MIRA INFORM REPORT

 

 

Report Date :

13.04.2012

 

IDENTIFICATION DETAILS

 

Name :

OMNITECH INFOSOLUTIONS LIMITED

 

 

Registered Office :

A/13, Cross Road No. 5, Kondivita Road, MIDC, Marol, Andheri (East), Mumbai – 400093, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2011

 

 

Date of Incorporation :

30.01.1990

 

 

Com. Reg. No.:

11-055256

 

 

Capital Investment / Paid-up Capital :

Rs.138.605 Millions

 

 

CIN No.:

[Company Identification No.]

L30007MH1990PLC055256

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMO02155G

 

 

PAN No.:

[Permanent Account No.]

AAACO1775F

 

 

Legal Form :

A Public Limited Liability company. The company’s Share are Listed on the Stock Exchange.

 

 

Line of Business :

Providing IT Solutions and Value Added Services.

 

 

No. of Employees :

847 (Approximately)

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A (62)

 

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 8833000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is an established company having fine track. Financial position of the company appears to be sound. Trade relations are fair. Business is active. Payments are reported to be regular and as per commitments.

 

The company can be considered good for normal business dealings at usual trade terms and conditions.

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – September 30, 2011

 

Country Name

Previous Rating

(30.06.2011)

Current Rating

(30.09.2011)

India

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

 

 

 

 

 

 

 

 

 

 

 

LOCATIONS

 

Registered Office/ Corporate Head Quarter/ factory  :

A/13, Cross Road No. 5, Kondivita Road, MIDC, Marol, Andheri (East), Mumbai – 400093, Maharashtra, India

Tel. No.:

91-22-40956666

Fax No.:

91-22-40956565

E-Mail :

gaurav.s@omnitechglobal.com

kothari_kenia@rediffmail.com

marketing@omnitechglobal.com

Website :

www.omnitechglobal.com

 

 

Factory 1:

A-812, T.T.C. Industrial Area, Koparkhairane, Navi Mumbai 400703, Maharashtra, India

 

 

Factory 2:

106, 1 Floor, Building No.17, Mind Space, Pocharam, Opp. Sanskrit Township, Gatkesar (Township), Hyderabad – 500 087, Andhra Pradesh, India

 

 

Branches :

Located at:

 

  • Bangalore
  • Hyderabad
  • Chennai
  • New Delhi
  • Ahmedabad
  • PUne

 

Global Branches:

 

  • Hong Kong
  • Europe
  • Singapore
  • USA
  • Japan
  • Australia

 

 

DIRECTORS

 

As on 31.03.201

 

Name :

Mr. Maganlal K. Hemani

Designation :

Non-Executive Chairman

 

 

Name :

Mr. Atul M. Hemani

Designation :

Managing Director & CEO

 

 

Name :

Mr. Avinash C. Pitale

Designation :

Jt. Managing Director

 

 

Name :

Mr. Devarshi D. Buch

Designation :

Executive Director

 

 

Name :

Dr. Kalimohan J.Bhattacharya

Designation :

Non-Executive and Independent Director

 

 

Name :

Prof. Venkateshwaran H. Iyer

Designation :

Non-Executive and Independent Director

 

 

Name :

Mr. Vasudeva V. Kamath

Designation :

Non-Executive and Independent Director

 

 

KEY EXECUTIVES

 

Name :

Mr. Gaurav Sharma

Designation :

Company Secretary and Chief Officer (Compliance and Legal)

 

 

Name :

Mr. Ajay Kotkar

Designation :

CEO, Asia Pacific & Global BFSI Practice Head

 

 

Name :

Mr. Ed Trautig

Designation :

CEO, Avensus BV

 

 

Name :

Mr. Nikul Shah

Designation :

President, Global HR and Corporate Services

 

 

Name :

Mr. Aniruddha Modak

Designation :

VP-National Sales

 

 

Name :

Mr. Ravi Khurana

Designation :

VP-Finance and Accounts

 

 

Name :

Mr. Dhansing Thakur

Designation :

VP - Commercial

 

 

Name :

Mr. Sanjay Mishra

Designation :

VP - EMEA Operations

 

 

Name :

Mr. George Puthussery

Designation :

Integrated Service Delivery Head, India

 

 

Name :

