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BUSINESS ENVIRONMENT ASSIGNMENT CORPORATE GOVERNANCE & CORPORATE SOCIAL RESPONSIBILITY OF SATYAM

SUBMITTED TO MR. PANKAJ JAIN.

SUBMITTED BY AVTAR SINGH. SEC-318. ROLL NO-R318B59.

About SATYAM Satyam is a leading global business and information technology services company, delivering consulting, systems integration, and outsourcing solutions to clients in 20 industries and more than 65 countries. Satyam leverages 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. The companys 52,865 Associates 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. Satyam development and delivery centers in the US, Canada, Brazil, the UK, Hungary, Egypt, UAE, India, China, Malaysia, Singapore, and Australia serve 690 clients, including 185 Fortune 500. Corporate social responsibility (CSR, also called corporate responsibility, corporate citizenship, responsible business and corporate social opportunity) is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large. The following are the fields in which Satyam has done some work for society in recent years with some social objectives. Educational Reforms Objective: To create and enable a learning environment in 200 schools through volunteering and Technology The destiny of India is shaped in her classrooms. It is said that the foundation of every state is the education of its children and youth. The quality of education in Government schools in India is compromised, the reasons being many and varied. Important among these are lack of basic infrastructure and facilities like class rooms, drinking water, sanitation added with

poor quality of teaching, due to absence of proper teaching material and aids, lack of motivation etc making the environment non-conducive to learning. It is not surprising that education continues to suffer from dismal academic performances, low attendance, high drop-out rates and scant learning. The reason for low pass percentage of students in board exams is due to lack of conceptual understanding of basic math , science and English language. The Education Forums initiatives are designed to energize the education system in Government schools. The Forum focuses on working in High schools, Upper Primary and Primary schools. a) School education through the formal school system up to class X b) Enabling Creative Learning Environment for Education through the following Service Offerings: Computer Distribution and Training, Notebook Distribution, Improving Science Education through capacity building for teachers, Inter school competitions Motivational visits, KidSmart computer centers for Pre Primary and Primary children Mentoring of High school students by Satyam Associates Developing libraries in the schools, Special focus on learning sessions in Science, Math and English Nutrition Mobile Science lab Vedic Math The outcome of these will be to retain the enrolled students and to improve learning skills among the students belonging to deprived sections of society. This year an MOU was entered with the District Collector and Sarva Siksha Abhiyan for taking up activities in schools to reach out to 200 schools, 50,0000 students, 768 teachers and 64 M7 groups so far.

Livelihood Program

Objective: Facilitate 20% income enhancement of 15,000 BPL families by Mar-09 Livelihood Program of Satyam Foundation believes in enabling individual capacities. An individual or an organization is modeled around specific skills and practical knowledge. Our policy recognizes the fact that by providing skills to the underprivileged individual, we add value to the individual as well as job markets. Our initiatives urge the need to maximize the potential of under privileged people and instill confidence so they can compete in emerging job markets.Livelihood Program Initiatives speak for themselves. The initiatives focus on increasing individual skills. We believe that in enabling an individual we can create confident and skilled workers. Livelihood Program is experienced in identifying the needs of under privileged people and transferring appropriate skills. Satyam Foundation creating waves..with livelihoods!!! Satyam Foundation has signed a Memorandum Of Understanding with Rajiv Udyogasri Society (RUS) for IT enabled Vocational Training Scheme under which the Livelihoods Program of Satyam Foundation will be training an estimated 12,500 candidates belonging to the vulnerable sections of the society, and to generate at least 10,000 livelihoods. Rajiv Udyogasri Society was launched by the Govt of Andhra Pradesh with an objective of generating approximately one million jobs in the next two years, and is headed by the Chief Minister of Andhra Pradesh as its chairman. The Memorandum of Understanding was signed by Mr Naveen Yelloji, Director and CEO, Satyam Foundation and Mr. Bhanwar Lal, IAS, CEO, RUS and Commissioner, Employment and Training, on 14 August, 2008, under which, Satyam Foundation will be the state level Nodal Agency for generating the 10,000 livelihoods by March, 2009, in the first wave. More such waves are envisaged in the near future for generating livelihoods on a large scale. SAARC Chamber Women Entrepreneurs Council (SCWEC) is an arm of SAARC Chamber of Commerce and Industry (SCCI), established in 2001 in Colombo, Sri Lanka, with the objective of developing and promoting women entrepreneurs in the South Asian Region. It is aimed at making women competent, self-confident

