MIRA
INFORM REPORT
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Report Date : |
27.03.2008 |
IDENTIFICATION
DETAILS
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Name : |
I-FLEX SOLUTIONS LIMITED |
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Registered Office : |
Unit No. 10-11, SDF 1, SEEPZ, Andheri (East), Mumbai- 400 096, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
27.09. 1989 |
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Com. Reg. No.: |
11-53666 |
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CIN No.: [Company
Identification No.] |
L72200MH1989PLC053666 |
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Legal Form : |
Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Providers of information technology solutions. The company develops software, undertakes software project assignments and software products management. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 95900000 |
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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 engaged in the business as providers of information technology solutions. The company develops software, undertakes software project assignments and software products management. It has been making good progress in its performance over the years. Financial position of the company is comfortable. It is one of the few reputed information technology companies in India. The company’s trade relations are fair. Payments are correct and as per commitments. It can be considered good for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office : |
Unit No. 10-11, SDF 1, SEEPZ, Andheri (East), Mumbai- 400 096, Maharashtra, India |
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Tel. No.: |
91-22-28290170/28291020 / 56762000 |
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Fax No.: |
91-22-28292767 / 28292767 |
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E-Mail : |
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Website : |
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Corporate Office : |
I-Flex Center, 399 Subhash Road, Vile Parle (East), Mumbai – 400 057, Maharashtra, India |
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Tel. No.: |
91-22-67185000 |
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Fax No.: |
91-22-28323374 |
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Overseas Offices : |
10, Corporate Park, Suite 130, Irvine, CA 92606, U.S.A.
DLF Infinity Tower A, 3rd Floor, DLF Cyber City, Phase II, Gurgaon 122002, Haryana, India |
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Branches : |
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DIRECTORS
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Name : |
Mr. Charles Philips |
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Designation : |
Director |
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Name : |
Mr. Deepak Ghalsas |
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Designation : |
Director |
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Name : |
Mr. Derek Williams |
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Designation : |
Director |
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Name : |
Mr. N. R. Kothandaraman |
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Designation : |
Managing Director |
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Name : |
Mr. R. Ravisankar |
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Designation : |
Director |
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Name : |
Mr. Rajesh Hukku |
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Designation : |
Chairman |
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Name : |
Mr. Sam Bharucha |
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Designation : |
Director |
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Name : |
Mr. Tarjan Vakil |
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Designation : |
Director |
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Name : |
Mr. William T. Comfort, Jr |
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Designation : |
Director |
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Name : |
Mr. Y. M. Kale |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. Deepak Ghaisas |
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Designation : |
Company Secretary |
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Name : |
Mr. Makarand Padalkar |
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Designation : |
Chief Financial Officer |
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Name : |
Mr. Avadhut Ketkar |
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Designation : |
Chief Accounting Officer and Compliance Officer |
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Name : |
Mr. Joseph John |
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Designation : |
Executive Vice President |
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Name : |
Mr. Olivier Trancart |
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Designation : |
Executive Vice President |
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Name : |
Mr. V. Shankar |
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Designation : |
Executive Vice President |
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Name : |
Mr. Anand Phanse |
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Designation : |
Senior Vice President |
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Name : |
Mr. Atul Gupta |
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Designation : |
Senior Vice President |
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Name : |
Mr. Kishore Kapoor |
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Designation : |
Senior Vice President |
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Name : |
Mr. Manmath Kulkarni |
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Designation : |
Senior Vice President |
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Name : |
Mr. Nandu Kulkarni |
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Designation : |
Senior Vice President |
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Name : |
Mr. S. Hariharan |
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Designation : |
Senior Vice President |
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Name : |
Mr. S. Sundarajan |
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Designation : |
Senior Vice President |
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Name : |
Mr. Sajal Mukherjee |
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Designation : |
Senior Vice President |
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Name : |
Mr. Vijay Sharma |
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Designation : |
Senior Vice President |
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Name : |
Mr. Vivek Govilkar |
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Designation : |
Senior Vice President |
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Name : |
Mr. A. Srinivasan |
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Designation : |
Vice President |
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Name : |
Mr. Cafo Boga |
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Designation : |
Vice President |
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Name : |
Mr. Don Ganduly |
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Designation : |
Vice President |
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Name : |
Mr. Dilip Kulkarni |
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Designation : |
Vice President |
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Name : |
Mr. Dinesh Shetty |
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Designation : |
Vice President |
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Name : |
Mr. G. Narasimhan |
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Designation : |
