hiral, pragnesh karvy stock broking

8/13/2019 Hiral, Pragnesh Karvy Stock Broking

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Introduction to

Share Market

&

Fundamental Analysis

Of 3

IT Stocks

Pragnesh Rabari Hiral MistryRoll No. 38 Roll no. 24


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PREFACE

October is one of the peculiarly dangerous months to speculate

in stocks. The others are July, January, September, April, November, May,March, June, December, August and February!

The market is weird. Every time one guy sells, another onebuys, and they both think they're smart.

A market analyst is an expert who will know tomorrow why thethings he predicted yesterday didn't happen today!

The above-mentioned quotes are not only interesting but relateto the realities an investor faces at the time of making investments; lack ofknowledge of the stock market, the various so-called analyst or broker andthe investment opportunities and periodicity. Fundamental analysis is a self-assessment tool that helps an investor while making any investment.Generally fundamental analysis considers the long-term perspective on thecontrary to the technical analysis that takes a short-term view whileinvesting in stocks.

IT is a booming sector and is rocking Indian economy. Demandfor Information Technology is ever rising and so does the value of the stocksof IT companies. Computers have brought a change over in the way ofworking and Indian companies have contributed to a greater extent in theworld of Information Technology. The fundamental analysis of the IT stockshas been represented in our report stating the example about the factuality ofhow the analysis is done.


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The National Stock Exchange of India Ltd. (NSE), set up inthe year 1993, is today the largest stock exchange in India and a preferredexchange for trading in equity, debt and derivatives instruments byinvestors. NSE has set up a sophisticated electronic trading, clearing andsettlement platform and its infrastructure serves as a role model for thesecurities industry. The standards set by NSE in terms of market practices;

products and technology have become industry benchmarks and are beingreplicated by many other market participants. It provides a screen-basedautomated trading system with a high degree of transparency and equalaccess to investors irrespective of geographical location. The high level ofinformation dissemination through the on-line system has helped inintegrating retail investors across the nation. The exchange has a network inmore than 350 cities and its trading members are connected to the central

servers of the exchange in Mumbai through a sophisticatedtelecommunication network comprising of over 2500 VSATs. NSE hasaround 850 trading members and provides trading in over 1000 equity sharesand 2500 debt securities. Besides this, NSE provides trading in variousderivative products such as index futures, index options, stock futures, stockoptions and interest rate futures.

At NSE, it has always been our endeavor to continuouslyupgrade the skills and proficiency of the Indian investor. Since, financiallyliterate investors are the backbone of the securities market, knowledge andawareness about the securities market is of the foremost concern to us,starting with the most basic of information being made available as the firststep. This booklet has therefore been prepared for those of you who are keento acquire some basic but key information about the stock markets as aninitial step towards becoming a more informed investor. We hope this

booklet will act as a means of satisfying some of your initial queries on thestock markets.


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BSE

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a

rich heritage. Popularly known as "BSE", it was established as "The NativeShare & Stock Brokers Association" in 1875. It is the first stock exchange inthe country to obtain permanent recognition in 1956 from the Government ofIndia under the Securities Contracts (Regulation) Act, 1956.The Exchange's

pivotal and pre-eminent role in the development of the Indian capital marketis widely recognized and its index, SENSEX, is tracked worldwide. Earlieran Association of Persons (AOP), the Exchange is now a demutualised andcorporatised entity incorporated under the provisions of the Companies Act,1956, pursuant to the BSE (Corporatisation and Demutualisation) Scheme,2005 notified by the Securities and Exchange Board of India (SEBI).

With demutualisation, the trading rights and ownership rights have been de-linked effectively addressing concerns regarding perceived and real conflictsof interest. The Exchange is professionally managed under the overalldirection of the Board of Directors. The Board comprises eminent

professionals, representatives of Trading Members and the ManagingDirector of the Exchange. The Board is inclusive and is designed to benefitfrom the participation of market intermediaries.

In terms of organization structure, the Board formulates larger policy issuesand exercises over-all control. The committees constituted by the Board are

broad-based. The Managing Director and a management team ofprofessionals manage the day-to-day operations of the Exchange.

The Exchange has a nation-wide reach with a presence in 417 cities andtowns of India. The systems and processes of the Exchange are designed tosafeguard market integrity and enhance transparency in operations. Duringthe year 2004-2005, the trading volumes on the Exchange showed robustgrowth.

