Axience Service Offerings Brochure June 2011

RESEARCH & CONSULTING

BUSINESS INTELLIGENCE

FINANCIAL SERVICES

BusinessResearch

Market Analysis

Research &Analytics

StructuredFinance

Modelling &Valuation

CompetitionBenchmarking

Mapping &Databases

Your Trusted Business Services Partner

Specialized business services firmwith global delivery capability

Practice areas: Financial Research & Analytics, Business Intelligence, Research & Consulting

Unique combination of business intelligence consulting and modelling/analytics

Multicultural management and team advised by an experienced international board

Focus on quality and client services

Service delivery model customized to add value

Global clientele and strong references

Excellent in-house training and processes

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INSIDE AXIENCE

CLIENT COVERAGE

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KEY CLIENTS European leader in banking and financial services Independent pan-European investment bank One of the largest European management consulting firms Leading Commonwealth trade and investment agency Fortune 500 organizations Major Middle East–based private equity firms Multiple financial services search firms

OUR SERVICE PORTFOLIO

VERTICALS

ACTIVITIES

Investment ResearchEquity researchStrategic researchCredit researchCommodities researchSector research

Corporate FinanceTarget mapping Pitch bookValuationInvestor memorandumDue diligence

Structured Finance & Securitization

Cash flow modellingSurveillance/monitoringTrustee/servicer support

Investment AnalyticsHypothesis testingTrading strategiesPortfolio optimizationRisk reportingModel maintenance

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Bespoke ProjectsClient mappingInvestor mappingCompetition mappingPeer reviewsHuman capital mappingProduct/market entry

Strategic DatabasesClientCompetitionInvestorHuman capital

Reports/NewslettersBusiness movesPeople movesProduct monitoringTopical analysis

Capital Market SurveysProductClient segmentThematicSalary

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Product AnalysisCost/pricing analysisPotential client/customer identificationKey product entryBrand/product perception

Competition AnalysisCompetition benchmarkingPeer group profilingBrand/product perception

Market AnalysisMarket trendsIndustry analysisOpportunity assessmentRegulatory environmentCountry intelligence

OtherGlobal trade & investmentsBespoke reportsData analyticsTarget mappingGap analysis

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FINANCIAL RESEARCH& ANALYTICS

BUSINESSINTELLIGENCE

RESEARCH &CONSULTING

Axience is a specialist business services firm providing research, analytics and

intelligence services to all pillars of the financial services industry, consultancy,

governmental and non-governmental agencies as well as other businesses.

OUR PEOPLE

For further information – Website: www.axience.com; Email: [email protected]; Tel: +91 22 4205 4441

Hemant Jain – Founder and CEO

Hemant founded Axience in 2007 with a goal of building a specialist, bespoke, global business services firm.

Before founding Axience, Hemant set up a 100 people analytics and research centre for a reputed UK based Business Intelligence firm. He was overall responsible for the India operations and looked after infrastructure set-up, delivery, human resources, business development and new ideas generation. Prior to that, he worked at Morgan Stanley’s securitization division in London. Hemant started his career at Schlumberger Industries in Paris. Hemant holds an MBA from the HEC School of Management, Paris, France and an engineering degree from the Indian Institute of Technology (IIT), Mumbai, India.

Tarek Walid Tawfik – Investor and Non-Executive Director

Tarek is an Investor and a Non-Executive Director at Axience. He has several years of experience in the financial services industry.

Tarek has more than 13 years of experience in the financial services industry, with expertise in wealth management, investment management and treasury. Most recently he was the Head of Private Wealth Management at Deutsche Bank in The Kingdom of Saudi Arabia and managed a portfolio of ultra high net worth clients. Earlier, he worked as the Family Investment Manager for the Abdul Rahman Saad Al-Rashid (ARTAR) Group from 2000 to 2007; prior to this he worked within the brokerage division and on Corporate Treasury desk of the Banque Saudi Fransi. Tarek is a Bachelor of Arts in Financial Management, from the King Saud University, Riyadh, Saudi Arabia and is fluent in Arabic, English and German.

Alex Carre de Malberg – Non-Executive Director

Alex is a Non-Executive Director and helps in promoting brand Axience within Financial Services industry, specifically in Middle East and France.

He is a Senior Advisor within the Investment Banking division at The National Investor (TNI) in Abu Dhabi. Prior to joining TNI, Alex was the Head of Investment Banking at Invest AD (Abu Dhabi Investment Company). Prior to that, he co-headed investment banking for Rothschild in the Middle East after working for Rothschild in Paris. He has also worked at Lazard Frères (New York), Peregrine Capital (Hong Kong) & Equinox Capital (Singapore). Alex holds a French engineering degree, an MS from the University of Massachusetts and an MBA from HEC-ISA.

