The Directors are delighted to present their Fourteenth Report on the
business and operations of Hexaware Technologies Limited (hereafter
referred to as `Hexaware') together with Audited Accounts for the
financial year ended December 31, 2006.
Year ended December 31, 2006 2005 Growth %
Rs. Million Rs. Million
Income from Operations 8,482.14 6,786.62 24.98
Other Income 281.67 145.74 93.27
Total Income from Operations 8,763.81 6,932.36 26.42
Profit before Depreciation & Tax 1,561.34 1,222.24 27.74
Less : Depreciation 198.58 209.90 (5.40)
Profit before taxation 1,362.76 1,012.34 34.61
Less: Provision for taxation
Current Tax 115.54 43.65
MAT Credit Entitlement (8.40) -
Deferred Tax (11.30) 38.96
Fringe Benefit Tax 24.59 14.76
Net Profit after tax 1,242.33 914.97 35.78
Year ended December 31, 2006 2005 Growth %
Rs. Million Rs. Million
Income from Operations 4,126.92 3,557.93 15.99
Other Income 533.29 142.96 273.03
Total Income from Operations 4,660,21 3,700.89 25.92
Profit before Depreciation & Tax 1,382.98 971.68 42.33
Less : Depreciation 156.70 177.27 (11.60)
Profit before taxation 1,226.28 794.41 54.36
Less: Provision for taxation
Current Tax 25.02 5.13
MAT Credit Entitlement (8.40) -
Fringe Benefit Tax 23.05 13.88
Net Profit after tax 1,186.61 775.40 53.03
Add: Balance b/f from previous year 904.06 392.42
Balance available for appropriation 2,090.67 1,167.82 79.02
Transfer to/(from) General Reserve 200.00 100.00
Interim Dividend* 112.65 71.00
Proposed final Dividend* 127.89 71.62
Dividend for previous year 6.78 -
Tax on Dividends 34.69 21.14
Balance carried to Balance Sheet 1,608.66 904.06
* Interim and final dividend includes dividend on Preference shares for
the year 2006.
Results of Operations
a) Global operations
The Company has recorded consolidated income (as per Indian GAAP) of
Rs. 8,763.81 million in 2006 compared to Rs. 6,932.56 million in 2005.
The revenue from software business grew by 24.989/o to Rs. 8,482.14
million in 2006 from Rs. 6,786.62 million in 2005. The net profit after
tax increased by 35.78% to Rs. 1,242.33 million in 2006 from Rs. 914.97
million in 2005. Excluding PeopleSoft BOT business, your Company's
revenue growth was at 39.90% to Rs. 8,482.14 million compared to Rs.
6,062.58 million in 2005 and net profit after tax was up at 99.10% to
Rs. 1,242.33 million compared to Rs. 624.08 million in 2005.
Excluding PeopleSoft BOT business, contribution was at 37.31% as
against 35.68% in 2005, EBIDTA registered a healthy improvement to
15.59% as against 12.98% in 2005, Profit After Tax improved
substantially to!4.65% of revenue compared to 10.29% in 2005.
The major key drivers/contributors for good growth are: (i) the ability
to successfully replace PeopleSoft BOT business with other accounts
(ii) the addition of 49 clients, the highest ever so far (iii) the
ability to acquire new business at a better rate- both for offshore and
onsite (iv) the ability to achieve 88.40% of revenue through repeat
business and (v) the ability to execute projects efficiently and manage
During the year, the quality of your Company's offerings have
significantly improved. This is testified by (i) acquisition of highest
number of new clients ever i.e. increase in clients' confidence in
your Company (ii) an active client base of 129, of which 41 clients are
fortune 500/global 500 compared to 30 clients in the previous year,
(iii) top 10 clients contribute around 47% of revenue compared to 58%
of revenue in the previous year, (iv) increase in Testing business by
over one and half times as compared to the previous year. Your Company
strengthened this offering by acquiring FocusFrame Inc; USA in November
'06. (v) your Company has successfully penetrated into new geographies
like Belgium, Sweden, Denmark, Norway and Philippines
b) India operations
The Company has recorded a total income of Rs. 4,660.21 million in 2006
compared to Rs. 3,700.89 million in 2005, demonstrating a growth of
25.92%. The revenue from the Software business grew by 15.99% to Rs.
