancing their profitability. The Company entered into collaboration with TACK
Training International, UK, to offer TACK's training services to the Indian
corporate peoples in the year 1998. Established the Insurance Practice in the
year 1999 and achieved the SEI CMM - Level 4 assessment in the identical year
for ODC's. After a year, in 2000, the company's ODC's assessed at SEI CMM -
Level 5 and also subject made a partnership with PeopleSoft in India, it was a
major milestone in the partnership. During the year 2001, merged with the
software division of Aptech, leaders in software training and development. This
merged entity later demerged from the training arm and is now called Hexaware
Technologies Limited, forming one of the largest high-end software companies in
India and subject goes public in January of the year 2001. The Company had sets
up Design Lab for Embedded Systems Practice in July of the year 2002. Subject
launched BPO practice in late 2002 and also in the same year partnership with
PeopleSoft in the ASEAN region.
The name of the company was changed from Aptech Limited to Hexaware
Technologies Limited in the year 2002. During the year 2003, Subject signed up with
Temenos, a leading banking solutions provider in January. Won the partnership
engagement for setting up and managing PeopleSoft India Service Center in
Bangalore and also in the identical year the Rational Center for Excellence was
inaugurated. Subject opened a new office and proximity center in Germany in the
year 2004. The Company achieved BS 7799 certification for Information Security.
During the same year 2004, Subject launched SAP Practice, won first major SAP
Implementation project and also launched Oracle Practice consolidating as a
global provider of Enterprise Solutions. A dedicated Business Intelligence /
Data Warehousing Lab was set up in Chennai. The Company ranked 11th in NASSCOM
Top 20 in the year 2005 and in the same year subject opened office in Japan. In
2006, Subject selected Fluensee as Partner for RFID-Enabled Asset Tracking
Solutions and in the same year 2006, the company acquired FocusFrame, a US
based specialized testing consulting firm. The Company expanded its physical
presence and commenced work in Siruseri, Chennai.
As of June 2007, Subject selected by a major System Integrator in Japan
to develop a core bespoke application for the IT modernization of the Postal
department of a South East Asian country. Subject launched a joint venture Risk
Technology International Limited in 2007, where the company owns 85% stake.
During October 2007, Subject bagged a contract worth Euro 5 million from a
leading German financial institution. In November of the year 2007, the company
inaugurated its second development center in Saltillo, Mexico. Hexaware arm
RiskTech bagged three new contracts in July of the year 2008, a subsidiary and
a leading provider of enterprise risk management and risk technology services
has won three new consulting and implementation contracts in UK and Middle
East.
The Company entered into an agreement with General Atlantic. According to the
agreement, the latter would invest USD 67.6 million through a preferential
allotment. The company plans to utilize the proceeds of the allotment for
creating infrastructure assets, enabling suitable acquisitions and meeting
working capital needs of the company. This will facilitate the company in
sustaining growth in the long term and also help it in realizing new growth
opportunities in USA.
RESULTS OF OPERATIONS
a) Global operations
The Company has recorded a consolidated income (as per Indian GAAP) of Rs.
10,686.74 million in 2007 as compared to Rs. 8,726.29 million in 2006. The
revenue from operations grew by 22.6% to Rs. 10,398.03 million in 2007 from Rs.
8,482.14 million in 2006. The Company has achieved robust growth for the year
2007 from the global IT software services and BPO business.
Profit after Tax decreased by 94.2 % to Rs. 72.29 million in 2007 as compared to
a profit of Rs. 1,242.33 million in 2006. The Company has booked a net loss of
Rs. 1,029.95 million as an exceptional one-off loss on foreign currency
transactions which has adversely affected the profit after Tax of the
company.
Some of the major achievements of the Company in 2007 are:
·
During the year, 66 new clients were added, highest addition ever. The
record client addition of 66 during the year took the total number of active
clients to 175. Currently, the Company has 60 Fortune 500 / Global 500
clients.
·
The Company's strategy to mine high potential existing accounts has
resulted in an increase in the million dollar clients from 41 to 54 . Out of
above seven accounts were in the $5 - $10 million band and four clients billed
more than $10 million each on a trailing twelve month basis.
