MIRA
INFORM REPORT
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Report Date : |
27.02.2008 |
IDENTIFICATION
DETAILS
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Name : |
SATYAM COMPUTER
SERVICES LIMITED |
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Registered Office : |
Mayfair Centre, 1-8-303/36,
S. P. Road, Secunderabad – 500 003, Andhra Pradesh |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
24.06. 1987 |
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Com. Reg. No.: |
01-7564 |
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CIN No.: [Company
Identification No.] |
L72200AP1987PLC007564 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
HYDS00106B |
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Legal Form : |
A public limited
liability company. The company’s shares are listed on the Stock Exchanges |
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Line of Business : |
The company is
engaged in Providing Computer Software Solutions Services in the areas of
Product Development and Implementation, Re-Engineering of Applications,
e-Commerce and Consulting. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 232000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a
well-established and reputed software company, which has established excellent
track of performance and financial status. Available information indicates
high financial responsibility of the company. Trade relations are reported as
fair. Payments are correct and as per commitments. The company can
be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
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Registered Office : |
Mayfair Centre,
1-8-303/36, S. P. Road, Secunderabad – 500 003, Andhra Pradesh, India. |
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Tel. No.: |
91-40-27813166/ 27843222/55854343 |
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Fax No.: |
91-40-27840058/ 27840058/27813166 |
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E-Mail : |
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Website : |
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Development Centres |
Located at
Hyderabad, Secunderabad, Bahadurapally, Chennai, Bangalore, Pune and
Bhubaneshwar |
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Branches : |
Satyam Technology Center, Bahadurpally Village, Qutubullapur Mandal, R
R District - 500 855. India Esteem Towers, 9, Railway Parallel Road, Kumara Park West,
Seshadripuram, Bangalore - 560 020, Karnataka, India. Mansarovar Building, 271 A, Anna Salai, Teynampet, Chennai - 600 018,
Tamilnadu, India. #23 & 24, Chamiers Road, Teynampet, Chennai - 600 018, Tamilnadu,
India. 4th Floor, Kakani Towers, K. N. Khan Road, Chennai - 600 006,
Tamilnadu, India. 3A, 3rd Floor, A Block, 4, Canal Bank Road, Taramani, Tidel Park,
Chennai - 600 113, Tamilnadu, India. 2nd Floor, A Block, 4, Canal Bank Road, Taramani, Tidel Park, Chennai
- 600 113, Tamilnadu, India. |
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Indian Global Offices : |
Hyderabad, Secunderabad, Bangalore, Chennai, Pune, New Delhi, Gurgaon,
Mumbai |
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Overseas Global Offices : |
USA, Canada,
Brazil, Europe UK, France, Paris, Germany, Hungary, Ireland, Italy,
Netherlands, Spain, Madrid, Sweden, Switzerland, Australia, China, Japan, New
Zealand, Korea, Singapore, South africa, UAE, Thailand, etc. |
DIRECTORS
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Name : |
Mr. B. Ramalinga
Raju |
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Designation : |
Chairman |
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Name : |
Mr. B. Rama Raju |
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Designation : |
Managing Director |
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Name : |
Mr. V. P. Rama
Rao, IAS (Retd.) |
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Designation : |
Director |
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Name : |
Dr. (Mrs.)
Mangalam Srinivasan |
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Designation : |
Director |
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Name : |
Mr. Krishna G
Palepu |
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Designation : |
Director |
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Name : |
Mr. Vinod K Dham |
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Designation : |
Director |
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Name : |
Mr. V. Srinivas |
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Designation : |
Chief Financial Officer & Senior Vice President |
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Name : |
Mr. G. Jayaraman |
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Designation : |
Vice President & Company Secretary |
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Name : |
Mr. M Rammohan
Rao |
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Designation : |
Director |
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Name : |
Mr. Ram Mynampati
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Designation : |
Whole Time
Director and President |
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Name : |
Mr. T Prasad |
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Designation : |
Director |
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Name : |
Mr. V S Raju |
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Designation : |
Director |
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Global PR representatives : |
Corporate_Communications@Satyam.com
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MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Category of Shareholders |
No.