The Exchange provides an efficient and transparent market for trading inequity, debt instruments and derivatives. The BSE's On Line Trading System(BOLT) is a proprietary system of the Exchange and is BS 7799-2-2002certified. The surveillance and clearing & settlement functions of theExchange are ISO 9001:2000 certified.


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incorporate qualitative analysis into your evaluation of a company is to do itonce you have done the quantitative analysis.

The conclusion you come to on the qualitative side can put yourquantitative analysis into better perspective. If when looking at the companynumbers you saw good reason to buy the company, but then found manynegative qualities, you may want to think twice about buying. Negativequalities might include potential litigations, poor R and D prospects or a

board full of insiders. The conclusions of your qualitative analysis eitherreconfirm or raise questions about the conclusions of your quantitativeanalysis. Fundamental analysis is not as simple as looking at numbers andcomputing ratios; it is also important to look at influences and qualities thatdo not have a number value.


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Using Dividend Discount Model:

When using the dividend discount model, the type of industryinvolved and the dividend policy of the industry is important in choosingwhich of the dividend discount models to employ. As mentioned earlier, theintrinsic value of a share is the future value of all dividend cash flowsdiscounted at the appropriate discount factor. For those familiar with thecalculation of yield in fixed income analysis, the concepts are similar.

For constant dividends:

P=Dt/ke Where:

P = intrinsic value D t= expected dividend ke = appropriate discount factor for the investment

This method is useful for analyzing preferred shares where the dividend isfixed. However, the constant dividend model is limited in that it does notallow for future growth in the dividend payments for growth industries. As aresult the constant growth dividend model may be more useful in examininga firm.

For constant dividend growth:

P=Dt/(ke-g) Where: P = intrinsic value D t= expected dividend ke = appropriate discount factor for the investment g= constant dividend growth rate


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The constant dividend growth model is useful for matureindustries, where the dividend growth is likely to be steady. Most mature

blue chip stocks may be analyzed quickly with the constant dividend growthmodel. This model has its limitations when considering a firm, which is inits growth phase and will move into a mature phase at some time in thefuture. A two-stage growth dividend model may be utilized in suchsituations. This model allows for adjustment to the assumptions of timingand magnitude of the growth of the firm.

For the two stage growth model;

P=n t=1[D0(1+g1)t/(1+ke)

t]+ t=n+1[Dn(1+g2) /(1+kt-n

e) ]t

Where: P = intrinsic value D0= expected initial period dividend Dn= expected dividend during mature period ke = appropriate discount factor for the investment g1= expected dividend growth rate for initial growth period g2= expected dividend growth rate for mature period

The two-stage model allows for greater flexibility in the testing

of scenarios for the investor looking at a firm in its infancy or in a newindustry.


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Fundamental Analysis Tools:

These are the most popular tools of fundamental analysis. They focus onearnings, growth, and value in the market.

Earnings per Share EPS

Price to Earnings Ratio P/E

Projected Earning Growth PEG

Price to Sales P/S

Price to Book P/B

Dividend Payout Ratio

Dividend Yield

Book Value

Return on Equity

No single number from this list is a magic bullet that will giveyou a buy or sell recommendation by itself, however as you begindeveloping a picture of what you want in a stock, these numbers will

become benchmarks to measure the worth of potential investments.


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Strengths of Fundamental Analysis:

Long-term Trends

Fundamental analysis is good for long-term investments based onlong-term trends, very long-term. The ability to identify and predict long-term economic, demographic, technological or consumer trends can benefit

patient investors who pick the right industry groups or companies.

Value Spotting

Sound fundamental analysis will help identify companies thatrepresent a good value. Some of the most legendary investors think long-term and value. Graham and Dodd, Warren Buffet and John Neff are seen asthe champions of value investing. Fundamental analysis can help uncovercompanies with valuable assets, a strong balance sheet, stable earnings, andstaying power.

Business Acumen

One of the most obvious, but less tangible, rewards of fundamentalanalysis is the development of a thorough understanding of the business.After such painstaking research and analysis, an investor will be familiarwith the key revenue and profit drivers behind a company. Earnings andearnings expectations can be potent drivers of equity prices. Even sometechnicians will agree to that. A good understanding can help investors avoidcompanies that are prone to shortfalls and identify those that continue todeliver. In addition to understanding the business, fundamental analysis

allows investors to develop an understanding of the key value drivers andcompanies within an industry. Its industry group heavily influences a stocks

price. By studying these groups, investors can better position themselves toidentify opportunities that are high-risk (tech), low-risk (utilities), growthoriented (computer), value driven (oil), non-cyclical (consumer staples),cyclical (transportation) or income-oriented (high yield).


