Chariman's Speech
Mr. Kamal K Singh, Chairman & Managing Director of Rolta India Limited at the Annual General Meeting on November 24, 2009
Ladies and Gentlemen,
I have great pleasure in extending you all a warm welcome to the Nineteenth Annual General Meeting of your Company.
The Financial Results of the Company for the year 2008-09 have been with you for sometime and, with your permission, I take them as read.
Economic Scene
The global economy, which passed through a complex and difficult phase, has begun to recover from the deep recession set off by the financial crisis. This recovery is supported by output expansion in emerging market economies, particularly those in Asia. Manufacturing activity has picked up, trade is recovering, financial market conditions are improving, and risk appetite is returning. With a sharp recovery in equity markets, the anxiety and nervousness that pervaded the financial markets during the height of the crisis has been replaced by a sense of calm, and even optimism.
The Mid Term review of macroeconomic and monetary review of Reserve Bank of India has affirmed that the Indian economy, which slowed down significantly during the second half of 2008-09 largely due to the knock-on effect of the global financial crisis, has begun to stabilise. Performance of the industrial sector has improved markedly in recent months. Capital inflows have revived with both domestic and external financing conditions being on the upturn. Liquidity conditions have remained easy and interest rates have softened in the money and credit markets. The Indian economy posted a growth of 6.1% for Q1 of 2009-10. This is higher than the 5.8% in Q4 of 2008-09. On current assessment, the GDP growth for 2009-10 is expected to be in the region of 6 to 7%.
The Indian IT/ITES Industry continues to grow but at a subdued pace in the face of severe economic downturn in key markets. According to the annual NASSCOM survey, on the performance of the Indian IT-BPO services sector for F.Y. 2008-09, the sector achieved gross revenues of US$ 58 billion in F.Y. 2008-09 as against US$ 52 billion in F.Y. 2007-08. Export revenues recorded a growth of 16% and clocked revenues of US$ 46 billion in F.Y. 2008-09 up from US$ 40 billion in F.Y. 2007-08. The domestic segment grew by 21% to register revenues of Rs. 57,000 crores as against Rs. 47,000 crores in F.Y. 2007-08. The survey also projects that export revenue shall grow at 4 to 7% to reach US$ 48 to 50 billion during 2009-10. The domestic IT-BPO revenue for 2009-10 is estimated at about Rs. 66,000 crores representing a growth of 15%.
Performance
I am pleased to inform you that your Company has been able to achieve reasonable growth even in a difficult environment by strengthening its businesses and moving up the value chain. It is my belief that your Company is well placed to show better results and deliver greater value to all our stakeholders as the economic revival gathers momentum.
Your Company has transformed its business model from a portfolio that was service-centric to one that offers a higher value proposition by focusing on enterprise level solutions that incorporates its own Innovative Intellectual Property. These differentiated solutions enable the Company to sell more effectively and at higher levels of the value chain. Your Company has leveraged the expertise of its acquisitions and assimilated them into the existing business of the Company thereby improving the margins in the long term. For example, ROLTA Geospatial Fusion™ based on your Company's own IP, is an innovative, world class solution and framework, which fuses the information, applications and processes of an enterprise into a seamless, cohesive solution. Your Company has also launched ROLTA OneView™, a solution that integrates business intelligence tools with enterprise level.
engineering databases and applications using Rolta's Fusion Middleware. ROLTA iPerspective™ brings data integration to life, by making information stored in disparate databases and heterogeneous platforms securely available and re-usable across the enterprise.
Your Company achieved creditable performance during the year 2008-09. The total consolidated revenue for the year was Rs.1,373 crores, as against Rs.1,072 crores for year ended June 30,2008. This represents a growth of 28%. The consolidated net profit after tax was Rs.294 crores as against Rs.230 crores in the previous year and this represents a growth of 27%.
Indian corporate sector is now beginning to move towards convergence with International Financial Reporting Standards (IFRS) norms in 2011. In line with its voluntarily adopting best international regulatory practices and high standards of corporate governance, your Company has already published its consolidated accounts for 2008-09, drawn under IFRS as audited by Grant Thornton.
Your Company successfully completed in June 2009, a tender offer for repurchase of its outstanding zero coupon FCCBs due in 2012. Your Company accepted all the tenders received for Bonds with a total face value of US $ 38.31 million at a discount of 25% on accreted value of the bonds. The bonds have been repurchased at a gross repurchase price of US $ 32.75 million resulting in a gain of US $ 10.92 million equivalent to Rs.51 crores.
Your Directors have recommended a dividend of Rs.3.00 per share for the year 2008-09.
Future Outlook
Over the years your Company has built a solid business as evidenced by its established track record, empowered people, domain knowledge, world-class infrastructure, enduring partnerships, exceptional IP and healthy financials. Your Company's capabilities, today, stand expanded significantly and Rolta is poised to serve markets much larger than ever before.
I am confident that your Company will continue to prosper by leveraging its strategic position in specialized markets like Defense, Security, Government and Infrastructure, which are expected to remain strong for decades. Your company, with its joint venture companies Shaw Rolta Limited and Rolta Thales Limited, is uniquely positioned to capitalize on huge opportunities in these sectors.
Acknowledgements
I express my sincere appreciation to my colleagues on the Board, the Management Team and Roltaites at all levels for their invaluable contribution in steering your Company towards greater heights of excellence. I also thank our Bankers, Business Partners and Customers for their support and cooperation.
Finally, I thank you shareholders for your consistent support. I look forward to your continued support in achieving our goals. I particularly thank all of you who have come personally to this meeting, sparing your precious time.
Thank you,
Kamal K Singh
Chairman & Managing Director