of Shares |
%
of Holding |
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Shareholding of
Promoter and Promoter Group2 |
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Indian |
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Individuals/ Hindu Undivided Family |
56368326 |
8.48 |
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Sub Total(A)(1) |
58673346 |
8.79 |
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Foreign |
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Total
Shareholding of Promoter and
Promoter Group (A)= (A)(1)+(A)(2) |
58673346 |
8.79 |
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Public
shareholding |
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Institutions |
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Mutual Funds/ UTI |
40063379 |
6.00 |
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Financial Institutions / Banks |
905471 |
0.14 |
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Insurance Companies |
36621020 |
5.49 |
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Foreign Institutional Investors |
315021563 |
47.22 |
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Sub-Total (B)(1) |
392611433 |
58.84 |
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Non-institutions |
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Bodies Corporate |
6272040 |
0.94 |
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Individuals |
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Individuals -i. Individual shareholders
holding nominal share capital up to Rs 0.100 million |
9712099 |
1.46 |
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ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 million |
91221818 |
9.18 |
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Any Other (specify) n Non Resident
Indians n Foreign
Nationals n Trusts |
8491853 500 3448 |
1.27 0.00 0.00 |
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Sub-Total (B)(2) |
85701758 |
12.85 |
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Total Public
Shareholding (B)= (B)(1)+(B)(2) |
478313191 |
71.69 |
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TOTAL (A)+(B) |
536986537 |
80.48 |
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Shares
held by Custodians and
against which Depository Receipts
have been issued |
130209472 |
19.52 |
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GRAND TOTAL
(A)+(B)+(C) |
667196009 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
The company is
engaged in Providing Computer Software Solutions Services in the areas of
Product Development and Implementation, Re-Engineering of Applications,
e-Commerce and Consulting. |
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Products : |
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Exports to : |
U.S.A., Canada,
Germany, U.K., Denmark, Singapore, Australia, Poland, Malaysia, Japan,
Sweden, Netherlands and Kenya. |
GENERAL
INFORMATION
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Customers : |
*
GE *
Caterpillar *
Northern
Telecom * Cable and Wireless |
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No. of Employees : |
Around 35670 |
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Bankers : |
* BNP Paribas, Secunderabad, Andhra Pradesh. * Bank of Baroda, Secunderabad, Andhra Pradesh. * Citibank N.A., Secunderabad, Andhra Pradesh. * ICICI Bank Limited, Secunderabad, Andhra Pradesh. * Vijaya Bank, Secunderabad, Andhra Pradesh. * HDFC Bank Limited *
HSBC Limited |
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Facilities : |
Secured Loan (Rs.
in millions)
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Price Waterhouse Chartered
Accountants |
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Address : |
Hyderabad – 500
082, Andhra Pradesh, India |
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Tel. No.: |
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Mobile No.: |
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Fax No.: |
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E-Mail : |
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Memberships : |
*
Confederation
of Indian Industry * National Association of Software &
Service Companies |
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Joint Ventures : |
* Satyam Venture Engineering Services Private Limited *
CA Satyam ASP Private Limited |
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Associates/ : |
* Satyam Infoway Limited * Vision Compass Inc. * Dr. Millennium Inc. * Satyam (Europe) Limited * Satyam Asia Pte. Limited * Satyam Japan Limited *
Satyam Manufacturing Technologies Inc. (SMTI) *
Sify Limited (ceased to exist as an associate w.e.f. November 09,
2005) |
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Subsidiaries |
* Citisoft Pic * Citisoft Inc. * Knowledge
Dynamics Pte Limited * Knowledge
Dynamics Private Limited * Knowledge
Dynamics USA Inc. * Info On Demand
SON BHD * Nipuna Services
Limited * Satyam Computer
Services (Shanghai) Company Limited * Satyam
Technologies Inc. |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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800,000,000 |
Equity Shares |
Rs. 2/- each |
Rs. 1600.000 millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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667,196,009 |
Equity Shares |
Rs. 2/- each |
Rs. 1334.400 millions |
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Out of the above: 4,000,000 Equity Shares of Rs. 2 each were allotted as fully paid-up Equity
Shares for a consideration other than cash pursuant to the Scheme of
Amalgamation with Satyam Enterprise Solutions Limited 468,289,738 (2006-140,595,000) Equity Shares of Rs. 2 each were
allotted as fully paid-up by way of Bonus Shares by capitalising free
reserves of the Company 1 30,209,472 (2006 - 64,680,600 ) Equity Shares of Rs. 2 each fully
paidup represent 65,104,736 (2006 - 32,340,300) American Depository Shares 38,11 6,009 (2006 - 9,909,539 ) Equity Shares of Rs. 2 each fully
paid-up were alloted to associates of the Company pursuant to the Associate
Stock Option Plan - B and Associate Stock Option Plan (ADS) |
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FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
1334.400 |
648.900 |
638.500 |
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2] Share Application Money |
78.500 |
17.800 |
0.000 |
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3] Reserves & Surplus |
56480.700 |
42687.500 |
31531.700 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
57893.600 |
43354.200 |
32170.200 |
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LOAN FUNDS |
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1] Secured Loans |
137.900 |
125.700 |
98.700 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
137.900 |
125.700 |
98.700 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
58031.500 |
43479.900 |
32268.900 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
3499.500 |
3494.200 |
2522.900 |
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Capital work-in-progress |
2900.500 |
768.400 |
646.800 |
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INVESTMENT |
2011.500 |
1557.400 |
784.800 |
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DEFERREX TAX ASSETS |