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Knowing Who's Who

Stocks move as a group. By understanding a company's business,

investors can better position themselves to categorize stocks within theirrelevant industry group. Business can change rapidly and with it the revenuemix of a company. This happened to many of the pure Internet retailers,which were not really Internet companies, but plain retailers. Knowing acompany's business and being able to place it in a group can make a hugedifference in relative valuations.


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Weaknesses of Fundamental Analysis:

Time Constraints

Fundamental analysis may offer excellent insights, but it can beextraordinarily time-consuming. Time-consuming models often producevaluations that are contradictory to the current price prevailing on WallStreet. When this happens, the analyst basically claims that the whole streethas got it wrong. This is not to say that there are not misunderstoodcompanies out there, but it is quite brash to imply that the market price, andhence Wall Street, is wrong.

Industry/Company Specific

Valuation techniques vary depending on the industry group andspecifics of each company. For this reason, a different technique and modelis required for different industries and different companies. This can getquite time-consuming, which can limit the amount of research that can be

performed. A subscription-based model may work great for an InternetService Provider (ISP), but is not likely to be the best model to value an oilcompany.

Subjectivity

Fair value is based on assumptions. Any changes to growth ormultiplier assumptions can greatly alter the ultimate valuation. Fundamentalanalysts are generally aware of this and use sensitivity analysis to present a

base-case valuation, a best-case valuation and a worst-case valuation.

However, even on a worst-case valuation, most models are almost alwaysbullish, the only question is how much so.


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Analyst Bias

The majority of the information that goes into the analysis comes

from the company itself. Companies employ investor relations managersspecifically to handle the analyst community and release information. AsMark Twain said, "there are lies, damn lies, and statistics." When it comes tomassaging the data or spinning the announcement, CFOs and investorrelations managers are professionals. Only buy-side analysts tend to venture

past the company statistics. Buy-side analysts work for mutual funds andmoney managers. They read the reports written by the sell-side analysts whowork for the big brokers (Angel, Merrill Lynch, India Bulls, Karvy, MotilalOswal, Marwadi to name a few). These brokers are also involved inunderwriting and investment banking for the companies. Even though thereare restrictions in place to prevent a conflict of interest, brokers have anongoing relationship with the company under analysis. When reading thesereports, it is important to take into consideration any biases a sell-sideanalyst may have. The buy-side analyst, on the other hand, is analyzing thecompany purely from an investment standpoint for a portfolio manager. Ifthere is a relationship with the company, it is usually on different terms. Insome cases this may be as a large shareholder.

Definition of Fair Value

When market valuations extend beyond historical norms, there ispressure to adjust growth and multiplier assumptions to compensate.

It used to be that free cash flow or earnings were used with amultiplier to arrive at a fair value. In 1999, the S&P 500 typically sold for 28times free cash flow. However, because so many companies were and arelosing money, it has become popular to value a business as a multiple of itsrevenues. This would seem to be OK, except that the multiple was higherthan the PE of many stocks! Some companies were considered bargains at

30 times revenues.

Conclusions

Fundamental analysis can be valuable, but it should be approachedwith caution. If you are reading research written by a sell-side analyst, it isimportant to be familiar with the analyst behind the report. We all have

personal biases, and every analyst has some sort of bias. There is nothing


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wrong with this, and the research can still be of great value. Learn what theratings mean and the track record of an analyst before jumping off the deepend. Corporate statements and press releases offer good information, butthey should be read with a healthy degree of skepticism to separate the factsfrom the spin. Press releases don't happen by accident, they are an importantPR tool for companies. Investors should become skilled readers to weed outthe important information and ignore the hype.


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Definitions of analysis tools:

EPS

The EPS is arrived by dividing the net profit by the expandedequity. The expansion in equity may be due to various reasons, which areindicated by putting the following marks after the price: Rights, Bonus.Conversion, Public issue, Foreign issue, Miscellaneous issues, Cum-bonus,Ex-bonus, Cum-rights and Ex-rights.