and enabling them to be gainfully employed, through Skill Building Training programs. Initially a batch of 60 beneficiaries were given training by Satyam Foundation in Ms-Office, Spoken English, and English Typing for a period of 2 months, alongwith inputs in Personality Development and Health & Nutrition before placing them in various organizations like Health Management Research Institute (104) with salaries ranging from Rs.3,500/- to Rs.10,000/- per month. Similarly, poor and vulnerable women are being trained in Italian Lace Products. The training is given by Spoorthi, an NGO and an exporter of Italian Lace Products from Andhra Pradesh. and has been working with Satyam Foundation for the past 1 year and so far trained 200 women in Italian Lace Products. Inauguration of new schools in Hyderabad: Four new IT Schools were started in Paliburg, Amber pet, kondapur and Vijaynagar Colony in Hyderabad. Petalburg: In Petalburg IT school 43 Students were trained of which 28 trainees have joined jobs and 15 trainees are pursuing further studies. Amberpet: In Amberpet 3 batches were covered in which 139 students were trained and out of them 122 students got jobs and 17 are pursuing their studies. Kondapur: In the IT school at Kondapur 91 students were trained out of which 82 students got jobs and 9 are pursuing their studies. IT School, Vijaynagar Colony It was inaugurated on 16th August 2006 in the premises of Society for Integrated Development in Urban & Rural Areas (SIDUR). So far 126 students were trained out of which 97 students got jobs and 29 are pursuing their studies. In this center we trained victims of women trafficking under UNDP TAHA Project.

ITES training & production center


This is a unique center started in partnership with Lepra Society exclusively for PLHA. It was inaugurated on 17th July 2006 in the premises of LEPRA Society, Picket, and Secunderabad. The main intention behind this project is to enable PLHA on computer skills which can be utilized to carry out job work and to remove stigma from society. Another goal is to give them job at the training place. A total of 7 students were trained. Lepra Society outsourced data entry work worth of INR 15000.

Vocational training programmes: Apart from training students in IT Skills, Livelihoods forum also facilitates students to join other vocational training programmes like Computer Hardware, Medical Transcription, Hotel Management, Leather Technology, Architecture, Digital Architecture, Total Station, Electrician, Masonry, Welding, Carpentry, Plumbing, Bar Bending, Painter, General Work Supervision, Land Surveyor, Crane Operator, Store Keeper, Curtain Making, cabinet making, Beautician, Air Ticketing, Air Cargo, Air Hostess, Garment Making , Jute Technology, Fashion Designing, Agricultural works, Air conditioning and Refrigeration, Mechanist, Turner, Fitter etc. in association with National Academy of Construction, Boys Town, Institute of Hotel Management, AP Footwear Training Institute. School at Bollarum: One more IT school was started at Bollarum. Inaugurated on 27th March 2006 in the premises of Govt. Junior College, Bollarum, 288 students were trained out of which 241 students got jobs and 47 are pursuing their higher studies. Health Program

Objective: To ensure facilitation access to primary and secondary health care for slum

population by providing support services. The Foundation was registered in July 2001 as Alambana Trust. It initially concentrated on providing healthcare services to the community. Satyam is Blood champion For the Fourth Time!! The Indian Red Cross is a pioneer in the field of blood services and one of the largest voluntary blood banks in India since 1962, apart from being a voluntary humanitarian organization. IRCS regularly conducts motivational campaigns to organize Voluntary Blood Donation Camps, and has more than 100 blood banks all over the country. Satyam Foundation, in association with The Red Cross Society, conducts blood donation drives in all Satyam locations regularly. This year Satyam associates of Hyderabad have donated 1,000 units of blood, which is the highest among all the IT companies in Hyderabad. To commemorate this achievement The Red Cross Society has declared Satyam as the Blood Champion and the largest corporate promoting Voluntary Blood Donations for 2007-2008. This is the fourth year in a row that Satyam has this achievement. Adoption of Hospital On 25 August 2008, Satyam Foundation has adopted the Ramdev Rao Memorial General Hospital in Kukatpally, Hyderabad. The Foundation will be managing and assisting the hospital in providing quality services for the citizens of the vicinity. Urban Health Posts:

The 4 Urban Health Posts adopted by the Foundation are functioning smoothly, with an average of 45-50 patients utilizing the facilities. The number of beneficiaries crossed 2,00,000 . The Urban Health Posts are operating with an average of 45-50 patients in each center. To date more than 200,000 patients have utilized the facilities.