·
The year 2007 saw a healthy order book addition for your company, in
each of the quarters, both from existing and new clients. Many new orders
booked in 2007 from existing clients were for higher revenue commitments. For
instance, the Company has signed a multi-million dollar deal with one of its
largest existing clients to manage a set of internal applications including
Enterprise Applications and customized applications in BA/ BI and Testing
Solutions. The total size of the 3- year deal is in excess of $18 million and
provides for 30% increase over the current revenue with the same client.
·
One of subject's strategic customers extended the duration of their
total application management contract by another three years. Subject has been
managing a set of internal applications including BI/BA, PeopleSoft, Siebel and
Mainframe Systems for the past 3 years. The total size of the deal is in excess
of $ 50 million.
·
In the last quarter of the year, Focus Frame, a subsidiary of the
company, added one of the world's largest broad-based manufacturers of health
care products as its first client to deliver software services from India-based
delivery centers.
·
During the second half of the financial year, the company added a integrated
multi-module core-banking application developer as a strategic partner. Through
this alliance, the company has added one of the largest Mexican retail bank as
a client for implementing specific modules of the core-banking application.
This relationship is being nurtured and delivered from the global delivery
center based in Mexico, the newly opened development centre.
·
During the last quarter of 2007, the company added a marquee client in
the financial valuation, pricing and data services. Building on this
significant new win, the company plans to launch a new service offering with
this unique combination of IT and BPO services in the BFSI domain.
b) India operations
The Company has recorded a total income of Rs. 4,957.41 million in 2007 compared
to Rs. 4,617.04 million in 2006, demonstrating a growth of 7.4%. The revenue
from the Software business grew by 13.6% to Rs. 4,687.96 million in 2007 from
Rs. 4,126.92 million in the previous year. The net loss after tax was 107.61
million as compared to a profit of Rs. 1,186.61million in 2006 mainly due to
booking of a net loss of Rs. 1,029.95 million as an exceptional one-off loss on
foreign currency transactions.
The Company has successfully unwound all the foreign exchange option contracts
and had provisioned for the financial loss arising from the same in last
quarter of 2007, with no carryover to 2008.
RESERVES
During the year, the Company does not propose to transfer any amount to the
General Reserve.
INFRASTRUCTURE
The Company intends to continue to invest in physical and technological
infrastructure to support the growing worldwide sales and delivery operations.
In terms of technology infrastructure, Subject is making optimum investments in
latest technology to win customer's trust and confidence as also to improve
operational efficiencies. In terms of physical infrastructure subject is making
adequate investment to support the scaling up of operations which will provide
a world class work ambience to its employees, which in turn helps in recruiting
and retaining the best talent. The company currently operates out of the
following facilities in India:
Pune
In line with the anticipated growth and vision, during the year, the company has
expanded its presence by taking on lease 37,892 sq. feet at A3 Building,
E-Space, Nagar Road in Pune to seat 350 Software Professionals.
Nagpur
The company and
Caliber Point, the 100% subsidiary of the company, together have acquired 10
acres of land in Nagpur, a tier II city, at a SEZ location. The campus will
scale up to accommodate 3,000 people through multiple phases, first phase of
which is expected to be ready for occupation from the last quarter of
2008.
Madurai
The Company has also acquired 5 acres of land at Madurai for its subsidiary
Caliber Point.
Chennai
The company has consolidated the operations by securing a lease for bigger
premises in Ambattur of 120,000 sq.ft to seat 1,400 software professional and
de leased the existing HT2 and HT 4 buildings.
Siruseri Campus
The 1st phase of Green Campus in Siruseri, Chennai, one of India's largest
campuses became partially operational in March 2008. The total capacity of this
1st phase of the environment friendly and world-class facility will be around
5,000 software professionals and will be available for occupation by end of
2008.
BUSINESS
·
During the year, the Company re-aligned its business and technology
service offerings successfully to the global business environment by
re-aligning its offshore and onsite business structure.
·
The Company continues to expand its testing service offerings at a brisk
pace, which reinforces the expertise in Independent Testing and Verification
services. The testing services unit is the fastest growing business segment.
The integration of Focus Frame with the Company has taken off well, thereby the
Company now encompasses a complete range of testing services across the
globe.
·
The Company has successfully formed a range of service offerings around
Enterprise Risk Management through its Joint Venture Company Risk Technologies
International Limited and its subsidiaries in US and UK. The various offerings
under this include operational risk, credit risk, asset liability management
risk and market risk solutions, there by expanding your company's service
offerings in BFSI space.