P/E Ratio

The P/E ratio reflects the price currently being paid by themarket for each rupee of currently reported EPS. It measures investorsexpectations and market appraisal of the performance of the firm.

P/E ratio = _market price of share EPS

Book Value

The book value per share is arrived at by dividing the sum ofequity and reserves (excluding revaluation reserves) by the number of equityshares.

Dividend Yield

It is closely related to EPS. While the EPS is based on bookvalue per share, the yield is expressed in terms of the market value per share.The dividend yield is calculated by dividing the cash dividends per share(DPS) by the market value per share, (not price actually paid by investors).

Dividend yield = dividend per share * 100Market price per share


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Return on Equity

It reflects the rate of return, which a firm is able to generate onequity.

Return on equity = net income after taxEquity*

*Equity refers to equity share capital and reserves & surplus.


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INDUSTRY PROFILE(INFORMATION TECHONOLOGY)

Worldwide spending on IT-ITES witnessed steady growth in2005, on the back of healthier spending across key markets of the US andWestern Europe, and strong growth in emerging markets. Outsourcingcontinued to be the primary growth engine with global delivery forming anintegral part of the strategies adopted by customers as well as service

providers.

The year 2005 also witnessed the coming of age of the IndianIT multinationals, with the traditionally India-centric, indigenous players

beginning to build noticeable presence in other locations - through crossborder acquisitions, onshore contract wins and organic growth in other low-cost locations. This was complemented by global majors continuing tosignificantly ramp-up their offshore delivery capabilities -predominantly inIndia, vindicating the success of the global delivery model and highlightingIndia's increasingly important role in the new world IT order.

In addition to the growth in scale, the portfolio of servicessourced globally continued to expand into higher-value, more complexactivities- further reinforcing the growing maturity of the global deliverymodel.

The Information Technology (IT) sector is amongst the fastestgrowing in the country. IT professionals work in all major markets aroundthe world. Indian technology products and solutions are accepted globally.The first year of the new millennium has been a year of turbulence, tragedy,terrorism and slow-down in the world economy. The Indian IT software and

services industry has weathered this storm well. It is indeed creditable thatthe IT software and services industry in India has reasonably continued itsrobust growth of about 28 per cent during the year 2001-02.

The software industry has emerged as one of the fastestgrowing sectors in the economy with a compound annual growth rate(CAGR) exceeding 50 per cent over the last five years and with turnover of


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US$ 10.25 billion and exports of US$ 7.8 billion during 2001-02. Softwareexports have registered a CAGR of about 60 per cent. The IT software andservices industry accounted for about 2% of Indias GDP during 2001-02and 18 per cent of total exports. It is expected that by the year 2008, ITsoftware and services industry will account for 7 per cent of Indias GDPand 35 per cent of total exports.

The Asscom McKinsey Report 2002, released in June 2002, hasreiterated that despite recent slowdown, the Indian IT services (ITS) and ITenabled services (ITES) industry is poised to meet its long-term exports

potential of US$ 57 billion. The IT enabled services sector has witnessedexplosive growth the last two years. As a result, IT enabled services exportsis likely to reach US$ 21-24 billion by 2008. A large number of Indiansoftware companies have acquired international quality certification. Out of

top 400 companies, more than 250 have already acquired ISO 9000certification

As Stated by Kiran Karnik (Chairman NASSCOM)

2005 was a year of steady growth with gradually increasingoptimism for the global IT-ITES sector. Increasing outsourcing adoption andmaturing global service delivery were the key drivers of growth. Worldwidespending on information technology (IT) and IT-enabled business services(together referred to as IT-ITES) grew by nearly seven per cent in 2005, on

the back of healthier spending across key markets of the US and WesternEurope, and strong growth in emerging markets. Outsourcing continued to

be the primary growth engine with global service delivery forming anintegral part of the strategies adopted by customers as well as service

providers.

The year 2005 also witnessed the coming of age of the IndianIT multinationals with the traditionally India-centric, indigenous players

beginning to build noticeable global presence through cross border

acquisitions and organic growth in other low cost locations. This wascomplemented by global majors continuing to significantly ramp-up theiroffshore delivery capabilities predominantly in India, vindicating thesuccess of the global delivery model and highlighting Indias increasinglyimportant role in the new world IT order. In addition to the growth in scale,the portfolio of services sourced globally continued to expand into higher-value, more complex activities, further reinforcing the increasing maturity of


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skilled workforce availability and conducive regulatory environment will bediscussed in this section. The focus here will also be on emerging Indiancities, in the Tier II and Tier III categories that are being explored by ICTorganizations for setting up software development and ITES-BPO facilities.

