PRESENTATION ON FINANCIAL YEAR ENDED 31ST MARCH 2005

November 3, 2009 Key Market Trends 1

 BOARD OF DIRECTORS
Mr. B. Rama Raju ,
• Chief Exec. Officer, Managing Director, Director, Member of Investors
Grievance Committee of Nipuna

• Mr. V. Srinivas ,
Chief Financial Officer, Sr. VP, Director of business/support, Director,
Director of Satyam-GE Software Services Private Limited, Director of
Nipuna of Sify Limited

• Mr. F. S. Mohan Eddy ,

Director of Internal Information Systems and Platinum Processes Group -
Satyam Asia Pte Ltd

• Mr. Keshab Panda ,

Sr. VP Regional Bus. Unit Europe, Director and Chief Exec. Officer of
Satyam Technologies Inc

• Mr. Ram Mynampati ,

Pres of Commercial and Healthcare Bus.es and Chief Operating Officer of
Vertical Bus. Unit of Insurance, Banking & Financial Services and
Healthcare
 DIRECTOR’S REPORT

During the financial year 2005 satyam has grew 35.20%

and 34.99% in terms of revenue and net profit
respectively. Companys EPS for the year was Rs 23.61.
During this Financial year company recorded total
revenue of Rs 345,677.99 lakh comprising income from
software services Rs 346,422.50 lakh and other incomes
of Rs 8,255.49 lakh and net Profit of Rs 75,026.00 lakh.

Director recommended a final dividend of 150% on the

Equity share. This along with the intreim dividend of
100% already paid,rises the total dividend for the year to
250% on the Equity share capital
 MANAGEMENT ANALYSIS

• “Vendor Management and “clear communication plans most critical success factor
for an offshore engagement - 38%
• "credibility, track record and references" was the key selection criteria for selecting
IT offshore vendors - 44%
• IT offshore vendors were in the process of building business continuity processes -
78%
• countries like China, Mexico, etc needed at least 2-3 years to become key players
in the offshore outsourcing space - 95%
• highest growth of IT spending in the next 12 months to be in Application
Integration/ EAI - 41%
• important area that offshore vendors need to focus on to improve overall service
performance is "Deeper industry domain expertise” - 45%
 MANAGEMENT ANALYSIS

• Overall experience with offshore outsourcing as "Very Good” - 63%

• IP protection, security, business continuity & disaster recovery process was
critical while considering an IT offshore vendor - 47%
• 54% of clients said that their expectation on benefits from offshore outsourcing
in terms of cost savings is >=25% and < 40%, while 26 % said their expectation
on benefits from offshore outsourcing in terms of cost savings is >=40%.
• Expect to see results in 6 months to 1 year - 64%
• Expect the offshore rates to remain the same in the next 24 months - 55%
 BCG MATRIX
?
STARS SATYAM
2005 1987
high
Among top ten Speculative
Position
gainers in BSE
Business DOGS
Growth rate
CASH COWS 1998
1991 America sent
back non engineers
low Libralisation

Strong Relative competitive position weak

 SWOT ANALYSIS
STRENGHTS

 Strong relationships with congregations

 Highly trained empolyees in logic and analytical reasoning.
 Capacity to provide Hi enduser satisfaction.
 Diversified functions like sify, Citisoft, health care, retailing.

WEAKNESSES

 Poor infrastructure.
 Limitation in getting tenders of clients
 Limited marketing budget to develop brand awareness.
OPPORTUNITIES
• High growth rate of indan economy 8.1
• Requirement for effective application software
• Ability to develop long term customers.

THREATS

 IBM’s entry to india as world’s largest help desk.

• High rate of ittration.
• Slump in the economy.
 FOR CREDITORS
A creditor always interested in knowing how
safe is his money in the company and what is the
possibility of getting it back.

DEBT EQUITY RATIO

= (SECURED LOANS+ UNSECURED) /
(RESERVE +SHARE CAPITAL- MISC LOSSES).