Ajay Pahwa – Non-Executive Director

Ajay is a Non-Executive Director at Axience and CEO of Kaya Limited in India, the beauty and wellness arm of Marico group of India.

Ajay’s experience over the past 22 years has been in hospitality and retail businesses. Prior to Kaya, he worked with Yum Restaurants International for several years in senior level operating roles in the Far East, UK, and Middle East and North Africa. Prior to this he had several years of progressive professional experience in hospitality industry globally. Ajay holds an MBA from IMD Lausanne (Switzerland) and also possesses a Bachelors degree in commerce from Delhi University in addition to various reputable retail and hospitality industry certifications. Ajay won the CMO Asia Awards for Brand Excellence in the Beauty, Wellness & Fitness category in 2010.

Ryan McGovern – Non-Executive Senior Advisor

Ryan is a Non-Executive Senior Advisor at Axience and a Partner at Ember Capital LLP, a London based alternative investment fund manager.

Before establishing Ember Capital, Ryan and his colleagues were part of a Nomura sponsored European mezzanine fund business known as Nomura Mezzanine. Ryan has been involved in making numerous mezzanine and other subordinated debt investments in private equity owned companies across Europe since becoming a founding member of the Nomura Mezzanine business in 2005. Ryan joined Nomura Mezzanine from AIG-MezzVest, another European mezzanine fund manager, and prior to this he worked in corporate finance and M&A advisory in Europe at HSBC Investment Bank PLC and in the United States at Stephens Inc. Ryan has a BA from Vanderbilt University and did his MBA at HEC Paris and London Business School.

http://www.axience.com/

mailto:[email protected]

FOOTPRINTS IN GLOBAL FINANCIAL RESEARCH

For further information; Website:www.axience.com . Email: [email protected] . Tel: +91 22 6671 8696

A case il lustration

Project Overview: Preparing an information pack for buyout analysis of a UK-based structural steel fabrication company

Client: Direct Private Equity Investment team of a European Institutional Investor

Axience Offerings:

Provided complete information pack including: Company overview with management and

shareholding information, key projects, subsidiaries overview as well as growth plans

Detailed industry analysis with insights on industry trends and competitive analysis in the geographies where company operated

Financial projections, company valuation based on direct-cash-flow model and leveraged buyout analysis

Due diligence questions and strategic considerations for the client while going for the buyout

Valuation Support: Detailed valuation model based on DCF, valuation

multiple, LBO Conducted scenario analysis to find fair value of

the company in — worst, current and best — economic and industry scenario over the next five year

Proposed range-bound deal multiple based on above analysis

Project Challenges:

Low availability of company information – company or management level information was not easily available. Axience used company’s business plan, rigorous primary and secondary research to address this issue as well as sourced financial information from Company’s House in UK.

Niche industry – structural steel fabrication is a niche industry with low data availability on industry size and trends. We assumed the industry to follow same trends as its related sectors such as construction and real estate. Low dependency on yearly data and trends – Considering the recent global economic slowdown, real estate scenario has changed worldwide. In this respect, trends and market predictions older than 4-5 months become obsolete.

Key Positives:

The information pack allowed client to get accurate and objective third party analysis on the buyout target.

Our analysis pointed out some concerns in business plan assumption and client was well placed to clarify all concerns in the meeting with management

Axience delivered the project in 4 days from start to finish

Client Testimonial

Objective third party analysis with complete information memorandum delivered before I boarded my flight to London, as desired. Well done.



EXCELLENCE IN INDUSTRY RESEARCH


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Project Overview: Comprehensive coverage of the Gulf Petrochemical sector and development of underlying sector model

Client: Leading UAE-based asset management firm

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CHINA: industry leader

Challenges – rising labor cost, exchange rate and high dependence on trade

INDIA: in high growth phase

Challenges – Labor productivity and lack of export expansion

GULF: developing plastic processing zones

Challenges – industry skill set, expertise and technology

Diversify and/ or attract companies to invest in production of capital goods such as cars, consumer electronics and Consumer home appliances

ME290

SE Asia800

N America900

W Europe1000

NE Asia1050

ME200

SE Asia400

N America490

W Europe500

NE Asia510

2008: Brent crude - 98$/ bbl 2009: Brent crude - 45$/bbl

ME Cost Advantage

Production cost sensitivity to crude oil prices

Project Requirements:

