Vcustomer Delhi - PowerPoint

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Vcustomer Delhi - PowerPoint Powered By Docstoc
					 VCustomer
Paulina Quirarte. Déborah Alcocer.
Ricardo Estrada. Mario Malfavón.




                                     1
Agenda
                       Where?

         Today’s
                                   Why?
         situation



                      VCustomer
     Growth
                                       How?
     Strategy



                             What to
                Proposals
                             Expect?


                                              2
 Today’s situation


                            BPO

    India-based                         Growth
     operations

                         Expand to
                          another
                          country
Rising wages
Fast appreciation                    Diversify investment
Value of Rupee vs                    Offer new services
US dollar                            Look for new Locations

                    Lower margins                         3
Where to invest?
      Business environment
                                     Philippines



                                       China



                                      Ukraine

                     People skills
 Low cost                 &
                      availability    Mexico



                                                   4
Where?
                   Kiev
                   IRR= 8%




                                   Davao
                                   IRR= 25%




Hidalgo    New Delhi
IRR= 35%
                             Nanjing
                             IRR= 289%   5
How to enter the market?

  Philippines         Corporation



    China            Wholly Foreign
                    Owned Enterprise


                     Limited Liability
   Ukraine              Company



                 Limited Liability Company
   Mexico           & Variable Capital

                                             6
   What to expect?
                                      Business      Tax: 53%
     Initial investment:$5,500,000   Environment
     Annual Wage average:                           Start up:48 days
     BPO: $10,000                                   No. Procedures: 11
     Annual Inflation rate: 6.2%
     NPV: $550,000 USD                              Investors Protection
     Exchange rate:                                 3.33/10
     51 PHP/ USD                                    Tax deduction: available
                                       PHL


                                                    Labour skills
                         Costs
                                                    & availability




                                     Languages: English Spanish, Korean, French,
                                     German, Chinese, Japanese, Hindi, Arabic
                                     Skills                                    7
Source: Deloitte
                                      Tax: 77.1%
     Initial investment: $4,200,000   Start up: 35 days
     Annual Wage average:             No. Procedures: 13
     BPO: $7,600                      Investors Protection: 5/10
     Annual Inflation rate: 1.5%      Tax deduction: favorable
     NPV: $ 3,300,000 USD
     Exchange rate:
     8 CNY/ USD




                                        Languages: Chinese & English

                                                                   8
Source: Deloitte
                                                   Tax: 15%
     Initial investment:$5,500,000    Business     Start up:33 days
                                     Environment
     Annual Wage average:                          No. Procedures: 10
     BPO: $10,000                                  Investors Protection. 3.67/10
     Annual Inflation rate: 11.6%                  Tax deduction
     NPV: 271,000 USD
     Exchange rate:
     5 UAH/USD
                                       UKR

                                                     Labour skills
                           Costs
                                                     & availability




                                          Languages: Ukrainian, Russian, Rumanian,
                                          Polish, Hungarian and English
                                                                                   9
Source: Deloitte
                                               Tax: 35%
     Initial investment:$9,500,000             Start up:27 days
     Annual Wage average:                      No. Procedures: 8
     BPO:$18,000                               Investors Protection: 6/10
     Annual Inflation rate: 3.4%               Tax deduction: available
     NPV: $1,200,000 USD
     Exchange rate:
     11 MXP/USD




                                     Languages: Spanish, English, French, German

                                                                            10
Source: Deloitte
                   Pros                       Cons
              Understand US mkt
Philippines                          More expensive than India
                 Voice Work
                                         Small talent pool
                 Low attrition



  China           Low Costs                Low Quality



                                         Small talent pool
 Ukraine      European Language           Higher costs



              30% cheaper than USA     Good for low-end jobs
 Mexico        Geographic location
                  Spanish skills
                                                             11
Recommendations


                  Integral Fiscal Services




                  Provide service to 3PL’s
                  Tracking merchandise
                  and containers




                                             12
Integral fiscal services
             Philippines      Tax deduction


                           IMMEX
              Mexico       DRAW BACK
FISCAL AID


               China               Up to 50% Tax exemptions




             Ukraine          EU tax regulations
                                                              13
3PL Services

           Right condition         Right time




                         59% share
                         of revenues
       Right cost                        Right place




                       Right product


                                                       14
Annex Index
•   Country Analysis                 •   Definitions
•   Macroeconomic Country Analysis   •   Competition Growth Average
•   Global Skills                    •   Industries Wage Averages
•   Global Skills chart              •   Inflation Values
•   Starting a Business              •   Building Rent
•   Dealing with Licenses            •   Smart Cubicle
•   Employing Workers                •   Financial Example China
•   Registering Property             •   Financial Example Philippines
•   Getting Credit                   •   Financial Example Ukraine
•   Protecting Investors             •   Internal Rate pof Return
•   Paying Taxes                     •   Financial Example Mexico
•   Trading Across Borders           •   Industry WACC
•   Enforcing Contracts              •   Competitors Industry WACC
•   Closing a Business               •   VCustomer Growth Rate
•   Investment Countries             •   Risk Index