433.600 |
42.900 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
0.000
|
0.000
|
0.000 |
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Sundry Debtors |
16498.600
|
11228.100
|
7651.700 |
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Cash & Bank Balances |
39598.200
|
30523.300
|
23633.100 |
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Other Current Assets |
648.300
|
1105.900
|
0.000 |
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Loans & Advances |
2617.500
|
1832.400
|
1679.200 |
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Total Current Assets |
59362.600
|
44689.700
|
32964.000 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current Liabilities |
5971.700
|
4357.100
|
2761.900 |
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Provisions |
4204.500
|
2715.600
|
1887.700 |
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Total Current Liabilities |
10176.200
|
7072.700
|
4649.600 |
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Net Current Assets |
49186.400
|
37617.000
|
28314.400 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
58031.500 |
43479.900 |
32268.900 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
62284.700 |
46343.100 |
34642.200 |
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Other Income |
1816.100 |
3801.700 |
1024.200 |
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Total Income |
64100.800 |
50144.800 |
35666.400 |
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Profit/(Loss) Before Tax |
15732.300 |
14458.900 |
8670.000 |
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Provision for Taxation |
1500.000 |
2061.400 |
1167.400 |
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Profit/(Loss) After Tax |
14232.300 |
12397.500 |
7502.600 |
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Earnings in Foreign Currency : |
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Export Earnings |
47285.500 |
38553.600 |
NA |
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Total Earnings |
47285.500 |
38553.600 |
NA |
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Imports : |
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Capital Goods |
908.000 |
610.200 |
NA |
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Total Imports |
908.000 |
610.200 |
NA |
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Expenditures : |
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Power & Fuel Cost |
346.800 |
269.800 |
186.800 |
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Other Manufacturing Expenses |
867.100 |
677.000 |
642.500 |
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Employee Cost |
37060.400 |
27007.500 |
19977.100 |
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Selling and Administration Expenses |
7873.600 |
5777.300 |
4387.800 |
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Miscellaneous Expenses |
845.600 |
699.000 |
755.200 |
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Interest & Financial Charges |
76.100 |
27.200 |
7.600 |
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Depreciation |
1298.900 |
1228.100 |
1039.400 |
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Total Expenditure |
48368.500 |
35685.900 |
26996.400 |
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QUARTERLY RESULTS
|
Particulars |
30.06.2007 |
30.09.2007 |
31.12.2007 |
|
Type |
1st Quarter |
2nd Quarter |
3rd Quarter |
|
Sales Turnover |
17590.800 |
19482.400 |
21105.800 |
|
Other Income |
618.500 |
1082.000 |
686.900 |
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Total
Income |
18209.300 |
20564.400 |
21792.700 |
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Total Expenditure |
13463.700 |
15466.300 |
16418.600 |
|
Operating Profit |
4745.600 |
5098.100 |
5374.100 |
|
Interest |
5.100 |
4.700 |
42.800 |
|
Gross Profit |
4740.500 |
5093.400 |
5331.300 |
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Depreciation |
325.500 |
326.800 |
359.100 |
|
Tax |
523.600 |
595.100 |
562.200 |
|
Reported PAT |
3891.400 |
4171.500 |
4410.000 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
PAT / Total Income |
(%) |
22.20
|
24.72 |
21.03 |
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Net Profit Margin (PBT/Sales) |
(%) |
24.54
|
28.83 |
24.30 |
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Return on Total Assets (PBT/Total Assets} |
(%) |
20.86
|
28.60 |
234.84 |
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Return on Investment (ROI) (PBT/Networth) |
|
0.27
|
0.33 |
0.27
|
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Debt Equity Ratio (Total Liability/Networth) |
|
1.18
|
1.16 |
0.11 |
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Current Ratio (Current Asset/Current Liability) |
|
5.83
|
6.32 |
7.09 |
LOCAL AGENCY
FURTHER INFORMATION
History
A part of the Satyam group, Satyam Computer Services (SCSL) was incorporated in 1987 and became a public limited company in Aug.'91. SCSL is the fourth largest provider of Information Technology services in India. Satyam offers a range of expertise that includes: Software Development Services, Embedded Systems, Engineering Services (CAD/CAM/CAE), Systems Integration, ERP Solutions, Enterprise Application Integration, Customer Relationship Management, Supply Chain Management, Product Development, Electronic Commerce, and Consulting.
The Company, through its subsidiary Satyam Infoway, provides Internet access
& hosting services and network and network-enabled services. Satyam's range
of consulting and IT skills have helped businesses re-engineer and reinvent
their products, services andprocesses to compete successfully in an
ever-changing marketplace.
Satyam has a presence in 35 countries and a customer base of over 300 global
clients, including around 40 Fortune 500 Corporations. More than 9,500 highly
skilled IT professionals at Satyam, its subsidiaries and joint ventures provide
customized IT solutions for industries in Telecom, Manufacturing, Insurance,
Banking and Financial Services, Health Care, Bioinformatics and Retail sectors.
Satyam's software development centers in India, the United States, the UK, the
Middle East, Japan and Singapore work with a variety of business and technology
partners to design and implement projects onsite, offshore and offsite.
Satyam's ideas and products have resulted in technology-intensive
transformations that have met the most stringent of international quality
standards. At the same time, Satyam teams proactively work on turning new ideas
into products that answer global market needs. Its products include
VisionCompass and Search Pad.
Satyam has developed strategic alliances with leaders in several technical
areas. Among the company's long-standing technical partnerships are those with
Microsoft, Oracle, SAP, LHS GmbH and inTouch Technologies. Recently formed
alliances, which reflect the growing emphasis on New Economy initiatives,
include Vignette, Ariba, i2 Technologies, Siebel, Exterprise and PeopleSoft.
Satyam is one of the first 10 companies in the world to attain an
organization-wide SEI CMM Level 5 assessment, and reflects Satyam's commitment
to quality processes and products. In 2000, Satyam Enterprise Solutions, Satyam
Renaissance Consulting and Satyam Spark Solutions were amalgamated with Satyam
Computer Services from Apr. '99.