2005 2004 2003 2002 2001

Equity Paid Up 63.85 63.25 62.91 62.91 56.24

INTERPRETATION: The ratio indicates the proportion of owner

stake in the business. The ratio provides a less margin to the
financers
 FOR CREDITORS
ACID RATIO TEST

Current Ratio:
It is the most used short-term liquidity measure of the
company.

Current Ratio = Current Assets / Current Liabilities

1,880,338,107/96,879,295
17.25
standard ratio is 2:1

INTERPRETATION:
The current ratio of the company is above 2:1. hence it has less
current liabilities than current assets. This is the greatest advantage
for the company.
 FOR CREDITORS
Gross profit ratio:
Gross profit ratio = (gross profit / sales) * 100
= 82.74%
Net profit ratio = (net profit / sales) * 100
= 13.95%
INTERPRETATION : It ensure adequate coverage for operating expenses of
a firm and sufficient returns to the owners of a business.
operating profit ratio :
operating profit ratio = operating profit(PBDIT)/sales*100
= 2537.4/10295 * 100
= 24.64%
INTERPRETATION: It serves as an over all measure of operating
effectiveness of a company
 INVESTOR POINT OF VIEW
ROCE :
ROCE = PBIT / Capital employed

Year End 200503 200403 200303 200203 200103

ROCE (%) 29.85 27.95 24.64 33.83 45.55

ROCE analysis:
Here we can see that the use of the capital employed
has incresed as compared to the last year.

EPS:
EPS= Profit available to equity shareholders / no. of equity shares.
Year End 200503 200403 200303 200203 200103
EPS(RS) 15.65 14.25 13.17 14.89 11.36

EPS analysis:
Here we infer that the profit available to share holders has
increased as compared to previous
years
 FOR INVESTORS

Dividend per share:

DPS= dividends distributed / no. of equity shares

Year End 200503 200403 200303 200203 200103

Dividend (%) 250 200 150 60 40

DPS analysis:
here we can infer that the company has paid more dividend
compared to the last year. This is a good sign for the investors
 BANKERS POINT OF VIEW
A Banker will always look at the financial aspects of the company as it should
know the person to whom it is lending money is capable of returning it or
not .A banker can take decisions in this regard by studying the following
ratios.

Debtors Turnover Ratio

= Credit Sales / Sundry Debtors

Debtors Ratio 5.1 4.74 4.62 4.49 4.13

INTERPRTATION:
The ratio measures how rapidly receivables are collected. A high ratio is
indicative of shorter time lag between credit sales and cash collection.
 INTERPRETATIONS

• Debtors Turnover Ratio :

Debtors Turnover Ratio is 4.25 which is good according to the
standards set so, a banker may not hesitate in lending money to
the company.

• Liquidity Ratios :
Liquidity Ratios are high which show a strong financial position of
the company which serves the purpose of banker to decide the
credibility of the company. The ratios indicate that the a banker
can do business with the company safely.
 As an Employee

• Good salary package

• Good working atmosphere
• Concern about employees
• Periodical appraisal
• High rate of promotion
• Job satisfaction
• Personal loans
• Employee state insurance
RATIOS - DUPONT MODEL - Satyam Computer Services Ltd

200503 200403 200303 200203 200103

PBIDT/Sales(%) 28.05 30.47 24.41 35.31 52.2

Sales/Net Assets 1.07 0.98 0.94 0.89 1.24
PBDIT/Net Assets 0.3 0.3 0.23 0.32 0.65
PAT/PBIDT(%) 77.21 71.78 62.24 73.48 76.36
Net Assets/Net Worth 1 1 1.01 1 1.21

ROCE(%) 25.88 23.57 20.55 32.76 55.46

 CONCLUSION

All the ratios which have been derived show that the
financial position of the company is strong and it also
has a sizable cash Position.
According to Z score derived from Altman
Z = 3.8 which means company is in safe mode, it is
looking at the coming years with renewed hope and
vigor to grow at a much stronger pace. The company
is very optimistic about the future and has also shown
signs of promise, anybody can hold a stake of this
company without any doubt.