                                                                         15
    Country Analysis
                                                    20%                                                         35%                              45%                    100%
    Economy                             Business Environment                                        People Skills and Availability       Financial Factors         Investment Score
                 Ease of doing                                                                    Globalization
                   business        Political Risk     Economic Risk          Financial Risk          Index           Global Skills   Inflation     Industry Wage
                     5%                  5%                  5%                   5%                  18%                18%          10%               35%             100%
Algeria               2                  5.6                 0.98                0.52                  0                   0            9                0              0.455
Argentina             3                  3.9                 2.3                  3.9                  3                   0            4               4.02            2.587
Brazil                2                  5.2                 3.2                  2.8                  1                   6            9               3.37           3.9645
Bulgaria              7                  3.8                 3.8                  3.6                  0                   8           7.5              4.26            4.551
China                 4                  4.5                 2.5                 0.75                  2                   2           7.5               10            5.5375
Colombia              5                  7.2                 3.7                  3.5                  2                   0           9.7              5.93           4.3655
Czech Republic        7                  2.8                 2.6                  2.3                  8                   4           8.7              2.48            4.573
Estonia               9                  2.9                 2.8                  3.3                  0                   6           9.6              5.41           4.8035
Hungary               6                  2.4                 4.2                  4.4                  7                   0           9.7              2.67           3.9795
India                 0                  5.8                 3.8                  1.6                  0                  10           8.7              6.92            5.602
Mexico                7                  3.6                 3.6                  2.1                  4                   7           9.4              3.07           4.7545
Philippines           1                  6.3                 3.2                  2.8                  5                   8           7.8              7.59           6.3765
Poland                5                  3.3                 2.6                  2.6                  5                   6           7.3              3.25           4.4675
Russia                4                  4.9                 1.1                 0.52                  2                  10           4.2              3.43           4.2465
Singapore             10                 1.9                 0.52                0.98                  10                  6            7               1.86            4.821
Slovakia              8                  2.8                 3.6                 3.51                  6                   1           9.6              2.55            3.973
Sri Lanka             4                  8.5                 4.9                  3.7                  3                   0           1.9              6.65           4.0975
Thailand              9                  6.5                 3.6                  2.1                  3                   1           8.9              5.68            4.638
Tunisia               5                  3.6                 3.5                  3.3                  4                   0           9.4               0               2.41
Ukraine               1                  4.5                 4.7                  2.3                  4                  10           2.4              5.23           5.1455
United States         10                 2.3                 2.98                 6.2                  10                 10           8.5              0.54            5.613
                       Sources: Foreign Policy Globalization Index 2005, A.T. Kearney, Inc
                                 Global Skills Report 2006 Brainbench, Inc
                                 International Country Risk 2007, Political Risk Services Group
                                 World Monitoring Report 2007, The World Bank                                                                                              16
 Macroeconomic Country Analysis
                                                  Cell              Internet
            GDP real                Phone lines phones Internet users per
             growth                     /100      /100   users per     100                                  Exchange
 Country       rate    Inflation     habitants habitants    host   habitants Literacy    Unemployment           rate  Currency
Algeria       5.60%        3%          7.716    40.983    1597.34     5.760    70%          15.70%            72.647
Argentina     8.50%       10%          21.84     54.84       6.20     24.81  97.10%         10.20%            3.0543
Brazil        2.80%        3%          22.31     45.37       3.98     13.63  86.40%          9.60%            2.1761
Bulgaria      6.50%      6.50%         33.91     85.28      11.89     30.04  98.60%          9.60%            1.5576
China        10.35%      1.50%         26.51     33.10     528.40      9.31  95.10%         4.20%*              7.97    CNY
Colombia      5.40%      4.30%         49.23     17.30       8.14     10.68  92.50%         11.10%           2,358.60
Czech Rep. 6.20%         2.70%         31.45    115.13       4.03     49.86    99%           8.40%            22.596
Estonia       9.80%      4.40%         33.59    109.81      13.21     52.44  99.80%          4.50%            12.473
Hungary       3.80%      3.70%         33.71     93.61       5.02     30.63  99.40%          7.40%            210.39
India         8.50%      5.30%          4.40      6.12      38.89      5.31  59.50%          7.80%              45.3
Mexico        4.50%      3.40%         17.95     43.66       5.43     17.13  92.20%         3.20%**           10.899    MXN
Philippines 5.40%        6.20%          3.77     36.02      70.28      8.59  92.60%          7.90%            51.246    PHP
Poland        5.30%      1.30%         30.64     75.72      29.57     27.52  99.80%         14.90%            3.1032
Russia        6.60%      9.80%         28.36     84.88      11.97     16.76  99.60%          6.60%              27.2
Singapore     7.40%        1%          40.59     96.31       2.69     53.20  92.50%          3.10%            1.5889
Slovakia      6.40%      4.40%         21.97     83.34      11.86     45.89  99.60%         10.20%            29.611
Sri Lanka     6.30%     12.10%          7.22     20.47      42.91      1.34  92.30%          7.60%            103.99
Thailand      4.80%      5.10%         10.81     42.08       8.97     12.94  92.60%          2.10%            37.882
Tunisia         4%       4.60%         12.24     55.28    2228.50      9.28  74.30%         13.90%             1.331
Ukraine         7%      11.60%         26.22     37.18      17.65     11.40  99.70%         6.7%***             5.05    UAH
USA           3.40%      2.50%         89.00     72.86       1.05     68.18    99%           4.80%               1

              Source: World's Fact Book CIA 2007                            *official rate for urban areas
                                                                            **about 25% underemployed
                                                                            *** international labor organization (gov 2.7%)   17
Global Skills
•   Information Technology
•   Finance
•   Customer Support
•   Sales and Marketing
•   Management
•   Health Care

