India Strategy V4 L

Professional Services Training & Consulting India Strategy Webinar Saibal Sen, Shrikant Waghmare, Jim Weik, Thak Patel AND a team of ZENESYS Certified Consultants Version 4.0

Agenda »! INDIA STRATEGY Lessons »! Talent Myths »! Location Facts »! Conclusions Operating Buying »! OPPORTUNITIES & CHALLENGES »! Infrastructure »! SME Markets »! Renewable Energy »! ZENESYS SOLUTIONS Selling »! Market Entry »! Opportunity Identification Strategy 2 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Entering India – Lessons Learned Costs Controlling Costs Talent Development Talent Despite popular belief, India is facing a talent crisis and rising costs… 4 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Low Revenue/Employee by Global Standards RPE comparison of companies in India and abroad $180,000.00 $160,000.00 Talent crisis $140,000.00 $120,000.00 »! Large bench strength – to take care of high $100,000.00 attrition rate $80,000.00 $60,000.00 »! Companies generally employ twice the number $40,000.00 of employees required $20,000.00 »! Quote lesser number of project-resource $- requirement (in project proposal) in order to win TCS Infosys Wipro IBM Accenture EDS bids »! Training employees on the back of projects »! Ensure deliverables on-time Declining RPE of companies in India in past few years »! Improve the quality of deliverables $60,000.00 Rising costs $50,000.00 $40,000.00 »! Extended training duration – recently few $30,000.00 Infosys companies have almost doubled the training $20,000.00 Satyam duration, thereby increasing training costs Wipro $10,000.00 TCS »! High costs of quality $- »! Employees recruited do not have sufficient knowledge of technology »! Defect prevention and monitoring costs high RPE in $ per employee 5 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Mismatch in career aspirations – Exodus to b- schools b-school entrants industry experience »! Employees are in wrong jobs »! Many employees are leaving jobs to do MBA to change roles 1% 3% »! Around 60% students in premier b-schools have 7% work experience and 65% of the experienced 11% Fresher 40% students are from IT and related industries (in 1-12 months India there is no pre-requisite regarding work- 12-24 months experience for admission to b-schools) 20% 24-36 months »! Employee perspective not accounted for during 36-48 months 18% role/domain change 48-60 months >60 months »! Training is prescribed by employer so employee is not taking full interest Note: Data gathered from 10 leading b-schools of India 6 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Metro clustering is driving up costs Median salary (in $) by State per year Bangalore »! The need to operate in Bangalore, Gurgaon Mumbai & Delhi means high costs of living Mumbai Hyderabad »! Salaries in certain cities (Tier I) are high to Pune account for high cost of living in those Noida cities Median Salary by City Delhi New Delhi Chennai Kolkata Trivandrum Chandigarh Surat Ahmedabad Bhopal Indore 7 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Sharp Rise in Real Estate Costs &'\"#(%'))*+#,'-% »! Real estate costs in Tier I cities in India !\"#\"$% &'\"#(%'))*+#,'-% )'.\"%/%5067!2 8%)9#-:$%;-%<=% )'.\"%/%0!123--*4% 4'-\"9.% is comparable to real estate costs in 3--*4% Tier I cities of the world !\"#$\"#% &'()**% +,,)-.% /0)+% »! Total occupation cost in Tier I cities of 1\"23\"% +(')&*% +.+)',% /0).% India have increased in past 12 months, 456%7\"82% 9()-(% *9)(&% /&),% however they have reduced in most of :5;<=% +&&)+(% (*)9(% +.)*% the other places >?@AB=% +,-)(0% +&+)*.% *)&% »! Total occupation cost in Tier I cities of India is increasing at a higher rate and CB#DB;\"85% '+).*% &9)''% ')(% may go beyond the total occupation Data as in Nov, 2008 cost in London and Tokyo (which are experiencing cost reduction) 8 Copyright © Zenesys & Kuber Professional Services Training & Consulting

In Conclusion Costs Whether you are looking for: 1.!Partnership 2.! oint venture J 3.! wn Subsidiary O Capabilities Issues Take into consideration… Assessment Criteria 9 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Infrastructure Opportunities to 2012 Key Sector Estimated Investment (FY08-12, USD Bn) Power 167 Sector wise investment break-up Mining 125 1% 1% Roads & Highways 92 Power 3% 1% Mining Railways 65 8% 25% Roads & Highways 8% Telecom 65 Railways 10% Telecom Irrigation 54 Irrigation 19% Water Supply & Sanitation 49 Water Supply & Sanitation Ports 22 Ports 10% Airports Airports 8 Storage 14% Storage 5.5 Gas Gas 5 Total 657.5 11 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Infrastructure opportunities – Roads & Highways Opportunities Projected spending till 2012 - US$92bn Policy Update Srinagar to