Blood donation camps:

Blood donation camps were also a success and Satyam was named the largest Corporate blood donor to the Red Cross Society in three cities of Hyderabad, Bangalore and Bhubaneswar. The Foundation is supporting 500 Thalessaemia children with fresh blood whenever required. Using technology, a Patient identification and tracking health records through Biometric solutions was installed at one UHP. This is useful for patient registrations, doctor prescriptions and the maintenance of patient history. In Bhubaneshwar, a health check up camp was organized in Nayapalli, IRC village. 220 people were tested for blood sugar ECG test and medicines given. In February 2007, the foundation launched the Health Information Help Line (HIHL) call center for the entire State of Andhra Pradesh with a single toll free number 1056, in a Public Private Partnership with the Govt. of Andhra Pradesh. The Features of this health help line are : Offers Standardized, Uniform, Scientific Health information and knowledge Universal access to health information through a single toll free telephone " Universal access to health information through a single toll free telephone Universal access to health information through a single toll free telephone Covers all aspects of health, with priority for National Health Programs Fully trained Para Medical staff and Doctors available round the clock Assured confidentiality and privacy Equipped to handle 6500 calls a day at present. Launched in collaboration with the Andhra Pradesh State Government under the National Rural Health Mission First of its kind in Asia Health Helpline counseling services Complain registration and information Directory services Jobline connecting demand and skills Suicide counseling Helpline Integrates multiple functions on one platform- telephone, fax, Email,

chat, mobile phone and instant messaging- first of its kind in the world. Urban Health Posts: Four Urban Health Posts in Bhoiguda, Karwan, Aman Nagar and Parvatinagar have been adopted by the Foundation in Hyderabad during 2005 to provide health care to people living in the slums located in and round the UHP, during the evenings from 4 to 8 pm. The Foundation has appointed a MBBS doctor and one female nurse and an assistant On an average 50-60 patients utilize the facilities of the clinics.

Satyam volunteers are actively involved in talking part in the polio camp, conducting eye camp and helping the people having cataract to get operated free of cost, and providing free spectacles for the vision defective people . An important service under this will be identification of disorders very early in childhood and facilitating interventions on these. Awareness and education about killer diseases will be augmented. Blood donation was made more systematic, along with educating people on blood donation.

Hyderabad: When the city was affected by the dreaded chikungunya, the Program conducted a pilot awareness campaign programme in the old city of Hyderabad with the help of volunteers from NSS, Satyam and COVA. This campaign was aimed at reducing the breeding of mosquitoes for prevention of chikunguniya by creating awareness and also to dispense medicine for Chikunguniya. 15,000 houses were covered under this project. Urban Health Posts:

The Health Program strived to provide better healthcare facilities for the poor sections by adopting 4 Urban Health Posts in Hyderabad, which were run in the evenings. The Foundation provided experts to diagnose and treat non-communicable diseases. Volunteers support the activities at the UHPs.

The team conducted a polio camp and planted trees at the Center.

Satyam Foundation was responsible for the groundwork for EMRI and creating the basic framework for the same. This included guiding concepts such as the Sense Reach-Care paradigm, designing of the ambulance by Satyam engineers, the GIS and dispatch software design & development and suggesting a common three digit toll-free number. The Foundation was also instrumental in building relationships with various stakeholders who were essential for the piloting and realizing of the EMRI project given the complexity of relationships & partnerships, this project needed to become an independent entity and EMRI was spun off into an independent organization during July 2004 and April 2005, when there was an agreement with Govt. of AP for EMRI. Medical camps: Camps were organized once a month in slum areas EMRS: Incubation of EMRS under health services. The concept was to provide round the clock State of Art Ambulance service to the poor. Initially to be launched in the twin cities. Towards this end research was undertaken on all aspects During the year 2002, the Health camps continued in the slums regularly.

Under Healthcare, various activities like Blood donation, AIDS awareness, Medical Camps were conducted in the slum areas. In these slum areas about 2000 patients were benefited.