·
The Company expanded its offerings in Transportation by adding offerings
for Hospitality and Third Party Logistics (3PL) companies, thereby enabling the
Company to strengthen its position as niche service provider.
·
During the year, the Company has expanded its presence overseas by
opening up its 2nd near-shore stateof- the-art development center in Mexico
with an aim to offer services from the same time zone as Americas and easy
access of talent pool, which will help in creating a scalable model.
·
The Company seeks to selectively expand its global presence to enhance
its ability to service clients. The Company plans to accomplish this by
establishing new sales and marketing offices, representative offices and global
development centers to expand its global footprint.
OPERATIONS
a. Multi-Cultural Dimension
The Company operates on a global platform, working with many Fortune 500
customers in North America, Europe and Asia Pacific. This gives the company a
unique understanding and access to not only the business practices but also the
cultural and work-ethics in different regions and corporate leaders.
b. Process and Methodologies
The Company has developed and institutionalized innovative project management
and transition/ change management methodologies to ensure timely, consistent
and accurate delivery of superior quality technology solutions, to improve
operational efficiency and to maintain a high level of customer
satisfaction.
The company benchmarks its processes and methodologies against globally
recognized quality standards and guidelines on an ongoing basis.
Certifications: The company has received various certifications including ISO
9001: 2000, SEI-CMM Level 5, Tick IT, BS7799 and ISO 27001.
c. Leadership in Focus Areas
The Company has demonstrated leadership and expertise in focus areas like
attaining global leadership role in PeopleSoft services, leading IT solution
providers for the Transportation and Hospitality Industry, one of the fastest
growing independent testing services provider and a fast emerging IT services
provider in Germany.
d. Enhance our niche areas
The company differentiates itself by focusing on niche service offerings,
emerging technologies, new industry trends, and pervasive business issues that
confront its clients. In recent years, the company has added new service
offerings, such as Enterprise risk management services, capital market services
and business analytics services, which are major contributors to the growth of
the company.
e. Right sized Company
Being a right-sized company, the Company has the ability to demonstrate agility
and flexibility in its operations to suit the dynamic needs of its customers.
The Company has demonstrated capability in meeting human capital and physical
infrastructure requirements for large projects, at the same time establish its
customer relationship comfort.
QUALITY AND
SECURITY
The process improvement initiatives planned and executed over the last one year
have shown positive results under various process categories.
The company's Chennai and Mumbai centers were assessed against CMMI Level 5 -
Dev Ver1.2 and the findings of the appraisal were presented by KPMG, India on
31st March 2007. Software Engineering Institute (SEI) has accepted the SCAMPI
appraisal and awarded CMMI v1.2 Level 5 for the Chennai and Mumbai delivery
centers. This assessment status will be valid till 31st March 2011.
The company continues to ensure benchmarking and certification against
international standards like ISO 9001:2000, TickIT and ISO 27001
standards.
The implementation of the Project Management Tool (Plan Arena) has been
completed and is now used enterprise-wide for real-time monitoring of projects
by all relevant stakeholders.
MILESTONES
·
Selected in the Leaders category for The 2007 Global
Outsourcing 100' by the International Association of Outsourcing Professionals
(IAOP).
·
The company featured in Business Week's annual list of
Asia's Hot Growth Companies for the second consecutive year. The company ranked
6th among the 13 Indian companies and 53rd among Asia's 100 companies with
annual sales below $ 500 million.
·
The company has the distinction of being among India's best
IT employers for three consecutive years ranking among the Top 20 in
Dataquest-IDC's Annual Best Employer Survey in 2005, 2006 and 2007.
·
A survey of Women in IT' by Dataquest-IDC conducted in
2007 recognised the company among the top 3 employers with highest number of
women working for the organisation. The company ranked second in the survey for
the highest number of women in the managerial cadre.
·
The company was positioned by Gartner Inc. in the niche
quadrant for Magic Quadrant for ERP Service Providers, North America, 2007'
report as well as in the Magic Quadrant for North American Offshore
Applications Services, 2007' report.
·
The company was Ranked No. 11 for 2006 - 2007 in the NASSCOM's
(India's National Association of Software and Service Companies) Top 20 IT
Software and Services Exporters from India.
·
The company was identified as one of India's best midsized
companies and has been labelled as one of 'Tomorrow's Giants' by Business
World, one of the business magazines in India. Additionally, Business World
ranked subject as the 10th biggest wealth creator among mid size companies
across all industry verticals.