Jammu, Madhya Govt. investment to Pradesh to Nagpur, Armur to increase from US$ 15 Kadloor, Thrismur to billion per year to US$ 23 Coimbatore billion in 2011-12 Mumbai Trans-Harbour Link - Govt. planning 200 projects in 22.5 km long and valued at US NHDP Phase III and V to be bid $1.2bn. Construction of an 8- out (around 13.000 km of roads). lane bridge across Mumbai Average project size is US$150 Harbour. million-US$200 million More than 10 states are Ranchi-Jamshedpur - US actively planning the $487m, 150 km in length. development of their EOI’s to be invited soon. highways NHAI indicated that bidding More than 4,500 km of for around 40 new Phase III state highways are likely and Phase V projects will to be awarded by the end commence in April 2009 of 2010 12 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Infrastructure opportunities – Railways & Electricity Opportunities Projected spending till 2012 - US$65bn Policy Update Dedicated Freight corridor project to alleviate congestion on rail routes between Delhi- IR is looking for private Mumbai and Delhi-Kolkata partners to modernize (estimated cost US$6 billion – 7 railway stations & increase billion) connectivity with airports IR have plan to introduce 300-350 kmph trains and 225 stations to develop in the next five years Projected spending till 2012 - US$167bn All new awards are through open competitive bidding National Transmission Plan targets inter-regional capacity Private participation to increase to 37 GW by 2012 envisaged in creation of from 17 GW currently National Grid (capital outlay of USD 31 billion) 13 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Infrastructure opportunities – Ports & Airports Opportunities Projected spending till 2012 - US$22bn Policy Update National Maritime Development Program includes 276 projects – investment about US$15 billion Recent deregulation of the over the next 10 years, with sector allows 100% FDI private investment targeted at around US$ 8 billion Permitted100 percent Expenditure of Rs. 5,990.81 exemption in income tax for crores for development of a period of 10 years metro and other private/ green field airports Projected spending till 2012 - US$8bn Greenfield airport projects are Permitted100 percent planned in resort destinations exemption in income tax for and emerging metros such as a period of 10 years Goa, Pune, Navi Mumbai Construction of world class AAI proposes to spend Rs. international airports in 6,443.53 crores for certain cities, permitting development of 35 non- upto100% foreign equity metro airports investment announced 14 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Partner Roles for addressing Bidding Issues ISSUE INDIAN PARTNER FOREIGN PARTNER SUPPORTING DATA Frequent changes in •! Authenticate •! Provide clarity in •!There has been some controversy recently surrounding changes to a bidding process sources requirements number of the criteria which apply to the bidding of road projects. •!Frequent change of rules at the RFP stage had created problems as a •! Keep track of •! Educate clients number of the bidding groups have withdrawn from what they consider bidding criteria better less attractive projects (in some cases leaving the project with no bidders) in order not to fall foul of the rules for the more attractive projects. Complexity and •! Be a focal point of •! Risk Management to •!India is currently not a member of the WTO Agreement on Government delays in bidding contact with address impact of Procurement (GPA) •!In its efforts to keep pace with the global scenario across sectors, the process Government changes government at all levels is procuring at a rapid rate and entering into •! Work with •! Advocate contracts with the private sector. agencies set up by simplification of •!However, while it does so, the government’s contractual interactions with government process the private sector, and resistance to adoption of modern procurement tools due to vested interests, are becoming increasingly complex. Loopholes in tender •! Engage with •! Position strengths to •!Although the tendering process has improved over the years, there still process and lack of procurement lock in competitive exist many lacunae. Rating of the contractors is a major area of concern. transparency teams before advantage •!Experts reveal that JV formation for getting pre-qualified is a part and tendering begins parcel of the business – however, sometimes after securing the job the basic premise of JV formation is ignored. •!This may be due to inaccurate work or reuse of old outdated information, which can lead to a variety of problems on clearances, joint venture partnerships or financial closure. 