Q revenue at US$ 95.8 mn; at ` 589 Crores

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1 Q revenue at US$ 95.8 mn; at ` 589 Crores First Interim Dividend of 2014: ` 3.00 per share Revenue at $ 95.8 mn up 2% Y-o-Y in $ terms (up 16%Y-o-Y in ` terms to ` 589 Crores) Revenue down 4.3% sequentially in $ terms at $ 95.8 mn (down 5% Q-o-Q in ` terms to ` 589 Crores) Q Gross margin down 90 bps Y-o-Y; down 300 bps Q-o-Q to 36.8% EBITDA margin for Q at 19.2% stable Y-o-Y; down 330 bps Q-o-Q Q Profit after Tax (PAT) at ` 70.3 Crores Q Diluted Earnings per share (EPS) at ` 2.33 Return on Equity (RoE) at 24% at the end of Q Cash & Cash equivalents at the end of March 2014 at ` 443 Crores First Interim Dividend at ` 3.00 for Q Days of Sales Outstanding (DSO) was 48 days at the end of Q new clients added in Q1 2014; 235 active clients currently 167 Fresh graduate engineers added during Q Attrition for the quarter ended March 2014 was at 12.8% Mumbai April 29, 2014: Hexaware Technologies Limited, a leading global provider of IT, BPO and Consulting services has just reported the results for the first quarter of the calendar year ended March 31, Organization Updates Hexaware has been re-assessed at Level 5 of the Capability Maturity Model Integration (CMMI), using the multi-model approach for Development and Services version 1.3. The scope of the assessment covers software development, maintenance, testing, production support and infrastructure management services in its centers in India and Mexico. Hexaware was found to be the 10 th organization in the world, and only the second in Mexico to receive a CMMI Version 1.3 Level 5 distinction. P R Chandrasekar, CEO and Vice Chairman, Hexaware Technologies Limited stated Though this quarter has been soft, we expect a healthy growth in revenue in Q on the back of the visibility from our existing customers and our deal pipeline. To enable the Company s future growth prospects, Hexaware has invested by adding 167 freshers offshore during the quarter. In addition, the Company has further strengthened its field sales force by a gross addition of 14 personnel for sales and marketing activities. Keeping with the growth focus, P R Chandrasekar added We have engaged a leading consulting firm to provide advisory on sharpening the Go to Market strategy, conducting For immediate release 1

2 portfolio assessment of our micro-verticals and to institutionalize sales excellence processes. This initiative will drive the Company on its long term growth path. First Interim Dividend of 2014 The Board of Directors declared a first interim dividend of ` 3.00 per share (150%) on equity shares of ` 2/- each. The record date is fixed as Monday, 12 th May 2014 for determining the shareholders entitled for this first interim dividend of the year The payment shall be made on May 16 th, This would result in a cash outflow of ` Crores for dividend payment including tax, amounting to a dividend payout ratio of 150% for Q Payment of the 2013 Final Dividend Final dividend for the year 2013 was ` 1.00 per share (50%). Total dividend comprising three interim and final dividend for 2013 amounts to ` per share, (555%) up from ` 5.40 per share (270%) for the year Business Update During the quarter, Hexaware experienced decline in revenue from some of its Top 10 customers. This was primarily due to some project closures as well as budget re-allocation to other initiatives on the client side. However, the relationships with all these customers continue to be strong and the Company expects a healthy growth from the same set of clients in the coming quarters. During the previous quarter, the Company added 11 new clients across all its key focus areas. Of these, 1 client was added in the Banking and Financial Services (BFS) Domain and 2 clients each were added in the Healthcare & Insurance (H&I) space and in the Travel and Transportation Vertical and 3 clients in the Manufacturing Vertical. Of the 11 clients added in Q1 2014, 5 customers are based in Americas, and 6 in Asia Pacific (APAC) region. From a horizontal service line perspective, 6 clients were added in Human Capital Space (Enterprise Solutions), 2 clients in Business Intelligence and Business Analytics (BI/ BA) Horizontal and 1 client each in Quality Assurance and Testing Services (QATS) and Remote Infrastructure Management Services (Remote IMS) service line. With this backdrop, the Company expects to register healthy revenue growth Q-o-Q and an improvement in Operating Margin in Q Foreign Exchange Cover The Company has hedges worth $ mn at an effective rate of ` and 7.4 mn at an effective exchange rate of ` maturing over the course of the next six quarters (from April 2014 to July 2015). Awards and Recognition Hexaware has received the CISO Hall Of Fame award from CISO Platform (India) for its excellence in the deployment and sustenance of Information security within the Organization. This award has been given in recognition of receiving the Top 100 CISO Awards for the last four years continuously. Hexaware has been mentioned as one of the Tier 3 India-based Remote Infrastructure Management (RIM) providers in the Gartner report titled, Competitive Landscape: India-Based For immediate release 2