Mr. Amit Patil

Designation :

AVP Sales - Services

 

 

Name :

Mr. Amit Abhyankar

Designation :

AVP Sales - BCP

 

 

Name :

Mr. Ayan Mitra

Designation :

AVP - Marketing

 

 

Name :

Mr. Mihir Mohanty

Designation :

AVP - Presales

 

 

Name :

Mr. Nitin Purohit

Designation :

AVP - Technology Services

 

 

Name :

Mr. Kosal Sharaff

Designation :

Head - Strategic Account Manager

 

 

Name :

Mr. Nilesh Thakkar

Designation :

GM Operations - DR & BCP

 

 

Name :

Mr. Machhindranath Tapare

Designation :

National Delivery Manager - Tech Support

 

 

Name :

Mr. Rajesh Bhosle

Designation :

National Delivery Manager - Operations

 

 

Name :

Mr. Anil Singh

Designation :

National Delivery Manager - CRM

 

 

Name :

Mr. Ramesh T.

Designation :

Deliverylead, Consulting Services

 

 

Name :

Mr. Rajish Rajan

Designation :

Technical Manager - WCC

 

 

Name :

Mr. Dinesh Rane

Designation :

Sr. Manager - Accounts

 

 

Name :

Mrs. Akanksha Misra

Designation :

Manager - L&D

 

 

Name :

Mr. Farzana Adenwalla

Designation :

Manager - Corporate Relation

 

 

Name :

Mr. Ganesh Ganguli

Designation :

Manager - Administration

 

 

Name :

Mr. Mahalakshmi Chowdhary

Designation :

Manager - HR

 

 

Name :

Mr. Mahendra Bhande

Designation :

Manager - Strategy and MIS

 

 

Name :

Mr. Sanket Mangrulkar

Designation :

Manager - M&A and IR

 

 

Name :

Mrs. Shabina Khan

Designation :

Manager - Quality Assurance

 

 

Name :

Mr. Yugal Hemani

Designation :

Manager - IT

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As on 31.12.2011

 

Names of Shareholders

No. of Shares

Percentage of Holding

(A) Shareholding of Promoter and Promoter Group

 

 

(1) Indian

 

 

Individuals / Hindu Undivided Family

6,121,705

41.58

Bodies Corporate

1,811,060

12.30

Sub Total

7,932,765

53.88

(2) Foreign

 

 

Total shareholding of Promoter and Promoter Group (A)

7,932,765

53.88

(B) Public Shareholding

 

 

(1) Institutions

 

 

Financial Institutions / Banks

1,170,542

7.95

Sub Total

1,170,542

7.95

(2) Non-Institutions

 

 

Bodies Corporate

1,686,878

11.46

Individuals

 

 

Individual shareholders holding nominal share capital up to Rs.0.100 million

1,960,077

13.31

Individual shareholders holding nominal share capital in excess of Rs.0.100 million

904,369

6.14

Any Others (Specify)

1,067,582

7.25

Clearing Members

202,588

1.38

Non Resident Indians

688,581

4.68

Trusts

150,000

1.02

Office Bearer

26,413

0.18

Sub Total

5,618,906

38.17

Total Public shareholding (B)

6,789,448

46.12

Total (A)+(B)

14,722,213

100.00

(C) Shares held by Custodians and against which Depository Receipts have been issued

-

-

(1) Promoter and Promoter Group

-

-

(2) Public

-

-

Sub Total

-

-

Total (A)+(B)+(C)

14,722,213

-

 

 

 

BUSINESS DETAILS

 

Line of Business :

Providing IT Solutions and Value Added Services.

 

 

 

 

GENERAL INFORMATION

 

No. of Employees :

847 (Approximately)

 

 

Bankers :
  • IDBI Bank Limited
  • HDFC Bank
  • ICICI Bank Limited
  • Hongkong and Shanghai Banking Corporation Limited
  • Standard Chartered Bank Limited
  • Kotak Mahindra Bank Limited
  • Axis Bank Limited

 

 

Facilities :

Secured Loan

As on

31.03.2011

(Rs. in

Millions)

As on

31.03.2010

(Rs. in

Millions)

(A) From Kotak Mahindra Bank Limited

 

 