4,126.92 million in 2006 from Rs. 3,557.93 million in the previous
year. The net profit after tax grew by 53.03% to Rs. 1,186.61 million
in 2006 from Rs. 775.40 million in the previous year.
During the year, your Company proposes to transfer Rs. 200 million to
the General Reserve as compared to Rs. 100 million in 2005. An amount
of Rs. 1,894.79 million was proposed to be retained in the Profit &.
a) Preference Dividend
During the year 2006, your Company paid an amount of Rs. 8.12 million
as interim dividend @ 2.95% for 67 days on 10,55,570 Series 'A'
Redeemable and/or Optionally Convertible Preference Shares. Your
Directors recommend a final dividend @ 2.95% for 184 days amounting to
Rs. 22.31 million (Previous year Nil) on 10,55,570 Series `A'
Redeemable and/or Optionally Convertible Preference Shares subject to
the approval by the members at the ensuing Annual General Meeting.
b) Equity Dividend
During the year 2006, your Company declared and paid an interim
dividend @ 40% (Re. 0.80 per share on par value of Rs. 2/-). Your
Directors recommend a final dividend of 40% i.e. Re. 0.80/- per share
on par value of Rs. 2/- subject to the approval by the members at the
ensuing Annual General Meeting. The total dividend declared for the
year 2006 would be 80% (i.e. Rs.1.60/- per share on par value of Rs.2/-
each) as compared to 60% (i.e. Rs.1.20/-per share on par value of
Rs. 2/- each) in the previous year 2005.
The total cash outgo on account of total dividend &L tax
thereon amounts to Rs. 274.27 million. The break up of
dividend is shown in the table:
(Rupees in Millions)
Total Preference Equity
Dividend Shares Shares
Interim 112.65 8.12 104.53
Final - proposed 127.89 22.31 105.58
Tax -33.73 4.27 29.46
Total 274.27 34.70 239.57
The final dividend, if approved, will be paid to those members whose
names appear in the Register of Members as on the date of the Annual
As per Investor Education and Protection Fund (Awareness and Protection
Investor) Rules, 2001, an amount of Rs.1.01 million for the financial
year 1997 towards unclaimed dividends was transferred during the year
to the Investor Education and Protection Fund. During the year, your
Company circulated a reminder letter to those shareholders who had not
claimed their dividend from the year 1998 onwards.
During the year 2006, the paid-up Share Capital of your Company
increased to Rs. 1,763.92 million (i.e. Rs. 263.96 million equity + Rs.
1,499.96 million Preference) from Rs. 238.72 million. The break up of
Share Capital comprising of (i) 131,980,625 equity shares of Rs. 2/-
each. This increase was on account of (a) Private Placement of
10,569,790 equity shares of Rs. 2/- each at a premium of Rs. 140.10/-
per share to GA Global Investments Limited; and (b) Upon exercise of
warrants/options, allotment of 62,955 equity shares of Rs. 2/- each and
1,989,185 equity shares of Rs. 2/- each under Employee Stock Option
Scheme 1999 and Employee Stock Plan - 2002 respectively; and (ii)
1,055,570 Series `A' Redeemable and/or Optionally Convertible
Preference Shares at a price of Rs. 1,421/- issued and allotted to GA
Global Investments Limited.
The market capitalization of your Company as on December 31,2006 was at
Rs. 26,304 million (US$ 595.21 million). Market capitalization is
calculated on the basis of closing price of Rs. 199.30 per share as of
December 31, 2006.
