Operating Financial parameters changed over last 5 year period Financial

& IT Parameter

s

Year 2006-07

Closing

Year 2010-11 Closing

(Unaud/Est.)

Compounded average annual growth/reducti

on

Reasons & Impact

Gross Margin of Services BU

43.48% 52.79% 3.96% p.a. Improved productivity, cost reduction, revamped Hurixnet to monitor Operations

Overheads per seat

Rs.16,954 Rs.11,037 -8.23 % p.a.(Minus – sign is good indicator

Better controls, processes & innovation in cost reduction

DSO (No. of Days)

133 Days 57 Days -15.62% p.a.(Minus – sign is good indicator)

Worked with BU & Sales on contracts, milestones, RR systems & follow-up

Banking & Working Capital Limits

3.00 Cr. 18 Cr. 41.47% p.a. Negotiated hard with Bankers to optimise WC & Forex hedging.

IT Platforms – Tally & Hurixnet

Very raw financial & operational ERP in place

Robust Financial &

Operating IT platform –

Timely decision support system

Significant impact on governance & financial controls

with timely closing & alignment to 1

cycle.

Lead to better business levers grip, better business analytics & decision making support.Strategic CFO Initiatives PE/VC Funding, Corporate Restructuring – Next slides

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q-I – New additional modules in Operational & Financial ERP platform integrated for better serving the need of Product & Services Companies with complete ramped up team & hurixnet in place.

Q-II – Obtained funding term sheet of US$3 Million for product business from PE. Appointed Investment Banker and commenced road show for bringing strategic investor or private equity to fund the product division next scale.

Q-III – Enhanced banking limit from Rs.10 cr. to Rs.18 cr. Leading to support on working capital and product development front.

Q-IV – SEEPZ-SEZ Facility was up and running. Final round of due diligence and valuation in place to induct strategic partner (Sony) in the Company to meet product development and marketing plan.

Company is all set to reap the benefit of strong financial driven Company with revamped in place from Services driven to Product driven Company.

2010 -11 – Migration from Services to Product business with PE funding

2

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010• Q-I – Product accounting was set-up to monitor the product

development cost. Streamlined BU’s in services side for better focus on net bottomline.

• Q-II - SEEPZ-SEZ application came up for hearing & secured LOP in favour of Hurix. Significant capital cost saving & then recurring overheads benefit of SEEPZ-SEZ property. ( Potential rental saving of Rs.1 cr. per annum. Migration from STPI to SEZ commenced. Shares Buyback over.

• Q-III – Delivered first set of project level profitability reports to PA/Sales & new stale norms unbilled inventory for refining pricing & estimation process leading to positive financial controls & governance.

• Q-IV – Product business hived-off into new Subsidiay Company (for Joint Venture on K-12 – India’s Leading Listed Technology Company

2009 – 10 Product & Services business – Transformation

3

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

• Q- I - Banking relationship was strengthen with confidence building measure & credit limit was reset. Hedging & forex recovery in place.

• Q-II - More emphasis on DSO & Cash management with the support from revenue recognistion norms & revamped Hurixnet (Operating ERP in-house) system firmly in place.

• Q-III - US recession was taking toll on business. Finance took lead in cost & expenses monitoring with firm objective of not buring cash with management. One of the Chennai office shut-down. Launched CRISP ( Cost reduction & Improvement in staff productivity) programme to address cost & productivity issue.

• Q-IV - More cost cutting/rationalisation – Renegotiation with Vendors/Overheads reduced/Manpower trimmed/Outsourcing v direct hiring was given importance to address cost & revenue mismatch.

2008 – 09 Finance ruled with “ Cash is King “ motto

4

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

• Q-I – Set relationship with NBFC’s. Entry of Helion (PE Fund) as strategic shareholder on the board of the Company. Due to controls issue payroll function was brought under Finance from HR.

• Q-II - On set of difficult phase of business with reduced customers spending on IT outsourcing & huge $/Rs appreciation impacting results. Operating ERP system was brought under finance umbrella to revamp & address project accounting systems & control.

• Q-III - Steps taken in reorganising Mumbai under one centre. Admin function was brought under finance umbrella. Budget, Outlook & Time Sheet system was reinforced by finance across Organisation to set proper governance across Organisation.

• Q-IV - Banking relationship & limits came under tremendous pressure & credit limit was suspended. BU Organisation restructuring was suggested to reduce overheads & result focus organisation.

FY-2007-08 – Difficult financial year – Put to address cost v revenue

5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

• Q-II – Carried out systems/process/team study of finance & revamped financial accounting system in Tally by adding IT tools.

• Q-III – Set the stage for putting month closing processes to address• Timely reporting resulting in better flow of info & decision• To ensure year end audit closing within time with +/- 2%

variance with month closing figures.

• SEEPZ-SEZ (Mumbai) application was filed to secure commercial premises at concessional subsidised rate. (waitlisted)

• Q- IV - Introduced management reporting in newly defined format. Road shows to bring second round of PE funding in Company.

• Introduced first time new set of accounting guideline on revenue recognition to address Controls, Cash & Clarity (3 C’s).

FY 2006-07 – Redefining Hurix Finance structure – with C’s

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