Satyam Crisis
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Satyam SHAME & SCANDAL
FINANCIAL SHENANIGANS
SHAREHOLDE RS EQUITY Capital +profit
CURRENT ASSESTS
BALANCE SHEET CURRENT LIABILITY
FIXED ASSETS
FIXED LIABILITY Capital +profit
BALANCE SHEET
CURRENT ASSESTS •CASH BALANCE •SUNDRY DEBTORS • ACURRED INTEREST
CURRENT LIABILITY UNDERSTATE D LIABILITY
FIXED ASSETS EMPLOYEES 5300 but only 5000 employees were there
WHAT WENT WRONG….????
Simple manipulation of revenues and earnings to show superior performance Raising fictitious bills for services that were never rendered.( which is added to sundry debtors on the B/S) To increase the Cash & bank balance correspondingly. Operating profits were artificially boosted from the actual Rs 61 crore to Rs 649 crore.
Rs 490 of this artificially inflated Rs. 588 crore was added to receivables as conceded by Mr.Raju Remaining Rs.98 crore appears to be a part of the Rs.5040 crore cash hole in the B/S Satyam also showed an interest earnings of Rs 376 crore that was fictitious Mr. Raju says he infused funds of Rs. 1230 crore as dues to him. Thus Satyam has understated its liability. Everything is wrt 2nd quarter only ,but Mr.Raju said in his statement that he has been doing this for several years
CURRENT ASSESTS
ACTUAL CASH IN BANK IS 321 INFLATED 5040cr
2651.6 5312.62
376 ACTUAL DEBT IS 2161 OVERSTATED 490 Cr
NO ACCURRED INTEREST 376 Cr
LIABILITIES
REVENUE
2700
OPERATING MARGIN
690
ARTIFICIALLY ADDED 588 OPERATING PROFIT ADDED 588 INCREASING THE CASH RESERVE ONLY FOR Q2 ALONE TO 588
UNDERSTATE D LIABILITY 1230 Cr which is arranged by Mr.Raju 5040+376+1230+ 490= 7136
ACTUAL OPERATING MARGIN 61 Cr ( CREATED AN ARTIFICIAL REVENUE OF 588)
Operatin Profit ( IN CRORES)
Operating Profit 800 648.61
600 400
401.61
468.72
649.27
545.49
200 0 Series1
Sep '07
Dec '07
Mar '08
Jun '08
Sep '08
401.61
468.72
545.49
648.61
649.27
Quarter
GROWTH IN THE OPERATING PROFIT
REVENUE
Operating Profit
2700 3000
649
2112
588
2500
700 600
2000
500
1500 588 1000
400 300 61 200
500
100
0 Actual Revenue Q 2
Reported
Difference
0 Actual Op
Reported
Difference
NFLATING THE PROFIT AND REVENU
Satyam computer Ltd., B/s
SOURCES OF FUNDS
1.
Shareholders funds a. Share capital (share application money , pending)
AS ON 30.09.08
ADJUSTED BALANCE SHEET
134.70
134.70
2.76
2.76
8392.23 ________ __ 8529.69
(415.47) _________ 278.01
ADJUST MENTS
b. Allotment c. Reserves and surplus ________________ ___
_______ _ 0
SOURCES OF FUNDS
AS ON 30.09.08
ADJUSTED BALANCE SHEET
30.49
30.49
ADJUST MENTS
2. Loan Funds a. secured loans B. unsecured loans
234.80 ______ 8794.98 __________________ _______ __
1464.80 _______ 1217.28 _______
APPLICATION OF FUNDS
AS ON 30.09.08
ADJUSTED BALANCE SHEET
1230.00 ______ _ 1230.00 ______ __ ADJUST MENTS
1381.10 618.64 118.75
1381.10 618.64 118.75
1381.10 618.64 118.75
2651.36 5312.62
490.00 272.62
2161.36 5040
1. 2. 3. 4.