During the year, your Company acquired FocusFrame Inc; USA (FocusFrame)
for US$ 34.3 million, all in cash. FocusFrame's business revolves
around Systems Verification, Quality strategy and IT Governance
Solutions and various functional performance, and system stress
verification exercises. As per the terms of the Agreement, your
Company has paid US$ 25 million in cash towards acquisition of
FocusFrame along with its employees and consultants base of over 200.
The balance amount of US$ 9.3 million is being paid out over 24 months
contingent on achieving the projected revenue and margin targets.
FocusFrame became a wholly owned subsidiary of your Company w.e.f.
November 28, 2006.
The Company and FocusFrame together will reinforce their expertise in
Independent Testing and Verification Services, which is amongst the
fastest growing business opportunities for offshore vendors. Your
Company will now be in a position to offer comprehensive solutions of
Testing Service and aim to achieve more than US$100 million revenue
from this practice in the next three years. The firm's specialty is to
provide end-to-end enterprise systems validation and optimisation for
CRM, ERP, and Web based business technologies. This is accomplished
with a suite of services that utilises proprietary process methodology,
highly skilled professionals, and third-party automation validation and
optimisation tools. FocusFrame is a global firm with offices in the US,
Europe and Mexico which will help your Company to strengthen its global
presence and relationship with its clients.
During the year, your Company made an investment of Rs. 1,209.51
million of which (i) Rs. 1,164.51 million were utilised for acquiring
common stock of FocusFrame Inc; USA; and (ii) Rs. 45 million were
invested in Caliber Point Business Solutions Limited. These investments
are strategies to (i) complete the Testing competencies that would
allow increase in market share, accelerate growth and position your
Company to take advantage of global demand and (ii) to meet the growing
global demand of BPO services by adding new offerings including call
The Company's endeavour has been to build scale with latest technology
to win customers' trust and confidence. Your Company is committed to
invest in attracting and retaining talent and to create capacity to
serve the customers better.
TALENT is your Company's key asset that will constantly enhance and
develop by harnessing the full potential of people. Your Company's
Human Resource Capital will become source of competitive advantage.
The Company focuses on campus recruitment to build a comprehensive
framework that will enable the organisation to attract the best talent
from leading engineering institutes across the country and to develop a
diverse workforce that can adapt and contribute across all spheres of
In line with the anticipated growth and vision, during the year, your
Company has expanded its presence by acquiring on lease a 13,000 sq.ft
facility in Gurgaon, as well as a 22,500 sq.ft. facility in Pune. Your
Company also acquired around 25 acres of land in the SEZ area of
Hinjewadi, Pune and around 14 acres in Airoli, Navi Mumbai from MIDC.
The progress on 1st phase of Green Campus in Siruseri, Chennai, one of
India's largest campuses will be operational by August 2007. The total
capacity of this 1st phase of the environment friendly and world-class
facility will be around 4,000 software professionals.
The Company's new facility in Millennium Business Park, Navi Mumbai
housing 600 software professionals has become operational from
During the year, your Company re-invented its technology strategies to
compete successfully in the global business environment by re-aligning
its offshore and onsite business, global talent and understanding the
impact of global business. In line with the strategy, your Company has
achieved various milestones; a few of them are listed below:
a) Business portfolio enhancement and differentiated offerings
* The Company strengthened its testing Services by acquiring FocusFrame
Inc; which will reinforce expertise in Independent Testing and
Verification services. The testing services being the fastest growing
business segment, your Company will leverage on it and with the
acquisition, your Company encompasses a complete range of testing
services across the globe.
* The Company expanded its offerings in Transportation & Hospitality by
adding Shipping, Hospitality, Car rentals and Third Party Logistics
(3PL) companies, thereby enabling the Company to position as market
* The Company established its footprint by providing comprehensive
Enterprise Application service portfolio with strong capability and
competency to its clients in the entire spectrum of Enterprise
Application and maintaining globally its leading position by offering
its services in PeopleSoft.
