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ExlService Holdings (EXLS)
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EXLS » Topics » Cash and Cash Equivalents

This excerpt taken from the EXLS 10-Q filed Nov 10, 2008.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Pursuant to our investment policy, our surplus funds are kept as cash or cash equivalents and are invested in highly-rated commercial paper, mutual funds and money market accounts to reduce our exposure to market risk with regard to these funds.

This excerpt taken from the EXLS 10-Q filed Aug 11, 2008.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Pursuant to our investment policy, our surplus funds are kept as cash or cash equivalents and are invested in highly-rated commercial paper, U.S. treasury bills, mutual funds and money market accounts to reduce our exposure to market risk with regard to these funds.

This excerpt taken from the EXLS 10-Q filed May 12, 2008.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Pursuant to our investment policy, our surplus funds are kept as cash or cash equivalents and are invested in highly-rated commercial paper, U.S. treasury bills and money market accounts to reduce our exposure to market risk with regard to these funds.

These excerpts taken from the EXLS 10-K filed Mar 17, 2008.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Pursuant to our investment policy, our surplus funds are kept as cash or cash equivalents and are invested in highly-rated commercial paper and money market accounts to reduce our exposure to market risk with regard to these funds.

Cash and Cash Equivalents

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Pursuant to our
investment policy, our surplus funds are kept as cash or cash equivalents and are invested in highly-rated commercial paper and money market accounts to reduce our exposure to market risk with regard to these funds.

STYLE="margin-top:18px;margin-bottom:0px">Short-Term Investments

The
Company’s short-term investments consist of time deposits, which mature in less than one year, valued at cost, which approximates fair value. Interest earned on short-term investments are included in interest income.

STYLE="margin-top:18px;margin-bottom:0px">Fixed Assets

Fixed assets are stated at cost.
Equipment held under capital leases is stated at the lower of present value of minimum lease payments at the inception of the leases or its fair value. Advances paid towards acquisition of fixed assets and the cost of fixed assets not yet placed in
service before the end of the period are classified as construction in progress.

Fixed assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable through an assessment of the estimated future undiscounted cash flows related to such assets. In the event that assets are found to be carried at amounts that are
in excess of estimated undiscounted future cash flows, the carrying value of the related asset or group of assets is reduced to a level commensurate with fair value based on a discounted cash flow analysis.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Depreciation is computed using the straight-line method over the estimated useful lives of assets. Depreciation and amortization on equipment held under
capital leases and leasehold improvements are computed using the straight-line method over the shorter of the assets’ estimated lives or the lease term.

SIZE="2">Accounts Receivable

Accounts receivable are recorded net of allowances for doubtful accounts. Allowances for
doubtful accounts are established through the evaluation of accounts receivables aging and prior collection experience to estimate the ultimate collectability of these receivables.

FACE="Times New Roman" SIZE="2">Revenue Recognition

Revenues from BPO services include revenue from a range of services,
including insurance services, banking and financial services, finance and accounting services and collection services. Revenues from advisory services include revenues from various services such as Sarbanes-Oxley compliance, internal audit
outsourcing and financial reporting. Revenues from research and analytics services include revenues from services that are intended to facilitate more effective data-based strategic and operating decisions by our clients using research, statistical
and quantitative analytical techniques.

 


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EXLSERVICE HOLDINGS, INC.

ALIGN="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007

 


The Company recognizes revenue as services are rendered, provided that persuasive evidence of an
arrangement exists, there are no remaining obligations with respect to the services rendered and collection is considered probable. The Company invoices clients in accordance with agreed upon rates and billing arrangements, which consist of
cost-plus, time-and-material, fixed price, contingent fee and unit-priced arrangements. The Company recognizes revenue since the last billing date as of the balance sheet date as unbilled revenues and recognizes billings in excess of revenues earned
or advances received from clients as deferred revenue.

In accordance with EITF 01-14, “Income Statement Characterization of
Reimbursements Received for ‘Out-of-Pocket’ Expenses Incurred,” the Company has accounted for reimbursements received for out-of-pocket expenses incurred as revenues in the consolidated statements of income. The Company typically
incurs telecommunication and travel-related costs that are billed to and reimbursed by clients.

