Hinduja Global Solutions

The Directors are pleased to present their Report on the business and
 operations of your Company for the year ended 31st March 2008.
 
 Financial Results
 
                                              (1)             (2)
 For the year ended 31st March              2008            2007#
 
 Operating Income                      35,798.20       15,224.64
 
 Other Income                             997.04          317.58
 
 Total Income                          36,795.24       15,542.22
 
 Operating Expenses                    27,720.85       12,352.80
 
 Depreciation                           2,337.12        1,143.16
 
 Financial Expenses                       135.21           35.10
 
 Profit/(loss) before tax               6,602.06        2,011.16
 
 Provision for tax (incl. deferred tax)   721.44           (1.30)
 
 Profit after tax                       5,880.62        2,012.46
 
 Add: Balance brought forward 
 from Previous year                       495.38         (114.41)
 
 Profit Available for Appropriation     6,376.00        1,898.05 
 
 Dividend
 
 - Final (Proposed)                     2,053.80        1,026.90
 
 - Dividend Tax                           349.04          174.52
 
 Transferred to General Reserve           588.06          201.25 
 
 Balance Carried Forward                3,385.10          495.38 
 
 Earnings per share (Rs.) -Basic           28.63           19.18
 
 -Diluted                                  28.35           19.18
 
 (Rs.  in lacs except share data)
 
 (3)               (4)                  (5)
 2007@             2008                2007*
                     IT/ITES Consolidated
 
 30,496.31      63,704.87             26.547.61
 
    555.57       3,636.07              1,611.37
 
 31,051.88      67,340.94             28,158.98
 
 24,463.49      54,319.59             23,880.28
 
  1,886.21       2,795.40              1,436.10
 
    134.40         145.05                  5.32
 
  4,567.78      10,080.90              2,837.28
 
     83.06       1,339.44                (91.41)
 
  4,484.72       8,741.46              2,928.69
 
 
 - Pursuant to a Scheme of Arrangement and Reconstruction under Sections
 391 to 394 and other applicable provisions of the Companies Act, 1956
 (the Act) between Hinduja TMT Limited (now known as Hinduja Ventures
 Limited) and your Company and their respective Shareholders and
 Creditors (Scheme) the Information Technology/ Information Technology
 Enabled Services (IT/ITES) Undertaking of Hinduja TMT Limited was
 demerged and transferred to your Company on a going concern basis with
 the Appointed Date of the Scheme being 1st October 2006. The Scheme was
 sanctioned by the Honble High Court of Judicature at Bombay vide its
 Order dated 23rd February 2007 and was filed with the Registrar of
 Companies, Maharashtra on 7th March 2007, which is the Effective Date
 of the Scheme. The Equity Shares of your Company - HTMT Global
 Solutions Ltd., were listed on the Bombay Stock Exchange Limited
 (BSE) and National Stock Exchange of India Limited (NSE) on 19th
 June 2007.
 
 - Comprises the results of the IT/ITES segment of Hinduja TMT Limited
 for the 6 months period from 1st April 2006 to 30th September 2006 as
 added to the Companys results for the 6 months period from 1st October
 2006 to 31st March 2007, to facilitate comparison with Column 1.
 
 - Materially reflect the results for the period of 6 months from 1st
 October 2006 to 31st March 2007, post demerger.  Accordingly, the
 Consolidated figures of current accounting year are not comparable with
 the previous years figures.
 
 Review of Financials
 
 Total income for the year is Rs. 367.95 Crores consisting of operating
 income of Rs. 357.98 Crores and other income of Rs. 9.97 Crores. Profit
 after tax for the year is Rs. 58.81 Crores (15.98% of total revenues).
 
 On a Consolidated basis, the revenues stood at Rs. 673.41 Crores with a
 profit of Rs. 87.41 Crores.  The Companys working results are not
 comparable to the previous year, due to the demerger with the Appointed
 Date being 1st October 2006.
 
 The highlights of the financial results (on a comparative basis) were:-
 
 - Increase in revenues by 17.4%.
 
 - Domestic turnover of Rs. 107.12 Crores 
 
 - establishing ourselves as a front line Company in the domestic
 market.
 