Term Loan

(Secured against first pari passu charge on movable assets, second pari passu charge on current assets, mortgage of immovable properties of the company situated at Andheri by second pari passu charge and first charge on property at MBP) [Amount due within one year is Rs.67.918 millions (Rs.35.075 millions) ]

99.690

84.765

Working Capital Demand Loan

(Secured against first pari passu charge on Movable assets, hypothecation of entire current assets, stocks and book debts of the company, mortgage of immovable properties of the company

situated at Andheri by second pari passu charge)

118.770

30.000

(B) From Standard Chartered Bank Limited

 

 

Cash Credit

(Secured against first pari passu charge on movable assets and hypothecation of stocks and book debts of the company

60.498

40.475

Packing Credit in Foreign Currency

 (Secured against first pari passu charge on movable assets and hypothecation of stocks and book debts of the company)

80.006

72.460

(C) From ICICI Bank Limited

 

 

Car Loan

(Secured against hypothecation of Cars)

[Amount due within one year is R402437/- (191584/-)]

1.880

0.998

(D) From HDFC Bank

 

 

Car Loan

(Secured against hypothecation of Cars)

[Amount due within one year is R272787/- (244482/-)]

0.297

0.541

(E) From IDBI Bank Limited

 

 

Working Capital Demand Loan

(Secured against first pari passu charge on movable assets, first pari passu charge on current assets, mortgage of immovable properties of the company by second pari passu charge)

90.461

0.000

Cash Credit

 (Secured against first pari passu charge on movable assets, first pari passu charge on current assets, mortgage of immovable properties of the company by second pari passu charge)

105.700

130.908

Letter of Credit

(Secured against first pari passu charge on movable assets, first pari passu charge on current assets, mortgage of immovable properties of the company by second pari passu charge)

86.599

75.502

(F) From Axis Bank Limited

 

 

Term Loan

(Secured against first charge on movable assets, current assets, mortgage of immovable properties of the company and personal guarantee of some of the Directors) [Amount due within one year is R Nil (Rs.35.017 millions)]

0.000

3.503

Total

643.901

439.152

 

Banking Relations :

--

 

 

Statutory Auditors :

 

Name :

Shah Jadavji and Company

Chartered Accountant

 

 

Step-down Subsidiaries :
  • Omnitech Services Limited, Hong Kong
  • Avensus Netherland B.V, Netherlands

 

 

Enterprises owned or significantly influenced by Key Management Personnel or their relatives :
  • Omnitech Technologies Limited, India
  • Wintel Computers Private Limited
  • Atul Hemani HUF
  • Avinash Pitale HUF
  • Omnitech Employees’ Welfare Trust

 

 

Subsidiaries :
  • Omnitech Technologies Inc. USA
  • Europe Omnitech Technology Services B.V., Netherlands
  • Omnitech Services Pte. Ltd., Singapore
  • Omnitech (Singapore) Holding Pte Ltd, Singapore

 

 

 

 

 

 

CAPITAL STRUCTURE

 

As on 31.03.2011

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

20000000

Equity Shares

Rs.10/- each

Rs.200.000 Millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

13860493

Equity Shares

Rs.10/- each

Rs.138.605 Millions

 

 

 

 

 

(a) Of the above 3024820 (3024820) Equity Shares of R10/- each have been issued as fully paid up bonus shares by capitalization of free reserves

 

(b) Of the above 400000 (400000) equity shares of R10/- each issued at a premium of R90/- per share on preferential basis.

 

(c) Of the above 3333333 (3333333) equity shares of R10/- each issued at a premium of R95/- per share In Initial Public Offer.

 

(d) Of the above 719210 (719210) equity shares of R10/- each issued at a premium of R155.51 per shares pursuant to conversion of Share Warrants

 

(e) Of the above 2000 (Nil) equity shares of R10/- each issued at a premium of R112.59 per shares pursuant to conversion of Share Warrants

 

 

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2011

31.03.2010

31.03.2009

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

138.605

138.585

131.393

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

2043.347

1572.008

1080.563

4] Equity Shares Warrants

26.357

26.602

21.930

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

2208.309

1737.195

1233.886

LOAN FUNDS

 

 

 

1] Secured Loans

643.901

439.152

332.259

2] Unsecured Loans

17.380

0.000

0.000

TOTAL BORROWING

661.281

439.152

332.259

DEFERRED TAX LIABILITIES

168.606

90.235

65.886

 