Revenues for the following periods include
reimbursements of out-of-pocket expenses:

 
























Year ended December 31, 2007

  $7,719,114

Year ended December 31, 2006

  $4,995,197

Year ended December 31, 2005

  $3,398,750

During the year ended December 31, 2007, two customers accounted for 27% and 25%
respectively, of the Company’s total revenues. During the year ended December 31, 2006, two customers accounted for 34% and 16%, respectively, of the Company’s total revenues. During the year ended December 31, 2005, two
customers accounted for 49% and 15% respectively, of the Company’s total revenues.

As of December 31, 2007, two customers
accounted for 30% and 24% respectively, of the Company’s total accounts receivable. As of December 31, 2006, three customers accounted for 25%, 21% and 12% respectively, of the Company’s total accounts receivable.

STYLE="margin-top:18px;margin-bottom:0px">Business Combinations, Goodwill and Intangible Assets

SIZE="2">Statement of Financial Accounting Standards No. 141, “Business Combinations” (“SFAS No. 141”), requires that the purchase method of accounting be used for all business combinations. SFAS No. 141
specifies that intangible assets acquired in a business combination must be recognized and reported separately from goodwill. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets” all assets and liabilities of
the acquired businesses including goodwill are assigned to reporting units.

Goodwill represents the cost of the acquired businesses in
excess of the fair value of identifiable tangible and intangible net assets purchased. Goodwill is not amortized but is tested for impairment at least on an annual basis, relying on a number of factors including operating results, business plans and
future cash flows. Recoverability of goodwill is evaluated using a two-step process. The first step involves a comparison of the fair value of a reporting unit with its carrying value. The fair value of the reporting unit is measured by discounting
estimated future cash flows. If the carrying amount of the reporting unit exceeds its fair value, the second step of the process involves a comparison of the fair value and carrying value of the goodwill of that reporting unit. If the carrying value
of the goodwill of a reporting unit exceeds the fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. Goodwill of a reporting unit will be tested for impairment between annual tests if an event occurs or
circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.

 


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EXLSERVICE HOLDINGS, INC.

ALIGN="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007

 


Based on the results of its first step impairment tests performed on October 1, 2007, the
Company’s goodwill was not impaired. The Company makes every reasonable effort to ensure that it accurately estimates the fair value of the reporting units. However, future changes in the assumptions used to make these estimates could result in
the recording of an impairment loss. In the event we record an impairment loss in the future, such amount will not be deductible for tax purposes. As of December 31, 2007, our goodwill balance was $16,785,487. The goodwill balance at
December 31, 2007 has changed from the balance at December 31, 2006 due to purchase price adjustments recorded during the year ended December 31, 2007.

FACE="Times New Roman" SIZE="2">Intangible assets are carried at cost less accumulated amortization. The intangible assets are amortized over their estimated useful lives in proportion to the economic benefits consumed in each period. The estimated
useful lives of the intangible assets are as follows:

 




















Customer relationships

  2 years

Trademarks

  1.5 years

Non-compete agreements

  1 year
This excerpt taken from the EXLS 10-Q filed Nov 14, 2007.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Pursuant to our investment policy, our surplus funds are kept as cash or cash equivalents and are invested in highly-rated commercial paper and money market accounts to reduce our exposure to market risk with regard to these funds.

 

4

Table of Contents
This excerpt taken from the EXLS 10-Q filed Aug 14, 2007.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Pursuant to our investment policy, our surplus funds are kept as cash or cash equivalents and are invested in highly-rated commercial paper and money market accounts to reduce our exposure to market risk with regard to these funds.

 

4

Table of Contents
This excerpt taken from the EXLS 10-Q filed May 15, 2007.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Pursuant to our investment policy, our surplus funds are kept as cash or cash equivalents and are invested in highly-rated commercial paper and money market accounts to reduce our exposure to market risk with regard to these funds.

 

4

Table of Contents
This excerpt taken from the EXLS 10-K filed Mar 30, 2007.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Pursuant to our investment policy, our surplus funds are kept as cash or cash equivalents and are invested in highly-rated commercial paper and money market accounts to reduce our exposure to market risk with regard to these funds.

 

EXCERPTS ON THIS PAGE:

10-Q
Nov 10, 2008
10-Q
Aug 11, 2008
10-Q
May 12, 2008
10-K (2 sections)
Mar 17, 2008
10-Q
Nov 14, 2007
10-Q
Aug 14, 2007
10-Q
May 15, 2007
10-K
Mar 30, 2007

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