Vice President |
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Name : |
Mr. George Thomas |
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Designation : |
Vice President |
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Name : |
Mr. Gopinath Govindan |
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Designation : |
Vice President |
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Name : |
Mr. Gratian Perez |
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Designation : |
Vice President |
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Name : |
Mr. Jambu Natarajan |
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Designation : |
Vice President |
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Name : |
Mr. K. Laxminarayan |
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Designation : |
Vice President |
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Name : |
Mr. Kapil Gupta |
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Designation : |
Vice President |
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Name : |
Mr. M. Ravikumar |
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Designation : |
Vice President |
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Name : |
Mr. Mahesh Rao |
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Designation : |
Vice President |
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Name : |
Mr. Meenakshy Iyer |
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Designation : |
Vice President |
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Name : |
Mr. Mohan Bhatia |
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Designation : |
Vice President |
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Name : |
Mr. Nikos Goutsoulas |
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Designation : |
Vice President |
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Name : |
Mr. Peter Yorks |
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Designation : |
Vice President |
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Name : |
Mr. Prabhakar Ravoori |
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Designation : |
Vice President |
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Name : |
Mr. S. Ramakrishnan |
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Designation : |
Vice President |
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Name : |
Mr. Sridhar Padmanabhan |
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Designation : |
Vice President |
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Name : |
Mr. Sridhar Ramachandran |
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Designation : |
Vice President |
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Name : |
Mrs. Swati Srinivasan |
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Designation : |
Vice President |
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Name : |
Mr. Sunder Annamraju |
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Designation : |
Vice President |
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Name : |
Mr. Thomas Mathew |
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Designation : |
Vice President |
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Name : |
Mr. V. Srinivasan |
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Designation : |
Vice President |
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Name : |
Mr. Venkata Subramanian |
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Designation : |
Vice President |
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Name : |
Mr. Vikram Gupta |
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Designation : |
Vice President |
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Name : |
Mr. Yung Wu |
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Designation : |
Vice President |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 31.03.2007
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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Foreign |
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Bodies Corporate Oracle Global (Mauritius) Limited |
67481698 |
81.02 |
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Mutual Funds/Axis |
471073 |
0.57 |
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Insurance Companies |
25000 |
0.03 |
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Foreign Institutional Investors |
161898 |
0.19 |
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Foreign Mutual Funds |
551782 |
0.66 |
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Non-Institutions |
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Bodies Corporate Individuals |
438394 |
0.53 |
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Individual
shareholders holding nominal share capital upto Rs. 0.100 Million. |
6121016 |
7.35 |
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Individual shareholders holding nominal share capital in excess of Rs.
0.100 Million |
4062766 |
4.88 |
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Clearing Member |
40998 |
0.05 |
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Market Maker |
1573 |
0.00 |
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Foreign Nationals |
59000 |
0.07 |
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NRI (Repatriate) |
935011 |
1.12 |
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NRI (Non-Repatriate) |
1732808 |
2.08 |
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Overseas Corporate Bodies |
800 |
0.00 |
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Directors |
686524 |
0.82 |
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Trust |
497374 |
0.60 |
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HUF |
20865 |
0.03 |
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Total |
83288580 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Providers of information technology solutions. The company develops software, undertakes software project assignments and software products management. |
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Products : |
v Software Development Services v Software Project Assignments v Software Product Management |
GENERAL
INFORMATION
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No. of Employees : |
7631 |
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Bankers : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
S. R. Batliboi & Associates Chartered Accountants Internal
Auditors
Mukund M. Chitale & Company Chartered Accountants |
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Associates : |
Login SA |
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Affiliates: |
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Subsidiaries : |
World Trade Center, B Tower, 12th Floor, Strawinskylaan 1245, 1077 XX Amsterdam, The Netherlands
27 International Business Park, # 04-05 Primefield Landmark Building, Singapore 609 924
99 Park Avenue, Suite 1530, New York 10016, U.S.A.
10050 Crosstown Circle, Suite 600, Eden Prairle, MN 55344, U.S.A.
10, Free Felix de Valois Street, Port Louis, Mauritius
399, Subhash Road, Vile Parle [East], Mumbai – 400057, Maharashtra, India
10, Corporate Park, Suite 130, Irvine, CA 92606, U.S.A.
DLF Infinity Tower A, 3rd Floor, DLF Cyber City, Phase II, Gurgaon 122002, Haryana, India |
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Joint Venture : |
· Flexcel International Private Limited |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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100000000 |
Equity Shares |
Rs. 5/- each |
Rs. 500.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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83288580 |
Equity Shares |
Rs. 5/- each
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Rs. 416.443
Millions |
Of the above
a. 67481698 equity shares of Rs. 5/- each are
held by Oracle Global (Mauritius) Limited ("Oracle"). The Company became subsidiary of Oracle on
April 14, 2006.