3 RIM Providers Are Starting to Break Away From the Clutter dated 05 March 2014 by analyst Arup Roy. Hexaware has been mentioned as one of the largest providers of project-based CRM services that operate in North America, in the Gartner report titled, The Gartner CRM Vendor Guide, 2014 dated 10 March 2014 by analysts Jim Davies, Ed Thompson, Gareth Herschel and many others. Hexaware has been mentioned as a medium-sized systems integrator with considerable mobile testing experience in the Ovum report titled Mobile Application Testing dated 27 February 2014, by analyst Chandranshu Singh. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. About Hexaware Hexaware is a leading global provider of IT & BPO and consulting services. The Company focuses on key domains such as Banking, Financial Services, Insurance, Travel, Transportation, Logistics, Life Sciences and Healthcare. Our business philosophy, Your Success is Our Focus, is demonstrated through the success we ensure for our clients. Hexaware focuses on delivering business results and leveraging technology solutions by specializing in Business Intelligence & Analytics, Enterprise Solutions, Quality Assurance and Testing Services, Remote Infrastructure Management Services and Legacy Modernization. Founded in 1990, Hexaware has a wellestablished global delivery model armed with proven proprietary tools and methodologies, skilled human capital and SEI CMMI-Level 5 certification. For additional information logon to Safe Harbor Statement Certain statements in this press release concerning our future growth prospects are forwardlooking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixedprice, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Hexaware has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. For more information contact: Sreedatri Chatterjee Hexaware Technologies Limited Tel: +91 (22) / 83 sreedatric@hexaware.com For immediate release 3

4 Consolidated Audited Income Statement (as per Indian GAAP) ` Mn Quarterly Data Head Q1 14 Q4 13 QoQ% Q1 13 YoY% Revenues 5,889 6, % 5, % Direct Costs 3,723 3, % 3, % Gross Profit 2,166 2, % 1, % Selling / General And Administration 1,033 1, % % EBITDA 1,133 1, % % Depreciation and Amortization % % Operating Profit = EBIT 1,025 1, % % Other Income (net) % % Forex Gains / (Losses) (135) (108) 25.7% % Profit Before Tax 975 1, % 1, % Provision for Tax % % Profit After Tax 703 1, % % Key Ratios Q1 14 Q4 13 QoQ% Q1 13 YoY% Gross Margin 36.8% 39.8% -3.0% 37.7% -0.9% SG&A to Revenue 17.5% 17.4% 0.1% 18.4% -0.9% EBITDA 19.2% 22.5% -3.3% 19.3% -0.1% Operating / EBIT Margin 17.4% 20.8% -3.4% 17.4% 0.0% Profit before tax 16.6% 20.8% -4.2% 19.8% -3.2% Profit after Tax 11.9% 16.6% -4.7% 15.6% -3.7% EPS-INR Basic (1.10) 2.67 (0.33) Diluted (1.09) 2.64 (0.31) Minor differences in the QoQ and in the YoY columns on account of rounding off For immediate release 4

5 Consolidated Audited Balance Sheet (as per Indian GAAP) As at Mar 31 As at Dec Head Equity & Liabilities ` Mn As at Mar Equity Share Capital Reserves 12,225 12,631 12,543 Forex MTM (662) (1,239) (411) Non Current Liability Deferred Tax Liability (Net) Liability - Forex (MTM) Dividend Pending Payout 1,405 2, Other Current Liabilities 2,824 2,800 2,727 Total Sources of Funds 16,622 18,084 16,575 Assets Net Fixed Assets 5,332 5,371 5,168 Deferred Tax Asset (Net) Long Term Loans and Advances 1,355 1,291 1,063 Non Current Assets / Investments Cash and cash equivalent 4,434 6,564 5,664 Current Assets Debtors 3,089 3,236 2,986 Current Asset - Forex (MTM) Others 1,975 1,617 1,490 Total Current assets 5,450 4,853 4,517 Total Uses of Funds 16,622 18,084 16,575 For immediate release 5