OUTLOOK
The year 2007 was a year of consolidation and the year 2008 will be a year of
Innovation in the Service offerings and in operational excellence. The company
expects to witness and participate in significant advances towards Service
Oriented Architecture (SOA) and Software as a Service (SaaS).
Outsourcing and offshoring trends signify increased offshoring due to margin
pressures at the times of global slow down.
The company's key revenue stream for the year 2008 will continue to come from
the key service offerings in the vertical and horizontal practices. Independent
testing will provide a good stimulus for growth along with the enterprise
solutions. These platforms continue to be the focus of the Company, on which
new verticals and horizontals will be built. In addition to that the Company is
confident to win new businesses with premium for the focused service offerings.
With the visibility of a formidable order book, the company is confident of
strengthening business in terms of quality, client base, geographies, verticals
and horizontal services by which every
stakeholder's value is expected to be enhanced.
MANAGEMENT
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Treading a differentiated path:
Subject is at the forefront of a new generation of offshore IT service
providers that offer differentiated services and is adept in delivering
specific business technology solutions. The Company's strength lies in its
innate ability to understand the requirements of its clients and to
continuously build the competencies and capabilities to provide integrated IT
and BPO solutions unique to client specific needs and industry demands. The
Company's position as a leader in its chosen segments gives it the strength to
invest in domains and technology capabilities ahead of the demand curve; to
de-risk client engagements; and to differentiate through flexible business
models and value added services.
The Company focuses on bringing about business impact to its clients by
maximizing returns on their investments in IT and Business Process Outsourcing.
The Company's unique capabilities augmented by a clear understanding of
industry trends and deep knowledge of global business models allows it to
leverage strong partnerships, intrinsic technology innovations and talent to
deliver excellence through global delivery.
Subject has achieved market leadership in the domain areas of HR IT, Airlines
and Leasing as well as possesses strong capabilities in the BFSI segment which
are high growth business areas in the outsourcing space. The Company leverages
strategic partnerships with global leaders in technology and business
solutions, with the goal of providing clients with end-to-end business
solutions.
Recognizing the need for scale and capacity in competing for large contracts
against larger players, the company is making substantial investments in
expanding its base of people and world class infrastructure facilities.
INDUSTRY STRUCTURE AND
DEVELOPMENTS
Rapidly changing global economic and business conditions and technological
innovation are creating an increasingly competitive environment that is driving
companies to transform their operations globally. To address the changing
needs, the Company is focusing on its core competencies and using strategic
partners to manage their applications and products, improve productivity and
manage operations more efficiently. While the expectations of the customers
have increased manifold there continues to be an increased motivation to
satisfy the clients with improved quality of service and accelerated delivery
schedules with a focus on developing long term relationships and strengthening
strategic partnerships.
The role of technology has evolved from support to transformation for global
companies. The ability to design, develop, implement and maintain business and
technology solutions, addressing the business and customer needs has become a
competitive advantage and a priority. On the other hand, the prevalence of
multiple technology platforms and a greater emphasis on network, data and information
security and redundancy have increased the complexity and cost of IT systems,
resulting in greater technological risks.
There is a growing need for global companies to look for specialists with
experience in their areas of business, technology and operations to drive their
companies' strategic goals and objectives.
KEY BUSINESS
AREAS
The Company provides end-to-end business solutions, leveraging domain expertise
and latest tools and technologies, thereby enabling its customers to enhance
business performance.
·
Enterprise
Solutions
·
PeopleSoft
Services
One of the Company's primary focuses is on PeopleSoft that includes HCM, FSCM,
CRM and EPM solutions. The company is staffed with a large number of senior
managers, functional experts and technical experts who bring a plethora of
experience in a variety of industries including Banking, Insurance,
Manufacturing, Airlines, Finance and Education.
The company has been positioned by Gartner Inc. in the niche quadrant Magic
Quadrant for ERP Service Providers, North America 2007' report.
·
SAP Services
The Company offers a range of end-to-end SAP services, anchored around process
driven solutions and in keeping with the changing market conditions, for major industry
segments such as Banking and Financial services, Manufacturing and
Others.
The Company helps enterprises leverage SAP Solutions to efficiently manage
enterprise resource planning (ERP), proactively handle supply chain management
(SCM) and build sales and marketing efficiency through customer relationship
management (CRM).