In Jun 2000, Satyam signed a letter of intent (LoI) with TRW Inc to form a
strategic alliance. A new JV, Satyam Manufacturing Technology Inc., was formed
to provide information systems and engineering services to TRW and other global
companies. During the year 99-00, Satyam has set up foreign subsidiaries in
Japan & Singapore to facilitate marketing in the respective region. As on
March 2000 Satyam has total Six subsidiary. Also, Satyam Infoway has signed an
agreement with Indiaworld Communication to purchase of 24.5% shares for $28.
In Feb. 2001, Satyam Computer Services and the US-based IdeaEDGE Ventures
entered into an alliance to set up a 50:50 joint venture Satyam Idea EDGE
Technologies to focus on business emerging from mobile
internetconvergence.
Its subsidiary Satyam Asia has opened an Asia Pacific headquarters in
Singapore. This new centre will spearhead the Saytam's growth in the Asia
Pacific region covering ASEAN, North China and Australia-New Zealand. Satyam
has more than 50 customers in the region and over 20 of them
Singapore-based.
The company is focusing on building new competencies in the field of
bioinformatics through a strategic alliance with the Hyederabad based centre
for Cellular and Molecular Biology. It also signed a MoU with Ford Motor
Company to provide a range of Applications Software Services to Ford. IT also
set up a joint venture with Computer Associates namely CA Satyam ASP Pvt Limited
to offer small and medium enterprises cost effective access to technology to
tap the potential of Asian e-Business.
It also has alliances with Broad Vision, Open Market, Sterling Commerce etc.
This buyout will be effective 1 January 2002 subject to approval by Sify's
board of directors and shareholders, valuation by an independent evaluator and
other requisite statutory approvals. SCSL expects the valuation of this
division in the region of $7 million.
In Dec.2001, the company was awarded IMC Ramkrishna Bajaj National Award Trophy
in the service category. In Jan. 2002 the company announced the launch of its
operation in China.
The Board of SCSL has decided to divest the company's holding in Sify in whole
or part & acquire the software services business of sify w.e.f January
1,2002. The acquisition was completed as per the said date for a consideration
of Rs.332.500 Millions by an independent valuer. During 2002-03, Sify Limited
had issued additional shares to new investors. Consequent of this issue,Sify
Limited ceased to exist as a subsidiary of the company.
During February,2003 the World Bank has awarded the Outsourcing contract to
Satyam Computer Serivces,with which the group has been working for sometime
now. The contract worth $10 -$15 million was awarded to satyam in the recently
held bidding process.
Some of the joint ventures of SCSL are CA Satyam ASP Pvt Limited, a joint
venture between Satyam and Computer Associates engaged in the areas, such as
knowledge & Document Management, e-learning, e-collaboration and Smart Card
Solutions: Satyam Venture Engineering Services Pvt Limited, a joint venture
between Satyam and Venture Global Engineering, US.
Nipuna Services Limited: Satyam Technologies, Inc: Satyam Computer Services
(Shanghai) Company, Limited are the subsidiaries of the company. SCSL's BPO
Services is offered by Nipuna Services Limited.
Overview:
For the financial year ended March 31, 2007, the Company reported a total
income of Rs.64100.800 millions comprising income from software services of
Rs.62284.700 millions, and other income of Rs.1816.100 millions. The income
from software services grew by 34.40% over previous financial year. The company
recorded an operating profit of Rs.17107.300 millions and a net profit of
Rs.14232.300 millions representing a growth of 8.87% and 14.80% respectively
over previous financial year. North America, Japan, Europe and rest of the
world accounted for 64.53%, 1.49%, 18.69% and 15.29% of the total revenues
respectively. The offshore share of the revenues during the year was 48.66%
while that of the onsite was 51.34%.
Infrastructure:
Company continued to create best in the class facilities in tune with
the times and the changing demands across the world to keep abreast with the
set growth targets. The directors feel happy to put on record that the Company
has added 8,000 spaces during the year under review, double to that of the
previous year and this noteworthy expansion has been achieved in a quick time.
Of this more than 60% of the spaces have been created in own campuses at
different locations, very much in line with the aggressive planning strategy
the Company came up with at the beginning of the current fiscal year. We have
also established new office spaces in London, Sydney and China.
During the current year, we have plans to develop infrastructure in the
SEZ campus at two locations in Hyderabad and in one location in Chennai. We
have also signed up for a campus in Nanjing, China and Malaysia.
Network and
Systems:
Technology plays an integral part in the business transformation
happening around the world. Corporate strategies evolve around the newer
technology. The Network and systems group is focused in bringing the latest
technology to enable data, voice and video communication across the enterprise
and in turn enable businesses to deliver high end solutions to several world
class global corporations.
The Network and systems group have taken up many initiatives to improve the
network infrastructure which is the backbone for the Satyam's growth.
Quality:
The vision of Quality at Satyam is to institutionalize excellence in
quality of software and business solutions by developing and deploying simple,
efficient and effective processes using the latest Quality models and Six sigma
methodologies. As part of its continuous improvement program, the Company has
achieved Global Certification against ISO 27001 (Information Security
Management), ISO 20000 (IT Service Management) and ISO 9001 standards.
In addition to earlier certifications like CMMI, PCMM the Company has also
achieved AS9100 (Aerospace) certification to realize higher levels of maturity
and be consistent with business and market needs.
Further, to keep pace with the organizational growth and deliver value
proposition to customers, the Company has institutionalized an enterprise wide
project management tool, Optima (Operational Projects Real Time Management).