15 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Partner Roles for addressing Political Issues ISSUE INDIAN PARTNER FOREIGN PARTNER SUPPORTING DATA Political influence •! Establish good •! Establish good •!Investment in infrastructure is highly political in nature and it is often the rapport with rapport with central lack of political stability that holds back necessary investment by foreign investors state government •!Investors are hesitant to make long-term commitments for fear of government •! Use financing and government intervention and breaches of contractual obligations technology transfer •!Example: Many of the states have their own corporations or agencies in levers to overcome charge of state highways. In view of this, investors do not have recourse political agendas to a single, independent regulator Role clarity of central •! Keep track of •! Be aware of project •!The balance of power for infrastructure planning among the central and and state government changes overheads in such state governments, the 28 states and seven territories (including the National Capital Territory of Delhi) is not clearly defined •! Insulate foreign scenarios •!There are different competencies amongst the existing authorities: partner with a •!Example: India’s rail network, including the commuter railway, is owned single interface and controlled by the national government, while the road network is a state affair 16 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Partner Roles for addressing Collaboration Issues ISSUE INDIAN PARTNER FOREIGN PARTNER SUPPORTING DATA Technical know-how •! Improve •! Provide technical •!Bandra Worli Sea-Link – Package - IV - HCC (Hindustan Construction operational expertise Company) and its foreign partner, the China Harbour Engineering Corporation, which has successfully completed similar projects. It is a efficiencies •! Robust Knowledge first ever open Sea Bridge of its kind. •! Handle legal & Transfer Process •!Nakheel of Dubai are partnering with DLF for developing townships in other domestic •! Bring innovation India issues •!Laing O'Rourke- UK based construction company credited with construction of Dubai International Airport, London's Millennium Tower, etc, will construct all DLF's landmark projects •!Reserve Bank Of India gives approval up to USD 2 million as a royalty fee to the foreign vendors for technology transfer, since technology is a source of bringing Foreign Investment in India Lack of coordination •! Improve •! Define roles and •!Due to defective planning and lack of coordination among different between the foreign collaboration responsibilities agencies involved in Sardar Sarovar project on Narmada river, the project couldn’t be completed at the scheduled time in 2002 partner and Indian skills •! Program operation management •! Collaboration tools Talent shortage •! Selection & •! Project •!Despite a large pool of talent there are pockets of vital skill gaps facilities Management •!According to The Associated Chambers of Commerce and Industry of India, attrition rate to the extent of 40% has been reported in key •! Traffic Modeling infrastructure like energy and steel •! Safety Procedures 17 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Partner Roles for addressing Investment Issues ISSUE INDIAN PARTNER FOREIGN PARTNER SUPPORTING DATA Need long term •! Inclusion of •! Provide de-risking •!Indian banks are best suited to provide rupee loans to match the financing sources lenders in pre- to foreign lending underlying rupee revenue of infrastructure projects for short term. •! Though this is an issue, its an opportunity for foreign banks bidding and sources and secure bidding process long term loans Frameworks for Public •! Study past •! Involve international •!Infrastructure projects are often governed by concession agreements & Private Partnership projects and bodies to arbitrate signed between public authorities and private entities •!Concession contracts require complex design and monitoring systems - by the GOI is not refine financial disputes such as thus, they are difficult to implement. Also, the absence of regulator clearly defined e.g. models World Bank across many projects would not give the foreign investor confidence to Reversal of Assets. •! Create approved •! Appoint volunteer participate in concession agreements methods for NGOs to act as •!Returning the asset back to the government in good condition is a crucial reversal arbitrators stipulation of the concession agreement. However in India, there is not much awareness about how exactly reversal of assets to the government is carried out in infrastructure projects 18 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Foreign Direct Investment in India Rules SECTOR FDI % ALLOWED COMMENTS Roads & Highways 100% FDI