Source: Global Skills Report 2006 Brainbench, Inc


                                                    18
Global Skills           TOP GLOBAL SKILLS RANK 2006

           RANK 2006    COUNTRY         RANK2005 Marginal contribution
               1        US                   1                10
              14        INDIA                2                10
              29        RUSSIA               3                10
              38        UKRANIA              5                10
              28        ROMANIA              4                 9
               7        CANADA               6                 9
              37        UK                   7                 9
               4        BELARUS             11                 9
               6        BULGARIA             8                 8
              27        PHILIPPINES          9                 8
              15        INDONESIA                              8
              26        PAKISTAN                               8
               3        AUSTRALIA                              7
              13        GERMANY                                7
              18        LATVIA                                 7
              21        MEXICO                                 7
               5        BRAZIL                                 6
              11        ESTONIA                                6
              27        POLAND                                 6
              31        SINGAPORE                              6
              19        LITHUANIA                              5
              25        Nigeria                                5
              33        SLOVENIA                               5
              34        South Africa                           5
              10        Czech Republic                         4
              16        Ireland                                4
              17        Italy                                  4
              20        Malaysia                               4
              39        United Arab E                          4
              12        France                                 3
              23        Netherlands                            3
              24        New Zeland                             3
              30        Saudi Arabia                           3
               2        Armenia                                2
               8        China                                  2
               9        Cuba                                   2
              40        Yugoslavia                             2
              22        Moldova                                1
              32        Slovakia                               1
              35        Sweden                                 1
              36        Thailand                               1
              Source:   Global Skills Report 2006 Brainbench, Inc        19
Starting a Business Analysis
                         Ease of Doing Business                               Starting a Business
                                                                               Cost (% of   Min. capital (%
                                                   Procedures                 income per    of income per    Ease of starting a
Code       Economy        RANK        Percentile    (number)    Time (days)     capita)         capita)     business (percentile)
DZA    Algeria             116           0.57           14          24           22%             46%                0.58
ARG    Argentina           101           0.53           15          32           12%             6%                 0.54
BRA    Brazil              121           0.58           17         152           10%             0%                 0.56
BGR    Bulgaria             54           0.44           9           32           8%              91%                0.46
CHN    China                93           0.52           13          35           9%             213%                0.60
COL    Colombia             79           0.49           13          44           20%             0%                 0.47
CZE    Czech Republic       52           0.44           10          24           9%              37%                0.42
EST    Estonia              17           0.28           6           35           5%              34%                0.34
HUN    Hungary              66           0.45           6           38           21%             74%                0.46
IND    India               134           0.61           11          35           74%             0%                 0.47
MEX    Mexico               43           0.40           8           27           14%             13%                0.37
PAN    Panama               81           0.49           7           19           24%             0%                 0.22
PHL    Philippines         126           0.60           11          48           19%             2%                 0.55
POL    Poland               75           0.48           10          31           21%            204%                0.56
RUS    Russia               96           0.52           7           28           3%              3%                 0.27
SGP    Singapore            1            0.08           6           6            1%              0%                 0.13
SVK    Slovakia             36           0.37           9           25           5%              39%                0.38
LKA    Sri Lanka            89           0.51           8           50           9%              0%                 0.32
THA    Thailand             18           0.28           8           33           6%              0%                 0.23
TUN    Tunisia              80           0.49           10          11           9%              28%                0.37
UKR    Ukraine             128           0.61           10          33           9%             199%                0.52
USA    United States        3            0.12           5           5            1%              0%                 0.02


       Source: World Monitoring Report 2007, The World Bank
                                                                                                                             20
Dealing with Licenses
                                             Dealing with Licenses
                                                       Cost (% of
                           Procedures                 income per    Ease of dealing with
   Code       Economy       (number)    Time (days)     capita)     licenses (percentile)
   DZA    Algeria              25           244          59%                0.62
   ARG    Argentina            23           288          46%                0.63
   BRA    Brazil               19           460         180%                0.69
   BGR    Bulgaria             22           226         270%                0.69
   CHN    China                29           367          84%                0.73
   COL    Colombia             12           150         646%                0.41
   CZE    Czech Republic       31           271          15%                0.60
   EST    Estonia              13           117          34%                0.15
   HUN    Hungary              25           212         260%                0.70
   IND    India                20           270         606%                0.75
   MEX    Mexico               12           142         105%                0.26
   PAN    Panama               22           121         115%                0.45
   PHL    Philippines          23           197         113%                0.60
   POL    Poland               25           322          86%                0.70
   RUS    Russia               22           531         275%                0.80
   SGP    Singapore            11           129          22%                0.12
   SVK    Slovakia             13           272          17%                0.34
   LKA    Sri Lanka            17           167         151%                0.44
   THA    Thailand              9           127          11%                0.08
   TUN    Tunisia              24           79          1032%               0.60
   UKR    Ukraine              18           242         187%                0.59
   USA    United States        18           69           16%                0.21


          Source: World Monitoring Report 2007, The World Bank



                                                                                            21
Employing Workers
                                                          Employing Workers
                                                                          Firing costs
                           Difficulty of    Rigidity of   Difficulty of    (weeks of     Ease of employing
   Code       Economy      Hiring Index    Hours Index    Firing Index      wages)       workers (percentile)
  DZA     Algeria             44.44            60              30             17                0.449
  ARG     Argentina           44.44            60              20             139               0.607
  BRA     Brazil              66.67            60              0              37                0.477
  BGR     Bulgaria            50.00            80              10              9                0.478
  CHN     China               11.11            20              40             91                0.415
  COL     Colombia            22.22            40              20             59                0.412
  CZE     Czech Republic      33.33            20              30             22                0.290
  EST     Estonia             33.33            80              60             35                0.662
  HUN     Hungary             11.11            80              10             35                0.442
  IND     India               33.33            20              70             56                0.513
  MEX     Mexico              33.33            40              40             74                0.502
  PAN     Panama              77.78            20              70             44                0.610
  PHL     Philippines         55.56            40              20             91                0.533
  POL     Poland               0.00            60              40             13                0.311
  RUS     Russia              33.33            60              40             17                0.433
  SGP     Singapore            0.00             0              0               4                0.013
  SVK     Slovakia            16.67            60              40             13                0.397
  LKA     Sri Lanka            0.00            20              60             178               0.473
  THA     Thailand            33.33            20              0              54                0.292
  TUN     Tunisia             16.67            40              80             17                0.449
  UKR     Ukraine             44.44            40              80             13                0.502
  USA     United States        0.00             0              0               0                0.000


          Source: World Monitoring Report 2007, The World Bank




                                                                                                                22
Registering Property
                                            Registering Property
                                                     Cost (% of
                          Procedures                  property      Ease of registering
  Code       Economy       (number)    Time (days)     value)      property (percentile)
  DZA    Algeria              15            51          7.50               0.73
  ARG    Argentina             5            44          8.32               0.46
  BRA    Brazil               14            47          4.03               0.61
  BGR    Bulgaria              9            19          2.32               0.43
  CHN    China                 3            32          3.10               0.21
  COL    Colombia              7            23          3.48               0.38
  CZE    Czech Republic        4           123          3.01               0.40
  EST    Estonia               3            51          0.66               0.22
  HUN    Hungary               4            78         11.01               0.54
  IND    India                 6            62          7.80               0.57
  MEX    Mexico                5            74          5.24               0.47
  PAN    Panama                7            44          2.40               0.42
  PHL    Philippines           8            33          5.74               0.53
  POL    Poland                6           197          1.98               0.49
  RUS    Russia                6            52          0.30               0.33
  SGP    Singapore             3            9           2.78               0.13
  SVK    Slovakia              3            17          0.07               0.08
  LKA    Sri Lanka             8            63          5.12               0.61
  THA    Thailand              2            2           6.32               0.20
  TUN    Tunisia               5            57          6.13               0.46
  UKR    Ukraine              10            93          3.43               0.65
  USA    United States         4            12          0.46               0.11