 

 

 

TOTAL

3038.196

2266.582

1632.031

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

1597.833

1225.021

678.245

Capital work-in-progress

186.695

138.597

79.349

 

 

 

 

INVESTMENT

45.581

25.853

138.996

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
425.991
287.114

140.006

 

Sundry Debtors
0.000
0.000

0.000

 

Cash & Bank Balances
63.783
38.613

28.493

 

Other Current Assets
755.852
513.919

584.913

 

Loans & Advances
479.286
355.258

166.325

Total Current Assets
1724.912
1194.904

919.737

Less : CURRENT LIABILITIES & PROVISIONS
 
 

 

 

Sundry Creditors

260.397

70.522

22.435

 

Other Current Liabilities
12.364
16.130

29.441

 

Provisions
244.064
231.141

133.022

Total Current Liabilities
516.825
317.793

184.898

Net Current Assets
1208.087
877.111

734.839

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.602

 

 

 

 

TOTAL

3038.196

2266.582

1632.031

 

 

 

PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2011

31.03.2010

31.03.2009

 

SALES

 

 

 

 

 

Income

3162.512

2164.966

1714.262

 

 

Other Income

7.634

10.530

21.851

 

 

(Loss) / Profit on Sale of Fixed Assets

(0.430)

2.049

0.000

 

 

TOTAL                                     (A)

3169.716

2177.545

1736.113

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Materials Consumed and Other Direct Expenses

1733.232

1225.073

974.665

 

 

Staff Cost

252.087

132.313

100.059

 

 

Administrative and Other Expenses

116.380

83.804

94.686

 

 

Selling and Distribution Expenses

20.746

30.040

30.717

 

 

Miscellaneous Expenditure Written Off

0.000

0.602

0.793

 

 

TOTAL                                     (B)

2122.445

1471.832

1200.920

 

 

 

 

 

Less

PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

1047.271

705.713

535.193

 

 

 

 

 

Less

FINANCIAL EXPENSES                         (D)

59.054

46.245

37.904

 

 

 

 

 

 

PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                                       (E)

988.217

659.468

497.289

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

244.947

156.589

79.501

 

 

 

 

 

 

PROFIT BEFORE TAX (E-F)                               (G)

743.270

502.879

417.788

 

 

 

 

 

Less

TAX                                                                  (H)

228.517

108.984

86.800

 

 

 

 

 

 

PROFIT AFTER TAX (G-H)                                (I)

514.753

393.895

330.988

 

 

 

 

 

Less

APPROPRIATIONS

 

 

 

 

 

Transfer to General Reserve

52.762

20.089

8.500

 

 

Dividend

37.423

20.788

15.767

 

 

Tax on Dividend

6.216

3.533

2.680

 

BALANCE CARRIED TO THE B/S

418.352

349.485

304.041

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

Export Sales (F.O.B Basis)

665.894

467.105

521.295

 

 

Commission Received

0.110

0.687

0.000

 

TOTAL EARNINGS

666.004

467.792

521.295

 

 

 

 

 

 

Earnings Per Share (Rs.)

34.45

27.89

25.19

 

QUARTERLY RESULTS

 

PARTICULARS

 

30.06.2011

30.09.2011

31.12.2011

 

1st Quarter

2nd Quarter

3rd Quarter

Net Sales

960.580

1028.660

1095.460

Total Expenditure

639.750

701.550

747.260

PBIDT (Excl OI)

320.830

327.110

348.200

Other Income

0.560

0.550

1.050

Operating Profit

321.390

327.660

349.250

Interest

24.700

29.260

39.620

Exceptional Items

0.000

0.000

0.000

PBDT

296.690

298.400

309.630

Depreciation

79.210

87.330

100.940

Profit Before Tax

217.480

211.070

208.690

Tax

63.430

45.510

62.480

Provisions and contingencies

0.000

0.000

0.000

Profit After Tax

154.050

165.560

146.210

Extraordinary Items

0.000

0.000

0.000

Prior Period Expenses

0.000

0.000

0.000

Other Adjustments

0.000

0.000

0.000

Net Profit

154.050

165.560

146.210

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2011

31.03.2010

31.03.2009

PAT / Total Income

(%)
16.24
18.09

19.06

 