permitted through automatic route •! Corporate tax holiday for a block of 10 years out of 20 years •! Duty-free import of specified modern high capacity equipment for highway construction Railways 100% FDI is allowed in Railway Related •! Policy bars private sector entry in train Components operations only 100% FDI is allowed in rail track construction •! Railways has so far allowed only infrastructure related investment in rail sector Electricity/Power 100% FDI in electricity generation, No license required for establishing power plants transmission, and distribution Ports 100%FDI permitted All areas of port operation open for Private Sector Participation Airport 100% FDI permitted through automatic route 100% equity ownership by Non Resident Indians for Greenfield/ merchant airports (NRIs) 19 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Factors responsible for growth Availability of RE resources – solar, wind, biomass Demand and supply gap Environmental awareness and energy crisis Incentive schemes 21 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Potential for growth in Re-newables »! Installed capacity - 144,912.97 MW as on Source Power (MW) June 30,2008. Thermal - coal 76648.88 »! GDP is targeted to grow at 8% over the Thermal - gas 14716.01 next ten years. Thermal - oil 1199.75 Hydro 36033.76 »! Additional capacity of 78,000 MW is Nuclear 4120 required to be added by 2012 per 11th Renewable 12194.57 plan. Power demands may rise to Installed capacity 144912.97 315-335 GW by 2017 as on June 30,2008 »! India's market for renewable energy and 8% related technology is growing by 25% per 3% year Thermal - coal Thermal - gas »! Shortfall for renewable around 8800 MW 25% Thermal - oil 53% till 2012 Hydro Nuclear »! MNRE requires 10% of electricity to come 1% Renewable from renewables by 2012 and 20% by 10% 2020. 22 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Market Attractiveness India ranked third most attractive country to invest in Opportunities Policy incentives renewable energy in the E&Y Country Attractiveness Indices Rural Renewable energy SEZ’s approved by GoI Electrification of all households in Why remote and un-electrified villages and Indian hamlets through off-grid renewable Rebate incentive for solar power projects energy by 2012 renewable of 80% with favourable generation based market? tariff for grid-tie Government goal - electrification of 24,000 remote villages; deployment of solar water heating systems in one million homes as well as 5 million Fiscal incentives such as income tax exemption for 10 years, 80% accelerated solar lanterns and 2 million solar Urban depreciation, sales tax exemption and home lighting systems; and setting Proposed that certain cities should excise duty exemption up an additional 3 million family size biogas plants be developed as Renewable energy/ Solar/Eco/Green cities through Electricity consumption by irrigation concentrated deployment of Several states have implemented fiscal pump-sets alone accounts for renewable energy systems/devices. and financial incentives for renewable between 10% and 15% of India’s total energy generation, including: energy buy consumption. back, preferential grid connection and Over 200,000 cell phone towers Utilities transportation charges and electricity tax across the country at the end of the exemptions year. 90,000 more towers are The government encourages foreign expected to be added in 2009. The investors to set up renewable power vast majority of these are powered by projects on Build-Own and Operate (BOO) basis with 100 percent foreign Import duty and excise tax waived on diesel generator back-ups. materials needed for the project direct investment 23 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Several areas of help needed by foreign players Issue Indian partner Foreign partner Supporting data Lack of technical know- •!Increase competitiveness to •!Provide technical expertise •!Reliability of generation has been found to be inadequate how and information improve operational •!Robust Knowledge Transfer due to lack of technical know-how in remote areas efficiencies Process •! Risks involved with technology adoption as kept away many investors •!Handle legal & other domestic issues Selecting the states Keep track of market progress Provide the metrics for doing •!Each state has different level of progress and market and identify favorable incentives ROI analysis friendliness •!State-specific financial incentives (rebates, incentives, grants and state credits) Scalable business Provide raw materials at Continuous technological •!New ideas are needed to make alternative energy proposition subsidized rate as well as funding innovation can be used to tap commercially viable needed for a successful operation into new domains and increase business opportunities Need to identify and Identify new market for renewable •!Though 85% of villages are considered electrified, 57% develop rural and urban energy rural households do not have access to electricity markets •!A growing niche market in terms of green housing market and commercial office space using renewable energy is anticipated to increase the demand for such products in the urban areas. •!Companies are also anticipated to hedge against the volatility of future energy costs and invest in renewable energy space. 