 - Employee headcount at 12,800 (Previous Year 9,953).
 
 - The EBITDA margin improves by 300 basis points from 20% to 23%.
 
 - The PAT margin has increased by 200 basis points from 14% to 16%.
 
 Dividend
 
 Your Directors have recommended a dividend of Rs. 10/- per share (100%
 on the face value of Rs.10/-) for the current year.
 
 The dividend payout will absorb Rs. 2,402.84 lacs, including dividend
 tax. Dividend payout (including dividend distribution tax), as a
 percentage of net profit would be 41% for the year.
 
 Business Review
 
 Global BPO Industry Trends
 
 While releasing their publication Strategic Review of Indian IT/ITES
 Industry 2008, Nasscom has stated that despite weak global markets, the
 Indian IT industry continues to perform very well and is set to achieve
 a healthy 33 percent growth in fiscal year 2008 (FY08).  They project
 that the positive market indications and strong records support the
 optimism of the industry in achieving its aspired target of  billion
 in software and services exports and -75 billion in overall software
 and services revenue by fiscal 2010. In their view, the robust growth
 of the Indian IT-BPO industry by over 33 percent in the current fiscal
 year reinforces the confidence of global corporations in India. This
 trend indicates that the industry is firmly poised for broad growth
 across industry and service lines. It strengthens Indias leadership
 position as the primary sourcing location for software IT
 experimentation and business process related services.
 
 Though the technology spend by corporations in the US has been
 curtailed due to an economic slowdown, global technology spending
 forecasts remain strong, supported by the momentum in the emerging
 market economies, including the Asia Pacific countries.
 
 The US continues to remain the biggest market for Indias software
 industry with a share of 61 percent. In addition, exports to Europe
 have expanded by over 5 5 percent since 2004, and the UK now accounts
 for 1 8 percent of Indias software services while continental Europe
 accounts for 12 percent.
 
 But there are contrarian views as well. A recent report released by
 Forrester Research Inc. said US IT buyers, concerned that the economy
 is slumping, may spend less than projected this year, reducing
 worldwide demand for computers, software and services.
 
 While US spending will climb 2.8 percent to 2 billion, missing an
 earlier forecast for 4.6 percent growth, global spending will rise 6
 percent to .7 trillion, instead of the 9 percent originally
 predicted, the report said. As per that report, the current
 belt-tightening is not temporary. The industry will have to operate at
 a new performance level. A study by McKinsey suggests that the BPO
 firms will have to continue to focus on many critical parameters of
 operational excellence- shift utilisation, productivity, support costs,
 span of control and attrition — to effectively deal with a weakening US
 Dollar and a weak economy.
 
 Some of the key trends emerging in 2008 are:
 
 1.  Consolidation of the competitive landscape:
 
 Scale will be more and more important as clients see global delivery
 and financial stability to be key criterion for choosing their
 outsourcing partners.  As a result, smaller BPOs with low-end,
 commoditised services will find it difficult to raise prices, and will
 be unable to pay enough to retain the best talent. In 2008, we believe
 that this will become critical not just for sustaining competitiveness
 but also for the very survival of smaller vendors. The vendors that
 succeed in differentiating their offerings and thereby move up the
 value chain will see new growth or exit options open up via better
 access to funding and M&A activity by larger players. The others, who
 are unable to exit the low price, low-cost game, will start fading away
 in the competitive landscape.
 
 2.  Cost management and efficiency drivers:
 
 Larger Companies may hedge forex exposures in the near term, but cannot
 disregard the threat of lower competitiveness in the long run. Large
 global vendors and focused, niche providers may be able to raise
 billing rates, but this will not compensate for the entire exchange
 loss, and will need a parallel productivity increase to prevent margins
 from weakening further.
 
 Cost rationalisation will be inevitable in 2008 for Indian vendors,
 whether small or large. The most obvious impact will be on wage hikes
 and executive perks. Recruitment is also expected to slow down
 marginally until mid-2008, as vendors push utilization rates up
 aggressively. Apart from the obvious cost heads, Companies will also
 look to optimise various administrative costs, in areas like transport
 costs, procurement, travel, telecom, etc.
 