The company has built solution accelerators around ERP packages like SAP that
guarantee a huge reduction in project time lines and corresponding benefits in
cost for its customers.
BUSINESS
OUTLOOK
The year 2007 was a year of consolidation and the year 2008 will be a year of
Innovation in the Service offerings and in operational excellence. The company
expects to witness and participate in significant advances towards SOA and
SaaS.
Outsourcing and offshoring trends signify increased offshoring due to cost
pressures on the Business As Usual parts.
The company's key revenue stream for the year 2008 will continue to come from
the key service offerings in the veritical and horizontal practices.
Independent testing will provide a good stimulus for growth along with the
enterprise solutions. These platforms continue to be the focus of the Company,
on which new verticals and horizontals will be built. In addition to that the
Company is confident to win new businesses with premium for the focused service
offerings. With the visibility of a formidable order book, the company is
confident of strengthening business in terms of quality, client base,
geographies, verticals and horizontal services by which every stakeholder's
value is expected to be enhanced.
CONTINGENT LIABILITIES IN RESPECT OF
·
Claims not acknowledged as debt to Rs. 42.62 million
·
Income tax disputed in appeal and pending decision Rs. 12.73 million,
Company is hopeful of getting a favourable decision.
FIXED ASSETS
·
Land – Freehold
·
Land – Leasehold
·
Building
·
Plant and Machinery
·
Furniture and Fixtures
·
Vehicles
·
Software
WEB DETAILS
COMPANY OVERVIEW
Subject is a global provider of IT and Process outsourcing services.
They focus exclusively on maximizing client returns from outsourcing and off-shoring. They have
extensive experience in managing large IT applications in real time as well as
in providing high value services around packaged enterprise applications such
as SAP and PeopleSoft. The experience in the business process outsourcing arena
fully complements and strengthens the service spectrum and allows them to
operate as an enterprise-class solution delivery company. The solutions aim to
provide high value by optimising cost of ownership of technology investments
for customers.
Subject has a
client base comprising several Global 1000 organizations. The commitment is to
provide solutions that translate into tangible business outcomes for our
customers. The ‘partner-in-business’
approach generates high business value for customers and rich dividends to
subject in the form of a continual stream of repeat business. Subject’s domain
capability expertise and reduced learning curves enables significant
compression in time-to-value deliverables. The customer-centric philosophy is further strengthened by a robust
Key Account Management process to find more ways to delight the key customers
and grow market share.
The company's
onsite/offshore delivery model provides significant cost savings. The
development centers are assessed at SEI CMMI-Level 5, and are also ISO 9001:2000 and TickIT
certified. These help us to continually provide high value, high quality deliverables
to the clients. They have consistently delivered to client expectations and
have established long lasting relationships with them.
Subject's global
operations are located in North America, Europe and Asia Pacific.
GROUP COMPANIES
Subject is a specialized
IT and BPO service provider, ranked the fastest growing mid-sized company in
India. They have leadership positions in PeopleSoft, HRIT, Airlines, and BFSI.
They specialize in Business Intelligence and Analytics, Legacy Modernization
and Independent Testing, and have over 5000 staff in 11 countries serving 145
clients globally. The experience in the business process outsourcing arena
fully complements and strengthens the service spectrum and allows them to
operate as an enterprise-class solution delivery company. The solutions aim to
provide high value by optimizing cost of ownership of technology investments
for customers.
FocusFrame
FocusFrame is a provider of Business
Technology Optimization consulting services. The firm's specialty is end-to-end
enterprise systems validation and optimization for CRM, ERP, and Web based
business technologies. This is accomplished with a suite of services that
utilizes proprietary process methodology, highly skilled professionals, and
third- party automation validation and optimization tools.
Caliber Point
Caliber
Point Business Solutions offers comprehensive Business Processing Outsourcing
(BPO) to global organizations. Specializing in IT led Transformational BPO
services, Caliber Point covers the Healthcare, Human Resources, Finance and
Accounting and Knowledge Services Domains. Our clients range from the largest
Third Party Administrators in the US to the largest Consolidators in the UK.
RiskTech
RiskTech
is a majority-owned JV of Hexaware Technologies with access to over 300
resources with significant business analytics know-how and skills in asset
management, derivatives and wealth management and a variety of risk and
treasury management applications.
PRESS
RELEASE
Hexaware names N.