Optima are based on 'C' Projects, a new Enterprise Project Management solution
from SAP. 'C' Projects has been customized to meet Satyam specific needs and
has been implemented across the organization.
Company has deployed a well researched Business Continuity Management system in
place to prevent and contain potential business disruptions in the event of any
disaster and quickly resume services to the customer at acceptable service
levels. Satyam simulated a first-of-its-kind, cross-border country outage test
in September and revived business operations from its Global Business
Continuity and Disaster Recovery Center in Singapore.
Awards and Recognitions:
The following are some of the recognitions that the Company won during the year
2006-07:
'Best Companies to Work For' by BT-Mercer-TNS:
In the recently concluded BT-Mercer-TNS Best Employer Survey 2006, Satyam was
ranked as the 3rd Best Place to Work for in India. This prestigious survey is
an acknowledged benchmark that recognizes outstanding people, processes and
practices across industries. Satyam's top ranking is a reflection of its
commitment to Associate Delight and Leadership Development within the
organization.
The global No. 2 outsourcing vendor:
Satyam has been ranked by the Brown-Wilson Group as the number two outsourcing
vendor globally. This was as per the Black Book of Outsourcing's Top 50 Best
Managed Companies and 2006 survey of over 870 IT and ITES companies worldwide.
This year, Satyam figured as the leading Indian IT services Company in the
outsourcing list.
Global Certified Advantage Partner by
Oracle:
Satyam has been certified as a Global Certified Advantage Partner (CAP) by
Oracle. This partnership leverages end-to-end services ranging from Satyam's
global delivery model to the best-in-class applications and technology
solutions from Oracle. This is the highest level of partnership at
Oracle.
Best Practice Award from the TDWI:
Satyam was the winner of the Customer Relationship Management category in the
2006 Best Practices in Data Warehousing competition conducted by the The Data
Warehousing Institute (TDWI).
The 2006 TDWI best practice award demonstrates Satyam's maturity in terms of
process, quality and skill in developing, deploying, and maintaining large and
complex data warehouses. This is the second instance of Satyam winning this
coveted award.
Asian MAKE Award:
Satyam has won the prestigious Asian Most Admired Knowledge Enterprise (MAKE)
Award. The MAKE Study is an established benchmark to recognize organizations
for their ability to leverage enterprise knowledge to deliver superior
performance in the areas of innovation, operational effectiveness and
excellence in products and services.
Satyam wins ASTDs BEST Award:
Satyam was ranked 15th among 78 organizations, in the American Society for
Training & Development's (ASTD) 2006 BEST Awards program, which recognizes
organizational commitment to employee learning. Satyam is among 39
organizations from India, South Africa, and the United States to receive the
ASTD BEST Award.
Integrated Engineering Services Practice ranked Number One by Brown &
Wilson: Satyam's Integrated Engineering Services Practice has been ranked
Number One by The Black Book of Outsourcing - 2006, amongst 50 Engineering
Services Outsourcing vendors, comprising national and international players.
The ranking has been carried out by Brown & Wilson Group Inc., Florida, and
USA.
BML Munjal Award for Excellence:
Satyam has been awarded the BML Munjal Award for Excellence in Learning &
Development for 2006. The focus on expanding entrepreneurial energy and transforming
individuals along with a strong social orientation, enhancing human skills of
the Company and encouraging distributed leadership were some of the reasons
cited by the jury for Satyam winning this coveted award.
Partner Network Award from Oracle:
Satyam was awarded the Partner Network Award for Business Excellence by Oracle
for the Middle East region.
Corporate Governance:
Company has been rated by IR Global Rankings as No. 1 in 'Best Corporate
Governance Practices' for India and also in 'Best Earnings Release &
Financial Disclosure Procedures' across the Asia Pacific, for both categories
viz. region (India) and industry (technology). We also continue to be amongst
the Top 5 companies in the Asia-Pacific/Africa region, with the best earnings
and disclosure practices, consecutively for two years.
A report on Corporate Governance along with Auditors' certificate on compliance
with the conditions of Corporate Governance as stipulated in clause 49 of the
listing agreement, is provided elsewhere in the Annual report.
Subsidiaries:
Ministry of Company Affairs vide their letter dated April 13, 2007 granted
approval under section 212 (8) of the Companies Act, 1956 exempting the Company
from attaching the documents of subsidiaries as specified under section 212(1)
of the Companies Act, 1956. The summarized financial information of the
subsidiaries is published separately in the Annual Report for information of
members of the Company.
Directors approved setting up of a subsidiary Company in Cairo, Egypt to
service customers in and around Middle East region and to tap further potential
business opportunities. Also it has been proposed to incorporate another
subsidiary in China in the province of Nanjing for setting up a development
center.
Nipuna Services Limited, Satyam's BPO subsidiary, has recorded revenue of
Rs.1716.900 millions and a net (loss) of Rs.176.100 millions for the year ended
March 31, 2007.
Satyam Computer Services (Shanghai) Company Limited, Satyam's 100%
subsidiary in China, recorded revenue of Rs.311.200 millions and a net loss of
Rs.70.100 millions for the year ended December 31, 2006.
Satyam Technologies, Inc., our 100% subsidiary, recorded revenue of Rs.80.800
millions and a net income of Rs. 5.800 millions for the year ended December 31,
2006.