 3.  Growth of the Indian Domestic Market:
 
 With the rise of Indian middle class and their rising expectations, the
 demand for world class service offerings in India is growing larger.
 Companies serving the Indian consumer now see the need to differentiate
 their offerings to attract and retain their customers. This creates
 opportunities for the Indian BPOs to bring their world class best
 practices in contact center management to Indian clients.  The market
 for domestic BPO services is estimated by NASSCOM to be in excess of
 USD 1 bn. The organised segments in this category have a less than 10%
 market share in this segment. This business will be a key growth factor
 for growth of BPO business for India.
 
 The cost and talent pressures will drive vendors to smaller cities at a
 faster rate. With improving attention to education across India and
 State Governments recognising the potential of the outsourcing sector,
 Companies are finding themselves almost spoilt for fresh location
 choices.  Proximity, connectivity to larger cities and good education
 infrastructure seem to be guiding the discovery of Tier III
 destinations like Udaipur, Bhopal, Vishakhapatnam, Nagpur, Chandigarh,
 Ahmedabad, Nashik, etc. These emerging cities offer infrastructure and
 realty advantages, lower attrition, lower operating costs and
 competitive talent at lower wages than erstwhile preferred locations.
 
 4.  Vendors to aggressively diversify client base
 
 The focus on the US market is already reducing.  NASSCOM analysis
 reveals that in IT outsourcing, the share of US-led business was about
 67 percent in 2006-07. We believe that this will reduce further in 2008
 for several reasons. First, a probable US recession is causing vendors
 to aggressively de-risk their sources of business. Secondly, the
 growing maturity of buyers in Europe, Middle East and Asia is opening
 up new, untapped markets.  Thirdly, vendors are maturing rapidly and
 have acquired the financial, managerial and operational capabilities to
 build and run centers at multiple locations around the world. All of
 this is driving the global sourcing movement in the industry, and 2008
 will see this playing out further.
 
 5.  Greater focus on the midmarket opportunity
 
 The midmarket segment in the US and Europe has been traditionally
 underserved for a variety of reasons, including lack of knowledge
 regarding offshoring, unattractive deal sizes for the premium vendors,
 etc. However, rising outsourcing maturity of early buyers amongst
 midmarket Companies is driving their propensity to deploy the more
 expensive services of larger vendors. At the same time, intensifying
 global competition is encouraging the larger vendors to look beyond
 Fortune lists.
 
 Some Indian vendors have laid down strategies to enhance their
 midmarket coverage via select acquisitions. We believe that in 2008
 many more vendors will create differentiated offerings for the
 midmarket segment, and target this business aggressively through
 defined strategies and calculated investments.
 
 Performance of HTMT Global Solutions
 
 Fiscal year 2007-08 was one of the strongest years for the BPO business
 of HTMT Global Solutions. Its revenues expanded by 17.4 % from previous
 year, while the PAT margin improved from 13% to 16%. This performance
 was in the face of some macro-economic challenges which affected the
 industry in general.
 
 2007-08 saw signs of economic slowdown in the US. It was also the year
 that the Indian Rupee and the Philippines Peso appreciated
 significantly against the US Dollar. The Sub-Prime mortgage crisis in
 the USA also affected some of the larger BPO vendors, who have clients
 in the mortgage vertical.
 
 HTMT Global Solutions effectively negotiated these changes thrown up by
 the unforeseen developments in the macro-economic environment. It
 undertook proactive forward currency hedges to protect its export
 earnings. It also diversified its currency risk by rapidly growing its
 Indian Rupee business, which contributed to 15% of its revenue and
 helped to mitigate the impact of the depreciating US dollar on the
 profitability. Also, earnings of US subsidiary Affina are not subjected
 to margin contraction when the dollar weakens, because the revenues and
 the costs are both denominated in US dollars. Other successes came from
 being able to negotiate price increases from most of its large
 customers.
 
 As HGSL did not have any significant exposure to the US mortgage
 industry, the slowdown in that vertical has not had much of an impact
 on HGSLs business.
 