Business In India

This is a one-stop information shop on how an IT-ITES company can be setup in India. The aim is to keep global organizations in the know about the

policy and business requirements that have to be met to kick-start such anenterprise.

Government Policies

This section is a compilation of the key Government policies that govern theflow of IT-ITES investment into the country, plus a host of regulatory and

procedural tenets that impact such ventures. This section also provides awindow into the laws related to SEZs, EPZs, STPs and other export

processing zones.


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Fundamental Analysis (Qualitative):

OVERVIEW:

Pioneering a new generation of Strategic Offshore Outsourcing

Infosys Technologies Ltd. (NASDAQ: INFY) providesconsulting and IT services to clients globally - as partners to conceptualizeand realize technology driven business transformation initiatives. With over58,000 employees worldwide, we use a low-risk Global Delivery Model(GDM) to accelerate schedules with a high degree of time and cost

predictability.

As one of the pioneers in strategic offshore outsourcing ofsoftware services, Infosys has leveraged the global trend of offshoreoutsourcing. Even as many software outsourcing companies were blamed fordiverting global jobs to cheaper offshore outsourcing destinations like Indiaand China, Infosys was recently applauded by Wired magazine for its uniqueoffshore outsourcing strategy it singled out Infosys for turning theoutsourcing myth around and bringing jobs back to the US.

Infosys provides end-to-end business solutions that leveragetechnology. We provide solutions for a dynamic environment where

business and technology strategies converge. Our approach focuses on newways of business combining IT innovation and adoption while alsoleveraging an organization's current IT assets. We work with large globalcorporations and new generation technology companies - to build new


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products or services and to implement prudent business and technologystrategies in today's dynamic digital environment.

Products:

Application Development and Maintenance

Application Development

Application Maintenance

Application Re-engineering

Application Portfolio Management

Platform Services

Corporate Performance Management

Enterprise Quality Services

Infrastructure Services

Application Management

Datacenter Services

Desktop Services

Infrastructure & ITIL Consulting

Mainframe Operations Network Services

Service Desk

Packaged Application Services

Customer Relationship Management (CRM)

Enterprise Application Integration (EAI)

Enterprise Resource Planning (ERP) Supply Chain Management (SCM)

Product Engineering

Additional Product Services

Offshore Product Development Center


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Product Consulting and Professional Services

Product Design & Development

Product Lifecycle Management

Product Sustenance

Testing & Automation

Systems Integration

Architecture Services

Business Intelligence and Data Warehousing

Enterprise Content Management

Enterprise Information Portal

Enterprise Mobility

Enterprise Security

Identity Management

Migration and Re-hosting

Infosys Foundation, the philanthropic arm of InfosysTechnologies Ltd., came into existence on 4th December 1996 with theobjective of fulfilling the social responsibility of the company by supportingand encouraging the underprivileged sections of society. In a short span oftime, the Foundation has implemented numerous projects in its chosen areas.The Foundation has undertaken various initiatives in providing medicalfacilities to remote rural areas, organizing novel pension schemes and inaiding orphans and street children. It has undertaken a large rural education

program titled "A library for every school" under which 5500 libraries havebeen set up in government schools spread across many villages. Other

activities include the reconstruction of old school buildings, setting up ofrural Science Centers and schemes to provide support to dying traditional artand culture forms


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Awards

Infosys has won Indias Best Managed Company Award based on astudy conducted by Business Todayand A.T. Kearney. Infosys was placed

ahead of 13 finalists.

The study looked at a companys financial performance (quantitative) aswell as the qualitative, non-commercial aspect of management, examininghow it innovates, learns and delivers on stakeholder needs. Infosys hasexcelled in both aspects.

In its cover story of March 27, 2005, Business Todaymade the followingobservations about Infosys:

Best Practice: Infosys, which has never missed a target in 48quarters, has a planning process that is quite clearly the best in class.

Key Differentiator: With around 36,000 employees on its rolls,Infosys has addressed the challenge of inducting and orienting a largenumber of employees into the Infosys way. The benefits: An army ofemployees that works the same way gains in process efficiency and

productivity, and higher quality.