A recycling hand made paper unit was set up for women Self Help Groups. Adequate training was given to them for running in an entrepreneur model. Greeting cards, visiting cards, folders and other stationary items were manufactured and sold to corporate. About one lakh greeting cards were sold during the year. HIV / AIDS Awareness Program

Objective:

To be among the top 3 CSR working in India on HIV / AIDS. Target Groups: Employees and Vendor community of Satyam Computer Services Ltd, Educated Youth (Engineering colleges and IT employees in corporates), Orphan Vulnerable Children, People Living with HIV and Vulnerable population. Street Children Program Objective: 1. To support with basic needs at a transit home for 100 children for 365 days 2. To provide infrastructure support through Associates donation drives 3. Provide health care and educational material at Bridge school 4. Edutainment at Observation homes 5. Livelihood courses for girls in observation home Empowerment for People with Disability Objectives: - To set up helpline to facilitate in catering needs and requirements of PWDs. - To create a website for helpline. - Issuing of permanent ID cards to the PWDs - To provide employment and self employment support to approximately 1,000 Ortho PWDs from 6 Hyderabad / Kukatpally and 5 Satyam Locations Vision: Transform People With Disabilitys quality of life with permanent empowerment and Livelihood Interventions. Beggars Rehabilitation Vision: To make Hyderabad Beggar free city by March 2010. Service Offerings Rehabilitation of Children involved in Begging Rehabilitation of Beggars with Special Focus on Adults involved in Begging The Project involves identifying, rescuing children involved in begging. To

rehabilitate them through various means mainly, by creating opportunities for bridge education for the children who have never been to school or those who have long gap in their education. This will I turn pave the way towards mainstreaming of the children through formal education system. The project also prioritizes the need for repatriation (where ever possible) of children in difficult circumstances with their families and strengthen their family based care system for further growth and development of children. To create opportunities for children (above the age of 15 years) for skill learning with basic education for better livelihood and to provide Quality Institutional Care for proper growth and development of children in the broader perspective of Child Rights. Environment Corporate Interventions Objectives: To facilitate Satyam Computer Services Limited to become a water and Energy efficient & zero waste corporate by 2010. Service Offerings Waste Management Solid Waste Liquid Waste Water Resources Water conservation and rain water recycling Energy Management Pilot project on Energy conservation in one Satyam location(Info City) Facilitation of technologies and processes on Energy Conservation Comprehensive Environmental Monitoring Base line data collection on Green Cover, Waste Mgt., Water resources and Energy Mgt., in all locations for strategic formulation on reduction in carbon emissions

Environment Community Interventions Program Objectives:

To transform heterogeneous area into a urban model neighbourhood by 2010. Key Achievements: 100% Participation in trash collection process in V Phase and 80% in IV phase 100% Sensitization for source segregation in IV and V Phases 80% households segregating at source, first of its kind in Hyderabad Immunization program for Trash collectors & families first time in India 10 RWH Systems for a total of 800,000 litres Capacity Promotion of 4 eco-friendly community Ganesh pandals Established new inclusive and integrated participation in Hyderabad 10 K Run (1029 participations) Satyam bags Asian CSR award Satyam was honored for its GramIT (Rural BPO) program, a key initiative of the Byrraju Foundation, a NGO founded by Satyam Chairman and Founder B. Ramalinga Raju. The Byrraju Foundation is dedicated to rural transformation and has significantly enhanced the quality of life of over 2 million people in 180 villages in Indias Andhra Pradesh state by offering high quality services such as healthcare, education, livelihoods, sanitation and drinking water. The key differentiators of Byrraju Foundation are application of knowledge and technology, backed up by a metrics driven project management approach. Satyam is a major alliance partner and the technology driver for the Rural BPO initiative. The GramIT initiative spurs dramatic transformation in rural areas by leveraging the capabilities of educated, unemployed villagers, who are given special training by Byrraju Foundation and are hired to work in rural business process outsourcing facilities, where they manage a broad range of critical business processes for numerous clients, including Satyam, which has outsourced several internal processes to GramIT facilities through a unique technology platform developed internally.

The Asian CSR Awards Program recognizes and honors Asian companies for outstanding, innovative and world-class products, services, projects and programs

in five categories: Best Workplace Practices, Concern for Health, Environmental Excellence, Poverty Alleviation, and Support and Improvement of Education.

