Presentation on Financial Year Ended 31st March 2005

8/14/2019 Presentation on Financial Year Ended 31st March 2005

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November 3, 2009 November 3, 2009 11Key Market TrendsKey Market Trends

PRESENTATION ON FINANCIAL YEAR ENDED 31PRESENTATION ON FINANCIAL YEAR ENDED 31 STST MARCH 2005MARCH 2005


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BOARD OF DIRECTORSBOARD OF DIRECTORSMr. B. Rama Raju ,

Chief Exec. Officer, Managing Director, Director, Member of InvestorsGrievance 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 andHealthcare


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During the financial year 2005 satyam has grew 35.20%and 34.99% in terms of revenue and net profitrespectively. 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 fromsoftware services Rs 346,422.50 lakh and other incomesof Rs 8,255.49 lakh and net Profit of Rs 75,026.00 lakh.

Director recommended a final dividend of 150% on theEquity share. This along with the intreim dividend of 100% already paid,rises the total dividend for the year to250% on the Equity share capital

DIRECTORS REPORTDIRECTORS REPORT


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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


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MANAGEMENT ANALYSISMANAGEMENT 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 expectationon 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%


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BCG MATRIXBCG MATRIX

high

BusinessGrowth rate

low

STARS2005

Among top ten

gainers in BSE

?SATYAM

1987Speculative

Position

CASH COWS

1991Libralisation

DOGS 1998

America sentback non engineers

Strong Relative competitive position weak


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SWOT ANALYSISSWOT ANALYSISSTRENGHTS

Strong relationships with congregationsHighly 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 clientsLimited marketing budget to develop brand awareness.


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OPPORTUNITIES High growth rate of indan economy 8.1 Requirement for effective application software

Ability to develop long term customers.

THREATS

IBMs entry to india as worlds largest help desk. High rate of ittration. Slump in the economy.


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FORFOR CREDITORSCREDITORSA creditor always interested in knowing how

safe is his money in the company and what is thepossibility of getting it back. DEBT EQUITY RATIO

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

2005 2004 2003 2002 2001Equity 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 thefinancers


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FOR CREDITORSFOR CREDITORSACID RATIO TEST

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

company.

Current Ratio = Current Assets / Current Liabilities

1,880,338,107/96,879,29517.25

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 advantagefor the company.


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FOR CREDITORSFOR CREDITORSGross 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 operatingeffectiveness of a company


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ROCE :

ROCE = PBIT / Capital employed

Year End 200503 200403 200303 200203 200103ROCE (%) 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 200103EPS(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 previousyears

IINVESTOR POINT OF VIEWNVESTOR POINT OF VIEW


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Dividend per share:

DPS = dividends distributed / no. of equity shares

Year End 200503 200403 200303 200203 200103Dividend (%) 250 200 150 60 40

DPS analysis:

here we can infer that the company has paid more dividendcompared to the last year. This is a good sign for the investors

FOR INVESTORSFOR INVESTORS


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BANKERS POINT OF VIEWBANKERS 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 followingratios.

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 isindicative of shorter time lag between credit sales and cash collection.


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INTERPRETATIONSINTERPRETATIONS

Debtors Turnover Ratio :Debtors Turnover Ratio is 4.25 which is good according to thestandards 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 thecredibility of the company. The ratios indicate that the a banker can do business with the company safely.


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As an EmployeeAs an Employee

Good salary package Good working atmosphere Concern about employees

Periodical appraisal High rate of promotion Job satisfaction Personal loans Employee state insurance


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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


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CONCLUSIONCONCLUSION

All the ratios which have been derived show that thefinancial position of the company is strong and it alsohas a sizable cash Position.

According to Z score derived from AltmanZ = 3.8 which means company is in safe mode, it islooking at the coming years with renewed hope andvigor to grow at a much stronger pace. The companyis very optimistic about the future and has also shownsigns of promise, anybody can hold a stake of thiscompany without any doubt.

Documents

Presentation on Financial Year Ended 31st March 2005