24 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Technology, Capital & Expertise needed Issue Indian partner Foreign partner Supporting data Lack of fundamental Work with DAC to identify Provide know how and •!Difficult for companies to decide on the type of waste-power plants information on regions to regions with potential technology required determine RE potential •!Wind sector - lack of real data regarding windiest parts of India. Only 10% (53 out of 553) wind-monitoring stations are operational •!In Biomass market, there is no formal way of meeting demands or checking the quality of products High initial capital investment Interact with IREDA and •!Bring or provide access •!It is essential to have adequate means of financing. Also the dynamics required identify other funding to capital from various of partnership will determine if the client and the new partner are options Green or CSR funds willing to share the funding or if it is going to be a externally funded •!Can be a major driving business. This will ensure a smooth and uninterrupted source of funding required by the partnership force in new opportunities Lack of supporting resources Promote use of •!Use of technology to •!Majority of the solar and wind generation opportunities are in rural & infrastructure, for renewable energy at local scale-up production as areas production & marketing level per the demand •!Possible to work with semi-qualified NGOs with outreach programs addressing the market segment for renewable in rural areas •!Use funds and expertise to develop infrastructure A District Advisory Committee (DAC) on Renewable Energy headed by the District Collector is being constituted in every district to oversee the implementation of renewable energy programs in the district, integrate these with other rural development programs and address barriers to the accelerated switch over to renewable energy 25 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Ranking of RE Potential in India Source Potential Cumulative Physical target (in Proposed outlay in Comments achievements (in MW) in 11th plan million $ in 11th MW) as on Jan 2009 (2007-2012) plan Wind Centre for Wind Energy •!The Indian government envisages an annual capacity Technology - 48,561 MW addition of up to 2,000 MW in the coming years Indian Wind Turbine 15 •!India now ranks as a “wind superpower” having a net 9755.85 10500 Manufacturers potential of about 45000 MW of which only 20% has Association – 65GW to been tapped. 70GW Solar 500 MW by 2012 •!Processed raw material for solar cells, large capacity energy SPV modules, film solar cells, SPV roof tiles, 2.12 50 40 inverters, charge controllers etc., have good market potential in India •!India lies in the sunny regions of the world Biomass Biomass power - 17,000 Biomass Power (Agro •!Around 650 million tons of crop plantation residue energy – 20,000 MW residues) – 683.3 produced every year Biomass Power / •!Exemptions from excise duty and sales tax, Co-generation -1200 Co-generation - 120 Cogen.(non-bagasse) concessional customs duties, interest subsidy,100 Biomass Power - 500 Biomass Power - 40 – 150.92 percent corporate income tax holidays Biomass Gasifier – 160.31 Hydro Small hydro projects – •!GOI also provides concessions for existing hydro 15,000 MW 1400 140 projects including financial support for renovation, 2344.67 modernization and capacity upgrading of aging small hydro power stations Waste Urban & municipal - Grid interactive - Urban waste – 200 Urban waste – 30 15,000 MW 58.91 Industrial waste - 200 Industrial waste - 15 Industrial – 100 MW Off-grid – 31.06 26 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Professional Services Training & Consulting PART 4 SME Bilateral Trading Opportunities Example Growth Areas KPO, Medical Tourism & Pharmaceuticals 27 Copyright © Zenesys & Kuber Professional Services Training & Consulting