For the year ended March 31, 2007 Citisoft Plc. recorded revenue of Rs.480.400
millions and a net loss of Rs.12.500 millions. Knowledge Dynamics Pte
Limited. recorded revenues of Rs.34.100 millions and a net profit of Rs.22.500
millions for the year ended March 31, 2007.
Joint ventures:
CA Satyam ASP Private Limited, a joint venture between Satyam and Computer
Associates engaged in areas such as Knowledge & document management,
e-learning, e-collaboration and smart card solutions. CA Satyam recorded
revenue of Rs.77.100 millions and a net loss of Rs.3.400 millions for the year
ended March 31, 2007.
Satyam Venture Engineering Services Private Limited, a joint venture between
Satyam and Venture Global Corporation, US, earned revenue of Rs.690.000
millions and a net profit of Rs.60.000 millions for the year ended March 31,
2007.
Management
discussion and analysis:
Industry structure and developments:
Global IT services overview:
Global IT services spending is projected to grow at a compound annual growth
rate of 5.8% to reach US$589.0 billion by 2010, from an estimated IT services
spending of US$444.0 billion in 2005 according to International Data
Corporation. Satyam believes that the growth of global IT services spending is
driven by the following factors and trends:
Increased importance of IT to businesses. In today's increasingly competitive
business environment, companies have become dependent on information technology
not only to conduct day-to-day operations, but also as a strategic tool to
enable them to re-engineer business processes, restructure organizations and
react quickly to competitive, regulatory and technological changes. As
information systems continually become more complex with the use of multiple applications
and rapidly changing technologies, companies are increasingly turning to
external IT service providers to develop and implement new technologies and
integrate them with existing applications in which they may have already made
considerable investments.
Impact of the Internet and other new technologies on business. Businesses are
increasingly using the Internet to interact with new and existing customers and
create new revenue opportunities. Businesses conducted electronically over the
Internet extend beyond Internet-based applications to include packaged software
tools, such as customer and supply chain management software, that need to be
integrated with a company's enterprise systems. These initiatives are often
large and difficult to manage in-house and need to keep pace with constantly
evolving business processes and technological innovations leading to demand for
IT services companies.
Managing and upgrading existing systems. Managing and upgrading existing
systems has become critical given the importance of IT and related systems to
new business initiatives. Internal IT departments often do not have the
appropriate resources or breadth of skills necessary to manage or upgrade
existing systems. As a result, companies are increasingly looking to external
service providers to design, integrate, implement and maintain their
applications based on new technologies.
Increasing trend towards offshore outsourcing. The increasing complexities and
costs of IT services, together with an increasing need for highly skilled
technology professionals and tightening IT budgets for companies, are driving
demand for professional IT services companies who are able to provide a cost
effective, high quality, comprehensive range of services. The offshore delivery
model is enabling companies to increasingly outsource complex assignments and
generate not only cost savings in IT services but also greater efficiencies in
their business processes. In addition, companies are increasingly using the
'utility computing' or 'pay for what you use', model for infrastructure,
data-warehousing and IT system usage, which is further fueling growth in
infrastructure, network outsourcing and network management services.
Indian IT services
industry overview:
As organizations realize the cost effectiveness of offshoring their outsourced
services, they are increasingly making offshoring a part of their business
strategy. India is considered to be the most favored destination for
offshore IT service delivery. The NASSCOM-McKinsey Report of 2002 estimates
that export revenue generated from the software and service industry in India
was approximately US$17.7 billion in 2005 and is expected to reach US$60.0
billion by 2010 representing a compound annual growth rate of 27.7%. The key factors
that are expected to contribute to this growth are:
High quality delivery record. Indian companies have developed high quality
delivery processes. As of December 2006, over 440 Indian companies had acquired
quality certifications with 90 companies certified at SEI-CMM Level 5 which is
the highest in the world. Indian companies follow the Information Technology
Act 2000 legislation that outlines the broad policy framework for ensuring the
safety of information in India.
Large supply of English-speaking IT professionals. We believe that India
ranks second only to the United States as the country with the largest
population of English-speaking IT professionals. According to the NASSCOM
strategic review 2007, educational institutes in India will produce
approximately 500,000 technically trained graduates (Engineering
degree/Diploma/MCA) will pass out by the end of 2007. Approximately 2.3 million
graduates in arts, commerce and general science streams and 300,000 post
graduates and doctoral candidates are expected in 2007. Given the shortage of
technical labor in the United States and other developed economies, the
availability of technically skilled personnel is proving to be a competitive
advantage for Indian IT service companies.
Significant cost advantage. Satyam believes that the cost of employing
IT professionals in India is significantly lower than in developed countries
such as the United States. The use of high quality, low cost resources provides
a significant opportunity for companies to realize cost savings by off shoring
IT services to India.
Trends:
The Indian IT services industry has been witnessing changes in customer demands
and Satyam believes that service providers who are best able to adapt to these
changes will succeed in the long run. Some key emerging industry trends are
described below:
Enhanced expectations. Increasingly, companies are expecting more value from
their IT service providers than just the traditional cost advantages derived by
offshoring the delivery of IT services. Companies increasingly prefer service
providers that can provide strategic advice related to designing and increasing
efficiencies of business processes and also assist in implementing their
recommendations. Also, service providers with strong industry expertise are
favored over those who can only provide strong technical skills.
