Cybertech Systems & Software Ltd.
|BSE: 532173||Sector: IT|
|NSE: CYBERTECH||ISIN Code: INE214A01019|
|BSE LIVE 15:50 | 09 Dec||90.15||
|NSE LIVE 15:59 | 09 Dec||90.20||
|Mkt Cap.(Rs cr)||244.13|
|Mkt Cap.(Rs cr)||244.13|
Cybertech Systems & Software Ltd. (CYBERTECH) - Chairman Speech
Company chairman speech
LETTER TO FELLOW SHAREHOLDERS
LETTER TO FELLOW SHAREHOLDERS Dear Fellow Shareholders
I am pleased to provide you detailed information on the performance of our Company forthe financial year April 2013 through March 2014. For the year ending March 31 2014 weachieved consolidated revenue of Rs. 731 million and net profit of Rs. 76 million. Thiscompares against a consolidated top line revenue and net profit from last fiscal year(ending March 2013) of Rs. 752 million and Rs. 88 million respectively. On a standalonebasis our revenue has increased to Rs. 460 million from Rs. 448 million (ending March2013). On a standalone basis our net profit was Rs. 87 million versus prior year's Rs.112 million.
Before I proceed further in discussing CyberTech's business and current marketconditions I am pleased to announce that we inaugurated our new 25000 square feetGeoSpatial Center of Excellence on March 03 2014. This new fourth floor addition to the"CyberTech House" will seat an additional 250 engineers and increases our floorspace to over 90000 square feet. This Center of Excellence is a physical vision of ourworld-class GIS capabilities and commitment to rapidly growing field of GeoSpatialtechnologies and Location services. Designed exclusively as CyberTech's and India's 1stprivate GeoSpatial Technology Center it will connect GIS at a cultural level to theIndian markets.
On March 3 2014 Honorable Aseem Kumar Gupta Municipal Commissioner of Thane attendedinauguration as our Chief Guest and toured the facility. We thank Mr. Gupta and ThaneMunicipal Corporation staff and management for their continued support. CyberTech Board ofDirectors Employees and outside guests attended the inauguration function.
New CyberTech's Esri and ArcGIS Center of Excellence
On March 3 2014 evening Jack Dangermond President of Esri formally launchedCyberTech's Esri and ArcGIS Center of Excellence in the new fourth floor. I thank Mr.Damian Spangrud Director of Esri Solutions for participating in the events with Jack.
Esri is the world leader in Geospatial Information Systems Software. Esri's visionarymapping products define the science of GIS and increase understanding our world. Esriinspires and enables people to positively impact the future through a deeper geographicunderstanding of the changing world around them.
Under Jack Dangermond's leadership Esri have proven that geography is at the heart of amore resilient and sustainable future. Various countries across the globe use Esrisoftware as the de-facto standard of managing geographic information. Governmentsindustry leaders academics and non-governmental organizations (NGOs) trust Esriand ArcGIS platform to connect them with the analytic knowledge they need to makethese critical decisions that shape the planet.
Our long term partnership with Esri and deep ArcGIS technical expertise has led tomultiple mission critical client engagements that utilize ArcGIS platform for CloudServer and mobile solutions.
CyberTech is an Esri Gold Partner. As an Esri strategic partner CyberTech sharesEsri's commitment to solve Earth's most pressing challenges with geographic expertise andrational resolve. CyberTech has won multiple awards for technical excellence from Esri.Most recently Esri has named CyberTech as their Industry Specialty Partner for ArcGIS forLocal Government' and 'ArcGIS for Online'.
Changing Technology and Market conditions:
We have stabilization in the US and Global financial markets and client purchasingtrends. However IT spend continues to move from On Premise Computing to Cloud and HybridModels. Newer solution delivery models are moving services from traditional IT vendors toCloud based service providers. CyberTech has started delivering a larger portion of ourservices on the Cloud.