Fixed assests Investments Tax Current assets a. sundry debtors b. cash
Satyam computer Ltd., B/s APPLICATION OF AS ON ADJUSTED ADJUSTM FUNDS
30.09.08
BALANCE SHEET
ENTS
c. accrued interest d. Loans LIABITIES Net current assests
376.34 502.22 2166.05 6676.49
502.22 2166.05 901.21
376.34 -
_______ 8794.98
_________ 1217.28
APLLICATION OF FUNDS
5775.21 (difference ) ________ 7577.7
FINANCIAL SHENANIGANS
SHAREHOLDE RS EQUITY Capital +profit
CURRENT ASSESTS
BALANCE SHEET CURRENT LIABILITY
FIXED ASSETS
FIXED LIABILITY Capital +profit
BALANCE SHEET
CURRENT ASSESTS •CASH BALANCE •SUNDRY DEBTORS • ACURRED INTEREST
CURRENT LIABILITY UNDERSTATE D LIABILITY
FIXED ASSETS EMPLOYEES 5300 but only 5000 employees were there
WHAT WENT WRONG….????
Simple manipulation of revenues and earnings to show superior performance Raising fictitious bills for services that were never rendered.( which is added to sundry debtors on the B/S) To increase the Cash & bank balance correspondingly. Operating profits were artificially boosted from the actual Rs 61 crore to Rs 649 crore.
Rs 490 of this artificially inflated Rs. 588 crore was added to receivables as conceded by Mr.Raju Remaining Rs.98 crore appears to be a part of the Rs.5040 crore cash hole in the B/S Satyam also showed an interest earnings of Rs 376 crore that was fictitious Mr. Raju says he infused funds of Rs. 1230 crore as dues to him. Thus Satyam has understated its liability. Everything is wrt 2nd quarter only ,but Mr.Raju said in his statement that he has been doing this for several years
CURRENT ASSESTS
ACTUAL CASH IN BANK IS 321 INFLATED 5040cr
2651.6 5312.62
376 ACTUAL DEBT IS 2161 OVERSTATED 490 Cr
NO ACCURRED INTEREST 376 Cr
LIABILITIES
REVENUE
2700
OPERATING MARGIN
690
ARTIFICIALLY ADDED 588 OPERATING PROFIT ADDED 588 INCREASING THE CASH RESERVE ONLY FOR Q2 ALONE TO 588
UNDERSTATE D LIABILITY 1230 Cr which is arranged by Mr.Raju 5040+376+1230+ 490= 7136
ACTUAL OPERATING MARGIN 61 Cr ( CREATED AN ARTIFICIAL REVENUE OF 588)
Operatin Profit ( IN CRORES)
Operating Profit 800 648.61
600 400
401.61
468.72
649.27
545.49
200 0 Series1
Sep '07
Dec '07
Mar '08
Jun '08
Sep '08
401.61
468.72
545.49
648.61
649.27
Quarter
GROWTH IN THE OPERATING PROFIT
REVENUE
Operating Profit
2700 3000
649
2112
588
2500
700 600
2000
500
1500 588 1000
400 300 61 200
500
100
0 Actual Revenue Q 2
Reported
Difference
0 Actual Op
Reported
Difference
NFLATING THE PROFIT AND REVENU
Satyam computer Ltd., B/s
SOURCES OF FUNDS
1.
Shareholders funds a. Share capital (share application money , pending)
AS ON 30.09.08
ADJUSTED BALANCE SHEET
134.70
134.70
2.76
2.76
8392.23 ________ __ 8529.69
(415.47) _________ 278.01
ADJUST MENTS
b. Allotment c. Reserves and surplus ________________ ___
_______ _ 0
SOURCES OF FUNDS
AS ON 30.09.08
ADJUSTED BALANCE SHEET
30.49
30.49
ADJUST MENTS
2. Loan Funds a. secured loans B. unsecured loans
234.80 ______ 8794.98 __________________ _______ __
1464.80 _______ 1217.28 _______
APPLICATION OF FUNDS
AS ON 30.09.08
ADJUSTED BALANCE SHEET
1230.00 ______ _ 1230.00 ______ __ ADJUST MENTS
1381.10 618.64 118.75
1381.10 618.64 118.75
1381.10 618.64 118.75
2651.36 5312.62
490.00 272.62
2161.36 5040
1. 2. 3. 4.
Fixed assests Investments Tax Current assets a. sundry debtors b. cash
Satyam computer Ltd., B/s APPLICATION OF AS ON ADJUSTED ADJUSTM FUNDS
30.09.08
BALANCE SHEET
ENTS
c. accrued interest d. Loans LIABITIES Net current assests
376.34 502.22 2166.05 6676.49
502.22 2166.05 901.21
376.34 -
_______ 8794.98
_________ 1217.28
APLLICATION OF FUNDS
5775.21 (difference ) ________ 7577.7
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