People focus: Infosys sharp and intense people focus is a naturalcorollary of its booming business, with customers identifying this as aquality that often separates it from other competitors in the IT servicesspace.

Knowledge Sharing:Infosys has near perfected the art of knowledgemanagement and believes that it is important to build a knowledge sharingculture within the organization.

Competitive Advantage: Infosys has built an engine that can delivereverything from consulting to contact center services and scale. Yet, itscompetitive advantage comes from an unlikely source: its soul.


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Other information and announcements:

Infosys Technologies signs MoU with Government of Andhra Pradeshfor expansion plans in Hyderabad-Infosys wishes to expand in 550 acres;

Plans to ramp up headcount to 25,000 with an added investment of Rs.1250crore".

The Board of Directors recommended a Silver Jubilee specialdividend of Rs. 30 per share (600% on par value of Rs. 5 per share). TheBoard has also, proposed a final dividend of Rs. 8.50/- per share (170% onan equity share par value Rs. 5/-). 3) The Board of Directors recommendedan issue of bonus shares (stock dividend) on the companys equity shares inthe ratio of 1:1 i.e. one additional equity shares for every one equity shareheld by the members on the record date to be fixed by the Board. 4) The

Twenty Fifth Annual General Meeting of the Members of the Company willbe held on June 10, 2006.

The authorized capital of the company has been increased from Rs.150,00,00,000/- (divided into 30,00,00,000 equity shares of Rs. 5/- each) toRs. 300,00,00,000/- (divided into 60,00,00,000 equity shares of Rs. 5/-each).

Innovating the "Infosys way-Product Engineering Services

contributed close to 10% to total revenues; employs approximately 5000Infoscions-Invested 1.2% of total revenues on R&D in 2005-06-Infosys'SETLabs generated over 82 invention disclosures and filed over 20

patents".

"Infosys' continuing search for excellence: To hire top talent from USand UK universities. 300 American college graduates to join Infosys directlyout of US universities. Expanded recruiting initiative to hire 25 collegegraduates from UK in 2007."

Infosys' Finacle to power Banco Continental de Panama operationsacross Central America."

"Analog Devices Reduces Certain IT Costs By More Than 40% WithInfosys' Predictability and Process-Rigor; Additional Benefits Include BetterAlignment of IT to Business and Improved Customer Experience."


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"Infosys Recognized in the "Leader" Quadrant in OffshoreApplications Services Magic Quadrant".

Vision

At Infosys we have a vision of where we want to go, and it'sreally exciting. Would you like to be part of a company that is makinghistory? If yes, read on. With an annual compounded growth rate of around60% in the last 5 years, and branches across the world, we are forging aheadin the global market. To achieve our vision, we are always looking out fortalented, learnable individuals who are ambitious, who love challenges and

who have a passion to excel!

Towards this objective, Infosys participates in campus hiringprograms and also conducts a number of off-campus initiatives throughoutthe year at various locations. Apart from college hiring, we also hireexperienced professionals from the industry at various mid-level and senior

positions.


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Fundamental Analysis of Infosys (Quantitative):

Ratio: 05-06 04-05

EPS (rs.) 88.67 69.26

P/E ratio (rs.) 33.62 32.59

Dividend (rs.) 15 11.50

Book value (rs.) 250.29 193.73


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Infosys is proving to be a technically super power among the IT

giants with a robust growth year by year. The numerical figures indicate avery bright future on the quantitative side of the analysis. The ratios thatshow the ever-increasing growth trends for the company. The dividend

payouts have been excellent and that the company is fulfilling its promisesof increasing the shareholders value. The EPS that shows the earning on theeach share that is continuously increasing and strengthening the growth andcompetitiveness of the company. The book value of the shares is alsocontinuously increasing year by year. It shows the confidence of theshareholders in the company. The recent results of the Q1 of FY 2006-07have not been included in this report. The results have again proved theexcellent working of the company. There has been a tremendous rise inevery aspect say EPS, P/E ratio, Book value and other financials records.

On the qualitative side, the company has got really goodadministration for which it has been awarded as the best managed company

by Business Today. It offers a wide range of products and services to itshuge number of associates. It has also been successful in bagging manycontracts. In order to achieve excellent results the company has the staff of

professionals with masterminds giving best out of them in order to make thecompany success in every aspect.