Detailed analysis of the Gulf Petrochemical sector to identify industry growth drivers, key emerging trends, challenges, future expected trends

Sector model was required to estimate expected demand and supply situation over the next five years

Profile major Gulf countries with respect to the Petrochemical sector

Profile key players and projects in the sector

Axience Deliverable:

Provided comprehensive industry coverage report wherein we:

Estimated and projected global petrochemical demand and supply (ethylene was used as a proxy for industry) over the next five years

Identified industry growth drivers, emerging trends, challenges and constraints

Compared GCC petrochemical market with global market evaluating feedstock advantage of GCC in detail

Compiled and presented a comprehensive database containing all on-going petrochemical projects in the region

Profiled major Gulf companies operating in the petrochemical space

Profile Gulf countries with respect to their Petrochemical industry capacity, global contribution etc

Cracking the Project:

Building project database with capacity by product type and feedstock type was the key to arrive at industry forecast and check for conditions of industry overcapacity

Understanding the global feedstock dynamic and reasoning out Gulf positioning and advantage in that context

Key Positives:

Axience analysis challenged earlier demand and supply estimates taking into account post crisis situation

The client used most of our key findings in private placement of a petrochemical industry project

Asset manager was able to garner significant market traction for the published report

Client Testimonial

I appreciate the dedication of your team on this coverage report. The report looks rich in content and insights. It’s good to see that Axience has continued to keep the quality level high in this second report for us.



FEASIBILITY STUDY FOR EMERGING MARKET ENTRY AND JV

For further information: Website www.axience.com; Email [email protected]; Tel +91 22 4205 4441

Case illustration

Project Overview: Feasibility/due diligence support for Europe based pre-paid card and payment processing player for a pre entry assessment of Indian market

Client: European payment processor interested in entering the Indian market

Exhibit 1: Industry Growth

Research Methodology

Axience prepared a detailed report and investor presentation covering: Detailed industry analysis with insights

on industry trends and growth forecasts Competitive landscape: benchmarking

Indian peers of European clients in this industry Company analysis: Overview, business

description and structure, products, service channels, organizational structure, investors, management team and strategy of two potential JV/Acquisition targets Business plan: Growth plans and

projections for next five years Location / Partnership strategy:

Analysis of various options for Indian market entry

Project Challenges Exhibit 2: Cost Benefit Analysis

Given the niche and complex market, the team had to quickly develop domain knowledge to maintain the quality standards required for this project

Key Positives

Axience team attended distributor conference organized by an industry player to understand the business model first-hand and met key distributors and telecom operators

Rigorous primary and secondary research was conducted for competitive benchmarking and industry analysis

Axience Business Research Offerings

Research & Insight Strategic Support Business Intelligence India Desk

Business research Market research Social Media research

Market Analysis Competition Analysis Corporate Development

Database & Mapping Consumer Analytics Dashboards

Evaluation Stage Market Entry Stage Ongoing Support

Sources for Research: • Company website – understanding business, verticals, news,

annual reports, management strategy • Databases – for company and competitor financials • Industry reports – for industry specific information • News articles – for external views on company strategy • Management Interviews – for detailed insights • Government and regulatory body websites






Project Overview: Supported the M&A team in preparing Pitchbook for a company in the IT industry

Client: Leading UK-based boutique investment bank

Axience Offerings:

Presentation included detailed industry analysis, profiling of potential targets and their valuation using comparable company analysis

Studied the financial statements of the 25 companies and removed non-recurring/one-time charges from the income statement

Calculated clean EBIT and net income for all companies

Calculated operating and valuation ratios and compared companies in terms of profitability, leverage ratios and valuation

Presented the information in graphical format for the target and selected its peer group

Company (Target) Profil ing:

Provided profiles of 10 software firms covering:

Business description

Product and services portfolio

Financial overview

Organization chart and Management and Board overview

Annotated stock price chart

Precedent mergers and divestitures analysis

Company’s strategy

Axience Corporate Finance Offerings

Business Development & Origination Support

Opportunity/Client Database Target client mapping/industry mapping News Monitoring and opportunity identification

Execution Support

Target short listing and profiling for M&A/JVs Info Memo Production/Offering Document Industry, sector, company research, growth estimates

Valuation/Modeling Comparable Company Analysis

Other Support

India related deal making and complete due diligence White paper production Competition Monitoring – League tables Desktop due diligence