b. Of the above,
62,121,800 equity shares of Rs. 5/- each had been issued as fully paid up bonus
shares by
capitalizing the
securities premium account.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
416.443 |
381.442 |
374.400 |
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2] Share Application Money |
401.679 |
10.309 |
0.000 |
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3] Reserves & Surplus |
23166.636 |
13245.866 |
10877.500 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
23984.758 |
13637.617 |
11251.900 |
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LOAN FUNDS |
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1] Secured Loans |
0.000 |
0.000 |
0.000 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
0.000 |
0.000 |
0.000 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
23984.758 |
13637.617 |
11251.900 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
1493.216 |
1633.951 |
1321.500 |
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Capital work-in-progress |
1270.678 |
581.356 |
85.600 |
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INVESTMENT |
6092.200 |
413.536 |
425.400 |
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DEFERREX TAX ASSETS |
131.351 |
70.762 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
0.000
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0.000 |
0.000 |
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Sundry Debtors |
10419.437
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7428.617 |
6200.800
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Cash & Bank Balances |
5007.470
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5579.881 |
5393.900
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Other Current Assets |
987.275
|
257.437 |
0.000
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Loans & Advances |
4866.857
|
2567.237 |
1844.100
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Total
Current Assets |
21281.039
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15833.172 |
13438.800 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
5930.401
|
4326.091 |
3558.500
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Provisions |
353.325
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569.069 |
460.900
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Total
Current Liabilities |
6283.726
|
4895.160 |
4019.400 |
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Net Current Assets |
14997.313
|
10938.012 |
9419.400
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
23984.758 |
13637.617 |
11251.900 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
15523.444 |
11538.224 |
9319.300 |
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Other Income |
365.535 |
299.208 |
0.000 |
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Total Income |
15888.979 |
11837.432 |
9319.300 |
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Profit/(Loss) Before Tax |
3810.482 |
2895.101 |
2471.100 |
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Provision for Taxation |
263.743 |
447.566 |
494.700 |
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Profit/(Loss) After Tax |
3546.739 |
2447.535 |
1976.400 |
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Earnings in Foreign Currency : |
14951.667 |
11083.053 |
17609.314 |
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Total Imports |
91.577 |
146.928 |
139.733 |
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Expenditures : |
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Selling and Marketing Expenses |
651.438 |
602.267 |
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Cost of Revenue |
8884.576 |
6515.333 |
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General and Administrative Expenses |
1959.900 |
1436.919 |
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Depreciation & Amortization |
565.351 |
387.812 |
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Other Expenditure |
17.232 |
0.000 |
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Total Expenditure |
12078.497 |
8942.331 |
6848.200 |
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QUARTERLY RESULTS
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PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
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Type |
1st Quarter |
2nd Quarter |
3rd Quarter |
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Sales Turnover |
3846.400
|
4351.700
|
4567.400
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Other Income |
108.400
|
148.500
|
132.000
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Total Income |
3954.800
|
4500.200
|
4699.400
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Total Expenditure |
3186.200
|
3500.100
|
3376.300
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Operating Profit |
768.600
|
1000.100
|
1323.100
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Interest |
0.000
|
0.000
|
0.000
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Gross Profit |
768.600
|
1000.100
|
1323.100
|
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Depreciation |
142.700
|
168.200
|
166.500
|
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Tax |
43.900
|
66.100
|
48.800
|
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Reported PAT |
582.000
|
765.800
|
1107.800
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KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
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Long Term Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
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Current Ratio |
3.22 |
3.29 |
3.69 |
|
Fixed Assets |
5.13 |
4.67 |
4.87 |
|
Inventory |
0.00 |
0.00 |
0.00 |
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Debtors |
1.74 |
1.69 |
1.78 |
|
Interest Cover Ratio |
0.00 |
0.00 |
0.00 |
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Operating Profit Margin(%) |
28.19 |
28.11 |
30.31 |
|
Profit Before Interest And Tax Margin(%) |
24.55 |
24.75 |
27.37 |
|
Cash Profit Margin(%) |
26.49 |
24.23 |
24.84 |
|
Adjusted Net Profit Margin(%) |
22.85 |
20.87 |
21.89 |
|
Return On Capital Employed(%) |
20.48 |
22.95 |
23.63 |
|
Return On Net Worth(%) |
19.06 |
19.36 |
18.90 |
LOCAL AGENCY
FURTHER INFORMATION
Fixed Assets:
- Tangible
assets
- Land
- Improvement
to leasehold premises
- Buildings
(See Note below)
- Computer
equipments
- Electrical
and office equipments
- Furniture and
fixtures
- Leased
vehicles
- Intangible
assets
- Goodwill on
acquisition
- Customer
contracts
- Product 1PR
- Peopfe Soft
ERP
Contingent Liabilities
Financial bank guarantees given to banks on
behalf of subsidiaries, aggregates to Rs. 0.039 Million as at 31.03.2007.
Loan to Equinox Global Services Private Limited
Loan given to Equinox has conversion option in
equity shares of Equinox. In case of
conversion, interest of 8% would not be payable by Equinox. The Company intends to exercise the option
of conversion and hence to interest has been accrued on the loan.
Performance
On an
unconsolidated basis, the Company's revenue grew to Rs. 15523.440 million
during the financial year 2006-07 from Rs. 11538.220 million last year, a
growth of 35%. The net income before taxes and prior period item stood at Rs.