 
 
 

 

Net Profit Margin

(PBT/Sales)

(%)
23.50
23.23

24.37

 

 
 
 

 

Return on Total Assets

(PBT/Total Assets}

(%)
22.37
20.78

26.14

 

 
 
 

 

Return on Investment (ROI)

(PBT/Networth)

 
0.34
0.29

0.34

 

 
 
 

 

Debt Equity Ratio

(Total Liability/Networth)

 
0.53
0.43

0.42

 

 
 
 

 

Current Ratio

(Current Asset/Current Liability)

 
3.34
3.67

4.97

 

LOCAL AGENCY FURTHER INFORMATION

 

Check List by Info Agents

Available in Report (Yes / No)

1) Year of Establishment

Yes

2) Locality of the firm

Yes

3) Constitutions of the firm

Yes

4) Premises details

No

5) Type of Business

Yes

6) Line of Business•

Yes

7) Promoter’s background

No

8) No. of employees

Yes

9) Name of person contacted

Yes

10) Designation of contact person

Yes

11) Turnover of firm for last three years

Yes

12) Profitability for last three years

Yes

13) Reasons for variation <> 20%

--

14) Estimation for coming financial year

No

15) Capital in the business

Yes

16) Details of sister concerns

No

17) Major suppliers

No

18) Major customers

No

19) Payments terms

Yes

20) Export / Import details (if applicable)

No

21) Market information

--

22) Litigations that the firm / promoter

--

23) Banking Details

Yes

24) Banking facility details

Yes

25) Conduct of the banking account

--

26) Buyer visit details

--

27) Financials, if provided

Yes

28) Incorporation details, if applicable

Yes

29) Last accounts filed at ROC

Yes

30) Major Shareholders, if available

Yes

 

REVIEW OF PERFORMANCE

 

Operating Results

 

The Company continued to achieve strong and desired growth in the financial year 2010-11 into international as well as domestic markets. In the current slowdown where companies were looking at reducing costs, the Company offered its customers a solution that can help them to reduce the costs substantially and this has helped the Company to post a healthy growth rate in spite of the current economic downturn. It has also helped the Company to renew most of the contracts with existing customers.

 

During the Year, the Company achieved Income from Operations amounting to Rs.3162.512 millions as compared to 2164.966 millions in the previous year thereby recording an increase of 46.08%. The Net Profit after tax (PAT) for the year was Rs.514.752 millions as compared to Rs.393.896 millions in the previous year, thereby an increase of 30.68%.

 

Financing Cost

 

The Finance Cost has increased by Rs.12.810 millions as compared to the previous year, which is mainly due to raising of additional working capital facility for covering up the increase in Gross Sales

 

MANAGEMENT DISCUSSION AND ANALYSIS

 

ECONOMIC OVERVIEW

 

Global economic recovery continued gaining strength, aided by improving financial conditions throughout 2010. Improving private demand in developed economies and robust overall demand in emerging market economies helped the global economy to come back on the growth track. Global Economy grew by 4˝ percent in 2010. High unemployment in the developed economies, geopolitical uncertainty in certain regions and rising food and commodity prices are the challenges that might weaken the economic growth. IMF has forecast the world real GDP growth to be about 4˝ percent in 2011 and 2012. Real GDP in advanced economies and emerging and developing economies is expected to expand by about 2˝ percent and 6˝ percent, respectively.

 

Indian Economy has been thriving on its strong fundamentals – led primarily by domestic-demand; well-diversified mature segments like industry, agriculture and services etc.; well regulated financial sector and capital markets; promising demography of young and skilled population and sizeable and prospering middle class. Riding on these very fundamentals and supported by a favourable south-west monsoon, Indian Economy posted strong recovery in the fiscal years 2010-11(FY 11). Revised estimates of Central Statistical Office have projected the Indian Economy to grow by 8.5 percent in FY 11.