Considering the results and the management of Infosys thestock prices are expected to move upward with the way it has beenrewarding in past. Even though there had been tremendous downfall in thestock market where all scripts saw


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CORPORATE OVERVIEW:

The corporate governance structure specifies the distribution ofrights and responsibilities among different participants in the corporation,such as, the board, managers, shareholders and other stakeholders, and spellsout the rules and procedures for making decisions on corporate affairs. Bydoing this, it also provides the structure through which the companyobjectives are set, the means of attaining those objectives and monitoring

performance

BUSINESS OVERVIEW:

When we commenced operations in 1968, we pioneered the offshoredelivery model for IT services.

Today, with a presence in 34 countries across 6 continents, & acomprehensive range of services across diverse industries, we are one of theworld's leading Information Technology companies. Six of the Fortune Top10 companies are among our valued customers.

We are part of one of Asia's largest conglomerates - the TATA Group -,

which, with its interests in Energy, Telecommunications, Financial Services,Chemicals, Engineering & Materials, provides us with a groundedunderstanding of specific business challenges facing global companies.


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Mission, Vision & Values

While the Mission articulates the reason for our existence, our vision reflectsan aspiration to continually improve, to excel & be the best. Our valuescharacterize us as an organization & guide our every action.

Mission

To help customersachieve their business

objectives by providinginnovative, best-in-classconsulting, IT solutionsand services. Make it a

joy for all stakeholdersto work with us.

Vision

To be among the globaltop 10 by 2010

Values

Integrity

Leading Change

Excellence

Respect for theIndividual

Learning and Sharing

Products:

Its products are popular all over the world. They are known to be user-friendly, flexible, comprehensive, and trailblazers in their respective areas

Banking

Payments

SecuritiesCorporate Actions

Custody

Internet Delivery Channel

Anti Money Laundering

Core Banking

Trade Finance


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Accounting

E.X. Next Generation 1.5

E. X. Personal Investment Manager

E.X. Personal Accountant

Insurance

Apollo

TARABS

Reinsurance SystemPDA Quotation System

Product Designer Workbench

Integrated Insurance Management System

(IIMS)

Financial Services

NCS Corporate Actions

NCS Custody

Financial Industry Gateway

EClearSettle

E-Integrated Brokerage System

TradeX

ESecurity

Tata-Dhruvam

Tata-Saakshi

OCSP Validation Server

FileSigner

FormSigner

Manufacturing

CemPac FACTORe


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Life Sciences and Healthcare

Tata HMSBio-Suite

Tools

MasterCraft

Assent

Infrex

DataClean

S-Governance

SMARTGOV framework for knowledge-ledgovernance

Online government-citizen interface(PORTAL)

VAT administration, income tax and sales taxadministration

Computerized administration for enhanced

responsiveness and efficiency (CARE) at thedistrict and collectorate level

Computerized project finance managementsystem (CPFMS)

Army insurance management system (AIMS)

Motor vehicle registration/ tax / drivinglicence

KisanNet

Treasury integrated system (TIS)

Primary health centers

Public distribution system

Temple accommodation and seva system(TASS)

Integrated computer-based managementinformation system (ICMIS) for state forestdepartments

Integrated MIS applications for municipalarea development authorities

Hazard management system (PROMPT)

Energy & Utilities

En'rgise


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Ratio: 05-06 04-05

EPS (rs.) 55.53

P/E ratio (rs.) 30.4 -

Dividend (rs.) 4.50 5

Book value (rs.) 48.93 -


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Conclusion:


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Wipro Technologies is the No.1 provider of integrated business,

technology and process solutions on a global delivery platform.

Wipro Technologies is a global services provider deliveringtechnology-driven business solutions that meet the strategic objectives of our

clients. Wipro has 40+ Centers of Excellence that create solutions aroundspecific needs of industries. Wipro delivers unmatched business value tocustomers through a combination of process excellence, quality frameworksand service delivery innovation. Wipro is the World's first CMMi Level 5certified software services company and the first outside USA to receive theIEEE Software Process Award.

