HELIOS AND MATHESON INFORMATION TECHNOLOGY LIMITED
ANNUAL REPORT 2005-2006
Ladies and gentlemen,
A hearty welcome to all of you to the annual general meeting of Helios &
Matheson Information Technology Ltd., in its 16th year. This is a proud
occasion for all of us. I am sure all of you are happy with the unbroken
record of dividend paid/proposed by the board and the two successive 1:1
Your company has fared well in the financial year under review. Under
Indian GAAP, total revenue grew by 82% to Rs.1207.6 million (664.8 m) while
earnings before interest, depreciation and taxes witnessed an increase to
Rs.406.2 million (239.6 m) - an increase of 70% over fiscal 2005.
Consolidated revenue and earnings were Rs.2213.4 million (1223.1 m) and
Rs.569.4 million (331.6 m) respectively.
Indian companies are delivering the latest in information technology to
markets across USA, Europe and Apac, helping to improve not only lives of
individuals but the progress of nations. Some think competition. We think
Our long term strategic partnership with clients to provide end-to-end IT
solutions helps our clients to achieve enhanced customer satisfaction
through adoption of innovative technology, improved process efficiency and
world-class service to customers.
In our business, software unifies people, processes and technology to
increase efficiency and optimization - it gives clients visibility and
dynamic control to manage risk, manage costs, improve service and align IT
investments. Best practices are followed to ensure information security,
safety and privacy.
Our strategy for future has several components. but I would like to mention
here two of them, which, in my view, are most significant.
1) Differentiation - focus on healthcare vertical, and
2) Cost leadership - for competitive advantage.
Differentiation - focus on healthcare vertical
We are building on our domain expertise - extensive industry-specific
knowledge and experience - to enable us have the differentiator and open
new avenues for growth.
There is an explosive growth in private healthcare facilities; advanced
technology, expertise and quality of service on offer.
Health information technology (HIT) there is an urgent need for building
HIT infrastructure for scale and speed in delivery of service. It means,
healthcare should be supported by systems (HIT) that are carefully and
consciously designed to produce care that is safe, effective, patient-
centered, timely, efficient, and equitable. HIT has enormous potential to
improve the quality of healthcare with regard to all six of the aims set
Like IT, healthcare is a vast and yet unexplored subject. evolving
legislations like MMA(1) and HIPAA(2) add to the tremendous scope for
growth in our business.
15 years of relentless focus on bottom line and processes laid the
foundation for our cost leadership strategy.
It has given us the ability to manage large client relationships to gain
economies of scale.
We aim to get our clients' functions automated when they want, on time, at
the lowest possible cost, and make sure they have a good time doing it.
15 years - key milestones:
* Went public in 1999, issue got over-subscribed. got listed with MSE, HSE
* Listed in BSE and NSE in 2000 and 2005 respectively
* Uninterrupted record of profits and dividend distribution since inception
* Company made a 1:2 bonus share issue in 1999
* Company made two 1:1 bonus share issues in 2004 and 2005 doubling the
dividend payout year on year
* Acquired Laxmigroup Inc., USA in 2001
* Acquired Systemlogic Solutions Ltd., Bangalore, India in 2001
* Acquired healthcare IT focused companies, Maruthi Consulting Inc., USA
and Jayamaruthi Software Systems Ltd., Chennai, India in 2004
* Strengthened healthcare IT presence further by acquiring controlling
stake in tact inc., USA (Nasdaq capital market: tacx) and tact global,
Bangalore, India in 2006
* 37% of our income from healthcare IT - it is even more exciting to see
tact global leading us into a niche expertise in life sciences domain,
offering image interpretation and data analysis, clinical trials and
* Placement of foreign currency convertible bonds (fccb) for USD 25 mn(3);
the formalities and overseas listing of the bonds completed on July 7, 2006
'... The board decided in favor of the placement of FCCB in view of Helios
& Matheson's strong, predictable revenue streams and positive outlook for
its business. the resounding success of the placement is an endorsement of
strong investor interest and confidence in Helios & Matheson....'
G.K. Muralikrishna, CEO & Managing Director
(1) : Medicare modernization act
(2) : Health insurance portability and accountability act
(3) : Including green-shoe option of USD 5 mn
15 years - what they say:
* Featured among the top 30 fastest growing IT companies by the Nasscom
* Ranked among India's most valuable companies by business today (November
* Business standard listed Helios & Matheson among 'BS 1000: India's
corporate giants' by net sales
* Ranked 29 in the data quest survey (August 2005)
* Ranked 340 in the ET 500 survey (February 2006)
As you can see, we've been busy these past 15 years. and we promise that
the next 15 will be just as fun fitted and exciting as the last. We are
proud of our accomplishments, and it just goes to show that time really
does fly when you're having fun! We thank God for the seemingly endless
In this 16th year of our operation, I, along with your board, pledge our
fullest endeavors in shaping a bright future for your company. towards this
end, I am sure we can rely on your unstinted support as always.
Chennai V. Ramachandiran
28th Sep., 2006 Chairperson
Source: 14th AGM
Dated : 28th September, 2006