Project Overview: Preparing an initiating coverage report for a France based small-cap Company

Client: Leading independent pan-European investment bank and brokerage house

P roject Challenges:

Target had grown from a small firm within a year making eight acquisitions in FY 07, multiplying its’ revenue by 15 times and entering into three new business lines

Lack of information and language constraints on all information sources – website, financial reports, public media, management discussion transcripts and press release

Severe paucity of company level information Majority of sector level details were in regional language No analyst coverage Production of final report in three weeks including

management calls

Axience Offerings: Provided a complete initiating coverage report

including company overview, industry overview, financial projections and valuation sections

Valued the company using sum-of-the-parts analysis as the company analyzed was present in four different industry segments

Used purchase method to consolidate the acquisitions

Covered all four sectors in industry analysis section

Key Positives: Brokerage house became the first to initiate coverage

for the firm Liquidity in stock significantly increased which

generated favorable environment for the stock to migrate from Marche Libre in France to AlterNext

CLIENT TESTIMONIAL: “Axience has proven precise in its analytical work and extremely timely in meeting delivery deadlines. We are pleased with the team’s ability in supporting us in researching across different sectors with depth and consider them a reliable partner”

Director, Corporate Finance

Ax ience Investment Research Axience proposes to set up capabilities to complement and supplement internal research teams of investment banks, brokerage, asset management, hedge funds and independent research organizations. Following is an illustration of ways in which Axience can support global buy side players in mitigating their research centric challenges;

Team Size Managerial Bandwidth Cost Budgeting Value Added Services

Typical challenges faced by research teams

Building large in-house research capability has long gestation period

Exhaust significant managerial bandwidth in recruitment, retention, training and development

Sub-optimum research budget

Dearth of other value added services due to lack of scale

Related value proposition by Axience

Axience maintains a ready-made pool of junior/mid level analysts to assist lead analyst

Significant enhancement in managerial bandwidth with junior analyst role outsourced to Axience

Axience provide significant cost arbitrage benefits to its client

Complementary value added services such as monthly newsletter, research summary report, databases



INVESTMENT RESEARCH – EQUITY RESEARCH – INITIATION REPORT

For further information; Website: www.axience.com . Email: [email protected] . Tel: +91 22 6671 8696


Project Overview: Client requested Axience to prepare a 20 page initiation reports on each of 10 small and medium European companies, with a Buy/Hold/Sell recommendation for their equity shares, with a 12 month time horizon. We have here discussed the report made on a Healthcare company.

Client:A large independent investment house in Europe.

Research Methodology:

Axience carried out information search about the company and the industry, to get company and industry overview. Axience prepared a detailed earnings

model with five years of historical data SWOT analysis, Porter’s 5 forces analysis

and management analysis for the company were carried out. Earnings model was finalized with 5 year

future projections. Valued the company using sum-of-the-

parts analysis as the company analyzed was present in four different industry segments. Valuation (DCF & Relative) of the equity

shares was done with respect to competitors using key valuation multiples Axience came out with a buy/hold/sell

recommendation based upon its analysis.


The company is undergoing large scale reorganization in all divisions; hence estimating revenues was a challenging task.

The company earns revenues in various currencies and hence estimating all revenues in reporting currency was a challenge due to exchange rate fluctuations.

Lack of information and language constraints on all information sources – website, financial reports, public media, management discussion transcripts and press release.

Key Positives: With Axience’s exposure to comprehensive business research,

we were able to do an in-depth analysis of the business and come out with suitable recommendations.

Axience EquityResearch Offerings:

Division Value of operating

assets (€ m)

Value of

Equity (€ m)

Weighting

0.44

0.38

0.21 0.01

1.05

0

0.2

0.4

0.6

0.8

1

1.2

Contract Medical devices

Care Equipment SOTP Total

Contract 72.0 40.28 42.2% Medical Devices 48.6 35.02 36.7%

Care 82.3 19.47 20.4%

Equipment 14.2 0.56 0.6%

Total 100%

Beta FV (€) 1.75 2 2.25 2.5 2.75

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2.00% € 1.51 € 1.18 € 0.91 € 0.68 € 0.48 2.25% € 1.62 € 1.26 € 0.97 € 0.73 € 0.52 2.50% € 1.73 € 1.35 € 1.05 € 0.79 € 0.57 2.75% € 1.86 € 1.45 € 1.12 € 0.85 € 0.62 3.00% € 2.00 € 1.56 € 1.21 € 0.92 € 0.68