 Subsidiaries
 
 Pacific Horizon Limited, a wholly owned subsidiary of your Company
 incorporated under the laws of Mauritius, the principle activity of the
 Company consists of investments in Overseas Subsidiary and investment
 of Surplus Funds in short-term financing activities. Pacific Horizon
 Limited owns 100% of the share capital of Source! HTMT Inc, USA, and
 C-Cubed NV, Netherlands.
 
 Source 1 HTMT Inc, USA, a wholly owned subsidiary of Pacific Horizon
 Ltd, Mauritius, specializes in marketing and providing both voice and
 non-voice related Customer Contact and Business Process Outsourcing
 services to its clientele.
 
 Source 1 HTMT Inc, USA, has a subsidiary in North America namely,
 Affina LLC, and two subsidiaries in Europe namely, HTMT Europe Ltd, UK,
 and Hinduja TMT France. Souce 1 HTMT is essentially a marketing outfit
 and operates on a fixed margin on the business secured for the parent
 company and hence its profit margins are not comparable to that of
 Affina, which is an operating call center Company.
 
 During the current year, Source 1 HTMT Inc, USA, has come out with
 strong operating results, partly due to the sizeable increase in the
 volume of business and increase in rates secured from existing clients
 in both voice and data related business for offshore delivery by
 Sourcel HTMT and partly on account of the improved performance of
 Affina LLC, arising from higher gross revenue secured from existing
 clients and a few new logos, improvement in the operational efficiency,
 and rationalization of Telecom and Heath Insurance expenditure.
 
 Affina LLC, which was acquired in November 2006, and having two
 subsidiries namely RMT LLC and Affina Company, by Source1 HTMT Inc,
 USA, operates seven delivery centers in USA and Canada and is focusing
 on delivering high quality services to its forty plus clients through a
 comprehensive suite of customer interaction solutions, that include
 inbound customer care, inbound sales and order taking, analytics and
 market research, product and literature fulfillment, and business
 process outsourcing. Affinas clients include some of the worlds most
 recognised and respected companies and brand names in different
 verticals like Consumer Electronics, Consumer Products and Packaged
 Goods, Telecommunications, Automotive, Pharmaceuticals and Publishing.
 The verticals and domain expertise of Affina are complementary to the
 existing business and domain expertise of your Company.
 
 During the year, the operations of Affina have been turned around from
 a loss making business unit into a profitable business, thanks to the
 coordinated efforts of the Affina management team and the guidance and
 direction provided by Source 1HTMT Inc. representatives in Affinas
 joint Executive Management Team.
 
 The statement under Section 212 of the Act, in respect of the
 subsidiaries is attached.
 
 Addressing Social Concerns
 
 The Company has now defined a roadmap for Corporate Social
 Responsibility aimed at strengthening our relationship with local
 communities in which we operate.  The Company is committed to being a
 responsible Corporate Citizen and is working towards building strong
 partnerships with our key stakeholders.
 
 The Company has commenced working with Samarthanam Trust for the
 disabled. Samarthanam provides educational assistance to visually
 impaired and physically challenged children from economically
 disadvantaged backgrounds. The Company has committed, with the
 overwhelming support of its employees, to partner with Samarthanam on
 various fronts, which includes employee funded sponsorship, sharing of
 learning materials, educational tuition and guidance, mentoring and
 counselling. The Company is committed to providing children of
 Samarthanam with a future, which will lead to employment within the
 organisation.
 
 HCSL along with its subsidiaries over the last year has supported a few
 national charity events and some local ones as well.
 
 1.  Cookout for the Cure, benefiting the Susan C. Komen Foundation for
 Cancer research. AFFINA held a cook out at all Peoria locations and
 raised funds that presented to the Susan G. Komen race for the cure
 foundation.
 
 2.  South Side Mission, AFFINA donated funds to The South Side Mission
 to support Camp Kearney. This camp was designed to work with
 underprivileged youth to give them a wonderful experience that they
 otherwise could not afford.
 
 3.  Saint Jude, AFFINA has sponsored several events from dessert days
 to cook out and to upcoming event called Bowling for Kids event to
 raise money for Saint Judes Childrens Hospital.
 