High growth KPO players fall in SME Sector Market size of Indian KPO industry »! The Indian KPO sector has immense opportunities for 14 Market size in billion $ the SMEs. The SMEs can change their costs as per 12 2010; 12 the short-term demands, which can create new 10 8 business models. 6 »! NASSCOM – size of KPO industry by 2010 - $17 4 2007 2 billion, of which $12 billion outsourced to India 2001 2003 0 »! India to capture 70% of KPO sector 2000 2002 2004 2006 2008 2010 2012 Year Digital Others Segments in KPO industry Animation, (LPO, FPO) simulation 9% Data research Share of Indian KPO industry in global KPO market and games integration and management 80 8% 29% 70 Market share (%) 60 R&D 12% 50 40 30 20 Biotech, 10 pharmaceutica 0 E-Learning l R&D and 12% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Engineering medical & Design services Year 12% 18% 28 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Medical tourism operators fall into SME Sector »! Globally medical tourism is more than $25 Market size of Indian Medical Tourism industry billion industry and India ranks 2nd in medical 2.5 Market size in billion $ tourism 2 »! A recent report on Medical Tourism stated that 1.5 by 2017, over 16 million Americans could be 1 travelling overseas for medical care 0.5 »! ASSOCHAM - India’s medical tourism market is 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 growing by 30% and is expected to become $2 billion business opportunity by 2012-15 Year »! About 200,000 foreigners visited India for Procedure UK ($) India ($) treatment in 2008-09 Approx Approx »! India's low-cost advantage and the emergence Open heart surgery 18000 4800 of new high-quality healthcare service providers Facial Surgery and Skull base 13000 4500 »! Indian government has introduced a new Neurosurgery with 21000 6800 category of medical visa for foreigners coming Hypothermia for treatment Complex spine surgery with 13000 4600 implants »! Waiting time in UK, US and Canada is high Hip Replacement 13000 4500 29 Copyright © Zenesys & Kuber Professional Services Training & Consulting

SME in Pharmaceuticals – Clinical Trials, Drug Manufacturing, Contract Manufacturing etc. Market size of Indian Pharmaceutical Outsourcing 3.500 Market size in $ billion 3.000 »! IMS global - global pharmaceutical sales 2.500 Indian pharmaceutical to surpass $820 billion in 2009 and $940 2.000 outsourcing 1.500 Contract research billion in 2012 1.000 0.500 »! Global pharmaceutical outsourcing 0.000 Contract manufacturing market to touch $76 billion by 2010 and 2005 2006 2007 2008 2009 2010 2011 Indian pharmaceutical outsourcing market Year is expected to reach $3.33 billion by 2010 Market segmentation Indian Pharmaceutical Outsourcing »! Indian pharmaceutical outsourcing market CM - Contract growing at a CAGR of 37.6% 5% manufacturing »! Indian pharmaceutical market estimated at Others $17.8 billion in 2012 61% 50% 34% CR - Pre-clinical & Clinical trials 11% CR - Research Chemistry & Research Biology 30 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Pharmaceuticals – medical equipments »! Surgical and medical instruments »! Orthopaedic, prosthetic and surgical appliances and supplies »! Dental equipment and supplies »! X-ray apparatus, tubes and related irradiation apparatus »! Electro-medical and electro-therapy apparatus »! Ophthalmic equipment 31 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Issues in import/export SME Partnerships 1 of 2 Issue Indian Partner Foreign Partner Supporting Data Selection Criteria is •! Make all information available •! Make sure all the right questions •!Most partnerships are formed as a result of not rigorously to foreign partner in a are asked up front connecting with the most visible players •!Unless there is a mutual and natural win-win fit, followed transparent manner •! Validate all information provided partnerships fail •! Openly seek assistance in by Indian partner •!Foreign partners best interest is not always the deficient areas •! Be willing to support deficient top most on Indian partners agenda areas Contractual terms •! Take a long-term attitude in the •! Ensure expectations are made •!Resource constraints and lack of communications are not defined for relationship clear right up front causes many operational failures in SMEs •!Enforcing terms without any local representation smooth ongoing •! Allocate resources and time on •! Insist on using modern net is difficult for both players relationship an ongoing basis to ensure technologies to encourage terms are being honored communications more frequently Protection of IP •! Be prepared to prove that IP •! Try to create a model which will •!Non–Existence of fool proof coordinated control rights is a concern protection intent. Contracts are minimize the damage if IP is system for strict enforcement of data protection policies does not give the required confidence not sufficient compromised to the foreign player. •! Be willing to accept serious •! In case