Large, multi-year, end-to-end contracts. Companies are increasingly
looking for IT service providers that can provide end-to-end solutions over a
long period of time. In addition, companies, which have a presence across
various geographies, need IT support on a global scale and often seek a single
service provider that can offer a comprehensive range of services on a
long-term basis across the world, and understand and integrate a wide spectrum
of emerging technologies with existing systems.
Relationships with customers' key senior management. As outsourcing contracts
increasingly gain strategic importance to businesses, customers' senior management
teams have become more involved in outsourcing contract negotiation and
monitoring. As a result, IT service providers need to ensure that their senior
account managers develop strong and lasting working relationships with
customers' senior management.
Performance measurement. Companies are increasingly demanding
transparency in performance measurement. IT service providers with their own
well developed benchmarks, frameworks and models to measure performance or
demonstrate potential benefits are likely to have significant advantage over
their competitors who offer more generic IT services.
Business Process Outsourcing:
Outsourcing to India has provided companies with significant benefits over the
arbitrage in labor costs - through business process enhancements and
improvements. Indian vendors are expanding their service offerings, enabling
customers to deepen their offshore engagements; the shift from low-end business
processes to higher-value, a knowledge-based process is having a positive impact
on the overall industry growth. In spite of the rising elements of cost, Indian
offshore operations provide cost savings of 40-50 per cent; in spite of wage
inflation averaging 10-15 per cent annually, companies are able to leverage
declines in telecom and other overhead costs, productivity gains and economies
of scale to sustain the cost arbitrage. India has already registered its mark
on the globe in ITES-BPO sector. There was steady growth across the key service
categories of finance and accounting, customer interaction and human resource
administration. These three segments accounted for an estimated 89 per cent of
the industry revenues. According to a recent study by Forrester, IT spending
and staff hiring by businesses and government agencies in India is growing
rapidly, at higher rates compared to their North American, European, and Asia
Pacific counterparts.
Outlook:
The outlook for the fiscal year ending March 31, 2008 is as follows:
For fiscal 2008, income from services is expected to be between Rs.77930.000
millions and Rs. 79160.000 millions, implying a growth rate of 20.0% to 22.0%
over fiscal 2007 income of Rs.64850.000 millions. Earnings Per Share (EPS) for
the fiscal 2008 is expected to be between Rs.25.32 and Rs.25.73, implying a growth
rate of 18.00% to 20.00% over fiscal 2007 EPS of Rs.21.45.
The company’s fixed
assets of important value include Goodwill, Freehold Land, Leasehold Land,
Buildings, Plant & Machinery (including Computers and Softwares), Office
Equipments, Furniture & Fixtures, Interiors and Vehicles.
Subject has been
accredited with ISO 9001 Certification.
The company has
joint ventures / alliances with the following companies: -
v
Satyam GE
Software Services Limited
v
Satyam Venture
Engineering Services Limited
v
Satyam
Manufacturing Technologies, Inc.
v
CA Satyam ASP
Private Limited
As per
website Details
Profile
Subject is a leading global business and information technology company that delivers consulting, systems integration, and outsourcing solutions to clients in over 20 industries.
They leverage deep industry and functional expertise, leading technology practices, and an advanced, global delivery model to help clients transform their highest-value business processes and improve their business performance.
They are powered by Nearly 49,200* professionals who excel in engineering and product development, supply chain management, client relationship management, business process quality, business intelligence, enterprise integration, and infrastructure management, among other key capabilities.
They have strategic alliances with 96* best-of-breed technology companies, and operate through 27*state-of-the-art development centers in the US, Canada, Brazil, the UK, Hungary, Egypt, UAE, India, China, Malaysia, Singapore, and Australia. We serve 630* global companies, of which 181* are Fortune Global 500 and Fortune US 500 corporations. Our presence spans 61* countries, across six continents.
News
Satyam Posts Over 32%
YoY Revenue Growth for Q3 FY 07-08; Revises Revenue Guidance
Total income for FY
08 to be between US$ 2,119.2 mn and US$ 2,122.1 mn, implying a growth rate of
45.0 % to 45.2 % over fiscal 2007.
Hyderabad, January
21, 2008: Satyam (NYSE: SAY) today announced the audited results of the company
for the quarter ended December 31, 2007 (Q3).
Consolidated Indian
GAAP Highlights
Revenue was Rs. 2,195.56 crore; a YoY increase of 32.2% and a sequential increase of 8.1%, Volume growth for the quarter was 9.4% Net Profit after Tax was Rs. 433.63 crore; a YoY increase of 28.6% and a sequential increase of 6.0%, EPS was Rs. 6.48; a YoY increase of 26.1% and a sequential increase of 5.9%, EBITDA margin for the quarter was 21.46%
US GAAP Highlights
Revenue was US$ 562.9 million; up 49.9% YoY and 10.5% sequentially, Net Income was $109.7 million; YoY increase of 54.3% and a sequential increase of 7.7%, Basic earnings per ADS for the quarter was US$0.33; increase of 50% YoY and up 6.5% sequentially, Operating margin (EBIT) was 19.04%
Other Highlights
The company ended the quarter with 44,847 associates, an addition of 3,424 associates including 2,128 trainees. Total employees including subsidiaries and joint ventures, is 49,199, Attrition on a trailing twelve months fell to 13.1 % from 13.9 % in Q2, Added 32 clients, including 8 Fortune 500 companies
Business Outlook
For fiscal 2008, under US GAAP, revenue is expected to be between US$ 2,119.2 mn and US$ 2,122.1 mn, implying a growth rate of 45.0 % to 45.2 % over fiscal 2007. Basic earning per ADS for fiscal 2008 is expected to be US$ 1.27, implying a growth rate of 39.6 % over fiscal 2007.
