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18th
Annual General Meeting, 29th September, 2003 |
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'An obsession with winning across all levels & functions'
Dear Shareholders,
HTMT delivered one of its best performances in 2002-03.
It posted record growth in its total revenue, IT income
and profits. The total revenue increased by 57% to Rs.115
Crores from Rs. 73 Crores and IT income by 82% to Rs.
100 Crores from Rs. 55 Crores in 2001-02. Our core values
of customer focused service, quality, dependability and
people empowerment constituted the underlying DNA that
made us achieve these healthy results and propel us closer
to realize our vision of becoming Scale Player and Leader
in Information Technology.
The Company has also attained success in developing differentiation finger prints
that distinguish it in areas like strong process capability, cost effective delivery,
innovation, infrastructure and execution.
The consolidated revenues of the Company & its subsidiaries posted a growth
of 32% from Rs. 164 Crores in 2001-02 to Rs. 217 Crores in 2002-03.
The net profit rose by 86% from Rs. 31 Crores to Rs. 58 Crores. The growth in
the businesses of the conglomerate was due to their being closely related and
capturing synergy in operation.
Business Environment
The Indian ITES BPO industry has shown remarkable growth in capacity
in the last two years. The setting up of captive centers by MNCS, emergence of
venture funded third party ITES firms and established software companies getting
into ITES arena are fundamentally changing the competitive landscape in the industry
putting pressure on margins. Appreciation of Indian Rupee vis-à-vis US
Dollar, continued downturn in the global economy, competition from countries like
China and Philippines and geo-political risks and protectionism as also backlash
against offshoring work to India are the other threats looming large on the horizon.
However, worldwide spending on BPO services are projected to grow at an overall
compounded annual growth rate of 11% to US$ 1.2 trillion by 2006.
Since India has barely scratched the surface of the business on offer and the
key driver for BPO activity has been cost reduction, the long-term potential of
the industry in general and companies like HTMT in particular remains robust.
HTMT also has made strides in securing fresh orders in the IT services space.
Our IT enabled services capability supported by technology and domain expertise
in IT services will enable us to extend new sets of service offerings and end-to-end
solutions.
Governmental Support
India has made steady progress in the post liberalization period, thanks to several
initiatives taken by the Government to strengthen the IT, communication and entertainment
infrastructure. Business Environment Governmental Support Considering the ever
increasing contribution of IT and ITES industry to the growth of Indian economy,
the Government should create a conducive regulatory environment for exports and
further strengthen the infrastructure and manpower base.
The Conditional Access System (CAS), which has been made
mandatory by the Government, will lead to the fostering
of an equitable and transparent relationship between the
four parties involved in television transmission and distribution
process viz: broadcasters, MSOs, local cable operators
and consumers. CATV industry has been demanding tax benefits
available for telecom infrastructure providers to reduce
the burden on consumers.
The Government should consider acceding to the request
of the industry, as it is part of the information and
communication infrastructure.
The temporary reduction of import duty now granted on set-top-boxes to 5% till
30th September, 2003 is a step in the right direction. It is hoped that the reduction
in duty would be made permanent in the interest of consumers.
Subsidiaries and Associates
The purpose of bringing the privately held media and telecommunication businesses
under the umbrella of HTMT was to make the Company a real convergence play and
unlock the value latent in the businesses to create wealth for its shareholders.
Kudelski SA, Switzerland has recently agreed to take 2.41% in the equity of HTMT's
flagship subsidiary viz: IndusInd Media and Communications Limited (IMC) for about
US$ 12 million, giving IMC a valuation of approximately US$ 500 million (Rs.2300
crores).
Nagravision, Kudelski's subsidiary, will become a technology partner with IMC
and supply its state of the art conditional access system. HTMT holds 62.07% of
IMC's equity through its fully owned subsidiary InNetwork Entertainment Limited.
The Company's associate, Fascel Ltd., the largest cellular services provider in
the Gujarat circle is growing from strength to strength. The recent sale of Kotak
Mahindra's 11% stake in Fascel at Rs. 92 crores reported some time back to provides
a benchmark valuation of Rs. 169 crores for HTMT's 20.2% effective stake in Fascel,
which was acquired through share swap on merger of a privately held Hinduja Group
company with itself in 2001-02. The recent improvement in prospects of cellular
industry coupled with the revival of capital markets will further enhance the
value of this investment.
The Company's fully owned internet subsidiary, In2cable (India) Ltd and IMC, are
in the vanguard of the revolution of utilizing IMC's broadband cable network and
making high speed broadband internet connectivity an utility service like gas
or electricity which, instead of delivering power, will deliver on-line entertainment
such as music and movies.
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A.
P. Hinduja
Chairman |
Place :
Mumbai
Date : 29th September, 2003 |