 HTMT, Philippines Branch in cooperation with the University of St.Tomas
 Outreach Club and Humanities Organization went to the New Bilibid
 Prison (NBP) to conduct an outreach program for some 6,000 inmates in
 the NBP medium security prison. HTMT was able to send boxes of food,
 toiletries and clothes courtesy of kind-hearted donors who participated
 in the week-long donation drive prior to the activity. A team led by
 the Human Resources Group personally handed over the said donations to
 the officers of NBP.
 
 HTMT employees, spearheaded by the Human Resources Group, initiated a
 donation drive for the elderly (mostly abandoned and neglected parents
 and grandparents) housed at the Golden Acres.  Employees gave old
 clothes, canned goods and other slightly used items. Golden Acres is a
 haven for the aged. It accommodates more than 200 people.
 
 Your Company contributes for social upliftment through various
 charitable institutions/ organisation working for the upliftment of the
 poor and destitute communities in both rural and urban areas, helping
 them to discover alternatives that can lead to their socio-economic
 independence, self sustainability and better health.
 
 During the year, your Company made a donation of Rs 10 lacs for social
 projects.
 
 Communication and Public Relations
 
 Your Company continues to focus on communication with key stakeholders
 of the business. The leadership team of the organisation is strongly
 aligned with industry bodies, the wider financial community, including
 analysts, investors and educational institutions. The Company continues
 to work towards building the brand of the Company in a manner which
 espouses the intrinsic values and tenets of Company culture.
 
 The Company has also invested in creating an internal brand which
 projects and embodies our fundamental belief in our people. Companys
 quarterly global magazine, monthly HR newsletter, and ongoing reward
 and recognition activities, build and engender loyalty to the Company.
 Companys leadership is committed to connecting with all levels of the
 organisation through regular and structured communication sessions
 which continue across Companys global locations.
 
 Your Companys financial results, important developments and
 achievements are communicated and uploaded on its website
 www.htmtglobal.com
 
 Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
 Certification
 
 Chief Executive Officer and Chief Financial Officer (Executive Vice
 President - Global Finance) Certification as required under Clause 49
 of the Listing Agreement, and Chief Executive Officer declaration about
 code of conduct are furnished in Annexure A and A-l to this Report.
 
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings and Outgo
 
 The prescribed particulars as required under Section 217(1) (e) of the
 Act relating to Conservation of Energy, Technology Absorption and
 Foreign Exchange earnings and outgo are furnished in Annexure - B to
 this Report.
 
 Corporate Governance
 
 On 7th June 2007, BSE being the designated exchange granted
 in-principle approval of listing and the Companys shares were listed
 on BSE and NSE with effect from 19th June 2007. The Company is required
 to comply with the provisions of the Listing Agreement entered into
 with the Stock Exchanges with effect from 19th June 2007, the date of
 listing.
 
 As required under Clause 49 of the Listing Agreements, a detailed
 report on Corporate Governance forms Annexure-C to this Report.
 
 The Statutory Auditors of the Company have examined the Companys
 compliance and have certified the same as required under the Listing
 Agreements. The certificate is reproduced as Annexure-D to this Report.
 
 Management Discussion and Analysis Report
 
 Further, a separate Management Discussion and Analysis Report covering
 a wide range of issues relating to performance, outlook etc., is
 annexed as Annexure - E to this Report.
 
 Compensatory ESOP
 
 The HTMT Technologies Limited Compensatory Employees Stock Option Plan,
 2006 (ESOP 2006), which forms an integral part of the Scheme, had
 been formulated to compensate the transferred employees of Hinduja TMT
 Limited into the Company in respect of the stock options granted to
 them under the Hinduja TMT Limited Employees Stock Option Plan 2001
 which would have otherwise lapsed on coming into effect of the Scheme.
 The Board of Directors granted 308860 Stock Options to the transferred
 employees on 7th March 2007, which is the Grant Date under the ESOP
 2006.  The disclosures required to be made under the Securities
 Exchange Board of India (Employee Stock Option Scheme and Employee
 Stock Purchase Scheme) Guidelines, 1999 are given in Annexure - F to
 this Report.
 
 Fixed Deposits
 
 Your Company has not accepted any fixed deposits from the public and,
 as such, no amount of principal or interest was outstanding as on the
 balance sheet date.
 