of highly sensitive IP •!The foreign partner may get into a situation where penalties for violation appoint a third party watchdog it is difficult for him to determine what to share and what not to 32 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Issues in import/export SME Partnerships 2 of 2 Issue Indian Partner Foreign Partner Supporting Data Motivating Indian •! Understand that not •! Make clear what value-add you •!Motivation important for maintaining long-term Partner to act in representing joint interest is a are seeking from Indian player partnership and is and indicator of progress towards building successful working joint interest recipe for failure •! Ensure convincing evidence and partnerships •! Be able to prove your terms are provided to deliver that •!According to Ivey Business Journal, Good partnership value add value-add coordination between the partners is essential for the effective execution of strategy. Effective execution is likely to be facilitated by a shared vision. Ongoing •! Be prepared to invest in •! Be prepared to invest heavily up •!Internal and external communication plays an communications to modern communications front to develop a robust important role in the way partnerships function •!Partners should ensure constant contact with ensure partnership technology to keep costs down communications model each other to discuss their visions and aims success •! A well defined agenda and •! Set aside a contingency budget •!It pays to nominate a person responsible for parameters for measuring for spikes in communications communications as it helps in co-ordinating success costs responses and avoid misunderstanding Insufficient ability •! Be willing to reach out to •! Benchmark other countries/ •!Government is committed to promote SME’s and to take full various help centers setup by industries policies are designed to assist in improving their operations though in practice its difficult to work advantage of banks, government agencies •! Be willing to work with GOI with them Government •! Be willing to appoint Trade Fairs and Foreign •!However, inability of the SME’s to understand and Policies in SME consultants to seek out Embassy Trade Associations derive benefits from the policies prevents them Incentives incentive programs from taking full advantage. 33 Copyright © Zenesys & Kuber Professional Services Training & Consulting

Market Entry in Fixed Time and Fixed Cost Start Engagement Determine Objectives STRATEGY 4 Weeks Address the ISSUES OPPORTUNITY Represent in INDIA 8 Weeks Align Partner Identify Opportunity Resources Deliverables: !!ndia Operations Startup I !! pportunity Identification O 35 Copyright © Zenesys & Kuber Professional Services Training & Consulting

SUMMARY »! INDIA STRATEGY Lessons »! Talent Myths »! Location Facts »! Conclusions Fixed Price Opportunity »! OPPORTUNITIES & CHALLENGES »! Infrastructure »! SME Markets »! Renewable Energy »! ZENESYS SOLUTIONS Resources »! Getting Started »! Opportunity Identification Our Offer 37 Copyright © Zenesys & Kuber Professional Services Training & Consulting

References – Lessons Learned 1. RPE data http://www.thehindubusinessline.com/2006/09/21/stories/2006092104350400.htm 2. Median salary by state http://www.payscale.com/ 3. Office occupancy costs http://www.cbre.com/ 39 Copyright © Zenesys & Kuber Professional Services Training & Consulting

References - SME 1. NASSCOM – size of KPO industry by 2010 - $17 billion, of which $12 billion outsourced to India http://www.rnebizguideindia.com/knowledge_process_outsourcing_kpo.shtml http://www.istockanalyst.com/article/viewiStockNews/articleid/3186208 2. India to capture 70% of KPO sector http://www.kpoexperts.com/ 3. Medical Tourism related data http://www.frost.com/prod/servlet/market-insight-top.pag?docid=108452141 4. A recent report on Medical Tourism stated that by 2017, over 16 million Americans could be travelling overseas for medical care http://www.medicaltourismcongress.com/ 5. ASSOCHAM - India’s medical tourism market is growing by 30% and is expected to become $2 billion business opportunity by 2012-15 http://www.issuesinmedicalethics.org/161ed04.html http://en.wikipedia.org/wiki/Medical_tourism_in_India http://www.medical-tourism-india.com/medical_tourism_articles.htm <http://www.ehealthonline.org/news/news-details.asp?News=Indian-medical-tourism-industry- to-touch-INR-9,500-cr-by-2015:-Assocham&NewsID=15799> http://www.ehealthonline.org/news/news-details.asp?News=Indian-medical-tourism-industry-to-touch-INR-9,500-cr-by-2015:-Assocham&NewsID=15799 6. Cost related comparison between UK and India http://www.connectingindia.in/Medical_Tourism_India.htm 7. Global pharmaceutical outsourcing market to touch $76 billion by 2010 