Fundamental Research Trading Desks Portfolio Strategy Equity analysis Initiating coverage reports Earning update reports Thematic reports Macro economy research

Model creation and updates Relative value trade ideas Technical analysis Earning events tracker

Back testing of theme based portfolio ideas

Support services for sector allocation

Stock performance analysis


annual reports, management strategy • Bloomberg database – for companyand competitor financials • Industry reports – for external views on company strategy • News articles – for external views on company strategy • Broker reports & discussions

YE: 31 Dec (€ m) 2007 2008 2009e 2010e Sales (€ m) 129.5 166.3 185.7 214.8 % change yoy 33% 28% 12% 16% EBIT (€ m) 6.21 5.96 11.32 14.70 EBIT margin 4.8% 3.6% 6.1% 6.8% EPS diluted (€) 0.01 -0.01 0.01 0.05 EV / Sales 1.91 1.02 0.96 0.84 EV / EBIT (DA) 39.78 28.44 15.67 12.34 P/E (x) 190.09 -63.08 91.15 15.12 PEG -2.43 0.26 -0.54 0.03



ENHANCING FOCUS IN ‘INDIA CENTRIC’ RESEARCH



Project Overview: To build comprehensive portfolio with potential to deliver long-term investment performance

Client: Investment Team of a leading family office

Project Requirement:

Portfolio selection process was divided into five phases, of which Axience was allocated complete responsibility for four phases:

Phase I: Deciding investment themes

Phase 2: Developing Statistical Selection screen

Phase 3: Performing financial statement and investment analysis

Phase 5: Conducting peer group analysis

<<Phase 4 was executed at client end using their proprietary systems and processes>>

Axience Deliverable:

Selection of five stock per identified investment themes. We delivered stock selection under four themes – Consumer Masses, Consumer Discretionery, Infrastructure and Power.

For each theme, deliverable included;

o Initial Statistical Screen comprising all stocks matching the theme

o Fundamental Screen comprising stocks qualified in initial screening

o Ranking and selecting top quartile stocks based on fundamental screen

o Complete financial/investment thesis on selected stocks

o Peer group analysis for the selected stocks

Prepared portfolio analytics for regular tracking of 20 stocks after portfolio building phase is over

Cracking the Project:

Axience’s Indian market expertise and local presence was useful in providing insights on qualitative aspects – management quality, corporate governance, sector growth potential etc – of the covered companies

Key Positives:

The client eventually invested in 14 out of 20 stocks recommended by us

Pleased with Axience understanding of industries and companies covered, client made Axience responsible for physical due diligence on select companies

Client Testimonial

To summarize – this work is the most detailed oriented piece I have ever come across.



INVESTMENT RESEARCH – SHORT REPORT - CREDIT RESEARCH



Project Overview: Client requested Axience to prepare a 3 page credit research report on a European Telecom company, with a Buy/Hold/Sell recommendation for its bonds, with a 6 month time horizon.

Client: Leading global private bank.

Wind – Corporate Structure


Axience carried out detailed information search about the company and the industry, to get company and industry overview. Axience prepared a detailed earnings

model with three years of historical data punched in the model for income statement, balance sheet and cash flows. SWOT analysis, Porter’s 5 forces analysis


future projections. Relative valuation of the bonds was done

with respect to bonds of competitors and bonds of other companies with similar credit ratings. Axience came out with a buy/hold/sell



The company had a complex corporate structure, with some of its divisions having restrictive covenants.

With the various leveraged buyouts by the company in the past, the possibility of any such transactions in future resulted in an overhang on the bond prices.

Key Positives:

With Axience’s exposure to comprehensive business research, we were able to do an in-depth analysis of the business and come out with suitable recommendations even with restrictions on report size.

After analyzing bond prospectus, company website and other documentation, Axience was able to present a clear issuer structure which was the key for understanding the credit risk and structure.

Axience Credit Research Offerings:

Fundamental Research Trading Desks Portfolio Strategy

Corporate Credit Analysis High Yield Analysis High Grade Analysis Thematic Reports Macro Economy Research

Model creation and updates Relative Value trade ideas Yield Navigator Tear Sheets Credit events tracker

Back Testing of theme based portfolio ideas

Support services for duration management and sector allocation

Bank loan analysis

Secondary Sources for Research:

• Company website – understanding business, verticals, news, annual reports, management strategy

• Bloomberg database – for company and competitor financials • Industry reports – for external views on company strategy • News articles – for external views on company strategy • Broker Reports - for external consensus estimates



INVESTMENT RESEARCH – COVERED BOND RESEARCH REPORT



Project Overview: Client requested Axience to prepare a 3 page Research Report on a Covered Bond issued by an Irish Bank, with a Buy/Hold/Sell recommendation for its bonds, with a 6 month time horizon.