         Source: World Monitoring Report 2007, The World Bank



                                                                                           23
Getting Credit
                                                  Getting Credit
                              Credit
                           Information   Legal Rights   Sum getting    Ease of getting
   Code       Economy         Index         Index         credit      credit (percentile)
   DZA    Algeria               2             3              5               0.81
   ARG    Argentina             6             3              9               0.36
   BRA    Brazil                5             2              7               0.57
   BGR    Bulgaria              4             6             10               0.27
   CHN    China                 4             2              6               0.66
   COL    Colombia              4             3              7               0.57
   CZE    Czech Republic        5             6             11               0.18
   EST    Estonia               5             4              9               0.36
   HUN    Hungary               5             6             11               0.18
   IND    India                 3             5              8               0.47
   MEX    Mexico                6             2              8               0.47
   PAN    Panama                6             6             12               0.11
   PHL    Philippines           3             3              6               0.66
   POL    Poland                4             4              8               0.47
   RUS    Russia                0             3              3               0.98
   SGP    Singapore             4             9             13               0.06
   SVK    Slovakia              3             9             12               0.11
   LKA    Sri Lanka             3             3              6               0.66
   THA    Thailand              5             5             10               0.27
   TUN    Tunisia               3             3              6               0.66
   UKR    Ukraine               0             8              8               0.47
   USA    United States         6             7             13               0.06


          Source: World Monitoring Report 2007, The World Bank


                                                                                            24
Protecting Investors
                                                        Protecting Investors
                                            Director                   Investor
                              Disclosure    Liability   Shareholder   Protection   Strength of protecting
     Code       Economy         Index        Index      Suits Index      Index     investors (percentile)
     DZA    Algeria               6            6            4           5.33               0.47
     ARG    Argentina             6            2            6           4.67               0.68
     BRA    Brazil                5            7            4           5.33               0.47
     BGR    Bulgaria             10            1            7           6.00               0.26
     CHN    China                10            1            4           5.00               0.56
     COL    Colombia              7            2            9           6.00               0.26
     CZE    Czech Republic        2            5            8           5.00               0.56
     EST    Estonia               8            4            6           6.00               0.26
     HUN    Hungary               2            4            7           4.33               0.77
     IND    India                 7            4            7           6.00               0.26
     MEX    Mexico                8            5            5           6.00               0.26
     PAN    Panama                3            4            7           4.67               0.68
     PHL    Philippines           1            2            7           3.33               0.90
     POL    Poland                7            2            9           6.00               0.26
     RUS    Russia                7            2            7           5.33               0.47
     SGP    Singapore            10            9            9           9.33               0.01
     SVK    Slovakia              2            4            7           4.33               0.77
     LKA    Sri Lanka             4            5            7           5.33               0.47
     THA    Thailand             10            2            6           6.00               0.26
     TUN    Tunisia               0            4            6           3.33               0.90
     UKR    Ukraine               1            3            7           3.67               0.87
     USA    United States         7            9            9           8.33               0.04


            Source: World Monitoring Report 2007, The World Bank




                                                                                                            25
Paying Taxes
                                                   Paying Taxes
                                                                       Ease of paying
                             Payments                 Total tax rate       taxes
    Code       Economy       (number)    Time (hours)  (% profit)       (percentile)
   DZA     Algeria              61           504          76.4%            0.88
   ARG     Argentina            34           615          116.8%           0.79
   BRA     Brazil               23          2600          71.7%            0.74
   BGR     Bulgaria             27           616          40.7%            0.55
   CHN     China                44           872          77.1%            0.84
   COL     Colombia             68           456          82.8%            0.89
   CZE     Czech Republic       14           930          49.0%            0.57
   EST     Estonia              11           104          50.2%            0.29
   HUN     Hungary              24           304          59.3%            0.60
   IND     India                59           264          81.1%            0.77
   MEX     Mexico               49           552          37.1%            0.63
   PAN     Panama               59           560          52.4%            0.80
   PHL     Philippines          59            94          53.0%            0.55
   POL     Poland               43           175          38.4%            0.44
   RUS     Russia               23           256          54.2%            0.53
   SGP     Singapore            16            30          28.8%            0.10
   SVK     Slovakia             30           344          48.9%            0.58
   LKA     Sri Lanka            61           256          74.9%            0.77
   THA     Thailand             46           104          40.2%            0.40
   TUN     Tunisia              45           268          58.8%            0.68
   UKR     Ukraine              98          2185          60.3%            0.93
   USA     United States        10           325          46.0%            0.42


