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Moneycontrol.com India | Chairman's Speech > Computers - Software > Chairman's Speech from Mahindra Satyam - BSE: 500376, NSE: SATYAMCOMP

Mahindra Satyam

BSE: 500376  |  NSE: SATYAMCOMP  |  ISIN: INE275A01028  |  Computers - Software

Explore Mahindra Satyam connections « Mar 07
Chairman's Speech Year : Mar '08
Fiscal 2008 was an outstanding year for Satyam. We achieved record
 revenues and record net income. We expanded into new geographies and
 launched many more new, higher-value services. We acquired high-end
 firms that significantly strengthened our consulting capabilities, and
 we extended our lead in enterprise systems. We employed a record number
 of associates while bringing attrition to a three year low, and we were
 recognized as the best company in the world for associate training and
 development. We repositioned our brand and launched a strategic new
 global marketing sponsorship. We are now serving more clients -
 especially among the Fortune 500 - in more industries and more
 countries than ever in our history, and we are achieving uncommon
 success with our social responsibility programs.
 
 1 can think of no better way to mark the twentieth anniversary of
 Satyams founding than to report these results to you.
 
 US GAAP revenues grew 46 percent, to US.14 billion, up from US$ 1.46
 billion in fiscal 2007. While it took us 18 years to reach the US
 billion mark, we crossed the US billion threshold less than two years
 later. Our net income also grew by 40 percent last fiscal year, to
 US7 million.
 
 This growth has been the result of several strategic initiatives and
 continuous investments in our business model. It is also encouraging to
 note that last years exceptional results occurred despite a fairly
 hostile macroeconomic environment: the rupee appreciated by almost 9
 percent and our main cost component-talent-continued to rise. To
 curtail these margin pressures, we focused on increasing billing rates
 and offshore revenue contributions, diversifying our regional revenue
 mix.  These initiatives worked: North America contributed 60.35 percent
 of our revenue in fiscal 2008, down from 64.53 percent in the previous
 year.
 
 Our goal has always been to delight all of our stakeholders- investors,
 customers, associates and society at large. Our strategies are clearly
 aligned in this direction and have achieved superior results.
 
 Among Satyams most important and prominent developments in fiscal 2008
 was the repositioning of Satyams brand to address market demands and
 to reflect the higher-value capabilities we developed or acquired over
 the past several years.
 
 Our clients now expect us to work with them to transform their key
 business processes, their skill sets and cultures, their organizations
 and business models - as well as their technology - to help them
 achieve significant improvements in their performance. To communicate
 that mission, focus and experience, Satyam updated its corporate
 tagline to Business Transformation. Together.
 
 To help promote that positioning worldwide - even more in Europe, Asia
 Pacific and Latin America - we entered into a strategic partnership
 with FIFA, footballs governing organization. Satyam is now the
 official IT Services Provider to the 2010 and 2014 World Cups, to be
 held in South Africa and Brazil, respectively. The World Cup is the
 largest and most-viewed sporting event in the world. In conjunction
 with the partnership, we have also launched a global sports management
 practice.
 
 During the year, we continued to expand our service delivery footprint,
 opening new centers in Australia, Malaysia, China, Egypt and Brazil,
 and we launched new, advanced industry- and domain-specific solutions
 in areas such as BPO.  engineering services, infrastructure management,
 analytics and consulting. Ten times during the year, industry analysts
 have ranked Satyams offerings among the best in our industry.
 
 Our customers have embraced these developments, and our efforts to
 strengthen out customer relationships have gained significant traction.
 Satyam now has two customers with an annual revenue run rate greater
 than US0 million, and more than 50 exceeding US million. While we
 continue to strengthen our existing relationships, efforts to cultivate
 new customers have also gained momentum. At the end of fiscal 2008,
 Satyam had 617 active clients, with mote than 180 on the US and Global
 Fottune 500
 
 Our ability to acquire and retain talented professionals has also been
 exemplary. Today, Satyam has more than 51,000 employees, and our
 annualized attrition rate in Q4 was 11.5 percent-among the industrys
 lowest. Our excellent retention is a result of our considerable efforts
 to provide excellent career and leadership opportunities, efforts
 recognized by the American Society for Training and Development last
 year when they named Satyam the single best company in the world for
 associate development - the first time a non-American company was ever
 cited for this honor.
 
 Superior innovation is also fundamental to Satyams success, and draws
 on our culture of continuous learning. The capacity to innovate is a
 primary determinant of market value for companies like ours.
 
 A new venture with Cisco Systems, Inc. is an example of innovation that
 resulted in a transformational opportunity.  The venture provides
 secure medical and emergency management services to local and national
 governments, among other segments. The services are built on advanced -
 yet proven - processes and technology, and are designed to be
 replicated and implemented across the world.
 
 Innovation extends to how we build our capabilities. From this
 perspective, we made four key acquisitions in fiscal 2008.  In 02, we
 acquired Nitor Global Solutions, a UK-based infrastructure management
 services firm to bolster our growing remote IMS capabilities. Nitor
 helps customers design, implement and manage Microsoft technologies. In
 03, we acquired Bridge Strategy Group, a high-end, US-based management
 consulting firm. Bridge strengthens our business strategy formulation
 and business transformation capabilities and provides us expanded
 access to additional clients, at higher levels.
 
 In the fourth quarter, we entered into a definitive agreement with S&V
 Management Consultants, a renowned, Belgium- based supply chain
 management consulting firm that ARC Advisory Group ranks among the
 worlds premier boutique SCM consulting companies. And, to augment our
 capabilities in the increasingly important market research and customer
 analytics field, we acquired Caterpillars Market research and customer
 analytics business, including its intellectual property.
 
 I am pleased to report that MZ Consult, a global investor relations and
 financial communications firm, included Satyam among the five
 organizations it determined to have the Best IR Website in the Asia
 Pacific and Africa regions. Satyam also earned the top ranking in the
 global technology industry for Best Earnings Release and Financial
 Disclosures Procedures. Additionally, we were named among the regions
 top two companies for Best Corporate Governance Practices.
 
 Additionally, in January, we listed our existing ADSs on the NYSE
 Euronext stock exchange in Amsterdam. The listing has made investing in
 Satyam easier, enabled extended trading, and enhanced the
 organizations visibility in Europe.
 
 I am confident that as we continue to work more closely with clients on
 their most strategic and critical transformation initiatives, we will
 both succeed, and Satyams excellent growth will continue. Against this
 backdrop, we look forward to a revenue growth rate of 24 to 26 percent
 in fiscal 2009 (in both Indian and US GAAP). While EPS is expected to
 grow between 17 and 19 percent in Indian GAAP EPADS is expected to grow
 from 15.2 to 17.6 percent, as per US GAAP The Board has proposed a
 final dividend of 125 percent. The total dividend for fiscal 2008
 stands at 175 percent.
 
 The extraordinary successes I described here are the results of some
 51,000 associates who embody Satyams values of entrepreneurship,
 collaboration, inventiveness and responsibility. I am proud to count
 myself among them, and I look forward to working with them, with our
 clients, and with you as we take Satyam into its next twenty years.
 
                                                 Best regards,
 
                                              B. Ramalinga Raju
 Place : Hyderabad
 Date  : April 21, 2008
Source : Religare Technova

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