SCAMS OF THE CENTUARY

1. Accounting SCAM

2. • Satyam was established in 1987.
• 4th fastest growing IT company in India.
• 9 % market share
• 40,000 employees
• Revenue $2.1 billion
• It is the first company of India listed in three International Exchanges
i.e. NYSE, DOW and EURONEXT
INTRODUCTION

3. Ramalinga Raju, chairman
“None of the board members, past or present, had any knowledge of the
situation in which the company is placed.”
He INFLATED (non existent) cash and bank balance of Rs 5,040 crore(as against Rs 5,361
crore) reflected in the books.
Accrued interest of Rs 376 crore is non-existent.
He has understated liability to the tune of Rs1,230 crore in accounts of funds arranged by me.
He has over-stated debtors position of Rs 490 crore (as against Rs 2,651 crore reflected in the
books.)
FOR sept 2008, we reported Rs2,700 crore revenue and operating margin of Rs 649 crore
against actual revenue of Rs2,112 crore and margin of Rs 61 crore.

4. 5312.62
ACTUAL CASH IN
BANK IS
321
INFLATED 5040cr
2651.6
ACTUAL DEBT IS 2161
OVERSTATED 490 Cr
CURRENT ASSESTS
376
NO ACCURRED
INTEREST
376 Cr
UNDERSTATED
LIABILITY 1230 Cr
which is arranged
by Mr.Raju
5040+376+1230+
490= 7136
LIABILITIES
REVENUE 2700
OPERATING
MARGIN
690
ARTIFICIALLY ADDED 588
OPERATING PROFIT ADDED
588
INCREASING THE CASH
RESERVE ONLY FOR Q2 ALONE
TO 588

5. Operating Profit
401.61
468.72
545.49
648.61 649.27
0
200
400
600
800
Quarter
OperatinProfit(IN
CRORES)
Series1 401.61 468.72 545.49 648.61 649.27
Sep '07 Dec '07 Mar '08 Jun '08 Sep '08
ACTUAL OPERATING MARGIN 61 Cr (
CREATED AN ARTIFICIAL REVENUE OF
588)
GROWTH IN THE OPERATING PROFIT

6. ADJUSTED BALANCE SHEET

8. RATIO ANALYSIS
CURRENT RATIO : CURRENT ASSESTS/CURRENT LIABILITY
CASH RATIO : CASH & BANK BALANCE + CURRENT INVT / CURRENT LIABILITIES
BEFORE ADJUSTMENT AFTER ADJUSTMENT
= 8788.2
1603.07
= 5.48 : 1
= 2882.2
2833.07
= 1.01 : 1
BEFORE ADJUSTMENT AFTER ADJUSTMENT
= 5854.8
1603.7
= 3.65 : 1
= 814.8
2833.07
= 0.28 : 1

9. RATIO ANALYSIS (cont…)
OPERATING PROFIT RATIO : OPERATING PROFIT / SALES X 100
EARNING PER SHARE : NPAT – PREF DIVIDEND/ NO OF EQUITY SHARE HOLDERS
BEFORE ADJUSTMENT AFTER ADJUSTMENT
= 649.27 X 100
2700.52
= 24.04 %
= 61.00 X 100
2700.52
= 2.25 %
BEFORE ADJUSTMENT AFTER ADJUSTMENT
= 597.43
67.35
= 8.87 RS
= 9.430
67.35
= 0.14 RS