           Source: World Monitoring Report 2007, The World Bank


                                                                                        26
Trading Across Borders
                                                                   Trading Across Borders
                         Documents                     Cost to export   Documents                   Cost to import   Ease of trading
                          for export     Time for        (US$ per        for import   Time for        (US$ per       across borders
 Code       Economy       (number)     export (days)    container)       (number)   import (days)    container)        (percentile)
 DZA    Algeria               9             15             1606             9            22             1886              0.55
 ARG    Argentina             6             16             1470             7            21             1750              0.42
 BRA    Brazil                7             18              895             6            24             1145              0.37
 BGR    Bulgaria              7             26             1233             10           25             1201              0.52
 CHN    China                 6             18              335             12           22              375              0.27
 COL    Colombia              6             34             1745             11           35             1773              0.63
 CZE    Czech Republic        5             20              713             8            22              833              0.28
 EST    Estonia               5             3               640             6             5              640              0.09
 HUN    Hungary               6             23              922             10           24             1137              0.43
 IND    India                10             27              864             15           41             1244              0.67
 MEX    Mexico                6             17             1049             8            26             2152              0.45
 PAN    Panama                9             16              920             9            13              920              0.38
 PHL    Philippines           6             18             1336             7            20             1336              0.40
 POL    Poland                6             19             2260             7            26             2260              0.52
 RUS    Russia                8             39             2237             8            38             2237              0.70
 SGP    Singapore             5             6               382             6             3              333              0.05
 SVK    Slovakia              9             20             1015             8            21             1050              0.45
 LKA    Sri Lanka             8             25              797             13           27              789              0.50
 THA    Thailand              9             24              848             12           22             1042              0.52
 TUN    Tunisia               5             18              770             8            29              600              0.28
 UKR    Ukraine               6             33             1009             10           46             1025              0.53
 USA    United States         6             9               625             5             9              625              0.13


        Source: World Monitoring Report 2007, The World Bank



                                                                                                                                       27
Enforcing Contracts
                                                Enforcing Contracts
                                                                      Ease of enforcing
                             Procedures                 Cost (% of       contracts
     Code       Economy       (number)    Time (days)     debt)         (percentile)
     DZA    Algeria              49           397         10.3%             0.43
     ARG    Argentina            33           520         15.0%             0.45
     BRA    Brazil               42           616         15.5%             0.60
     BGR    Bulgaria             34           440         14.0%             0.40
     CHN    China                31           292         26.8%             0.43
     COL    Colombia             37          1346         20.0%             0.70
     CZE    Czech Republic       21           820         14.1%             0.40
     EST    Estonia              25           275         11.5%             0.17
     HUN    Hungary              21           335          9.6%             0.13
     IND    India                56          1420         35.7%             0.92
     MEX    Mexico               37           415         20.0%             0.50
     PAN    Panama               45           686         50.0%             0.83
     PHL    Philippines          25           600         16.0%             0.42
     POL    Poland               41           980         10.0%             0.57
     RUS    Russia               31           178         13.5%             0.23
     SGP    Singapore            29           120         14.6%             0.22
     SVK    Slovakia             27           565         15.7%             0.42
     LKA    Sri Lanka            20           837         21.3%             0.51
     THA    Thailand             26           425         17.5%             0.37
     TUN    Tunisia              21           481         17.3%             0.34
     UKR    Ukraine              28           183         16.0%             0.25
     USA    United States        17           300          7.7%             0.08


            Source: World Monitoring Report 2007, The World Bank
                                                                                          28
Closing a Business
                                       Closing a Business
                                 Recovery rate    Ease of closing a
                                 (cents on the       business
       Code       Economy           dollar)         (percentile)
       DZA    Algeria                41.66              0.23
       ARG    Argentina              36.24              0.33
       BRA    Brazil                 12.09              0.77
       BGR    Bulgaria               34.43              0.36
       CHN    China                  31.50              0.43
       COL    Colombia               57.66              0.14
       CZE    Czech Republic         18.48              0.64
       EST    Estonia                39.85              0.27
       HUN    Hungary                39.72              0.27
       IND    India                  12.97              0.76
       MEX    Mexico                 63.15              0.14
       PAN    Panama                 32.29              0.40
       PHL    Philippines            4.03               0.84
       POL    Poland                 27.92              0.48
       RUS    Russia                 28.74              0.46
       SGP    Singapore              91.35              0.01
       SVK    Slovakia               48.07              0.17
       LKA    Sri Lanka              35.55              0.33
       THA    Thailand               42.57              0.21
       TUN    Tunisia                51.25              0.16
       UKR    Ukraine                8.69               0.79
       USA    United States          76.97              0.09


              Source: World Monitoring Report 2007, The World Bank



                                                                      29
Investment Countries
                          Official                          Investment         Investment            Investment
 Country      Rank                   Unofficial Languages
                        Languages                              Score             Strategy               Place
                                     spanish, korean,
                     english,        french, german,
Philippines    1                                             6.3765           Corporation                  Davao
                     philippine      chinese, japanese,
                                     hindi, arabic

                                                                           Wholly Foreign -
  China        2     chinese         english                 5.5375                                    Nanjing
                                                                           Owned Enterprise

                                     russian, rumanian,                        Joint stock
 Ukraine       3     ukrainian                               5.1455                                        Kiev
                                     polish, hungarian                          company
                                     english, french,                         Fully owned
 Mexico        4     spanish                                 4.7545                                    Hidalgo
                                     german                                    enterprise


                                                                   Sorces: Deloitte Touche Tohmatsu 2007

                                                                          Ethnologue 2007




                                                                                                                   30
Definitions
    Structure of Investment                                                      Definition

           Subsidiary
                                A company for which a majority of the voting stock is owned by a holding company.
    Wholly Owned - Subsidiary   Subsidiary which is owned entirely by its holding company.
                                The granting of permission to use intellectual property rights, such as trademarks,
            Licensing
                                patents, or technology, under defined conditions.
                                A contractual agreement joining together two or more parties for the purpose of executing
          Joint Venture         a particular business undertaking. All parties agree to share in the profits and losses of
                                the enterprise.
                                Corporations are juridical persons established under the Corporation Code and regulated
                                by the Securities and Exchange Commission with a personality separate and distinct
           Corporation
                                from that of its stockholders. The liability of the shareholders of a corporation is limited to
                                the amount of their share in the capital.
                                A close corporation is particular type of corporation subject to less rigid formal
                                requirements than other corporations. In this form of entity, management and ownership
                                are merged because of direct stockholder management of the corporation. To be a close
        Close Corporation       corporation, a corporation must have 20 or fewer shareholders, must have certain
                                restrictions on share transfer, and cannot be engaged in mining or oil, banking,
                                insurance, public utilities, education or other activities considered to be in the public
                                interest. It also cannot have two-thirds or more of its voting stock owned by a corporation
                                that is not a close corporation.
                                Foreign corporations may establish a branch in the Philippines if the laws of their home
                                country similarly allow Filipino citizens and corporations to do business there. Branches
                                are required to register with the SEC and secure a license to do business in the
             Branch
                                Philippines. However, a branch cannot be used to conduct activities that are included in
                                the Foreign Investment Negative List, because it does not have the requisite Filipino
                                ownership.