3810.480 million during the year against Rs. 2895.110 million last year,
translating into a growth of 32%. The Company's net income after taxes and
prior period items increased to Rs. 3546.740 million this year from Rs.
2407.990 million last year, a growth of 47%.
Revenue, on the basis of
consolidated financials is Rs. 20609.380 million this year, an increase of 39%
as compared to Rs. 14823.000 million last year. The Earnings before Taxes on a
consolidated basis is Rs. 4131.130 million this year as compared to Rs.
3028.460 million last year, an increase of 36%. The Company's net income before
prior period item increased to Rs. 3722.800 million this year as compared to
Rs. 2473.940 million last year, an increase of 50%.
Oracle's acquisition of i-flex's shares:
As on April 1, 2006, Oracle
Global (Mauritius) Limited. ('Oracle')
was holding 36,422,788 equity shares (47.74% paid up capital) of the Company.
During the period April 2006 to June 2006, Oracle further acquired 3,725,524
equity shares. On September 14, 2006, the Company allotted 4,447,418 equity
shares to Oracle on preferential basis. On December 4, 2006, Oracle made an
open offer to the members of the Company to acquire up to 34.93% of the then
capital of the Company. Through this offer, Oracle acquired 22,885,968 equity
shares of the Company. As of March 31, 2007, Oracle holds 67,481,698 equity
shares (81.02% of the capital of the Company).
Use of IPO proceeds:
In June 2002, the Company
completed its Initial Public Offer (IPO) in India and listed its shares on the
National Stock Exchange of India Limited.
(NSE) and Bombay Stock Exchange Limited
(BSE). Out of the IPO proceeds of Rs.1780.80 million, the Company has
utilized Rs. 1,493.61 million up to March 31, 2007 for its infrastructure
projects in Mumbai and Bangalore, and in expanding its marketing reach.
The Company also issued
shares to Oracle Global (Mauritius) Limited on a preferential basis on
September 14, 2006. Out of the proceeds of Rs.5815.00 million, the Company has
utilized Rs. 5,679.47 million up to March 31, 2007 towards the acquisition of
Mantas Inc.
Infrastructure:
During the year,
the Company made significant additions to its infrastructure to meet the
growing business requirements. The Company opened new offices in Bangalore, Pune
and Chennai and the Company's subsidiaries added offices in Athens, Dublin, New
Jersey, London, Seoul and Taipei to accommodate the increasing workforce. These
new premises expanded the capacity by about 2,000 seats. Construction of the
Company's landmark building in Goregaon, Mumbai is completed and the operations
have recently commenced in the first phase of this building. The Company is in
the process of finalizing a lease for over a million square feet of contiguous
office space in Bangalore. The Company has also entered into the MOU for
acquisition of a large 100 acre piece of land in Nasik (Maharashtra) as a
future growth center.
Acquisitions:
On October 2, 2006,
the Company through its subsidiary, i-flex America inc., acquired 100%
ownership in Mantas Inc. for a total consideration of USD 126.43 million (Rs.
5,807 million) including transaction cost of USD 4.98 million (Rs. 229.8
million). The financial statements of Mantas Inc. are consolidated with the
Company from October 2, 2006. The Company has recorded goodwill on account of
the consolidation of Rs. 5,410 million as on March 31, 2007. Mantas Inc. is a
leading provider of Anti-Money Laundering (AML) compliance software and related
services. The Mantas Behavior Detection Platform(TM) is the industry's most
comprehensive solution for detecting risk, enhancing customer relationships and
addressing regulatory requirements in the Anti-Money Laundering, trading and
broker compliance areas. This acquisition greatly strengthens the Company's
offerings in the Risk and Compliance area led by its Reveleus(TM)
platform.
On January 3, 2007, the
Company, through its subsidiary i-flex solutions pte Limited, acquired 100%
ownership in i-flex Consulting (Asia Pacific) pte Limited , the erstwhile
Capital Markets Company Pte. Limited. ('CAPCO') for a total consideration of
USD 1.05 million (Rs. 46.4 million) and recorded goodwill of Rs. 38.3 million
on consolidation of CAPCO. This acquisition will strengthen i-flex Consulting's
ability to provide high-end consulting to banks in the Asia Pacific region. The
combined i-flex-CAPCO team provides a compelling pool of expertise to assist
banks in business transformation, management of large technology
implementations and addressing risk and compliance requirements.
Global alliances:
The Company lays great
emphasis in building and expanding its partner network with organizations which
can promote, sell, implement and support its offerings around the world. During
the year, the Company has made great strides in expanding its partner network
in a number of countries, especially the non-English speaking countries in
Europe, Latin America, Asia and Francophone Africa.
The Company made major
progress on multiple areas in its relationship with Oracle, from aligning its
solutions with Oracle to offering a much more comprehensive solutions portfolio
to its customers, to closely align the joint sales and marketing efforts.