6 Financial and Operational Metrics Performance Review Revenue Growth Vertical Split Service Lines Split `, Mn Q1 FY 14 Q4 FY 13 Q3 FY 13 Q2 FY 13 Q1 FY 13 FY 13 Revenue from Operations 5,889 6,200 6,211 5,366 5,077 22,853 %, q-o-q (5) (0) Other Income Banking and Capital Markets Travel & Transportation Healthcare & Insurance Emerging Segments Total Application Development & Maintenance (ADM) Enterprise Solutions Quality Assurance and Testing Services(QATS) / Testing Business Intelligence & Analytics Business Process Management (BPM) Remote Infrastructure Management Services (Remote IMS) Total Geography Onsite: Offshore Mix Americas Europe Asia Pacific Total Onsite Offshore Total Client data Repeat Business % Q1 FY 14 Q4 FY 13 Q3 FY 13 Q2 FY 13 Q1 FY Clients billed No Q1 FY 14 Q4 FY 13 Q3 FY 13 Q2 FY 13 Q1 FY Clients added No Q1 FY 14 Q4 FY 13 Q3 FY 13 Q2 FY 13 Q1 FY 13 FY For immediate release 6

7 DSO Revenue Concentration Client Size Days Q1 FY 14 Q4 FY 13 Q3 FY 13 Q2 FY 13 Q1 FY 13 Billed Including Unbilled Accruals Top Top Top Nos (Last Twelve Months) Q1 FY 14 Q4 FY 13 Q3 FY 13 Q2 FY 13 Q1 FY 13 More than $ 1 Mn Between $ 1 to 5 Mn Between $ 5 to 10 Mn Between $ 10 to 20 Mn Over $ 20 Mn People Numbers IT Services % Q1 FY 14 Q4 FY 13 Q3 FY 13 Q2 FY 13 Q1 FY 13 Billable Personnel Onsite 18.6% 18.6% 20.1% 18.8% 18.1% Offshore 73.1% 73.1% 71.8% 72.9% 73.6% Total 91.7% 91.7% 91.9% 91.7% 91.7% Marketing (Incl. Sales 2.3% 2.1% 2.0% 2.0% 2.0% Support) Others (Incl. Tech. 6.0% 6.2% 6.1% 6.3% 6.3% Support) Grand Total 100.0% 100.0% 100.0% 100.0% 100.0% Utilization Attrition Rate Including Trainees % Q1 FY 14 Q4 FY 13 Q3 FY 13 Q2 FY 13 Q1 FY 13 Last Twelve Months Rupee Dollar Rate Q1 FY 14 Q4 FY 13 Q3 FY 13 Q2 FY 13 Q1 FY 13 FY 13 Period Closing rate Period average rate For immediate release 7

8 Details of Cash and Cash Equivalents Bank / Institution Name Current Account Deposit Account Total IDBI Bank Ltd Bank of America The Royal Bank of Scotland Axis Bank ABN Amro Bank Kotak Bank Commerz bank DBS bank Punjab National bank National Australia Bank Ltd Bank of India HDFC Bank Ltd BANAMEX ICICI bank Ltd Banco Santander Rabo Metropolitian Bank CITI Bank UBS Bank Societe Generale Bawag P.S.K. Bank HSBC Bank Ltd Andhra Bank Handelsbanken Scotia Bank IndusInd Bank UCO Bank Mizuho Bank State Bank of India Canara Bank CASH Remit In transit Grand Total 1, , ` Mn Details of Investments in Mutual Funds ` Mn ICICI Prudential Kotak Birla Sun Life IDFC Sundaram HDFC Templeton Grand Total 2, For immediate release 8

9 Consolidated Audited Income Statement (as per Indian GAAP) USD K Quarterly Data Head Q1 14 Q4 13 QoQ% Q1 13 YoY% Revenues 95, , % 94, % Direct Costs 60,615 60, % 58, % Gross Profit 35,259 39, % 35, % Selling / General And Administration 16,796 17, % 17, % EBITDA 18,463 22, % 18, % Depreciation and Amortization 1,757 1, % 1, % Operating Profit = EBIT 16,706 20, % 16, % Other Income (net) 1,381 1, % 1, % Forex Gains / (Losses) (2,189) (1,737) 26.0% % Profit Before Tax 15,897 20, % 18, % Provision for Tax 4,472 4, % 3, % Profit After Tax 11,426 16, % 14, % Key Ratios Q1 14 Q4 13 QoQ% Q1 13 YoY% Gross Margin 36.8% 39.8% -3.0% 37.7% -0.9% SG&A to Revenue 17.5% 17.4% 0.1% 18.4% -0.9% EBITDA 19.3% 22.5% -3.2% 19.3% 0.0% Operating / EBIT Margin 17.4% 20.9% -3.5% 17.4% 0.0% Profit before tax 16.6% 20.8% -4.2% 19.8% -3.2% Profit after Tax 11.9% 16.6% -4.7% 15.6% -3.7% Minor differences in the QoQ and in the YoY columns on account of rounding - off For immediate release 9