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7/25/2019 Satyam Computers Turnaround Strategy Revised
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Satyam computers turnaround
strategy
7/25/2019 Satyam Computers Turnaround Strategy Revised
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PROBLEMS
On 7thJanuary, 2009
From past 7 years the accounting books were falsified
Profits were inflated caused by gaps in the balance sheet
Understated Liabilities, Overstated Debts, ccrued !nterests
"a#u wanted to take over his $%&' !(F" and $%&'
P"OP)"&!)'*+company of his sons*-e was blamed that he was using the funds of the investors for the family
business*
&here were allegations that funds from 'atyam were diverted to $aytas,
causing the .overnment agencies to verify the infrastructure company/s
records as well*
7/25/2019 Satyam Computers Turnaround Strategy Revised
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LOSSES
"s 01 crore profits inflated as "s 211 crore
&his gap in the balance sheet led to a fraud of "s 7,311 4rore
On 22 5anuary 2116, 4!D told in court that the actual number of employeesis only 1,111 and not 89,111 as reported earlier and that $r* "a#u had
been allegedly withdrawing !(" 21 crore rupees every month for paying
these 09,111 non:e;istent employees*
7/25/2019 Satyam Computers Turnaround Strategy Revised
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Turnaround Strateges
ppointing new board < change in management
=oard appointed by government >
former (asscom chief < ?iran ?arnik,
4hairman -DF4 < Deepak Parikh Former ')=! member < 4* chuthan *
'atyam shares gained over @ day after appointment of the new board*
(ew 4)O < ' $urthy
&ech $ahindra acAuired 'atyam on pril 09,2116*
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!"#$#%"$LS
!n 2113:16 losses of "s 3,07 crore +because of provisioning of "s 7,662
crore :: for "a#uBs misdemeanors
!n 2116:01 losses of "s 02 crore
$ahindra 'atyam reported a profit of "s 021 crore +"s 0*21 billion in the
first si; months of 2101:00* !ncome for the first si; months of the financial year stands at "s 2,61
crore which could give an annual income not too different from 2116:01Bs
"s 8,30 crore keeping in mind the appreciation in the rupee*
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T&R#$RO' STR$TE("ES &SE'
%OMPL"$#%E )"T* +$R"O&S $&T*OR"T"ES
!n the backdrop of the accounting scandal ,important that the company
gave out true information to the authorities*
!mportant step to instill confidence among its shareholders*
MER(ER
'ynergy between the two companies i*e &ech $ahindra and 'atyam
negligible*
&ech $ahindra::::operational efficiency and 'atyam::::=ad management
&hey both speak the same language of business though::::)mployees,
clients and operating margin*
&his merger was a win:win situation for both the companies*
7/25/2019 Satyam Computers Turnaround Strategy Revised
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T&R#$RO' STR$TE("ES &SE'
REBR$#'"#( &he name 'atyam had a brand value*
=ut the name C'atyam resonates with scam::::one of the
biggest corporate frauds in !ndian history
&ech $ahindra ought to establish brand C$ahindra 'atyamas a credible one*
%*$#(E "# M$#$(EME#T
(ecessary for the company to restore its credibility after the acAuisition
?ey personnel shifted to $ahindra 'atyam from &ech $ahindra 4 P .urnani appointed 4)O :::::::::known for customer centric business
approach
4hanges in management positions in 4PO, 4$O and others*
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T&R#$RO' STR$TE("ES &SE'
E#TR "#TO T$PPE' M$R-ETS im to reach revenue of E8 billion by 2108*
(eed to e;pand into new geographies like frica, 'outh merica and
ustralia
Ob#ective was to focus on the company/s bottom line*
RE($"#"#( LOST %L"E#TS
Out of the 81 clients, nearly 981 left when the scam broke out*
.overnment appointed directors gave assurance to the clients*
4ompany G4 nand $ahindra met the large customers and convincedthem to stay*
nalyst conferences held in -yderabad, London and =oston to apprise the
customers of the company/s doing
7/25/2019 Satyam Computers Turnaround Strategy Revised
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T&R#$RO' STR$TE("ES &SE'
%OST %&TT"#( ME$S&RES
Hith the inflated income taken out, 981 customers walked out
81111 workforce considered large for $ahindra 'atyam
When companies moved projects away from Satyam, they
were requested to take the teams along. s a result $ahindra had 2111 employees on its roll then*
$anpower accounted for 88 @ of companies efficient revenues*
4ompany e;ited around 92 offices saving "s 03 crores*
Legal e;penses brought down from "s 017 crore in 2116:01 to "s 0 crore
in the first half of 2101:00
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T&R#$RO' STR$TE("ES &SE'
O+ER*$&L $%%OT"#( SSTEM $#' ET*"%$L
PR$%T"%ES
&he company had been using non:integrated accounting practices so that
only a few knew the full picture*
Up gradation of software services* )mployees reAuired to understand code of conduct in business
7/25/2019 Satyam Computers Turnaround Strategy Revised
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Other turnaround strategies
employed
!ntegrate processes, )liminate overlaps, leverage best practices and deliver
enhanced value to all our stakeholders*
Unified go:to:market strategy
more outcome:based, transaction:based and results:based business model*
< restructuring built on three pillars : consulting, business volume enhancement and
enterprise business solutions*
$4ube initiative through which we are leveraging the presence of
$ahindras in various multifaceted sectors, which include real estate,
finance, manufacturing and distribution*
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THANK
YOU