Nataraj as Chief Information Officer
Hexaware
Technologies, a leading global provider of IT and BPO services and consulting,
today, announced the appointment of N. Nataraj as Chief Information Officer
(CIO). As a member of the executive management team, he will be responsible for managing and strengthening the
Company’s global integrated information technology (IT) systems and processes.
The appointment of Mr. Nataraj further strengthens the leadership team at
Hexaware.
Mr. Nataraj, an
accomplished professional with over 18 years of experience in IT, information
systems (IS), security and infrastructure joins Hexaware from Aztecsoft. As the
CIO of Aztecsoft, he headed the global activities pertaining to the strategic
implementation of IT and IS operations. He was also responsible to define and
implement security initiatives at Aztecsoft. His earlier stints included
working for organizations like Ericsson Software centre, India, Wipro and
Hughes Software Systems.
Welcoming Mr.
Nataraj on board, P. R. Chandrasekar,
CEO and Vice Chairman, Hexaware said, “The position of a CIO will play a key
role in enhancing our growth plans and I am pleased that we have found such a
competent individual. We have resources in implementing cutting edge technology
and with Mr. Nataraj’s significant expertise and extensive industry experience,
we will further channelize these resources to augment our services and
streamline our operational IT practices.”
Mr. Nataraj, an
influential CIO among his peers is known for his technical know-how and has received
many awards for his IT implementation projects across different industries. In
the near past, he was declared a winner of the Innovative CIO-100 award by
International Publishing Services (IDG).
Commenting on his
new role, Mr. Nataraj said, “I
am excited to contribute to further strengthen Hexaware’s robust systems and
processes. IT implementation is now a strategic enabler for any business,
additionally, compliance is increasingly evolving as the need of the hour. We
at Hexaware will embrace technology innovations that will give us an upper edge
in serving our customers better and in working on enhanced internal systems,
while we continue to maintain highest levels of corporate governance.”
Mr. Nataraj will
be based at Hexaware’s Chennai campus and will oversee the functioning of the
Information Systems Group (ISG) and Systems Technology Group (STG).
FINANCIAL RELEASE
Hexaware profitability metrics improve in
Q3’08
·
Revenue at Rs
2946.2 mn, an increase of 3.6% q-o-q; Revenue in USD at $66.3M, 2.0% decrease
q-o-q, -0.4% in constant currency
·
Operating Profit
(EBIT) at Rs 325.6 mn, operating margin increase from underlying 7.8% in Q2 to
11.1% in Q3
·
Profit after Tax at
Rs 115.1 mn, an increase of 21.0% q-o-q
·
New orders worth $
51 mn booked in Q3 ’08
·
25% interim
dividend paid out in August 2008
Mumbai – October
24, 2008: Hexaware Technologies Ltd, a leading global provider of IT & BPO
services and Consulting, today reported financial results for the third quarter
ended September 30, 2008.
Highlights of Q3
ended September 30, 2008
·
Revenue from operations stood at Rs 2946.2 mn ($66.3 mn)
o
Q-o-Q increase of 3.6% in INR terms, -2.0% in USD terms, -0.4% in
constant currency
·
Operating Profit (EBIT) stood at Rs 325.6 mn ($7.2 mn)
o
Operating Margin increased from underlying 7.8% in Q2 to 11.1% in Q3
·
Profit after Tax stood at Rs 115.1 mn ($2.65mn)
o
Q-o-Q increase of 21.0% in INR terms, 20.2% in USD terms
o
In view of the new SEBI format incorporating “Operating Income”, we have
revised the accounting treatment of foreign exchange gains & losses to show
under “Other Income” rather than as operating expenses.
§
Losses worth Rs 38.25mn in Q3 were hence reclassified, as was the gain
in Q2
§
Further, MTM loss amounting to Rs. 204.7 mn related to future hedges has
been booked in the Other Income line
·
4 new clients added during the quarter
·
177 active clients of which 66 are Fortune / Global 500 corporations
·
New order book added in Q3 ’08 was $51 mn
·
Global headcount stood at 5,924 as of September 30, 2008
“We have improved
all our operational metrics inspite of the volatile market environment. Though
the situation is likely to remain challenging till mid ’09, we continue to be
optimistic about the future” commented Atul Nishar, Executive Chairman,
Hexaware Technologies Limited.