http://www.moneycontrol.com/news_html_files/news_attachment/2008/Anus_Lab_%20IPO_SPA_Securities_Ltd._Neutral.pdf 8. IMS global - global pharmaceutical sales to surpass $820 billion in 2009 and $940 billion in 2012 http://www.imshealth.com/portal/site/imshealth/menuitem.a46c6d4df3db4b3d88f611019418c22a/? vgnextoid=9e553599b554d110VgnVCM100000ed152ca2RCRD&vgnextfmt=default 9. Size of Indian Pharmaceutical Market expected at $17.8 billion dollars in 2012. Correspondingly, the graph has also been modified. http://findarticles.com/p/articles/mi_m0EIN/is_2008_April_11/ai_n25148823/ 10. Indian pharmaceutical outsourcing market is expected to reach $3.33 billion by 2010 http://www.ukibc.com/content.php?contentid=32&sectionid=6 http://www.pharmpro.com/ ShowPR_Print~PUBCODE~021~ACCT~0000100~ISSUE~0805~RELTYPE~PR~ORIGRELTYPE~ATO~PRODCODE~9241~PRODLETT~R~CompName~Pharma ceutical%20Processing~ProdDesc~VENDOR+SOURCING+SERVICES.html 11. Medical equipments http://www.medicaltourismmag.com/issue-detail.php?item=155&issue=7 40 Copyright © Zenesys & Kuber Professional Services Training & Consulting

References - RE 1. Installed capacity www.cea.nic.in/power_sec_reports/Executive_Summary/2008_06/11.pdf 2. Additional capacity – 78,000 MW http://www.indiacore.com/ic-conf/15-dec07-thermal/index.html 3. Rise in power demand http://economictimes.indiatimes.com/News/News_By_Industry/Energy/Power/Indias_power_demand_to_rise__120_GW_to_335_GW/articleshow/3101315.cms 4. Why Indian renewable market http://www.ey.com/Global/assets.nsf/International/Industry_Utilities_Renewable_energy_country_attractiveness_indices/$file/ Industry_Utilities_Renewable_energy_country_attractiveness_indices.pdf http://www.greenchipstocks.com/articles/renewable-energy-india/352 http://mnes.nic.in/annualreport/2007_2008_English/Chapter1/chapter1_1.htm http://mnes.nic.in/annualreport/2003_2004_English/ch6_pg1.htm http://www.gwec.net/uploads/media/Global_Wind_2007_Report_final.pdf http://mnes.nic.in/pdf/11th-plan-proposal.pdf http://www.sonnenseite.com/One+World,Q++A-+Opportunities+in+Indias+Renewable+Energy+Market+,72,a5803.html http://www.renewableenergyworld.com/rea/news/article/2009/03/india-a-vast-market-for-american-solar-pv-companies http://www.gwec.net/index.php?id=124 www.csmworld.org/public/pdf/CSM-DP-Ringwald-July08.pdf 5. Supporting data www.powermin.nic.in/whats_new/pdf/Secy-sydney-IEA-121206.pps http://solveclimate.com/blog/20090419/indias-massive-renewable-energy-opportunity-being-squandered http://www.cbcglobal.org/CBC_Pages/MediaDetails.aspx?MediaId=147 http://www.renewableenergyworld.com/rea/news/article/2009/03/india-a-vast-market-for-american-solar-pv-companies http://mnes.nic.in/ http://mnes.nic.in/pdf/11th-plan-proposal.pdf www.buyusa.gov/kern/indiaenergyreport.html 41 Copyright © Zenesys & Kuber Professional Services Training & Consulting

References – Infrastructure 1. Supporting data www.dbresearch.com/PROD/DBR_INTERNET_DE-PROD/PROD0000000000218232.pdf www.legalserviceindia.com/article/l306-Infrastructure-Investments-in-India.html http://www.financialexpress.com/news/about-tender-tendering/304966/ www.cuts-international.org/pdf/Viewpointpaper-InfrastrConcessContract-intro.pdf http://www.projectsmonitor.com/detailnews.asp?newsid=16543 http://www.projectsmonitor.com/detailnews.asp?newsid=9583 2. Infrastructure opportunities and policies http://www.ashurst.com/doc.aspx?id_Content=4117 http://www.cnplus.co.uk/intelligence/winning-work/winning-construction-work-india/5200126.article http://pib.nic.in/release/rel_print_page.asp?relid=34891 Infrastructure in India – PWC Report http://www.pwc.com/extweb/pwcpublications.nsf/docid/F4A6F10C713D800DCA257571004412F6/$file/InfrastructureinIndia.pdf www.indiainfraguru.com/railways.html www.austrade.gov.au/ArticleDocuments/1418/KPMG-India-Infrastructure-Resources-Presentation.pdf.aspx http://pibmumbai.gov.in/scripts/detail.asp?releaseId=E2008PR1035 http://iic.nic.in/iic3_a.htm http://pibmumbai.gov.in/scripts/detail.asp?releaseId=E2008PR1035 http://www.pppinindia.com/sector-airports.asp Infrastructure and Resources Sectors in India – KPMG Report Doing business in India – Allen & Overy www.joi.or.jp/document/071026/10.26Presentation.pdf http://www.nhai.org/procurement_current.asp http://www.indiantollways.com/category/bot/ http://en.wikipedia.org/wiki/DLF_Universal_Limited http://en.wikipedia.org/wiki/Bandra-Worli_Sea_Link 3. FDI India rules http://dipp.nic.in/ind_investment_191004.pps http://business.mapsofindia.com/fdi-india/sectors/railway-related-components.html http://www.blonnet.com/2006/10/26/stories/2006102600890500.htm 42 Copyright © Zenesys & Kuber Professional Services Training & Consulting

India Strategy V4 L

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