In the last annual report (FY2019) I dealt at length on the topic of"Differentiating with Digital Transformation." This remains our core focus andis progressing well. At the same time the whole world has been caught unaware by theoutbreak of the COVID-19 pandemic. In the absence of a cure and a vaccine country aftercountry went into lockdown mode to contain the spread of the virus and save lives. As Ipen this message however nations are slowly coming out of the lockdown to reviveeconomic activity while taking ample measures to safeguard the wellbeing of people.COVID-19 had an impact on our business in Q4 of FY2020 and continues to impact ourperformance in FY2021. With no definite timeframes for the discovery of a vaccine wecontinue to live in extremely uncertain times.
Switching to a Work-From-Home (WFH) Paradigm
The Government of India ordered a nationwide lockdown on March 24 2020 for 21 dayslimiting the movement of 1.35 billion people as a preventive measure against the spread ofCOVID-19. Our Business Continuity Plan (BCP) never envisaged 100% non-availability of theworkforce at the workplace. In the electronic age associates can work from home (WFH) anddeliver services. However WFH was riddled with several operational teething challenges.We had to obtain permission from customers who were understandably paranoid about thesecurity of their data. We needed to provide associates with hardware software andcommunication technology to enable them to work seamlessly from home. The associatesrequired the physical infrastructure of continuous power supply uninterrupted andhigh-speed bandwidth and space for installing equipment. They also needed social supportin terms of secured space privacy from distractions etc. Despite the lockdownconditions we procured about 5000 laptops in a single week to ensure appropriatehardware was available to our associates. Though we had initial challenges with efficiencyin the last week of March efficiency improved considerably in April and May and we arenow confident of delivering close to 100% efficiency with most of our associates workingfrom home. I am happy to say that we are now prepared and looking forward to the "newnormal." The leadership team rose admirably to this unprecedented situation and putin tremendous efforts to keep operations on track.
Almost every country we do business in went into a lockdown of varying duration andstrictness resulting in demand contraction in the near term especially in the aerospaceand transportation sectors. At the same time we see a significant recovery in demand inseveral other sectors such as communications utilities and semiconductor. Further ourdecision to invest significantly in emerging digital technologies is enabling us toaddress the opportunities that are emerging due to the same. The new normal will seedecreased physical interactions and increased use of technology to perform a number oftasks. Your company is well-positioned to deliver significant value to our customers inthe adoption of these digital technologies. There are numerous examples across variousindustries on how we leveraged digital capabilities to solve complex technology problems.
In my message last year I had alluded to the AGILE (Ambition Growth MindsetInclusive Lead by Example and Empowerment) culture that would help the company expandfrom services to systems and solutions. I wish to reiterate the firm commitment of yourcompany to remain AGILE and optimize every opportunity that the current circumstances maybring forth.
The leadership team is optimistic about the future as they bring pragmatic enthusiasmto the business.
The leadership team continues to focus on strategies that can yield the highest resultsfor the company while balancing the short- and long-term goals. They mustered all thecourage and character to be decisive however difficult the decisions were. The team isconfident about achieving satisfactory results during FY21. To successfully meet ourcommitments and grow we strengthened our leadership team by inducting Karthik NatarajanPresident and Chief Operating Officer Felice Gray-Kemp Senior Vice President and GlobalGeneral Counsel and Meenu Bagla VP and Chief Marketing Officer to name a few.
Our associates performed their best in these difficult times. I am pleased to report mydelight with their performance in this changing environment. Our associates' abilities totake complete ownership of responsibility and deliver to our customers' expectations arecommendable. Post-COVID era will bring a new set of issues. Partial WFH will become thenew normal. While supervision will be less discipline and self-motivation will becomeprimary. Hours worked as a measure of performance will give way to outcomes as a measureof excellence. We are providing all the necessary infrastructure processes and trainingto ensure that accountability and ownership of our associates will improve even more.
Board of Directors
During FY20 Mr. K. Ramachandran retired from the Cyient Board after serving from2009-2019.
Mrs. Andrea Bierce and Mr. John Paterson also retired from the Board after completingtheir respective terms from 2014-2019. I thank these directors for their valuablecontributions and sage counsel over the years. We inducted two new directorsMrs.Matangi Gowrishankar and Mr. Vivek Gour both with an outstanding track record ofproviding leadership to large successful global companies. We constituted a Risk Committeeto oversee risks and the associated mitigation strategies.
With its rich experience the Board played a key role in managing the COVID-19situation. I wish to express my gratitude to each of the directors.
Corporate Social Responsibility
Your company continues its relentless focus on CSR activities. Our flagship initiativeduring FY2020 was the development of the Urban Micro Skill Center (UMSC) in PPP mode(Cyient Foundation along with Greater Hyderabad Municipal Corporation (GHMC) and theGovernment ofTelangana). The Cyient Foundation has built a state-of-art skill center inconformance with the National Skill Development Corporation's (NSDC) guidelines. Thecenter is fully functional with 300 community members graduating every three months infive skill areas. Along with skill development the center provides community servicessuch as day-care for children and digital literacy for adults. During the COVID-19pandemic this center rose to the challenge by stitching 10000 masks a week and donatedthem to the local community. The rest of our CSR initiatives focused on school educationdigital literacy community development and social innovation and continued to make aconsiderable impact.
Over the last 29 years we have built a great company creating shareholders'valueconsistently. FY2020was an aberration. We saw small degrowth in revenues and earnings anda significant fall in stock price. On behalf of the Board I assure all our shareholdersthat we are taking every necessary step to bring the company back to its pastindustry-leading growth rates. The COVID-19 pandemic has certainly thrown new challengesbut I believe in the next 12-18 months we will see normalcy returning. I would like toconclude by reassuring our shareholders that your company is steadfastly optimistic withunwavering faith in ourselves that we along with all our stakeholders will emergestronger out of this unprecedented situation.
BVR Mohan Reddy
Founder and Executive Chairman.