                                Under the Civil Code of the Philippines, a partnership is treated as a juridical person,
                                having a separate legal personality from that of its members. Partnerships may be either
                                general partnerships, where the partners have unlimited liability for the debts and
                                obligations of the partnership, or limited partnerships, where one or more general
           Partnership          partners have unlimited liability and the limited partners have liability only up to the
                                amount of their capital contributions. The most common form of corporate vehicle used
                                by foreign investors is the corporation. One reason is that a branch cannot be used if the
                                activities to be undertaken are included in the Foreign Investment Negative List. By
                                contrast, a corporation readily accommodates the requisite Filipino ownership.
                                Source: Investor Words

                                http://www.davaocity.gov.ph/doingbusiness/formsofdoingbusiness.htm




                                                                                                                                  31
  Competition Growth Average


                   2002           2003             2004             2005            2006    2002-2003   2003-2004   2004-2005   2005-2006   Growth Average
TCS                916.7         1140.3           1544.5           2170.6          2996.1     24%         35%         41%         38%            35%
Infosys            545.1          753.8           1062.6           1592.3          2151.8     38%         41%         50%         35%            41%
Wipro              476.6          625.2            943.3           1353.6           1815      31%         51%         43%         34%            40%
Satyam             414.5          459.2            566.4            793.6          1096.3     11%         23%         40%         38%            28%
Cognizant          180.9          257.1            413.5            648.6           989.6     42%         61%         57%         53%            53%
HCL Technologies   333.2           399             508.9            711.1           919.4     20%         28%         40%         29%            29%

                     Source: Exhibit 2 Revenue for the Top 6 Indian IT Companies




                                                                                                                                                      32
    Industries Wage Averages
   Country            BPO           Wage           Hours     Wage/Hour    VALUE 70%   CRM       Wage       Hours    Wage/Hour VALUE 30%
Argentina                       $     319.84        41.5     $     7.71      3.47           $     212.75    41.5   $      5.13   3.55
Brazil                          $     253.33        35.9     $     7.06      3.79           $     190.00    43.5   $      4.37   4.16
Bulgaria                        $     259.47        34.0     $     7.63      3.50           $     145.15    34.0   $      4.27   4.26
China                           $     146.92        55.0     $     2.67     10.00           $     100.00    55.0   $      1.82  10.00
Colombia                        $     216.59        44.2     $     4.90      5.45           $     188.53    44.2   $      4.27   4.26
Czech Rep.                      $     335.60        37.5     $     8.95      2.98           $     251.70    41.0   $      6.14   2.96
Estonia                         $     179.00        30.0     $     5.97      4.48           $     137.00    40.0   $      3.43   5.31
Hungary                         $     414.80        38.0     $    10.92      2.45           $     292.00    38.0   $      7.68   2.37
India                           $     149.71        50.0     $     2.99      8.92           $     112.28    50.0   $      2.25   8.10
Mexico                          $     335.26        45.0     $     7.45      3.59           $     251.44    53.0   $      4.74   3.83
Philippines                     $     189.45        41.6     $     4.55      5.87           $     110.00    41.6   $      2.64   6.88
Poland                          $     478.71        41.0     $    11.68      2.29           $     264.00    41.0   $      6.44   2.82
Russia                          $     313.95         44      $     7.14      3.74           $     228.46    44.0   $      5.19   3.50
Singapore                       $     660.03        46.5     $    14.19      1.88           $     528.00    46.5   $     11.35   1.60
Slovakia                        $     259.45        32.5     $     7.98      3.35           $     194.00    33.0   $      5.88   3.09
Sri Lanka                       $     112.28        36.0     $     3.12      8.56           $      84.21    36.0   $      2.34   7.77
Thailand                        $     169.48        48.0     $     3.53      7.57           $     177.57    48.0   $      3.70   4.91
Ukraine                         $     194.00        34.8     $     5.58      4.78           $     165.00    34.8   $      4.75   3.83
USA                             $   1,921.00        37.6     $    51.09      0.52           $   1,876.00    32.0   $     58.63   0.31

Source: www.ilo.org (International Labour Organization UN)
Different online sources




                                                                                                                                   33
Inflation Values
                      Average
                      Inflation
           Country       2006     Comparison to 4 %   Value
          Algeria         3%            1.00           9.00
          Argentina      10%           -6.00           4.00
          Brazil          3%            1.00           9.00
          Bulgaria      6.50%          -2.50           7.50
          China         1.50%           2.50           7.50
          Colombia      4.30%          -0.30           9.70
          Czech Rep. 2.70%              1.30           8.70
          Estonia       4.40%          -0.40           9.60
          Hungary       3.70%           0.30           9.70
          India         5.30%          -1.30           8.70
          Mexico        3.40%           0.60           9.40
          Philippines 6.20%            -2.20           7.80
          Poland        1.30%           2.70           7.30
          Russia        9.80%          -5.80           4.20
          Singapore       1%            3.00           7.00
          Slovakia      4.40%          -0.40           9.60
          Sri Lanka    12.10%          -8.10           1.90
          Thailand      5.10%          -1.10           8.90
          Tunisia       4.60%          -0.60           9.40
          Ukraine      11.60%          -7.60           2.40
          USA           2.50%           1.50           8.50
                          4%            0.00          10.00
          Source: www.cia.gov




                                                              34
Building Rent

                                         Building 2,500m2
    Country                Philippines            China          Ukraine         Mexico
    City                     Davao               Nanjing          Kiev           Hidalgo
    Price per m2         $         5.50       $        3.76   $        5.25   $        6.00
    Building/month       $ 13,750.00          $    9,400.00   $ 13,125.00     $ 15,000.00
    Per year             $ 165,000.00         $ 112,800.00    $ 157,500.00    $ 180,000.00