 

INDUSTRY OVERVIEW

 

GLOBAL IT SCENARIO

 

After the y-o-y contraction recorded in 2009, global technology products and services related spends registered an estimated growth of 4 percent in 2010 to reach USD 1.6 trillion. The growth was driven by US in addition to emerging verticals and emerging geographies. Hardware spends worldwide increased by 6.4 percent. The IT services spend increased by 1.4 percent within which IT outsourcing grew by 2.4 percent. Business Process Outsourcing (BPO) grew by 4 percent while software products grew by 3.7 percent. Within IT outsourcing, global sourcing grew by 10.4 percent. Restructuring in wide ranging contracts and reduction in deal sizes were witnessed in 2010 as customers came to terms with new business models and budgetary constraints. There was an increased adoption of multi-sourcing, which was partly precipitated by increased maturity of Indian providers. Established service providers went ahead with select acquisitions in order to enhance skills and scale. Despite cost and talent remaining the essential considerations, customers are constantly demanding more. They are asking for more immediate value from IT besides evaluating its participation in their forward business strategies that support growth and innovation. Service providers, subsequently, are adopting agile methods aimed at operational excellence through ongoing innovation, diversification, partnerships/alliances and new business models.

 

INDIAN IT-BPO SECTOR

 

India has maintained its dominance as the leading global shoring destination with a 55 percent share of global IT outsourcing and BPO market in 2010. This can be attributed to a set of factors unique to India. Besides unparalleled cost advantage, India has the world’s largest pool of employable talent, service delivery infrastructure across multiple geographically dispersed locations within the country and a supportive policy regime.

 

Transcending these basic value propositions, Indian industry is increasingly aligning itself for more collaborative contracts with inherent performance management and risk-reward frameworks. It is increasingly being driven by transformational business impact, service delivery maturity, scalability and sustainability. Indian IT-BPO sector recorded estimated revenue of USD 88.1 billion in FY 2011. IT software and services sector (excluding hardware) accounted for USD 76.1 billion. With an estimated addition of 240,000 employees, direct employment is expected to reach nearly 2.5 million, while indirect job creation is estimated to reach 8.3 million during FY 2011. As a proportion of national GDP, its contribution is estimated at 6.4 percent. With export revenues at USD 59 billion, its share of total Indian exports (merchandise and services) is estimated to reach 26 percent in FY 2011.

 

Exports market

During the year, there was a consistent demand from the US resulting in its share increasing to 61.5 percent. The growth was significantly aided by growth from emerging markets in Asia Pacific and rest of the world. The year was characterized by broad based demand across traditional segments such as BFSI at the one hand and emerging verticals of Retail, Healthcare, Media and Utilities at the other. With a growth of 22.7 percent and revenue of USD 33.5 billion, IT services segment was the fastest growing. BPO segment grew by 14 percent to reach USD 14.1 billion in FY 2011. The engineering design and product development segment grew by 13.6 percent to take its revenue to USD 9 billion.

 

Domestic market

Sustained economic momentum, rapid advancement in technology infrastructure, increasing competitiveness of Indian organizations, emergence of business models that help provide IT to new customer segments and enhanced focus by the government are the key drivers for increased technology adoption in India. IT-BPO revenues (excluding hardware) in domestic market grew by 16 percent to reach R787 billion in FY 11.

 

  • Government sector continue to be a key catalyst for increased IT adoption- through sectoral reforms that encourage IT acceptance. These include National eGovernance Programmes (NeGP) and the Unique Identification Development Authority of India (UIDAI) programme.

 

  • IT services features amongst the fastest growing segments in the Indian domestic market. Driven by localized strategies of service providers, it grew by 16.8 percent to reach R501 billion during FY 11.

 

  • Driven by demand from voice based services, in addition to adoption from emerging verticals, new customer segments, and value based transformational outsourcing platforms; domestic BPO segment is expected to grow by 16.9 per cent in FY2011 to reach Rs.127 billion.

 

  • Indian software product segment is estimated to have grown by 14 per cent to reach R157 billion.

 

FUTURE OUTLOOK

 

IT spend is directly linked to growth in GDP. In line with the projected Global GDP growth, IT spends are expected to grow by about 4 percent in 2011. Accelerated recovery in emerging markets is expected to generate more than half of all new IT spends worldwide. 2011 is likely to see a major surge in the use of private and public cloud and mobile computing on a variety of devices and through a range of new apps. IT services is expected to grow about 3.5 percent in 2011 and 4.5 percent in 2012. Customers will increasingly evaluate how their investment in IT can further their business objectives of ROI based transformation, leading to an increase in project based spending.