We now have a successful India Business that has completed over 3 full years ofoperation. However majority of the Company's revenues are generated in the United Statesand the North American geography continues to be our key market. The India diversificationof revenues and the improving US business conditions will increase our overall growth.During the 1st two fiscal quarters of 2014 the Indian Market spending was curtailedbecause of concerns of economy and change in government at the Center and many states.This led to slower growth of India operations.
CyberTech has now become a significant player in the area of mapping solutions andGeoSpatial Applications. This segment of information technology has become an attractiveand growing part in an otherwise stagnant IT landscape of Enterprises and PublicGovernment organizations. The strength of our Esri relationship has allowed us to harnessthis developing mapping market potential which we clearly see growing over the nextseveral years. This is a positive trend in favor of CyberTech with several hosted andcloud based implementations.
New implementations of complex ERP solutions such as SAP continues to be at astandstill and SAP is trying to refocus itself in newer areas such as Business AnalyticsIn-memory Computing Application Life Cycle Management and Mobile Applications. Whilethese cloud based trends are new areas for SAP growth they hardly replace big ERPimplementations. CyberTech has directed its focus on these newer SAP trends and buildexpertise in the emerging area.
Cost Reduction and Application Management Services continue to be a key component ofrevenue for all the leading Indian IT service providers. CyberTech continues ourApplication Management and Support Services focus and a large percentage of our clientsdepend on CyberTech for their mission critical IT support.
All this trends prove that IT infrastructure and management is rapidly moving to Cloudbased pay by use services. CyberTech is positioning itself by migrating most of ourclients to a more managed service oriented delivery platform. All Application Developmentservices have moved from complex 'Waterfall' model to rapidly implementable 'Agile Scrum'approaches. In recognition of these ongoing market trends CyberTech continues to evolveits Service Offerings Client Management approach and Solution Delivery Platforms.
I encourage my fellow shareholders to visit our newly redesigned website
CyberTech Business operations:
Our number one focus in the Company during the current fiscal year has been tostrengthen our Technical Solutions and Business Approach in our core solution areas toadapt to cloud and pay by use models:
Geo2.0 and GeoServe Platforms: To leverage the opportunity in the market inGeoSpatial areas CyberTech has developed a rapidly evolving Geo2.0 platform. CyberTechsimply believes the approach of developing new and complex GIS applications is dead. Usingour Geo2.0 approach Clients can implement new mapping and Geospatial applications at afraction of the cost reduce the time to market and eliminate risk. The Geo2.0 platform isan ongoing and continuously increasing set of CyberTech owned mapping components (Geo2.0components) which are like building blocks. Using these Geo2.0 building blocks like aLego TM set our clients can quickly assemble their solutions. Please see our micrositefor Geo2.0 www.appmaps.com that describes ourplatform.
Public Safety and GeoShield: Our GeoShield Product Platform is now availablein 3 product versions- (i) Law Enforcement (ii) Investigations and (iii) Prisons andCorrections. We have several new wins in State and Local Governments for the aboveproducts.
CyberSupport and Application Management Platform: CyberTech has beeninvolved in Application Management and Support Services for over 8 years. Our initialfocus has been to provide SAP post implementation and support services in the areas of SAPBASIS ABAP programming and Functional Module Support. We continue to expand and revampour Support offering with a newly branded Application Management Platform CyberSupport 2.Each client gets a unique support portal through which they interact with CyberTech. Allsupport metrics and Service Level Agreements (SLAs) are clearly visible and clients canmeasure CyberTech performance quantitatively. This increases Client Satisfaction providestransparency and reduces cost. We believe this platform is transformative for CyberTech asour future vision is to make this the Platform of Interaction for all clients.CyberSupport is a shared services platform that pulls down client cost and deliversdependable service with measurable performance metrics.