“As our improved
double-digit EBIT margin demonstrates, in this demanding environment we are
focusing our efforts to improve our overall efficiencies, while at the same
time, taking steps to further strengthen our ability to add value to our
customers. Our newly launched vertical structure, the plans to strengthen our
horizontal competencies as well as the steps to leverage our subsidiaries
better will position us to capitalize on opportunities as the market
environment improves,” said P. R. Chandrasekar, CEO and Vice Chairman,
Hexaware Technologies Limited.
Guidance
The Company has
indicated that Q4 ’08 revenue is likely to be in the range of $61.5 mn – $64.0
mn (exchange rates taken at 1 GBP = 1.65 USD and 1 EUR = 1.25 USD). In constant
currency terms (average Q3 2008 rates), the revenues would have been in the
range of $63.0 mn - $64.5 mn.
Interim Dividend
The Board of
Directors declared an interim dividend @ 25% on equity shares of the Company.
The record date for determining the shareholders entitled for this interim
dividend was August 16, 2008. The dividend was paid out on August 27, 2008.
Financial Review
The financial
ratios for the quarter are:
EBIT margin
increased by 10.6% to 11.1% vs. 0.5% in the previous quarter. Profit after Tax
margin was up by 60 bps at 3.9% vs. 3.3% in the previous quarter. The blended
utilisation for the quarter improved to 65.9% vs. 63.7% in the previous
quarter.
Client Updates
The quarter wit nessed
an addition of 4 new clients. In terms of verticals, 1 client was in BFSI, 2
clients were in the TTHL domain and 1 client was in Emerging Verticals. The
total number of active clients stood at 177; of which 66 belong to the Fortune
500 / Global 500 list.
The number of
clients registering $1m+ in revenues stood at 56, with 43 clients in the $1 -
$5 mn category. 9 clients are in the $5 - $10 mn range, with another 4 clients
billed over $10 mn each – on a trailing 12 months basis.
Of the 4 clients
added, 3 customers are based in North America and 1 in APAC. 64.1 % of revenues
came from North America, with the European share at 30.2% and the balance 5.7%
coming from the rest of the world.
Significant Wins
During the
quarter, Hexaware emerged as a strategic partner to a leading maintenance,
repair and overhaul (MRO) solutions provider in North America. Hexaware will
provide product customization and implementation support on their cutting-edge
product developed on a new generation technology platform. The scope of the
engagement also includes extending implementation support for this widely
popular product in the aviation industry.
In Q3 ’08,
Hexaware won a deal to implement a mission critical Basel II risk data
warehousing solution with a leading US Investment Bank. This is a multi-million
deal commencing with a comprehensive consulting study of the risk architecture
review and encompasses the roll out of the entire customized solution. This
engagement will be jointly executed with RiskTech, the joint venture
specializing in the enterprise risk management domain, in which Hexaware holds
the majority stake.
In the past
quarter, Hexaware emerged stronger after a recent vendor consolidation exercise
at one of its significant customers. For this customer, Hexaware provides
multiple services including maintaining the entire ERP application and carrying
out enterprise intelligence services. In addition, Hexaware conducts quality
assurance services for several custom built applications.
Following the
successful deployment of test accelerators at a leading multi-specialty
integrated healthcare provider, FocusFrame stands poised to deliver end to end
quality assurance services for several divisions of this provider. This
multi-year, multi-million $ opportunity may see work getting off-shored to
locations such as Mexico and India.
Forex Cover
The company
currently has forward cover of $213 mn spread over the next eight quarters. The
average rate of USD, GBP and EUR hedges in INR are 40.68, 81.81 and 65.16
respectively.
Pricing
The average
billing rate per hour for the quarter stood at $68.73 onsite and at $23.36
offshore, slightly lower due to depreciation of GBP & EUR vs USD. In
constant currency terms, the billing rates increased marginally q-o-q
Human Resources
Global headcount
at the end of Q3 ’08 stood at 5924, a net reduction of 674 over Q2 2008.
Technical personnel comprised 87.3% of the total work force. Attrition was at
28.3% on an annualized basis.
Awards and
Recognition
Hexaware ranked
among the Top 20 Best IT employers in India by DQ-IDC for four years in a row
now. Hexaware was ranked 11th and was rated highly on different parameters in
the survey.
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.49.90 |
|
UK Pound |
1 |
Rs.74.30 |
|
Euro |
1 |
Rs.63.42 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
8 |
|
--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 |
NO |
|
--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. |
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 |
|