* The Company also gained momentum in Insurance segment by leveraging
in Enterprise Content Management and winning new business from Europe
b) Flexible delivery excellence
* During the year, your Company has commenced its offshore development
centers in Pune and Gurgaon with an aim to de-risk from the existing
presence and easy access of talent pool, which will help in creating a
* The Company's `partner-in-business' approach generates high business
value for customers and rich dividends to your Company in the form of a
continual stream of repeat business. Your Company's domain capability
expertise and reduced learning curves enables significant compression
in time-to-value deliverables. Your Company's customer-centric
philosophy is further strengthened by a robust Key Account Management
process to find more ways to delight our key customers and grow market
c) Expanding & establishing global footprint
* The Company has opened new office in the business capital of the
world, New York, and a near shore facility at Mexico which will
reinforce its position as leading software services provider.
* The Company has been acknowledged amongst the fastest growing Indian
based IT Companies in the year 2006.
Striving to continue the growth momentum in overall business scenario
for off-shoring, onsite and on-shoring, your Company achieved good
growth in 2006. Some of the key drivers for your Company's growth are:
a) Effective Delivery
The Company has invested in building a significant offshore delivery
and consulting capability to absorb the process overheads of onsite by
locating our business practice leaders, account managers and top
management team in North America and Europe. This structure enables
quicker decision-making and ease of access to customers.
b) Innovative & Flexible Contract Mechanism
The Company provides a great deal of flexibility in both the
contractual and delivery models. This includes using innovative pricing
and payment models that meet the unique expectations of its clients, as
also optimising its SEI CMMI Level 5 processes to meet specific
customer requirements. Working relationships stretch from fixed
time/fixed fee to time and material.
c) Multi-Cultural Dimension
The Company operates on a global platform, working with several Fortune
500 customers in North America, Europe and Asia Pacific. This gives us
a unique understanding and access to not only the business practices
but also the cultural and work-ethics in different regions and industry
d) Process and Methodologies
The Company has institutionalised a number of processes and innovative
methodologies, which has built in risk mitigation strategies and cost
efficiencies. Our approach addresses the key issues of transition
management and operational efficiency improvement.
e) Leadership in Focus Areas
The Company has demonstrated leadership and expertise in focus areas
like global market leader in PeopleSoft services, leading IT solution
providers for the Transportation &. Hospitality Industry and your
Company is also fast emerging among the top two Indian IT services
provider in Germany.
f) Focus versus Generic Strategy
In alignment with our focus on select areas, your Company's investment
and focus is dedicated on growing to attain leadership in each sector.
This has helped us to compete and win in these areas against much
larger and more established vendors.
g) Domain Expertise
Another key differentiator is your Company's emphasis on bringing in
domain experts in almost every project.
h) Our size the right size
Being a right-sized company, your Company has the ability to
demonstrate adaptability and flexibility in our operation's to suit the
dynamic needs of our customers. Your Company has demonstrated
capability in meeting resource and infrastructure requirements for
large projects, at the same time remaining small enough for
Quality and Security
The Company's desire and continuous effort to improve and maintain a
competitive position, continues to ensure benchmarking against
international standards like SEI-CMMi, ISO 9001:2000 and TicklT. All
the new centres in Chennai and Mumbai were certified against the ISO
9001:2000 and TicklT. As a new initiative, your Company has trained
several employees in Six Sigma techniques and identified some projects
for improvement. A major process automation in the project management
area was initiated.
Thrust areas for 2007 include re-assessment against the SEI CMMi model,
inclusion of SEI-PCMM standards, thrust on improvement through Six
Sigma, and completion of implementation of the new project management
The Company has achieved a new milestone in Information security with
the successful completion of the certification audit and recommendation
for certification against the ISO 27001 standard for all its
development centres by Det Norske Veritas (DNV). This is a
re-confirmation of your Company's enforcement of data privacy and
protection practices, and our commitment to managing information
security to ensure Confidentiality, Integrity and Availability of
organisational and customer assets.