CHARTER FOR THE NOMINATION AND CORPORATE

GOVERNANCE

COMMITTEE OF THE BOARD OF DIRECTORS OF WIPROLIMITED

A. OBJECTIVES:

A Nomination and Corporate Governance Committee is central to theeffective functioning of the Board. The purpose of this Committee is toensure that the Board of Directors is appropriately constituted to meet itsfiduciary obligations to the shareholders and the company. To accomplishthis purpose, the Nomination and Corporate Governance shall;

- Develop and recommend the Board a set of corporate governanceguidelines applicable to the Company- Implement policies and processes relating to corporate governance

principles- Ensure that appropriate procedures are in place to assess Boardmembership needs- Recommend potential director candidates to the Board of Directors


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B. MEMBERSHIP:

The Nomination and Corporate Governance Committee shall consist of threenon-management and independent members of the Board. The Board ofDirectors shall appoint the members of the Nomination and CorporateGovernance Committee.

C. POWERS:

In discharging its responsibilities, the Nomination and CorporateGovernance Committee shall have the following powers;- Sole authority to retain and terminate any search firm to be used toidentify director candidates

- Sole authority to approve the search firms fees and other retentionterms

D. RESPONSIBILITIES AND DUTIES:

The Nomination and Corporate Governance Committee shall be responsiblefor considering and making recommendations to the Board concerning theappropriate size, function and needs of the Board. The Nomination andCorporate Governance Committee may diverge from these responsibilitiesand may assume such other responsibilities, as it deems necessary orappropriate in carrying out its functions.

1.1Responsibilities relating to the Board/Company

(a) Taking a leadership role in shaping the corporate governance of theCompany

(b) Assisting the Board in;- Evaluating the current composition and governance of the Board of

Directors and its Committees- Determining the future requirements for the Board as well as itsCommittees and making recommendations to the Board for approval- Formulating the desired/preferred board skills, attributes and qualificationsfor selecting new directors- Conducting searches for prospective board members whose skills andattributes reflect the requirements those desired


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part of the minutes of the Board of Directors meeting at which thoserecommendations are presented.

G. MINUTES:

The Company Secretary will maintain minutes of the meetings of theNomination Committee, which minutes will be filed with the minutes of themeetings of the Board of Directors

PRODUCTS:

Our alliances with leading organizations worldwide through our comprehensive alliance program ensure thatwe can offer our customers a choice of best-of-breed products and technologies. We have over 100 best-in-class alliances across products and services that include the following:

B2B integration Business intelligence & data warehousing

WebMethods IBM WebSphere DataStageInformaticaBusiness ObjectsMicroStrategyCognosHyperionSASInformation BuildersNetezza

Customer relationsh ip management Enterprise application integration

ClarifyOracleSAPSiebel

IBMSeeBeyondTibcoWebMethodsVitriaCyclone CommerceBlue TitanCape Clear

Amber PointSonic SoftwareReactivitySterling CommerceMagic SoftwareGXS

Enterprise resource planning e-procurement

PeopleSoftOracleSAPSiebel

Ariba

m-commerce Portals & content management


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Aether Sys tems IBMBEAOraclePlumtree

ATGDocumentumInterwoven

FileNetVignetteFormScape

Product design services Supply chain management

3DSPARMArtisanEmbedded Linux ConsortiumHyundaiMetrowerksMS Embedded Developer's ForumSymbian

Texas InstrumentsTSMCUMC

Aribai2 TechnologiesOracleSAP

Technology infrastructure services Telecom service providers

CiscoComputer AssociatesNortelSun Microsystems

AxiomCape TechnologiesConcept WaveCramerHPInfovistaMetasolvOblicoreOpenetSubex

Web securit y Web services

BlockadeBorlandCritical PathIBMRSA

BEAMicrosoft .Net

Knowledge management Manufacturing

Fast Search & TransferAutonomyVerity

Process Manufacturing: OM PartnersDiscrete Manufacturing: Selectia
http://kmav/


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Functional RFID Enabled Concept Store and Global DataSynchronization Laboratory

BS7799 and ISO 9000 certified among the top 3 offshore BPO service

providers in the world

Wipro is a strategic partner to five of the top ten most innovativecompanies in the world* (*Technology Review Innovation Index2005)

Over 40 industry facing Centers of Excellence

490+ clients - 53000 + employees

40+ development centers across globe


Ratio: 05-06 04-05

EPS (rs.) 14.37 21.48


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P/E ratio (rs.) 32.80 -

Dividend (rs.) 5 5

Book value (rs.) 44.9 -

hiral, pragnesh karvy stock broking

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