Client: A Bank in Europe


Axience carried out information search about the bank and the banking industry, to get organization and industry overview. Axience prepared an earnings model with

five years of historical data punched in the model for income statement, balance sheet and cash flows. SWOT analysis, Porter’s 5 forces analysis


future projections. Relative valuation of the covered bonds

was done with respect to bonds of other banks. Axience came out with a buy/hold/sell


Project Challenges:

The Risk on the covered bank was linked to the risk on the bank, which in turn was linked to the sovereign risk as the Bank is majority owned by the government. Hence, evaluation of risk was a bit tricky.

Any change in house prices would have a significant impact on the bond value as the underlying assets in the collateral were house properties. Estimating any such change was a challenging task.

Key Positives:

With Axience’s exposure to comprehensive business research,

we were able to do an in-depth analysis of the bank and come out with suitable recommendations.

Axience Credit Research Offerings:

Fundamental Research Trading Desks Portfolio Strategy

Corporate Credit Analysis High Yield Analysis High Grade Analysis Thematic Reports Macro Economy Research

Model creation and updates Relative Value trade ideas Yield Navigator Tear Sheets Credit events tracker

Back Testing of theme based portfolio ideas

Support services for duration management and sector allocation

Bank loan analysis

Secondary Sources for Research:

• Company website – understanding business, verticals, news, annual reports, management strategy

• Bloomberg database – for company and competitor financials • Industry reports – for external views on company strategy • News articles – for external views on company strategy • Broker Research – for consensus views on the bank



DELIVERY EXCELLENCE IN BUSINESS INTELLIGENCE

For further information; Website: www.axience.com; Email: [email protected]; Tel: +91 22 6671 8696


Project Overview: Structured Credit Investor Mapping for a leading investment bank. We supported their fund derivatives/structured fund product business and mapped business structure, investment-strategy, asset under management, investment managers of global institutional investors, within the structured credit space.

Client: Leading investment bank and brokerage house

P roject Challenges: Large scope of project – both in terms of geographical

coverage and types of investor segment

We screened over 500 institutional investors across geographies to identify and profile 200+ relevant investors, depending on their structured credit investments.

Paucity of information regarding details on structured credit

exposure of institutional investors

Project Results: Provided detailed investor mapping database

featuring over 200+ institutional investors across geographies

Investor Segment Coverage — Pension funds, Family Offices/Foundations, Asset managers, Insurance companies, Wealth Management firms, Alternative Investment managers

Geographical Coverage – Europe, Middle East, Americas, Australia, Japan

Client Feedback and Recommendation:

Client judged the interim deliverable of detailed institutional investor maps as extremely useful, high quality and unique and increased the scope of the projects to cover structured credit specific funds and institutional investment advisors.

Business Intelligence Offerings: Axience bespoke projects identify and map client and competition supporting management and business strategy. Axience also provides structured competition and client database services designed to ensure effective use of available as well as sourced data and information.

Bespoke Projects Strategic Databases

Reports/Newsletters

Capital Market Surveys

Investor mapping Client mapping Competition mapping Peer reviews Human capital mapping Product/market entry

Client Competition Investor Human capital

Business moves People moves Product monitoring Topical analysis

Product Client segment Thematic Salary

NICHE IN STRUCTURED FINANCE SERVICES



Project Overview: Performance evaluation of US CDO/CLO transactions constituting client portfolio Client: Risk department of a leading European bank

Project Challenges:

Customized surveillance template required to address client’s risk management objective

CDO collateral comprised of Leveraged Loans Quick turnaround time and stringent timelines Calculation of additional information from the trustee

report, offering memorandum as well as market counterparties

Frequent modifications in the surveillance templates based on client requests

Axience Offerings:

Detailed surveillance report to highlight collateral and bond information, deal characteristics, key ratios, test summary, etc

Historical information/trend analysis in graphical format for coverage tests, portfolio profile tests, collateral quality tests, etc

Stratification of portfolio by different classifications Analysis of Defaults and Swaps (funded / unfunded) Issuer Overlap Analysis Client specific customization requests

Key Positives:

Additional sections on historical trends and highlights support client in the investment decision process

Quick turnaround time Significant help to risk management team in portfolio

analysis Changes in ratings for each asset analyzed on a

periodic basis Established monitoring of non-regular documents

from trustees and helped client meet regulatory requirements

CLIENT FEEDBACK AND RECOMMENDATION: Pleased with the quality output and quick delivery, the client has extended its engagement with Axience to cover other geographies, asset classes and services.