Strategically, the Company
has taken several other important partnering initiatives, a notable one being a
joint collaborative initiative between i-flex, Oracle and IBM to provide next
generation solutions to top tier financial institutions worldwide. This
alliance brings together the world's No. 1 IT vendor, the world's No. 1
enterprise software vendor and the world's No. 1 core banking solution
provider, representing a unique and compelling value proposition to top tier
financial institutions around the world.
Subsidiaries:
The Company has subsidiaries in India, USA, Singapore, the Netherlands, Canada
and Mauritius to handle operations as well as to strengthen marketing and sales
efforts in the respective markets and ensure deeper penetration in these
regions.
During the financial year,
i-flex Processing Services Limited became a wholly owned subsidiary of the
Company. i-flex America inc., a wholly owned subsidiary of the Company,
acquired a 100% equity capital of Mantas Inc., and Mantas Inc. became the
subsidiary of the Company. i-flex solutions pte Limited , a wholly owned
subsidiary of the Company acquired 100% equity capital of i-flex Consulting
(Asia Pacific) pte Limited and
accordingly, i-flex Consulting (Asia Pacific) pte Limited became the subsidiary of the Company.
Pursuant to Section 212 of
the Companies Act, 1956, the Company is required to attach to its Annual Report
the Directors' Report and financial statements of its subsidiaries. Since the
Company presents audited consolidated financial statements under Indian GAAP
and US GAAP in its Annual Report, the Company has applied to the Central Government
of India for an exemption from attaching the Directors' Report, Balance Sheet
and Profit and Loss Account of its subsidiaries to the Annual Report. The
approval from the Central Government in this regard is awaited and in case the
exemption under Section 212 (8) of the Act is granted to the Company by the
Central Government, the financial statements of the subsidiaries of the Company
shall not be attached to the Annual Report of the Company. In that case the
Company undertakes that the financial statements of the subsidiary companies
for the year ended March 31, 2007 will be made available to the members on
request at the Registered Office/Corporate Office of the Company and the same
will be kept open for inspection by any member during the office hours of the
Company.
Fixed deposits:
During the financial year
2006-07, the Company has not accepted any fixed deposit within the meaning of
Section 58A of the Companies Act, 1956, and as such, no amount of principal or
interest was outstanding as of the date of the Balance Sheet.
Awards, honors and recognitions:
The Company has
consistently received wide recognition for leadership and achievements.
Information technology in the financial services
industry:
The financial
services industry is undergoing transformation, both in how it addresses its
customers, and in how it runs its operations. The entry of non-traditional
players, global mergers and acquisitions, ever increasing demands from
customers to deliver a ubiquitous and next generation customer experience, a
demanding regulatory environment, and the emergence of new customer interaction
channels have contributed to this shift.
Governance,
risk and compliance has emerged as a strategic priority for financial
institutions. The post 9/11 environment has seen financial institutions
grappling with the challenges of increasing regulatory complexity and also an
emerging convergence of the areas of governance driven by regulations such as
Sarbanes-Oxley, risk management with regulations in Basel II, and compliance
driven by regulations as anti-money laundering, the Patriot Act, data privacy,
etc.
In the core
transaction processing area, increasing number of financial institutions are
getting more and more receptive to the value proposition and the benefits of
core banking transformation, and the Company is taking concrete steps in that
direction.
Information
Technology (IT) plays a major role in such a scenario - acting as an enabler of
a new customer-centric outlook, and a means to improving operational efficiency,
while driving compliance to new regulatory norms, reducing costs and achieving
competitive differentiation.
In conjunction
with Oracle Global (Mauritius) Limited ('Oracle'), i-flex has a very clearly
articulated value proposition and strategy, which is centered around the
business priorities and challenges of financial institutions in the market
today. Their approach is centered on addressing the 4Cs that are affecting
financial institutions today: Competitive differentiation, Cost reduction, Customer
intimacy and Compliance and risk management. i-flex has organized its entire
range of offerings and value propositions to align with these priorities.
Overview:
i-flexr
solutions is in the business of providing comprehensive IT solutions to the
financial services industry worldwide. Playing the role of a specialized IT
partner to financial services institutions worldwide, their approach is
balanced with a wide range of products, custom solutions and consulting
services.
Their solutions
portfolio includes packaged applications, custom application software
development, deployment, maintenance and support services, business and IT
consulting services, technology deployment and management services and the
knowledge process outsourcing in the financial services domain.
As of March 31,
2007, the Group cumulatively serviced 750 customers in 125 countries through
its portfolio of products and services.