Talent Management - Asset Development
Consecutively, for the second year, your Company has been ranked among
the top ten Best IT Employers in the DQ-IDC Survey in 2006 and was
ranked 6th in terms of employee satisfaction among the 250 Companies
rated. During the year, your Company's employee strength stood at 5,829
as compared to 3,646 in the previous year. Your Company has, over the
years, made consistent efforts to retain and nurture talent by
providing quality work, openness, training, world class infrastructure
and net wealth programmes like ESOP. The attrition rate stands at 15%
on an annualised basis.
The Company firmly believes that professionals need to exhibit
dynamism, not only in their respective fields, but also in their
overall personality which includes leadership capabilities, resource of
knowledge etc. Towards this, your Company's training arm - HexaVarsity
organises seminars on a regular basis where eminent speakers from
diversified fields continuous basis arranges for seminars where eminent
enlighten our professionals on various topics. Your Company believes
that each day is a learning experience and your Company has supported
this ongoing learning process in more than one way.
Corporate Social Responsibility (CSR)
The Company firmly believes that actual growth cannot be quantified in
money and its equivalents. Your Company is committed to, and there has
been a desire over the years, to help social causes.
The Company believes that children are the future of this nation, and
at Hexaware everyone believes that your Company can provide a Helping
Hand. Our H3O - (Helping Hands from Hexaware - Outreach Program) has
been consistently taking up social responsibility projects in Mumbai
and Chennai to facilitate the health and education of the
* The Company has joined hands with the Helen Keller Institute for the
Deaf and Blind and celebrated Valentine day and New Year with nearly
150 Hearing Impaired and Visually Challenged students of the institute.
* The Company and the employees donated close to Rs. 3 lakh for the
development of the institute and built a fence around the institute to
address security concerns.
* The Company celebrated Christmas with the Little Flower Covent for
hearing impaired and visually challenged and employees donated Rs. 1
lakh to the institute.
* The Company organised a function at Chennai's Christ Faith Home for
Children which is home to 43 infants, 34 destitute women and 25
* Nominated amongst top 25 companies for `National Award for excellence
in Corporate Governance - 2006' by ICSI
* Ranked 12th in N ASSCOM Top 20
* Ranked 6th as India's Best Empoyer survey by DQ-IDC.
The year 2006 was a year of good growth and 2007 will be a year of
advancement. The software industry is on new footing and is poised for
significant moves in 2007. New technologies such as software as a
service (SaaS) and services-oriented architecture (SOA) - have become a
well-integrated part of life for both vendors and buyers.
The software vendor landscape continues to evolve rapidly. M&.A has
become a way of life. The offshore services firms play an ever larger
role and new crops of innovative services to keep everyone excited and
The Company's key revenue streams for the year 2007 are expected to
come from the Vertical segment i.e. Asset Management, Transportation 6k
Hospitality, HR IT solutions & Testing services and the Horizontal
segment of Enterprise Solutions. These platforms continue to be the
focus of your Company, on which new verticals &. horizontals will be
built. In addition to that your Company is confident to win new
businesses with better rate for the focused service offerings. With
the visibility of a formidable order book, your Company is confident of
strengthening business in terms of quality, client base, geographies,
verticals and horizontal services by which every stakeholders value
will be enhanced.
Corporate Governance and Management Discussion and Analysis
The Company takes pride in the belief that Corporate Governance not
only in law but also in spirit. Your Company is endeavours to maximize
the wealth of the stakeholder by managing the affairs of the Company
with a pre-eminent level of accountability, transparency and integrity.