CORPORATE GOVERNANCE
Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, management and the board of directors. Other stakeholders include employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large. Corporate governance is a multi-faceted subject. An important theme of corporate governance is to ensure the accountability of certain individuals in an organization through mechanisms that try to reduce or eliminate the principal-agent problem. A related but separate thread of discussions focus on the impact of a corporate governance system in economic efficiency, with a strong emphasis on shareholders welfare. There are yet other aspects to the corporate governance subject, such as the stakeholder view and the corporate governance models around the world. Report on Corporate Governance Companys philosophy Corporate Governance assumes a great deal of importance in the business life of Satyam (the Company). The driving forces of Corporate Governance at Satyam are its core values Associate Delight, Investor Delight, Customer Delight and the Pursuit of Excellence. The Companys goal is to find creative and productive ways of delighting its stakeholders, i.e., Investors, Customers, Associates and Society, thereby fulfilling the role of a responsible corporate representative committed to best practices. Satyam believes that sound Corporate Governance practices provide an important framework to assist the Board in fulfilling its responsibilities. The Board of directors is elected by shareholders with a responsibility to set strategic objectives

to the management and to ensure that the long term interests of all stakeholders are served by adhering to and enforcing the principles of sound Corporate Governance. Thus, the management is responsible to establish and implement policies, procedures and systems to enhance long-term value of the Company and delight all its stakeholders (Associates, Investors, Customers and Society). The principle of Delighting stakeholder is imbibed in everything we do at Satyam and is depicted in our value emblem given below as a mark of our commitment towards this principle. Board of directors The current policy is to have an optimum combination of Executive and Nonexecutive directors, to ensure the independent functioning of the Board. Meetings of the Board of directors During the financial year 2006-07 the Board of directors met 4 times on April 21, July 21, October 20, 2006 and January 19, 2007. Audit committee The Audit committee consists of 100% independent and non-executive directors and provides assistance to the Board of directors in fulfilling its oversight responsibilities. The functions of Audit committee include: 1. Oversight of the companys financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible. 2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. 3. Approval of engagement of and payment to statutory auditors for any other nonaudit services rendered by the statutory auditors. 4. Reviewing with the management, the quarterly financial statements before submission to the Board for approval. 5. Reviewing with the management, performance of statutory and internal auditors, and adequacy of the internal control systems.

6. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. During the year, the Audit committee met 8 times on April 21, April 28, July 21, October 19, October 20, December 12, 2006 ; January 19 and March 29, 2007. In addition, they participated in four meetings through tele/video conference. The meetings of the Audit committee were attended by the Head of Finance, Head of Internal Audit and Statutory Auditors as invitees. The quarterly and annual audited financial statements of the Company were reviewed by the Audit committee before consideration and approval by the Board of directors. The Audit committee reviewed the adequacy of internal control systems and internal audit reports and their compliance thereof. The Chairman of the committee was present at the previous AGM held on August 21, 2006. During the current financial year the Audit committee was reconstituted in the Board meeting held on April 20, 2007. Compensation committee The Compensation committee consisting of 100% independent and non-executive directors evaluates compensation and benefits for executive directors and frames policies and systems for Associate Stock Option Plans, as approved by members of the Company. During the year, the committee met 3 times on October 19, 2006, January 20 and 28 of 2007.the members attended all the meetings. In addition participated they in two meetings through tele/video conference. Remuneration policy The Compensation committee is responsible for devising policy for compensation and benefits for Executive directors and frames policies and systems for Associate Stock Option Plans. During the current financial year the Compensation committee was reconstituted in the Board meeting held on April 20, 2007 Investors grievance committee The functions of Investors grievance committee focuses on shareholders grievances and strengthening of investor relations, specifically looking into redressal of grievances pertaining to:

1) Transfer of shares 2) Dividends 3) Dematerialization of shares 4) Replacement of lost/stolen/mutilated share certificates 5) Non-receipt of rights/bonus/split share certificates 6) Other related issues During the year, the committee met on December 12, 2006 to review the investor grievances. Means of communication The audited quarterly, half-yearly, nine months and annual financial statements viz., balance sheet, profit and loss account, including schedules and notes thereon, press releases, and presentations are posted on the Companys website. The Companys quarterly, half-yearly, nine months and annual audited financial results are also uploaded on the EDIFAR (Electronic Data Information Filing and Retrieval System) website maintained by National Informatics Center (NIC). The periodical filings of the Company with Securities and Exchange Commission (SEC), US are also available on the Companys website and at www.sec.gov. The quarterly, half-yearly, nine months and annual audited financial results are generally published in Business Standard, The Hindu and in Eenadu (Telugu) Daily. All material information about the Company is promptly sent through facsimile to the Stock Exchanges where the Companys shares are listed and released to wire services and the press for information of the public at large. Besides, the Company disseminates information through press and analyst meets. As required by sub-clause IV (F) of clause 49 of the listing agreement, management discussion and analysis report is provided elsewhere in the annual report.

BIBLOGRAPHY

www.satyam.com

www.satyam.csr.org

www.wikipedia.com

www.google.com