                                                              43010.75269          ft2


               Sources: Local Real Estate Agencies




                                                                                              35
Smart Cubicle




                36
Financial Example China
WACC              13.49%                                1.1 (10% growth company)

                 CHINA
Year     concept                                            Cashflow
       1 Training           $ 110,105.77     $ 5,000,000.00 $    744,975.82
         Personnel          $ 3,817,000.00                  $ 1,535,139.72
         Rental             $ 112,800.00                    $ 2,085,139.72
         Telecom & maint    $    13,039.13                  $ 3,274,773.81 NPV
         Instalation cost   $ 202,079.28
         TOTAL              $ 4,255,024.18
       2 Training           $    22,021.15   $ 5,500,000.00
         Personnel          $ 3,817,000.00
         Rental             $ 112,800.00
         Telecom & maint    $    13,039.13
         TOTAL              $ 3,964,860.28
       3 Training           $    22,021.15   $ 6,050,000.00
         Personnel          $ 3,817,000.00
         Rental             $ 112,800.00
         Telecom & maint    $    13,039.13
         TOTAL              $ 3,964,860.28

                                                                                   37
Financial Example Philippines
WACC                13.49%                               1.1 (10% growth company)
             PHILIPPINES
Year     concept                                             Cashflow
       1 Training            $ 141,980.77     $ 5,000,000.00 $    (434,074.91)
         Personnel           $ 4,922,000.00                  $     381,588.98
         Rental              $ 165,000.00                    $     931,588.98
         Telecom & maint     $     3,014.86                  $     551,097.85 NPV
         Instalation cost    $ 202,079.28
         TOTAL               $ 5,434,074.91
       2 Training            $    28,396.15   $ 5,500,000.00
         Personnel           $ 4,922,000.00
         Rental              $ 165,000.00
         Telecom & maint     $     3,014.86
         TOTAL               $ 5,118,411.02
       3 Training            $    28,396.15   $ 6,050,000.00
         Personnel           $ 4,922,000.00
         Rental              $ 165,000.00
         Telecom & maint     $     3,014.86
         TOTAL               $ 5,118,411.02

                                                                                    38
 Financial Example Ukraine
WACC               13.49%                                1.1 (10% growth company)
       UKRAINE
Year      concept                                            Cashflow
        1 Training           $ 145,629.81     $ 5,000,000.00 $ (555,572.12)
          Personnel          $ 5,048,500.00                  $    263,011.01
          Rental             $ 157,500.00                    $    813,011.01
          Telecom & maint    $     1,863.03                  $    270,858.02 NPV
          Instalation cost   $ 202,079.28
          TOTAL              $ 5,555,572.12
        2 Training           $    29,125.96   $ 5,500,000.00
          Personnel          $ 5,048,500.00
          Rental             $ 157,500.00
          Telecom & maint    $     1,863.03
          TOTAL              $ 5,236,988.99
        3 Training           $    29,125.96   $ 6,050,000.00
          Personnel          $ 5,048,500.00
          Rental             $ 157,500.00
          Telecom & maint    $     1,863.03
          TOTAL              $ 5,236,988.99




                                                                                    39
Internal Rate of Return



      IRR       Initial investment Cashflow 1     Cashflow 2       Cashflow 3       IRR

  China         $   (327,918.41) $     744,975.82 $ 1,535,139.72   $ 2,085,139.72         289%
  Philippines   $   (370,094.14) $    (434,074.91) $ 381,588.98    $ 931,588.98            25%
  Ukraine       $   (361,442.31) $    (555,572.12) $ 263,011.01    $ 813,011.01             8%




                                                                                                 40
Financial Example Mexico
  WACC                     13.49%                                    1.1 (10% growth company)

                          MEXICO
  Year           concept                                                 Cashflow
             1   Training           $     258,158.65   $    8,500,000.00 $ (1,091,333.78)
                 Personnel          $   8,949,500.00                     $     167,272.43
                 Rental             $     180,000.00                     $ 1,102,272.43
                 Telecom & maint    $       1,595.84                     $ 2,130,772.43
                 Instalation cost   $     202,079.28                     $ 1,206,754.51 NPV
                 TOTAL              $   9,591,333.78   $    9,350,000.00
             2   Training           $      51,631.73
                 Personnel          $   8,949,500.00
                 Rental             $     180,000.00
                 Telecom & maint    $       1,595.84
                 TOTAL              $   9,182,727.57   $   10,285,000.00
             3   Training           $      51,631.73
                 Personnel          $   8,949,500.00
                 Rental             $     180,000.00
                 Telecom & maint    $       1,595.84
                 TOTAL              $   9,182,727.57   $   11,313,500.00
             4   Training           $      51,631.73
                 Personnel          $   8,949,500.00
                 Rental             $     180,000.00
                 Telecom & maint    $       1,595.84
                 TOTAL              $   9,182,727.57

     IRR         Initial investment   Cashflow 1       Cashflow 2            Cashflow 3       Cashflow 4     IRR
    Mexico       $     (383,675.12) $ (1,091,333.78) $    167,272.43       $ 1,102,272.43   $ 2,130,772.43   35%