They are
organized by region and business segment. They have two major business segments
- the Products Business (comprising product licensing, customization,
implementation and support) and the Services Business (providing customized
software and consulting services). They have also recently launched Knowledge
Process Outsourcing Services (value-added knowledge outsourcing). These
segments are described in greater detail below:
Products:
The i-flex portfolio includes FLEXCUBE(R), a complete banking product suite for
retail, consumer, corporate, investment and internet banking, and asset
management and investor servicing. Since its launch in 1997, more than 300
financial institutions in over 105 countries have chosen FLEXCUBE. The product
suite has been ranked the world's No. 1 selling core banking solution for five
consecutive years-2002, 2003, 2004, 2005 and 2006 - by the UK-based
International Banking Systems (IBS).
The product
suite's portfolio was further enriched last year by adding products targeted at
Islamic Banking. With the new FLEXCUBE SWIFTNet Services Integrator suite,
banks are able to leverage the SWIFTNet (SWIFT's IP-based messaging solution)
environment for increased business value.
Increased delivery capacity, and improved functionality through their
association with Oracle made this the best ever year for FLEXCUBE.
The
Reveleus(TM) suite of analytical applications for the financial services
industry is focused in the areas of risk management, customer insight, and
enterprise-wide financial performance. Reveleus Risk Analytics solves the most
complex global challenges facing the financial industry today, including
multi-jurisdictional Basel II compliance and operational risk management.
Reveleus was Highly Commended' for its Compliance Initiative Innovation in The
Banker Technology Awards for 2006.
Mantas(R) is a
wholly owned subsidiary of i-flex. Mantas' Behavior Detection Platform(TM) is
the industry's most comprehensive solution for detecting risk, enhancing
customer relationships, and addressing regulatory requirements in the
anti-money laundering, trading and broker compliance areas. Mantas, along with
Reveleus, offer a single, unified platform for governance, risk and compliance.
Waters Magazine ranked Mantas for Best Anti-Money Laundering solution for 2004,
2005 and 2007 and Best Compliance solution for 2003.
Daybreak(TM) is
a comprehensive consumer lending system that automates all aspects of financing
from origination, to servicing and collections for installment loans; consumer
leases, revolving products and home equity lines of credit. It empowers
financial services organizations to improve productivity, enhance customer
service and manage risks.
Together with
Castekr Software Inc., a majority-owned subsidiary, i-flex offers strategic
business software and services for the global Property and Casualty insurance
market. Castek provides insurance carriers with a suite of core business
processing systems for insurance product and process configuration, policy
processing, customer billing, claims management and services.
Their solution
portfolio rests on SOA, enabling interoperability, extensibility and
standardization. Encompassing cash management, trade, treasury, payments,
lending deposits, private wealth management, asset management, among others, it
helps financial institutions become model enterprises', reduces costs, improves
efficiency, and increases their addressable market and asset size.
PrimeSourcing(TM),
i-flex's global IT services division, provides customized software solutions
exclusively for the financial services industry worldwide, with a dedicated
focus on delivering solutions through domain specialization. While at a broad
level this domain specialization focuses on corporate, investment, private and
retail banking, and the insurance domains, each of these domains are further
segmented into relevant practice lines and Centers of Excellence. These
solutions are supported by a comprehensive pool of proprietary methodologies,
best practices, and backed by SEI-CMMi Level 5 compliant processes.
PrimeSourcing's
Oracle practice group caters to specialized practices in Business Intelligence,
Fusion Middleware (SOA), and Oracle Apps implementation. The division also
leverages well-established CoBIT-compliant global infrastructure and
development centers to deliver services in an optimized
onsite-near-shore-offshore model.
The i-flex
Consulting(TM) division offers an end-to-end consulting partnership, providing
comprehensive business and technology solutions that enable financial services
enterprises to improve process efficiencies; optimize costs; meet risk and
compliance requirements; define IT architecture; and, manage the transformation
process. Consulting services are offered in the areas of business
transformation, risk and compliance, program management, IT architecture, IT
governance and process improvement.
i-flex's solution
approach for financial services institutions is process-driven and rests on the
i-flex Process Framework for Banking (iPFB(TM)), a tool for transforming
banking operations. It is a process repository created by drawing on i-flex's
domain expertise and best practices.
i-flex's
Technology Deployment & Management Services (TDMS) division specializes in
conceptualizing, designing, deploying and managing IT Infrastructure. The
i-RIMS (i-flex Remote Infrastructure Management Services) Center manages IT infrastructure
remotely from India on a 24 x 7 basis through its on-site-offshore model. TDMS
services are based on best practices such as ITIL (IT Infrastructure Library),
COBIT (Control Objectives for Information and related Technology) model, a
globally accepted standard for IT management and control framework, and BS7799
(ISO17799).
i-flex
Processing Services is a 100% owned subsidiary of i-flex solutions, with
consultants experienced in various functions in the asset management space,
financial modeling and valuation KPO. The services provided encompass IT
software, consulting, KPO and infrastructure. Equinox Corporation, a wholly
owned subsidiary of i-flex, excels in providing cost-effective and high-quality
knowledge process outsourcing services (KPO) to the financial services
industry. Equinox was selected in the Leaders Category for the 2007 Global
Outsourcing 100' by The International Association of Outsourcing Professionals
(IAOP). The Global Outsourcing 100 defines the standard for excellence in outsourcing
service delivery. It was also recognized among the Top 50 Global Outsourcers
& Top 30 Global Offshore Vendors' by the International Association of
Outsourcing Professionals (IAOP).