Credit Support Chart: Graphical representation depicting upgrades and downgrades of the underlying assets over the

period of time Presentation of the securities comprising pool on

the basis of rating hierarchy WARF analysis used as a replacement for shadow

rated securities Enables the potential investors to analyze various

risk level of the securities in the pool Tranche monitoring using borders Important tool for Risk Management and Analytics

team



NICHE IN STRUCTURED FINANCE SERVICES



Project Overview: CDO/CLO - Cash flow modeling Client: Leading CLO Investor

Project Challenges: Complexity in modeling conditions and triggers

associated with asset side of the transaction as the collateral is dynamic till the reinvestment period ends.

Modeling revolving notes used as funding or liquidity facility to the transaction.

Replication of collateral and bond waterfall. Ensuring cash flow movement in the transaction and

quality control of data.

Axience Offerings:

Accounting for all deal specific inputs and assumptions including triggers, payment priorities, assets and liabilities.

Repline or Asset level collateral cash flows. Collateral cash flows on the basis of WAC, WARM and

repayment type using different vectors such as prepayments, defaults, recovery rate, recovery lag and reinvestments.

Bond cash flow model based on the payment priority and trigger events, as detailed in the deal indenture.

Providing bond analytics such as yield, duration, NPV etc.

Key Positives:

Axience expertise in securitization helped in Axience taking significant ownership of task. Excel modeling with advance macros and VBA expertise helped in developing a robust, efficient and scalable model

Comprehensive cash flow model coverage including all deal covenants, triggers and characteristics.

Client is considering outsourcing of 50 CLO model to Axience

CLIENT FEEDBACK AND RECOMMENDATION: “We were having a significant lack of resources in modeling the cash flow of our European CLO holding. Axience helped us in this task and team Axience was analytical and willing to go extra miles in helping us meet a deadline.” – JB, Portfolio Manager, European Credit Fund

Structuring Considerations: Modeling such transaction comprises of static

approach taking the best estimated scenario vectors such as CPR, CDR, recovery rate and recovery lag.

CLO valuation involves projecting cash flows for the underlying collateral using assumptions derived from historical collateral performance and deal specific inputs.

Account for deal specific payment priority, Interest coverage tests, par value tests and trigger events.



MARKET SIZING OF THE EUROPEAN SATELLITE INDUSTRY


Case illustration

Project Overview: The client requested Axience to map and assess the market size of the global European Satellite Industry

Client: A leading information publisher for the European Space Industry

Exhibit 1: Satellite Industry Value Chain


Axience developed a quick perspective on the European space industry, industry technological verticals and value chain of the satellite sector Axience, after having conducted its

preliminary research, consulted with its industry expert as well as the client, to ensure that the OEM and subcontractor categorization was both exhaustive and universally accepted Axience undertook rigorous secondary

research and developed a detailed database of enterprises, referenced per industry sub-category and technology Axience then estimated the aggregate

market size of the European satellite industry based on data gathered from financial documentations, research references and expert consultation Axience conducted primary research

undertaking in-depth interview with key stakeholders

Project Challenges Exhibit 2: Company Profile

Business research for the industrial sector is always challenging. In addition, space and satellite sector is niche and is technical in nature.

The subcontractors and suppliers often have a limited online presence; and occasionally, language barriers were a grey area.

Key Positives

Axience developed a focused industry map, customized to specific client requirements. Combined with the market size assessment, the deliverable proved to be an excellent reference resource for the client.







Sources for Research: • Company websites – understanding business, technology

verticals, news, annual reports, management strategy • Databases – for company and competitor financials • Industry reports – for industry specific information • News articles – for external views on company strategy • Expert Interviews- for detailed insights • Government and industrial associations’ websites • In-depth interviews with management, industry experts and

regulators



STRATEGIC SUPPORT FOR A BIOTECHNOLOGY FIRM


Case illustration

Project Overview: Client requested Axience to compile a detailed report on M&A activity in the molecular diagnostics industry in 2010

Client: A leading biotechnology company based in Europe

Exhibit 1: Number of Deals


Axience methodology included detailed source list creation through public sources and databases Bloomberg and other deal databases were

used to collect additional information about the deals Recursive search on deals, companies,

people, geographies, based on a structured process using exhaustive key words list and advanced internet research techniques The information then collected would be

cleaned and finally presented in the deliverable format Selected target buyers and sellers which

were involved in transaction were profiled in detail Axience compiled the list of regional

company registries in Germany to gather financial details not available in public domain.

