CAMBRIDGE SOLUTIONS LIMITED
(Formerly SCANDENT SOLUTIONS CORPORATION LIMITED)
ANNUAL REPORT 2006-2007
CHAIRMAN'S REPORT
CHAIRMAN'S LETTER
Dear Shareholder
India has been dominating the market with its sustained GDP growth rate of
over 9%. In the last four years, the country has recorded a compounded
annual growth rate at 8.5% led primarily by its services and infrastructure
sectors. Your Company, Cambridge Solutions took a giant leap forward,
building on the foundation it laid last year post the merger of its ITO and
BPO services companies. The financial results for financial year 2007
demonstrate not just the confidence of the customers, but the increasing
value they derive from the integrated services that are offered and the
efficiencies of a well orchestrated, integrated global delivery model. In
fact, integration and partnerships have been the hallmarks of our success
this year.
Your Company's success is reflected in its financial numbers for 2006-07.
Its business revenues grew by 24.5% over the previous year. The
consolidated revenues of almost Rs 1470 crores for the year ended March
2007 were reported. For a Company that is all of five years old, it has had
a great growth trajectory with a compounded annual growth rate of 122%
since inception. More importantly, the initiatives that have been taken to
grow the businesses by increasing productivity, through globally
acknowledged quality processes and cost optimization, are reflected in the
profits after tax. Your Company has moved from a loss of Rs 18.6 crores
last year to a profit of Rs 65.7 crores in FY 2007, a positive swing of Rs
84.3 crores, an effort worth appreciating.
Other quick highlights of FY 2007 performance are that:
* The BPO segment, with a share of 68.2%, continued to contribute
significantly to the Company's consolidated turnover.
* The ITO business segment grew 43.8% year on year, with a share of just
below one third in overall revenues.
* On a geographic basis, Americas contributed 77.5% of the consolidated
revenues followed by Australia at 13.1% and the balance 9.4% from Europe
and Asia.
* Quite a few million dollar clients were added during the year, taking the
total number of million dollar clients to 55.
Additionally, in the ITO Services segment, we made a significant decision
in FY 2007 to re-focus our efforts on the core high growth global off-
shoring business; hence, we decided to sell the onsite centric government
vertical, operating under Albion in the Americas. This will allow us to
drive more growth in our core Manufacturing and Logistics, Banking,
Financial Services, Insurance and Emerging Market verticals which will
further strengthen us.
Your company is truly global in nature with a footpring in 9 countries
across 4 continents and with a multi-cultural, multi-national workforce of
about 4400 as of year end. About 60% of the employee strength is located
overseas, building and delivering value closer to a blue chip roster of
clients which include many Fortune 500 companies.
I am proud to share that the BPO business had some outstanding industry
achievements, last year. Global Service media and neoIT, a leading offshore
outsourcing advisory firm, has for the second year in succession ranked
Cambridge as one of the top three BPO companies in the world. We were also
ranked by them as one of the top three leaders in human capital management.
This award validated the commitment to developing the best and brightest
workforce in the industry and one that has contributed significantly to our
performance in 2006-07.
Further your company has improved considerably on its ranking in the
International Association of Outsourcing Professionals (IAOP)'s '2007
Global Outsourcing 100' list, and emerged as the 10th leading outsourcing
company based on its executive leadership. The list which appeared in a
special section in Fortune Magazine ranked us at 28th last year.
These awards and accolades and the customer successes during the year
reiterate not just Cambridge's market leadership, but also the success of
its onsite-offshore model along with the cross selling strategies between
its two business segments.
As you are aware, your company operates at the high end of the knowledge
and transaction processing outsourcing segment, one that calls for a high
degree of skill and vertical expertise. The management feels confident
that the building blocks necessary for profitable growth in the future have
been laid down. Your company will continue to strive to generate more
revenue growth not just from its existing clients but also through
increased penetration of its resources, especially the ones at the
frontline, to do what they have committed to do, by serving our customers
flawlessly, at the appropriate time, and with utmost integrity. It is my
belief that such a concerted effort will further enhance profitability and
shareholder value for all the stake holders.
I thank you for your continued support and faith in your company.
Christopher A. Sinclair
Executive Chairman and Chief Executive Officer