Corporate development:
During the
year, Oracle purchased equity shares of i-flex solutions ltd., ('i-flex' or the
'Company') from OrbiTech Ltd., the then major shareholder of the Company and
through an open offer and, also from the stock market, taking its shareholding
to 81.02% as on March 31, 2007.
Business metrics:
Their total
revenues in fiscal 2007 were Rs. 15,523.4 million, representing an increase of
35% from Rs. 11,538.2 million in fiscal 2006. The net income in fiscal 2007 was
Rs. 3,547 million, against Rs. 2,408 million in fiscal 2006. Their net income
margins were 23% and 21% in fiscal years 2007 and 2006 respectively. They
define net income margins for a particular period as the ratio of net income to
total revenues during such period. They had 7,631 employees as on March 31,
2007 as against 6,044 at the end of the previous year in India.
Products revenue:
Their products
revenue represented 57% of the total revenues for both fiscal years ended 2007
and 2006. Their products revenue were Rs. 8,909.5 million during the fiscal
year ended March 31, 2007; an increase of 36% from Rs.6540.600 million during
the fiscal year ended March 31, 2006.
Products
revenue comprise license fees, professional fees for implementation and
enhancement services and annual maintenance contract (Post Contract Support -
PCS) fees for their products.
License fee:
Their standard
licensing arrangement for their products provides the user a perpetual right to
use the product for a pre-defined number of users and sites upon payment of a
license fee. The license fee is a function of a variety of quantitative and
qualitative factors, including the number of copies sold, the number of
concurrent users supported, the number and combination of the modules sold, and
the number of sites and geographical locations supported. The licenses are non-exclusive,
personal, non-transferable and royalty free.
Implementation fee:
After products
are licensed to these customers, they provide services related to the
implementation of these products at customer sites, integration with other
customer systems, and enhancement of products to address specific requirements
of customers. The customer is typically charged a service fee either on a
fixed-price basis or a time and materials basis. Implementation and enhancement
services comprise functional enhancements, interface building, implementation
planning, data conversion, training and product walkthroughs, and are provided
to customers who enter into licensing arrangements with us.
Services revenue:
Their services
revenue represented 43% of the total revenues for both the fiscal years ended
March 31, 2007 and 2006. The services revenue were Rs. 6613.900 million in the
fiscal year ended March 31, 2007; an increase of 32% from Rs. 4997.600 million
in the fiscal year ended March 31, 2006.
The contracts
relating to the services business are either time or material contracts or
fixed price contracts. The percentage of total services revenue from time and
material contracts was 87% in fiscal 2007 and 76% in fiscal 2006, with the
remainder of the services revenue attributable to fixed price contracts.
They provide
their services through offshore centers located in India, on-site teams
operating at customers' premises and their development centers located in other
parts of the world. Offshore services revenue consist of revenues from work
conducted at their development centers in India on behalf of foreign customers
while on-site revenue comprises work conducted at customers' premises outside
India. Revenue from India represents work done for Indian customers at their locations
and at their development centers in India. The composition of their on-site and
offshore revenue is determined by the project life cycle. Typically, the work
involving the design of new systems or relating to a system roll-out would be
conducted on-site, while the core software development, maintenance and support
activity may be conducted offshore. They received 62% of their services revenue
from on-site work and 38% from offshore work during the fiscal year 2007 as
against 59% and 41%, respectively in fiscal year 2006.
Their services
revenue and profits are also affected by the rate at which their software
professionals are utilized. The utilization rate is calculated as the
percentage billed for their personnel in a particular period to the average
number of staff that is considered billable in that same period. For the
purpose of calculating the number of billable staff, they exclude personnel
that are engaged in management, administration, marketing support, initial
training (six months for personnel without any priorwork experience and three
months for personnel with over two years experience) and personnel allocated to
the approved internal investment projects. Their on-site personnel deployment
on projects is based on project needs and therefore such personnel are fully
utilized. Utilization rates for their services business were 71% and 73% for
fiscal 2007 and 2006 respectively. They
have been able to restrict the drop in the operating margins to only 73 basis
points despite the additional staff costs due to wage hikes and lower
utilization.
Cost of services revenue and operating
expenses:
The cost of
revenues for services consists primarily of compensation expenses for their
software professionals; cost of application software for internal use, travel
expenses and professional fees paid to software services vendors. They
recognize these costs as incurred. Their operating expenses include selling,
general and administrative expenses and allocated overhead expenses associated
with human resources, corporate marketing, management information systems,
quality assurance and finance.