Project Challenges Exhibit 2: Deal Value Break-up

Obtaining the list of all the deals in the niche segment of molecular diagnostics in the last 12 months globally

Limited time frame for execution

Key Positives

Axience through its detailed research listed down all the deals in the last 12 months and also profiled the top buyers and sellers in the molecular diagnostics category

Axience further supported the management in meeting with Indian Oncology companies and compiled a list of PE/VC firms with portfolio firms in the oncology industry


0

4

8

12

16

Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10







annual reports, management strategy • Databases – for company and competitor financials • Industry reports – for industry specific information • News articles – for external views on company strategy • Government and regulatory body websites

0

5

10

15

20

25

30

0-5 5-10 10-30 30-50 50-100 100-150 150-200 Above 200



INDUSTRY RESEARCH REPORT FOR EUROPEAN SPORTING GOODS MARKET


Case illustration

Project Overview: Overview of the European Sporting Goods Market and benchmarking of major players Client: An US-based boutique consulting

Exhibit 1: Industry Overview


Prepared an industry overview including overall industry size, market share of key players and key growth drivers

Identified global players and benchmarked them using analytical modeling techniques

Profiled major players along following metrics:

• Business overview

• Key financials

• Key products/ services

• Top management and shareholders

• Geographical reach

• Recent mergers and acquisitions

• Recent news and developments

Project Challenges Exhibit 2: Top 12 European Markets

Limited data: Data availability, especially in central and eastern Europe was low. Axience assumptions / analysis was used to estimate the industry size and future trends

Currency fluctuations: Aligning historical industry data and statistics reported in different currencies into a common base was a key challenge.

Key Positives

Axience helped the client to understand the industry structure along with the identification of major players in the domain

Client eventually could screen out few geographies to focus for the next round of research deliverable








annual reports, management strategy • Databases – for company and competitor financials • Industry reports – for industry specific information • News articles – for external views on company strategy • Management Interviews- for detailed insights • Interviews with sports industry experts especially in Central

and Eastern Europe



BUSINESS INSIGHTS GENRATION FOR AN AUTOMOTIVE MAJOR


Case illustration

Project Overview: A major international automobile manufacturer consulted Axience to develop its car dealership network in key Indian cities

Client: An European automotive major

Project Challenges:

Information sources are not readily available – Axience adapted by combining both primary as well as secondary data collection methodologies to deliver a quality product India is a complex market, and it is always a challenge to

pick a representative sample size when conducting primary research – Axience drew on its network of industry experts to revalidate the representativeness of the sample population.

Key Positives:

Axience developed a brief and actionable deliverable, making effective use of the right research methodologies and resources. As a value-add, Axience also evaluated Tier II cities in India

and developed a location strategy for the client.


The project involved identification of potential dealers and favorable sites for new dealerships. Based on the objective, the study involved following steps:

Short-listing cities with maximum potential: a short-list of cities was generated based on factors such as car sales data, income per capita and growth, penetration of white goods and two-wheelers. Axience collected this information from government sources, automotive reports and various industry sources. A total of ten cities were shortlisted. Mapping dealer networks, due

diligence, and identification of high potential dealers: a three stage short-listing process was used to arrive at final list of potential dealers. Discussion with marketing managers:

To further ensure exhaustiveness, and to gain insights regarding regional trends and buying behaviors, Axience conducted interviews with senior marketing managers of major automotive companies across India. Identification of favorable dealership

locations: Axience conducted rigorous secondary research based on socio-economic indicators such as population growth and economic prosperity. Interviews were conducted with dealerships and real estate agents to better understand the logistics and economics affecting various location alternatives.







Sources for Research: • Company website – understanding business verticals,

news, annual reports and management strategy • Bloomberg database – for target list and financials • Industry reports – for external views on company

strategy • News articles – for external views on company

strategy

1st Shortlist 2nd Shortlist 3rd Shortlist

• 20 dealers in major cities

• 8-10 in small cities





Internet / Interviews Interviews Field Research

Dealer Details

Internet

Task

Out

put

Sou

rce

1st Shortlist 2nd Shortlist 3rd Shortlist







Internet / Interviews Interviews Field Research

Dealer Details

Internet

Task

Out

put

Sou

rce



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