Q4 Results 2007-2008

Dear Investor,

It is my distinct pleasure to report that Fiscal Year 2008 was exceptional for Satyam; our US GAAP revenues grew 46 percent, well beyond our 30 percent guidance from a year ago. It is heartening to note that we crossed the $2 billion milestone for the year. Net income growth was 40 percent. In Q4, Satyam grew 9 percent sequentially, which placed us at the forefront of our industry in terms of growth rates.

Our superior performance resulted from a sharper focus on strengthening customer partnerships. Our
increased portfolio of services helped us garner a higher share of our customers’ spending, resulting ingreater work volumes. The effectiveness of our strategy was borne out by several key statistics: Satyam now has two customers with an annual run-rate greater than $ 100 million, while 50 customers exceeded $ 10 million run-rate. The list of customers with an annual run rate of US$ 1 million is 230, a demonstration of our ability to win new customers, and an indication of future growth potential. Also, during Q4, we added 32 new clients, four of which are Fortune 500 companies. Manpower trends for FY08 are also encouraging. Today, the organization has more than 51,000 employees working in 63 countries. Annualized quarterly attrition continued its downward trend, dropping to 11.5 percent in Q4.

We are invited to participate in business transformation efforts with increasing frequency – to cultivate deeper partnerships with clients. To more accurately reflect this qualitative shift in the market to higher value delivery, we have adopted a new tagline –“Business Transformation.Together.”— which expresses the initiatives we undertake to ensure that our customers are able to experience long-term competitive advantage and receive superior value in a volatile market. It also reinforces our efforts to deliver a greater portion of our services within the context of transformational partnerships.

We recognize the need to accelerate our ability to connect more deeply with our customers to enable true transformation. One way of achieving these objectives is through inorganic growth intervention. In addition to our Q3 acquisition of Bridge Strategy Group, a high-end,Chicago-based management consulting firm, we have now entered a definitive agreement with S&V, a renowned, Belgium-based supply
chain management organization that ARC Advisory Group ranks among the world’s premier boutique SCM shops. And to better accommodate our clients’ needs for knowledge process outsourcing, we also intend to acquire Caterpillar’s market research and customer analytics business, including its intellectual property. This acquisition will strengthen our longstanding relationship with a critical customer; enable Satyam to offer MR&CA services to Caterpillar’s entire ecosystem – dealers, suppliers, etc. – and to the global marketplace, thereby contributing to non-linear growth.

These additions will enable Satyam to provide the full range of services – from strategy through implementation – for an even greater numbers of customers, and with enhanced value. Moreover, they bolster our ability to simplify our customers’ complex business problems and to develop and apply uncommon ideas and insights on their behalf.

Furthermore, we continue to monitor some of our major markets, where lagging economic conditions are hindering customer spending in selected sectors - a challenge to growth. Despite these concerns, Satyam will explore ways to maintain growth, including expansion into different industries, regions, and services.

Against this backdrop, we look forward to a revenue growth rate of 24 to 26 percent in FY09 (in both Indian and US GAAP). While EPS is expected to grow in the range of 17 to 19 percent in Indian GAAP, the EPADS* is expected to grow in the range of 15.2 to 17.6 percent,as per US GAAP.

The Board has proposed a final dividend of 125 percent. The total dividend for FY08 stands at 175 percent, including the interim dividend of 50 percent.

B. Ramalinga Raju
Founder & Chairman