Excerpts from CNBC-TV18's exclusive interview with the Satyam’s management : Page 5

Q: What about the human resources front, what do you expect to see going forward in terms of cost pressures from there? Can you manage utilization in a way which alleviates some pain on your margins?

Vadlamani: We have been doing that. If you look at our utilization bets, they are one of the best in the industry. So we continue to focus on that.

Specific to what kind of a wage inflation we are going to look at, I think it is too early to talk about, it depends on what overall environment and there again, the overall demand environment drives most of these things. So if the demand continues the way it is for the IT services, for example if Satyam continues to grow at 45% even next year, similarly the industry grows at these rates, I am sure that there is enough demand for the engineers and so the wage inflation at whatever 13%-14% off shore and 5% onsight may continue.

But I think we are talking too much into the future, but we are not looking at any respite on that front. But again, we are taking various initiatives to address that headwind, how we can manage our resources better, how we can improve the pricing and how we can improve the associate mix and also how we can better manage the fixed price contracts. There are various things we can do to basically manage the risk of the wage inflation.

And on the attrition front, you would have seen that we’ve done a fabulous job. This quarter again, I think it’s the sixth quarter in succession, where the attrition rates have come down to now 13.11%, which is I think one of the lowest in the sector. Some of the steps we have taken in terms of giving higher than industry average wage hikes, the RSUs that we’ve issued last year, some of these things are really playing out.

Q: You achieved your target on attrition what you have set out at the start of the year?

Raju: We always have very ambitious targets set for ourselves internally, so there is a room for further improvement. Attrition is a function of what is happening in the market place now; demand for talent and what kind of growth the markets are generally witnessing. But we are quite pleased with the progress that we have made.

What is more gratifying is the fact that in the group we consider as leadership A group and the attrition levels have always been quite low for Satyam. They have been in the single digits and that does makes a big difference.

We have been able to create an environment wherein people who are associated with us are regarding us as a company that provides a very conducive environment to work in.

Q: I have to ask you more about 2008 and I know you are not ready with your guidance yet for the next year, but if there was a problem for next year would you have sensed it by now or does it happen with a lag, hypothetically assuming that you might run into trouble next year?

Raju: No, would you have predicted what would happen this morning in the stock market? Going back to what Ram and Srinivas have said earlier, if there is a slowdown in the US economy, it does not necessarily mean that there will be a slowdown in growth for a company like Satyam.

In fact, it can even be positive, now if there is a recession or a deep recession and what the implications of that would be are very difficult to predict.

Apart from the negative aspects of slowdown in decision making, holding on decision-making. In case of discretionary spending, the positive things are that can be talked about more prominantly. Firstly you can expect the growth to be higher because the customers are willing to engage with you for larger projects, that is currently the case because they think that we have attained a minimal size.

Secondly, they are compelled to a greater extent to address issues of operational efficiencies and go to market issues, which we are in a position to provide better than most other companies coming from a developed country background. So those would be the positive effect. What the net result would be, is difficult to predict, but we are quite confident that in case of not very deep recession, the effects can continue to be positive for a company like Satyam.

Page1 Page 2 Page 3 Page 4 Page 5