 

Services such as virtualisation, consolidation and managed services will drive opportunities in the market. In order to reduce hardware infrastructure cost and achieve scalability on-demand, organisations will look for alternative IT models such as Cloud, On-demand, SaaS, etc.

 

In the coming years, the global IT-BPO industry is likely to undergo a paradigm shift across five parameters:

 

Growth will be driven by new markets. SMBs, Asia, public sector and government-influenced entities will form the priority customer base.

 

Customers will demand transformative value proposition that go beyond low cost replications. As technology creates virtual supply chains, customers will require a seamless experience across time zones and geographies which will increase demand for innovation and end-to-end transformation.

 

Offerings that are high-end and deeply embedded in customer value chains will emerge. Services and delivery will become location-agnostic leading to new opportunities like Remote Infrastructure Management. Solutions for domestic market will be a key focus area.

 

Government pressure to create local jobs coupled with the need for local knowledge will alter the employee mix. There will be a much greater focus on ongoing development of specialised skills and capabilities.

 

Driven by a focus on expertise and intellectual property, offerings will shift from piecemeal, technology-centric applications to a range of integrated solutions and higher-end services, spanning new service lines. Indian IT-BPO sector has begun to explore market opportunities beyond US and UK. By 2020, new segments (SMBs), new verticals (Public Sector and Defence, Healthcare, Utilities, Printing and Publishing) and new geographies (BRIC) will account for 50-55 percent growth in addressable market. India supply base is well placed to tap this potential and suitably exploiting these emerging opportunities both in global and domestic markets can help India reach USD 130 billion revenues by FY 15, a CAGR of 14 per cent. By then, Indian IT-BPO industry is expected to contribute about 7 percent to the annual GDP and create about 14.3 million employment opportunities (direct and indirect).

 

OPERATIONAL OVERVIEW

 

In 23 years of their active participation, they have witnessed several phases in the evolution of Information Technology, in India and across the globe. They have also evolved as an organization all along and transformed their selves from pure-play System Integrator to a pure-play Technology Services Company. In the process, they have grown. Today, they serve over 450 clients globally, employ over 1185 people, and have direct business presence in India, Singapore, Hong Kong, Netherlands and USA. Their revenue has grown at a CAGR of 36% over the last five years. They are the first Company in India to have multi-location DR sites. Today, they stand tall as a global organization that offers tailored solutions for SMBs, has a non-linear business model, is a leader in business continuity domain, enjoys excellent EBITDA margins and proactively adopts newer technologies. Having achieved a significant spread, scale and maturity, they are fast emerging as IT transformational partner for mid market customers in emerging markets. Increasingly their customers are engaging us at strategic levels. Increasingly, they are getting turnkey projects and long-term projects thereby securing better visibility.

 

Strategic Acquisition

Their consistent efforts towards widening and deepening their footprints in Europe culminated in strategic acquisition of Avensus, a Netherlands based managed service provider in February 2011. Avensus has annual revenues of USD 15 million and EBIDTA margin of 8% (FY 2010). The acquisition was done at a total consideration of USD 9 million. They engaged KPMG towards post merger integrations and expect to complete the integration in the first half of FY 12. Besides its existing business revenues, the acquisition brings with itself tremendous opportunities for cross selling of Omnitech’s Managed Services, Software Testing Services, Disaster Recovery and Business Continuity Services. Avensus is a pioneer in the high grade security services and solutions in Europe and the same opens equally promising cross selling opportunities for Omnitech in Asia Pacific region including India, Singapore and Hong Kong.

 

Cloud based offerings

Cloud as a technology is not new. What’s new is cloud as a business model, as an operational model. They have seen this trend ahead of time and prepared ourselves. At Omnitech, they have already been providing IaaS (Infrastructure as a Service) through their DR/BCP practice and SaaS (Software as a Service) through their PMS practice. They have tested and done soft launch of their private cloud service offering and are ready for its full commercial launch in the first half of FY 12. Their two DR centers at Navi Mumbai and Hyderabad provide us a ready infrastructure to launch as well as scale up their services. They have been fast moving away from linear to non-linear model and the launch of their Cloud offerings will further improve their Revenue per employee

 

Remote Infrastructure Management Services (RIMS)

They started offering RIMS to their customers as early as in 2008, with a Network Operating Center (NOC) manned by 5 people. The success of their RIMS offerings had led to a 120 seat NOC, now operating from their DR centers at Navi Mumbai and Hyderabad. Owing to increasing demand, they plan to further ramp up their NOC capacity in FY 12. They also plan to offer remote application management services and remote back up services in addition to RIMS.