Integration of mergers and acquisitions:
i-flex has
acquired a couple of companies in the past, i.e., SuperSolutions Corporation,
USA, ISP Internet Mauritius Company, Mauritius and Canada-based Castek Software
Inc. ('Castek'). During the year they acquired 100% of Mantas Inc., Virginia
('Mantas') through an investment in i-flex America inc. and these mergers and
acquisitions involve inherent risks, including:
- unforeseen
contingent risks or latent liabilities relating to these business that may only
become apparent after the merger or acquisition is finalized;
-
integration and management of the operations, sales and marketing, personnel
and systems;
The company, as
part of its policies, ensures that the companies acquired are successfully
integrated into the mainstream business.
SWOT analysis:
Strengths:
- One of the most comprehensive solutions portfolio for the financial
services industry
- Global client base and market reach
- Strong backing of Oracle
- Solutions based on world-class technology backed by strong
R&D
- High-quality manpower resources, with deep domain expertise in the
financial industry
Weaknesses:
- Weakening of Indian Rupee against the US Dollar
- Wage inflation pressure
Opportunities:
-
Increasing investment momentum in core banking systems by large and global
financial institutions
- India as preferred outsourcing destination
- Compliance, Risk and Governance is on the top of the investment agenda
for financial institutions
- Expanding solutions portfolio and entry into new market segments such
as consumer finance, business analytics, Basel II, anti-money laundering
Threats:
- Increasing competition
- Legislative
and visa related travel restrictions
Outlook:
i-flex
solutions offers the most comprehensive footprint of solutions for the
financial services industry today. These solutions cover customer delivery
across all customer touch points, core banking processing, transaction
processing across different verticals and different product processes across
consumer banking, corporate banking, investment, asset management, and
analytics for measuring the performance of the business and providing insights
to decision-making teams to enable timely, mid-course corrections.
There are
several key opportunities in the marketplace for i-flex. Large corporate and
retail banking assignments, emerging areas such as Islamic Banking, private
wealth management, enterprise risk management and compliance and IT outsourcing
are some of the areas where i-flex sees opportunities in the next few years.
The company has been engineering a series of acquisitions to expand into
software for risk management, anti-money laundering, consumer lending, and
property and casualty insurance.
There is
increased traction in large institutions looking to replace their core systems.
Multi-country standardization opportunities also form an integral part of the
core banking replacement strategy for global banks.
Risk and
compliance is the key priority area for banks and, again, i-flex solutions' GRC
framework is a leading solution in this area. Outside i-flex's traditional
market of core banking, there are emerging opportunities in other verticals
within the financial services industry. i-flex recently entered the insurance
vertical and it plans to continue to expand the capability within the financial
services domain.
AS PER
WEBSITE DETAILS:
PRESS
RELEASE
FLEXCUBE
Implementation Completed Within a Year at Allianz Bank, Bulgaria
12-Mar-08
Sofia, Bulgaria, March 12, 2008: i-flex®
solutions (Reuters: IFLX.BO & IFLX.NS), a leading provider of technology
solutions to the global banking and financial services industry, today
announced that FLEXCUBE® was live at Allianz Bulgaria Commercial
Bank, Bulgaria. The big bang rollout of FLEXCUBE was completed within a year,
across the bank's Bulgarian operations.
Allianz Bank is part of Allianz Bulgaria
Holding, Bulgaria's biggest financial group. The bank has more than 100
business centers in the country.
N R K Raman, Managing Director and CEO,
i-flex solutions, said: "i-flex's quiet dominance in Bulgaria is further
illustrated by this implementation. The hallmark of the implementation is that
it was led by our partner, SIRMA, demonstrating the maturity of our software
assets. Across the region, especially in Bulgaria, it's evident FLEXCUBE is an
obvious choice for banks looking for a proven banking platform."
About i-flex solutions
i-flex® solutions (Reuters:
IFLX.BO and IFLX.NS), majority owned by Oracle, is a world leader in providing
IT solutions to the financial services industry, with more than 790 customers
in over 130 countries. Its strategy for financial services addresses the
challenges that financial services institutions are faced with today. Its range
of applications software, custom solutions and consulting services enable
financial institutions to cut costs, respond rapidly to market needs, enhance
customer service levels and mitigate risk.
Together, Oracle and i-flex solutions offer
financial services institutions the world's most comprehensive banking
applications and technology footprint to address complex IT and business
requirements.
i-flex and FLEXCUBE are registered
trademarks of i-flex solutions. Reveleus, Mantas, PrimeSourcing, i-flex
Consulting and iPFB are trademarks of i-flex solutions and are registered in
several countries.
All other company and product names are
trademarks of the respective companies with which they are associated.
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 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. 40.14 |
|
UK Pound |
1 |
Rs. 80.41 |
|
Euro |
1 |
Rs. 62.59 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
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 |
|