                                                                                                                   41
 Industry WACC

                Number of                                            Std Dev in                             After-tax Cost of
Industry Name     Firms     Beta          Cost of Equity   E/(D+E)     Stock      Cost of Debt   Tax Rate         Debt          D/(D+E)   Cost of Capital
Advertising        36              0.99     9.55%          81.80%     87.99%        6.70%        11.96%          5.90%          18.20%        8.89%
Aerospace/Defense73                0.92     9.20%          82.77%     47.95%        5.95%        21.77%          4.65%          17.23%        8.42%
Air Transport      56              1.38     11.48%         70.34%     47.08%        5.95%        19.40%          4.80%          29.66%        9.50%
Apparel            64              0.93     9.26%          88.19%     76.32%        6.70%        21.60%          5.25%          11.81%        8.79%
Auto & Truck       31              1.29     11.04%         44.29%     30.02%        5.70%        18.90%          4.62%          55.71%        7.47%
Auto Parts         64              0.99     9.56%          65.58%     58.85%        6.20%        18.93%          5.03%          34.42%        8.00%
Bank              550              0.59     7.62%          64.69%     19.18%        4.95%        27.81%          3.57%          35.31%        6.19%
Bank (Canadian) 7                  0.72     8.24%          90.85%     14.26%        4.95%        24.41%          3.74%          9.15%         7.83%
Bank (Foreign)      4              1.78     13.44%            NA      18.61%        4.95%        0.00%           4.95%            NA!           NA
Bank (Midwest)     37              0.79     8.60%          61.93%     17.10%        4.95%        29.14%          3.51%          38.07%        6.66%
                   27
Beverage (Alcoholic)               0.66     7.96%          80.93%     45.65%        5.95%        15.30%          5.04%          19.07%        7.40%
                   21
Beverage (Soft Drink)              0.71     8.16%          88.01%     30.03%        5.70%        17.74%          4.69%          11.99%        7.75%
Biotechnology     105              1.56     12.37%         95.80%     81.32%        6.70%        4.41%           6.40%          4.20%        12.12%
Building Materials 47              0.98     9.50%          74.88%     63.90%        6.70%        23.55%          5.12%          25.12%        8.40%
Cable TV           23              1.76     13.32%         72.00%     52.16%        6.20%        13.90%          5.34%          28.00%       11.08%
Canadian Energy 14                 0.73     8.27%          87.51%     32.36%        5.70%        30.19%          3.98%          12.49%        7.73%
Cement & Aggregates13              1.02     9.69%          79.14%     39.74%        5.70%        26.29%          4.20%          20.86%        8.55%
Chemical (Basic) 24                0.98     9.49%          78.35%     62.11%        6.70%        13.31%          5.81%          21.65%        8.69%
                   36
Chemical (Diversified)             0.97     9.45%          85.97%     38.67%        5.70%        25.87%          4.23%          14.03%        8.72%
                   94
Chemical (Specialty)               0.98     9.53%          82.28%     46.80%        5.95%        19.08%          4.81%          17.72%        8.69%
Coal               16              1.75     13.29%         86.24%     40.26%        5.95%        11.64%          5.26%          13.76%       12.19%
                  425
Computer Software/Svcs             1.84     13.75%         96.56%     83.89%        6.70%        10.36%          6.01%          3.44%        13.49%




 Source: Cost of Capital by Sector
 http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wacc.htm
                                                                                                                                                   42
Competitors Industry WACC

     Company Name                    Ticker Symbol       Industry Name          SIC Code
     1mage Software Inc                   ISOL       Computer   Software/Svcs     3579
     AAMPRO GROUP Inc                     AAPO       Computer   Software/Svcs     3579
     Accenture Ltd.                        ACN       Computer   Software/Svcs     3579
     Access Worldwide Comm               AWWC        Computer   Software/Svcs     3579
     Accrue Software Inc                 ACRUQ       Computer   Software/Svcs     3579
     Acorn Factor Inc.                    ACFN       Computer   Software/Svcs     3579
     ActiveCore Technologies Inc          ATVE       Computer   Software/Svcs     3579
     ActivIdentity Corp                   ACTI       Computer   Software/Svcs     3579
     Actuate Corporation                  ACTU       Computer   Software/Svcs     3579
     Acxiom Corp.                         ACXM       Computer   Software/Svcs     3579
     Adept Technology Inc                 ADEP       Computer   Software/Svcs     3579
     Adobe Systems                        ADBE       Computer   Software/Svcs     3579
     ADVA International Inc               ADII       Computer   Software/Svcs     3579
     Advanced Oxygen Technologies         AOXY       Computer   Software/Svcs     3579
     Advant-E Corporation                 AVEE       Computer   Software/Svcs     3579
     Advent Software                      ADVS       Computer   Software/Svcs     3579
     Affiliated Computer                   ACS       Computer   Software/Svcs     3579
     Aftersoft Group Inc                  ASFG       Computer   Software/Svcs     3579
     Aladdin Knowledge                    ALDN       Computer   Software/Svcs     3579



   Source: Cost of Capital by Sector
   http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wacc.htm
                                                                                           43
VCustomer Growth Rate




       Source: DataQuest www.dqindia.com




                                           44
Risk index
•   Table1:                                         •   Table 5c:
•   Country risk, ranked by composite risk rating   •   Economic risk forecasts
•   Table 2a:                                       •   Table 6ª
•   Composite risk ratings Aug 05- Jul 06           •   Summary of economic risk components Jul 06
•   Table 2b:                                       •   Table 6b:
•   Current risk ratings (one-year forecasts)       •   Summary of financial risk components Jul 06
•   Table 2c:                                       •   Table 7:
•   Composite risk forecasts                        •   GDP per head of population
•   Table 3a                                        •   Table 8:
•   Political risk ratings Aug 05- Jul 06           •   Real Annual GDP growth
•   Table 3b:                                       •   Table 9:
•   Political risk by components Jul 06             •   Annual inflation rate
•   Table 3ba:                                      •   Table 10:
•   Political risk subcomponents                    •   Budget balance as a percentage of GDP
•   Table 3c                                        •   Table 11:
•   Political risk forecasts                        •   Current account as a percent of GDP
•   Table 4 a                                       •   Table 12:
•   Financial risk ratings Aug 05- Jul 06           •   Total foreign debt as a percent of GDP
•   Table 4b:                                       •   Table 13:
•   Financial risk by component jul 06              •   Debt service as a percent of exports of goods and
                                                        services
•   Table 4c:                                       •   Table 14:
•   Financial risk forecasts                        •   Current account as a percent of exports of goods
•   Table 5ª                                            and serv.
•   Economic risk ratings Aug 05- Jul 06            •   Table 15:
•   Table 5b:                                       •   International liquity ratios
•   Economic risk points by component Jul 06        •   Table 16:
                                                    •   Exchange rate stability
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                          Source: PRS Group Inc. www.prsgroup.com
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