Teleperformance Business Services India Ltd Management Discussions

SPARSH BPO SERVICES LIMITED ANNUAL REPORT 2010-2011 MANAGEMENT DISCUSSION AND ANALYSIS (A) Introduction: With its customers spread across various segments like Telecom, Banking & Financial Services, Insurance and Retail, and its work force of over 11,900 employees spread over 14 cities, the Company is uniquely positioned to be a significant player in the domestic call center business. (B) Opportunities: The Company seeks to harness business opportunities on the following strengths, it possesses: 1) Delivering through 19 centers across 14 cities in India. 2) Managing a wide array of processes across verticals including Banking, Financial Services, Insurance, Telecom, Travel, Retail, Media, Consumer Durables, etc. 3) Providing customized outsourcing services and solutions to over 38 clients and over 94 distinct processes. 4) Current capacity of over 8918 seats. 5) Work pool of over 11,900 dedicated resources. 6) Offering multilingual Indian languages including English, Hindi, Punjabi, Marathi, Gujarati, Kannada, Telugu, Malayalam, Tamil, Bengali, Assamese, Hariyani, Dogri, Urdu and Oriya services to customers. (C) Risks & Concerns: The Company perceives the following risks and concerns. Internal: 1) A significant portion of Companys revenue is from a small number of clients. The loss of any of the major clients, a decrease in the volume of work they outsource or a decrease in the price which they are willing to pay for the services of the Company may adversely affect revenues and profitability. 2) The Companys growth depends on acquiring new customers for its services apart from increasing business from existing customers. 3) The Companys success depends largely upon its skilled and trained manpower both at the Customer Service Executive level, its senior management and key personnel as well as and its ability to attract and retain these personnel. 4) The Company operates in a highly competitive environment and this competitive pressure on the business is likely to continue. 5) The Companys client contracts can usually be terminated without cause and with little or no notice or penalty, which could negatively impact its revenues and profitability. 6) The Company currently has a high employee turnover ratio. However this is an industry wide phenomenon. External: 1) Vulnerability to business cycles could affect the Companys capacity to sustain a growth in income, profits and shareholders value. 2) Terrorist attacks and other acts of violence or war, including those involving India could adversely affect operations of the Company resulting in a loss of business confidence. (D) Segmentwise Or Product-wise Performance: The Company operates in a single product segment viz. domestic Call Center Services, hence segment-wise or product-wise performance is not relevant. (E) Outlook: With the maturing of the economy and increased emphasis on customer care, the trend for outsourcing domestic call center activity has moved to virtually all types of business viz. entertainment, retailing, airlines, utilities to name a few. Further the clients have started showing a marked preference for companies which possess both skill and scale. The Board expects that this will augur well for the Company. (F) Internal Control Systems and their Adequacy: The Company has adequate internal control systems commensurate with its size and the nature of its business. (G) Discussion on Financial Performance with Respect to Operational Performance: On April 1,2010, Sparsh had 15 delivery centers across 11 cities in India with a capacity of about 11500 seats and work pool of over 15400 dedicated resources offering multilingual (15 Indian languages) services to clients. The Company now has over 8918 seats and work pool of over 11,900 dedicated resources offering services in 15 Indian languages to clients from 15 delivery centers across 14 cities in India (Mumbai, Thane, Pune, Gurgaon, Dehradun, Karnal, Noida, Kolkata, Bangalore, Chennai and Pondicherry). Your Company has over 38 clients and over 94 processes across several verticals including Banking, Financial Services, Insurance, The Companys operating income for the year ended March 31, 2011 has reduced by 9.18% over previous year due to ramp downs in Telecom clients. (H) Human Resources and Employee Relations: The relations between the Company and the employees are cordial. On behalf of the Board of Directors Conrad DSouza Susir Kumar Mumbai Director Director May 4, 2011 DIN: 00010576 DIN: 00049374