A report on Corporate Governance including the relevant (i) CEO and CFO
certificate (ii) Auditors' Certificate regarding compliance with the
conditions of Corporate Governance as stipulated in Clause 49 of the
listing agreement with stock exchanges; and (iii) declaration by CEO
regarding compliance by Board Members and Senior Management with the
Company's code of conduct are annexed. Management discussion and
analysis of financial conditions and results of operation is also
Directors' Responsibility Statement
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors hereby state and confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanations
relating to material departures;
(ii) the Directors 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 the Company at the end of the financial year and of the profit or
loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
(iv) the Directors have prepared the annual accounts on a going concern
Employee Stock Option Plans (ESOP)
During the year under review, your Company allotted 2,052,140 equity
shares of Rs. 2/- each on exercise of Stock Warrants/Options. These
shares have been listed on the Bombay Stock Exchange Limited and
National Stock Exchange of India Limited. Pursuant to the approval of
the shareholders, your Company had instituted the Employee Stock Option
Scheme, 1999 and the Employee Stock Option Plan, 2002 for all eligible
directors (excluding promoter directors), employees of the Company and
employees of its subsidiaries. Both the Plans are administered by the
Remuneration & Compensation Committee of the Board.
As at December 31, 2006, diluted earnings per share was at Rs. 8.09/-
as compared to Rs. 7.52/- for the financial year ended December
During the year under review, your Company did not accept or invite any
deposits from the public.
All the properties of your Company are adequately insured and
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The information relating to Conservation of Energy, Technology
Absorption, Foreign Exchange Earnings and Outgo required under Section
217(1)(e) of the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 is annexed and forms part of this
In accordance with the provisions laid down in Section 212 of the
Companies Act, 1956 (the said Act), your Company is required to
attach the Directors' Report, Balance Sheet and Profit and Loss Account
of the subsidiaries to its Balance Sheet. In accordance with Section
212(8) of the said Act, your Company had made necessary application to
the Central Government for seeking exemption from the aforesaid
requirement. In this regard, your Company has received an approval from
the Government of India, Ministry of Company Affairs, vide their letter
no. 47/307/2006-CL-III dated February 8, 2007, granting an
exemption from attaching the audited accounts of the subsidiaries to
this Annual Report for the financial year ended December 31, 2006.
Audited Accounts of all subsidiaries of the Company are available at
the Registered Office of the Company for inspection by members. The
Company will make available these documents upon request by any member
of the Company.
A Statement, as directed by the Ministry of Company Affairs, furnishing
particulars of the subsidiaries forms part of the Annual Report and is
available at the Registered Office of the Company for inspection by
members. The Company will make available the said document upon request
by any member of the Company.
In accordance with the Articles of Association of the Company, Mr. Rusi
Brij, Dr. Bakul H. Dholakia and Dr. (Mrs.) Alka Nishar, Directors of
the Company, retire by rotation at this Annual General Meeting and
being eligible; offer themselves for re-appointment at the ensuing
Annual General Meeting.
The Directors are pleased to inform you that with effect from March 23,
2007, Ms. Preeti Mehta has been inducted on the Board as a Director of
the Company in terms of the provisions of the Companies Act, 1956 (the
said Act) and Articles of Association of the Company. Ms. Preeti Mehta
holds office upto the date of the ensuing Annual General Meeting. As
required under Section 257 of the said Act, the Company has received
notice in writing alongwith the requisite deposit from a member,
proposing candidature of Ms. Preeti Mehta for the office of Director.
Mr. P. G. Kakodkar, Director of the Company retires at the ensuing
Annual General Meeting. Mr. Kakodkar has expressed his unwillingness
for seeking re-appointment. The Board has taken on record the immense
contribution made by Mr. P. G. Kakodkar during his tenure as a
Director of the Company.
The shareholders information as necessitated in Clause 49 of the
Listing Agreement pertaining to brief resume, expertise in functional
areas, names of companies in which Mr. Rusi Brij, Dr. Bakul H.