 

Industry Vertical Focus

While BFSI continues to remain the major focus vertical for us, they have widened their industry vertical focus to include education, retail and healthcare as new focus areas. Going by their initial results and the future projection for these three verticals, they expect them to contribute close to 20% of their revenues by FY 13.

 

PERFORMANCE OVERVIEW

 

At Omnitech, they continued to grow ahead of their economy and industry once again. Their strategy of seeking sustainable growth based on the ftheir pillars – People, Process, Infrastructure and Tools & Technology – is working well for them. Their approach towards business continues to be driven by Innovation, Operational Excellence and Customer Delight. Together with these, they are rigorously implementing their business vision of crossing Rs.11000 million revenue benchmark by FY 14. Innovation, expansion, alliances and M&A continue to be the key constituents of their business strategy.

 

The way they have been managing qualitative aspect of their growth gets reflected in the sheer consistency which they have achieved in the recent years. Between FY 08 and FY 11, the compounded annual growth rate (CAGR) of their revenues is 26.42%, their EBIDTA is 26.85% and their PAT is 16.09%. The fact that they have been scaling up their people, infrastructure and geographical capabilities all along makes their profitability even robust. Key points of their financial performance in the fiscal year 2010-11 are as follows:

 

 

Their total operating income grew by 58.55 percent to reach Rs.3463.400 millions in FY 11 from Rs.2185.300 millions in FY 10

 

Their EBIDTA grew by 58.46 percent to reach Rs.1070.900 millions in FY 11 from Rs.675.800 millions in the previous year

 

Their Profit after Tax grew by 35.95 percent to reach Rs.517.700 millions from Rs.380.800 millions in the previous year

 

They have consciously been reducing their dependence on top 10 customers. Revenue contribution from top 10 customers came down to 45% in FY 11 from 60% in the previous year. They have also been geographically diversifying their revenue base in order to reduce their dependence on a particular geographic market. India continues to be the single largest contributor to their revenues. However, its contribution to their revenues came down to 74.5% in FY 11 from 79% in the previous year. Revenues from Far East and Japan recorded the fastest rise during the year by taking its contribution to 9.6% from 4% in the previous year.

 

AWARDS AND RECOGNITIONS

 

During the year, the Company was recognized and awarded with the following:

 

1. Channel World Premier 100, 2010 Award

2. Kaseya ‘Managed Services Award’, 2010

3. Forbes Asia Best under Billion Company Award 2010

4. BCI Continuity & Resilience Awards, 2010

5. WebSphere Partner of the Year 2010' award by IBM Software Universe

6. The Second Annual Inc. India 500 Awards (2010)

7. Deloitte Technology Fast 500 Asia Pacific 2010

8. Channel Excellence Awards 2011

9. Channel World Premier 100, 2011 Award

10. Cyberoam Award, 2011

 

CONTINGENT LIABILITIES

 

Particulars

31.03.2011

31.03.2010

 

Rs in Millions

Contingent Liability (Outstanding guarantees given by banks  in favor of various government authorities and others, corporate guarantees)

755.157

6.169

TOTAL

755.157

6.169

 

FIXED ASSETS

 

  • Business Acquisition
  • Office Building
  • Land at MIDC
  • Land at Pune
  • Software
  • Computer Systems
  • Furniture and Fixture
  • Office Equipments
  • Car
  • Capital Expenditure

 

 

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.51.44

UK Pound

1

Rs.81.96

Euro

1

Rs.67.61

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

8

PAID-UP CAPITAL

1~10

7

OPERATING SCALE

1~10

6

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

7

--PROFITABILIRY

1~10

8

--LIQUIDITY

1~10

6

--LEVERAGE

1~10

6

--RESERVES

1~10

8

--CREDIT LINES

1~10

6

--MARGINS

-5~5

-

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

YES

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

62

 

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

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

-

NB

                                       New Business

-

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.