GeoCivic and India Business: GeoCivic brand has continued to develop in thisyear. We have done prestigious work at Bengaluru Thane Mumbai in the areas of revenuegrowth and property tax management. GeoCivic has several pieces of mission criticalsoftware that Cities and Local Governments need such as Property Tax assessment andcollections Emergency Management Public Health and Election Results Management. I amexpecting rapid growth in GeoCivic and this trend to lead to increased India revenues.
SAP and S2 Platforms: In alignment with SAP's focus around mobility andCloud we have created a major focus on SAP Next Generation platforms. This includesBusiness Intelligence (Business Objects) SAP Mobility Application Life Cycle Managementand In Memory computing (HANA).
Client Focus: I continue to invest my time personally with all clientstravel extensively building client and executive relationships. Steve Jeske or I ownexecutive relationships with almost all our clients in the US. CyberTech US continues tobe our front-end providing sales and client partner management thereby driving deeperoffshore focus in our Company.
Development of Company Intellectual Property: We continue to makesubstantial progress in the area of IP Development and Solution building. We have wonseveral more Public Safety Police and Emergency Response implementations. Our GeoShieldoffering is being embraced by clients in US and India. We have also developed a SAP GISIntegration Architecture CyberSERVE that has gained considerable market traction andexcitement. I thank our friend and partner Joseph Vanek Esq. of Vanek Vickers P.C. forpushing us on the trail of IP development.
Long Term Annuity Contracts: I can state that 90% of the CyberTech offshorecontracts are long-term annuity oriented. This gives us visibility of the pipeline and hasreduced revenue risk. It is our preference to build this book of annuity contracts overlumpy project business.
As I state in all my letters my core value has been to do the right thing forCyberTech for long period of time. Our goal is to do well in good markets but to do betterin bad markets while aiming for sustainable growth. CyberTech continues to focus on thelong term objectives that I have laid out in all my prior communications:
Continue to focus on off shore oriented annuity engagements
Focus on business growth
Manage our assets and Property to optimum returns
Steven Jeske and I are fiscally conservative and consider CyberTech from a long termbusiness holding perspective. The Company's assets and liquidity cash strength give uscomfort. Mr. Ramasubramanian our Executive Director has become a true partner who sharesour vision and values.
I am pleased to inform you that your Directors have recommended a dividend of Re oneper share (10% of face value) for the eighth year in a row since Steve and I took over themanagement of the company. We continue to enjoy the confidence of our customers resultingin opportunities that are adjacent in nature.
The focus on quality of services has ensured continued customer loyalty. Many of ourcustomers have been working with us for a period ranging from 6 to 15 years. We havecreated a good client base that will allow us to have sustainable growth with deeperfocus.
CyberTech will grow focus and excel in mapping solutions SAP implementation andCyberSupport Services. I am excited about our Public Safety and GeoSpatial Platformdevelopment that leverages our expertise as a core GIS player. For the next year I expectour offshore revenues to trend upward while US will be win more recurring revenueprojects.
I am grateful to our Executive Director and the Sales Delivery and Financial Leadersof the Company for their unstinted support to our efforts to enhance shareholder value.Our employees are our biggest asset and I wish to record my sincere appreciation to theirdedicated efforts.
The Company adheres to high level of transparency and corporate governance. We have aneminent Board of Directors. I am grateful for their association with CyberTech and me. Ithank Dr. Shreepad Karmalkar (IIT Chennai) Dr. N.L. Sarda (IIT Mumbai) for their help toCyberTech in several technical areas.
I would like to thank my dedicated Board of Directors and our US Board representativesfor their involvement counsel and support. I thank Bansi S Mehta & Co CharteredAccountants Mr. Farook Irani Esq and Vispi Patel and Associates Chartered Accountantsfor their valuable help. I thank Mr. M. P. Bharucha Esq. of Bharucha & Partners forhis friendship help and counsel. I am grateful to Shri. B. V. Goud Special Advisor tothe Chairman for his substantial help in many matters and for his tireless efforts to helpour Company.
On behalf of the entire organization I thank you my fellow shareholders for yourcontinued support.
Mumbai August 6 2014