Dholakia, Dr. (Mrs.) Alka Nishar and Ms. Preeti Mehta are Directors
etc. is being provided separately in the Annexure on page no. 36 of the
Corporate Governance Report section of this Annual Report. Members are
requested to refer to the said section of the Corporate Governance
Pursuant to the recommendation of the Audit Committee at its meeting
held on February 14, 2007, for re-appointment of M/s. Deloitte Haskins
& Sells as Statutory Auditors of the Company, for the financial year
2007, the Board of Directors have, at their meeting held on February
15, 2007, approved the re-appointment of M/s. Deloitte Haskins 6k Sells
as the Statutory Auditors of the Company for the financial year 2007
and to hold office till the conclusion of the next Annual General
Meeting scheduled to be held in 2008. In terms of the provisions of
Section 224 of the Companies Act, 1956 (the said Act) M/s. Deloitte
Haskins & Sells retire at this Annual General Meeting and being
eligible, offer themselves for re-appointment. In terms of provisions
of Section 224(1B) of the said Act, M/s. Deloitte Haskins 6k Sells have
furnished a certificate that their appointment, if made, will be within
the limits prescribed under Section 224(1B) of the said Act.
Particulars of employees
The particulars of employees, required to be furnished under Section
217(2A) of Companies Act, 1956, read with the Companies (Particular of
Employees) Rules, 1975 is annexed hereto and forms part of this Report.
The Directors place on record their gratitude towards their clients,
bankers, Government of India, regulatory authorities of other
countries, Registrar and Share Transfer Agent, vendors and Technology
Partners for the whole hearted support extended by them. Your Directors
are also deeply touched by the efforts, sincerity and loyalty displayed
by our employees without whom the growth was unattainable. Your
Directors wish to thank the investors and stakeholders for placing
immense faith in us. Your Directors seek, and look forward to, the same
support during the future years of growth. Your Directors hope that
they can continue to satisfy you better in the years to come.
For and on behalf of the Board of Directors
Atul K. Nishar
Place : Mumbai
Date : March 23, 2007
ANNEXURE TO THE DIRECTORS' REPORT
Information relating to conservation of energy, technology absorption,
research and development and foreign exchange earnings and outgo
forming part of directors report in terms of Section 217(1)(e) of the
companies act, 1956, and rules made thereunder.
CONSERVATION OF ENERGY:
In the age where conserving power has become an obsession, keeping in
view the shortage of power, your Company is fortunate that the
operations are not energy intensive. Your Company believes that it
forms part of the duty to save energy wherever possible and also
install apparatus which would help in conservation of energy. Your
Company's computer terminals, air-conditioning systems, lighting and
utilities are modern technology enabled so that optimum use of energy
and power can be made.
The Company believes that in addition to progressive thought, it is
imperative to invest in research and development to ascertain future
exposure and prepare for challenges. In its endeavour to obtain and
deliver the best, your Company has entered into alliances/tie-ups with
major global players in the I.T. Industry, to harness and tap the
latest and the best of technology in its field, upgrade itself in line
with the latest technology in the world and deploy/absorb technology
wherever feasible, relevant and appropriate. At the same time, your
Company has also attached tremendous significance to indigenous
development and upgradation of technology through its extensive
Research and Development operations. The benefits derived from these
processes are phenomenal and have improved the quality of our world
class services. It has also helped in diversifying the services
portfolio while increasing cost efficiency.
RESEARCH & DEVELOPMENT:
The Company has a state-of-the-art Research and Development (R&D) wing
carrying on Research and Development activities. This is in line with
the Company's philosophy of maintaining and sustaining leadership
status and the management team of your Company recognises the fact that
in the long run, R & D will be a crucial differentiator between
FOREIGN EXCHANGE EARNINGS AND OUTGO:
The details of Foreign Exchange Earnings and Outgo are mentioned in
Point No. 19 of Para 3 &. 4 of Schedule 13(B) of Notes to Accounts,
forming part of the Balance Sheet.
For and on behalf of the Board of Directors
Atul K. Nishar
Place : Mumbai
Date : March 23, 2007