Corresponding revenue growth under Indian GAAP consolidated is expected to be between 29.0 % and 29.2 %. EPS for the full year is expected to be Rs. 25.50, implying a growth rate of 18.90 %.
For Q4 FY 2008, under US GAAP, revenue is expected to be between US$ 594.4 mn and US$ 597.3 mn, implying a growth rate of 5.6 % to 6.1 %. Basic earning per ADS for the quarter is expected to be US$ 0.36.
For Q4 FY 2008, under Indian GAAP consolidated, corresponding revenue growth rate is expected to be between 5.3 % and 5.8 %; EPS for the quarter is expected to be Rs. 7.23.
Satyam BPO - Business
Highlights
In Q3, Nipuna changed its name to Satyam BPO Services. The organization posted revenues of US$15.3 million, and a net loss of US$2.4 million. The revenue guidance for FY08 is US$ 61 million, which represents growth of 60% over the previous year.
In Q3, Satyam BPO signed two new customers. The organization also won the prestigious and internationally-recognized Golden Peacock National Training Award for 2007, making it the first Indian BPO company so honored. The award emphasizes the Five Ts—total quality, transparency, trust, truthfulness, and training. Satyam BPO was selected from 186 entries, a testimony to the organization’s associate and leadership development, and its commitment to growing leaders faster than the competition.
Key Awards and
Recognitions in this Quarter
Satyam has been named a leader in SAP implementation capabilities by Forrester. ”The Forrester Wave: SAP Implementation Providers, Q4, 2007” (December 2007), by Stephanie Moore and Liz Herbert, places Satyam in the same category as companies heading “an extremely well qualified pack” and Rated No. 1 in current offerings among Indian organizations.
A report published by IDC Research Director Albert Pang cited Satyam for its 10,000-person-strong ERP practice on Oracle and SAP products.
Satyam’s founder and chairman, B. Ramalinga Raju, was accorded the Ernst & Young Entrepreneur of the Year Award 2007. Raju was selected for this honor, both for his business acumen and efforts to enhance the community.
Satyam has been selected as the official IT Services Provider to the FIFA World Cup in 2010 (South Africa) and 2014 (Brazil).
Satyam’s Customer Intimacy Marketing and Communication Program has won the ITSMA’s 2007 Marketing Excellence Award in “Strengthening Customer Relationships” category.
Satyam’s Infrastructure Management Practice secured 13th position among the Global Top 20 service providers in the “Black Book of Outsourcing Vendors.” Satyam ranked third for brand image and marketing communication efforts and first for infrastructure applications monitoring parameters.
Satyam won the Pegasystems Partner Innovation Award for helping the organization’s clients—financial institutions—comply with Anti-Money Laundering (AML) statutes.
Key Business
Achievements
Satyam added 32 new customers in the third quarter including 8 Fortune 500 companies. Some prominent customer additions included FIFA, Federation Internationale de Football Association, a German IT services provider and a subsidiary of one of the world’s largest media and entertainment conglomerates and the organization responsible for public transportation in Greater London.
The world’s largest steel manufacturer engaged Satyam to enhance its Total Cost Optimization program. The team analyzed its global plants to reduce expenditures, enhance knowledge management, and capture best practices across plants and geographies.
Satyam is helping a Tier 1 global investment bank implement a new application architecture to accommodate its front and back-office and data management needs. The multi-site, multi-year transformational program will begin in Asia and Europe before moving to the US. Satyam is also a preferred supplier for all of the organization’s business lines.
A global oil company engaged Satyam to develop a logistics solution, facilitate on-boarding solution for offshore-drilling platform personnel, and deliver IT services for its Global Gas Division.
A healthcare technologies manufacturer and services provider hired Satyam for a critical value-engineering and product design project. Satyam is providing mechanical, electrical, safety, and reliability design services to transform the client’s business.
A global manufacturer of pharmaceutical, diagnostic, therapeutic, surgical, and biotechnology products engaged Satyam to migrate an entire website into its private framework.
Satyam signed an agreement to help the organization responsible for most aspects of Greater London’s public transport system with a broad range of IT services.
Satyam is helping a German IT services company provide IT solutions to its parent company, a global media conglomerate, and to external customers.
Satyam is providing an end-to-end solution for the world’s largest international multimedia news
agency.
Satyam has entered into a definitive agreement to acquire Chicago-based Bridge Strategy Group LLC (BSG), specialized in providing Strategy and Management Consulting Services to various large clients across different industry segments. The acquisition would strengthen Satyam’s position as a provider of transformational consulting services, deepening relationships with existing customers and would provide the engine for a global delivery model in strategy consulting.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l Anti-Money
Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws, regulations
or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.81 |
|
UK Pound |
1 |
Rs.78.94 |
|
Euro |
1 |
Rs.60.12 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
74 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this report.
The assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|