 Directors
 
 Mr. Rajendra Chitale, Director of your Company, is liable to retire by
 rotation at the ensuing Annual General Meeting (AGM) and being
 eligible, offers himself for re-appointment.
 
 Mr. Somabrata Mandal, Director of your Company also retires by rotation
 at the ensuing AGM, but has not offered himself for re-appointment on
 account of his other commitments. Your Board recommends that the
 vacancy that would be caused by Mr. Mandals retirement, be not filled
 at the ensuing AGM. Your Board however intends to fill up the vacancy
 at a later date.  A resolution to this effect is being placed at the
 ensuing AGM for approval of members. The Board places on record its
 appreciation for the valuable contributions made by Mr. Mandal during
 his tenure.
 
 Mr. Rangan Mohan was appointed as an Additional Director of the Company
 with effect from 31st October 2007. Mr. Mohan is a B.Tech Chemical
 Engineer from the University of Madras in India and is a Post Graduate
 in Management Studies from the Indian Institute of Management,
 Ahmedabad.
 
 Your Companys Compensation Committee and Committee of Directors were
 reconstituted with the appointment of Mr. Rangan Mohan to the said
 Committees with effect from 31st October 2007.
 
 Directors Responsibility Statement
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors,
 based on the information and documents made available to them, confirm
 that:
 
 i) In the preparation of annual accounts for the year ending 31st March
 2008, the applicable accounting standards have been followed. There are
 no material departures in the adoption and application of the
 accounting standards;
 
 ii) They have selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 your Company at the end of the financial year and of the profit of your
 Company for that period;
 
 iii) They have taken proper and sufficient care to the best of their
 knowledge and ability for the maintenance of adequate accounting
 records in accordance with the provisions of the Companies Act, 1956
 for safeguarding the assets of your Company and for preventing and
 detecting fraud and other irregularities;
 
 iv) They have prepared the annual accounts on a going concern basis.
 
 Auditors
 
 M/s Price Waterhouse, Chartered Accountants, the Statutory Auditors of
 your Company, retire at the conclusion of the forthcoming Annual
 General Meeting of your Company and being eligible offer themselves for
 re-appointment. The Board recommends the re-appointment of Auditors.
 
 Exemption from attaching accounts and other documents of subsidiaries
 
 Your Company has been granted exemption by the Central Government under
 Section 212(8) of the Act from attaching the annual accounts and other
 documents of its subsidiary companies to the Annual Accounts of the
 Company, vide letter No. 47/235/2008- CL-III dated 18th July 2008.
 Accordingly, the Annual Accounts and other documents for the year ended
 31st March 2008 of the subsidiary companies are not attached to the
 Annual Report. The Accounts of the subsidiaries will be made available
 for inspection by any member of the Company at its Registered Office
 and also at the Registered Office of the concerned Subsidiary. The
 Accounts of the subsidiary companies and detailed information will be
 made available to the members upon receipt of request from them.  The
 summary of key financials of the Companys subsidiaries as provided in
 the approval is included in this Annual Report.
 
 Employees Particulars
 
 Particulars of employees as required under Section 217(2A) of the Act
 and the Companies (Particulars of Employees) Rules 1975 as amended,
 forms part of this Directors Report. However, in accordance with the
 provisions of Section 219(1) (b) (iv) of the Act this Report is being
 sent to all the shareholders of the Company excluding the aforesaid
 information. Members interested in obtaining the said information may
 write to the Company Secretary at the Registered Office of the Company.
 
 Acknowledgements
 
 Your Board takes this opportunity to thank the customers, vendors,
 business partners, shareholders and bankers for the faith reposed in
 the Company and also thank the Government of India, various regulatory
 authorities and agencies for their support and looks forward to their
 continued encouragement. Your Directors place on record their sincere
 appreciation of the contribution of the Companys most important asset,
 viz. the employees, who through their competence, hard work and
 co-operation have enabled the Company to achieve consistent growth.
 
                                     For and on behalf of the Board
 
                                              Ramkrishan P. Hinduja
                                                           Chairman
 Place: Mumbai
 Date : 31st July 2008