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FINANCIAL ANALYSIS OF SATYAM COMPUTERS LTDPresented By:SABYASACHI TARAI(39) BINAYAK MAHAPATRA(11) TRIDEEP SAHU(57)

AgendaSatyam is a leading global business and information technology company, delivering consulting, system integration, and outsourcing solutions. 03/08/09History and Overview Highlights Accounting Policies Income Balance Sheet Assets Ratio Analysis2

History It was incorporated on 24th June 1987. Main Objective-provide software solutions and consultancy services. It started under dept. of electronics of GOVT. OF INDIA. In 1991 it was converted into a public limited company. In 1992 first IPO was issued. In 1993 it went into Venture with DUN and BRADSTREET. Satyam Infoways was the second largest service provider in India. In 2006 it achieved ISO certification.03/08/09 3

Highlights(in Rs. crores)

2007 6410.08 1423.23 21.73 0.24% 1703.12 6777.41

2008 8137.28 1458.54 25.66 0.20% 1822.6 8734.66

Net revenues Net Profit Earnings per share Return on net worth Cash in Hand Total Assets

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ACCOUNTING POLICIES Satyam continues to prepare its consolidated financial statements under Indian GAAP for its local statutory reporting purposes.

Basis of Presentation:The financial statements of the Company are prepared under historical cost convention in accordance with the Indian GAAP and the provisions of the Indian Companies Act, 1956.

Revenue Recognition:Revenue from professional services consist primarily of revenue earned from services performed on a time and material basis & the related revenue is recognized as and when the services are performed.

Fixed Assets:Fixed assets are stated at actual cost less accumulated depreciation. Depreciation: Depreciation on fixed assets is computed on the straight line method over their estimated useful lives. Individual assets acquired for less than Rs.5,000 are entirely depreciated in the period/year of acquisition.

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Contd..

Investments: Current investments are carried at the lower of cost and market value.

Long-term investments are carried at cost less provision made to recognize any decline, other than temporary, in the value of such investments. Foreign Currency Transactions: Transactions in foreign currency are recorded at exchange rate prevailing on the date of transaction. Monetary assets and

Taxes on Income: Tax expense for the year comprises of current tax and deferred tax. Current taxes are measured at the amounts expected to be paid using the applicable tax rates and tax laws.

Earnings per Share: The earnings considered in ascertaining the Companys Earnings Per Share (EPS) comprises the net profit after tax (and includes the post tax effect of any extra ordinary items).03/08/09 6

IncomeNet RevenuesNET REVENUES8000

Net ProfitNET PROFIT1470

Earnings / ShareEPS22 21.5 21 20.5 20 19.5 19 18.5 18

7000

14606000

14505000 YEARS 4000

1440 1430

3000

14202000

1410 14002007 2008

1000

0

2007

2008

2007

20087

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Balance SheetSOURCES NW loan CL Total ASSETS Fixed Assets Investments CURRENT ASSETS Total03/08/09

7269.99 23.67 1441 8734.66 883.12 493.8 7357.74 8734.66

S OURCES NW 5746 loan 13.79 CL 1017.62 Total 6777.41 AS SETS Fixed Assets 640 Investments 201.15 CURRENT AS 5936.26 SETS Total 6777.418

Income StatementIncome Statement For 2007 Revenue(Ex,D&O) 6410.08 Less COGS 0 Less OPEX 4706.96 PBDITA Less Dep. Amotisation PBIT Less Int. PBT Less PFT PAT03/08/09

Income Statement For 2008 Revenue(Ex&D) Less COGS Less OPEX PBDITA Less Dep. Amotisation PBIT Less Int. PBT Less PFT PAT 8137.28 0 6314.68 1822.6 137.94 0 1684.66 0 1684.66 226.12 1458.549

1703.12 129.89 0 1573.23 0 1573.23 150 1423.23

Cash flow statementCFO CFI CFF Net cash Flow 2007 996.21 (1708.82) 70.19 (642.42) 2008 1328.57 ( 538.68) ( 236.76) 553.13

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Ratio AnalysisLiquidity Ratio Current RatioCurrent Ratio=Current asset/Current Liabilities Quick Ratio/Liquid Ratio Liquid Ratio=CA-Inventories/CL Absolute cash Ratio Absolute Cash Ratio=(CA-InventoriesDebtors)/CL 03/08/09

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Liquidity Ratio2007 CA CL Debtors Inventories Liquid Ratio Absolute Cash Ratio03/08/09

2008 7357.73 1441 2223 0 5.105 3.563 3.56312

5936.26 1017.63 1650 0 4.212 4.212

Current Ratio 5.833

Working Capital Working Capital=CA-CL 2007 CA CL WC 2008 5936.26 7357.73 1017.63 1441 4918.63 5916.73

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Solvency RatioDER= Debt/Shareholders Equity

2007 Debt Equity DER03/08/09

2008 24 7269.9 0.003214

14 5746 0.0023

Interest Coverage Ratio ICR=PBIT/Interest2007 PBIT Interest ICR 1573.23 7.61 206.73 2008 1684.66 5.94 283.6

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Profitability Ratio Profitability Ratio Return On Total Assets(ROTA)=PBIT/TA*100 Return On Capital Employed (ROCE)=PBIT/CE*100 Return ON NET worth (RONW)=PAT/NW

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ROTA2007 PBIT TA ROTA 1573.23 6777.41 0.23212 2008 1684.66 8734.66 0.19287

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ROCE2007 PBIT 1573.23 2008 1684.66

CE(TA-CL)

5759.79

7293.66

ROCE

0.27314

0.230975

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RONW2007 PAT NW RONW 1423.23 5746 0.2476 2008 1458.54 7269.99 0.2006

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Earning Per Share(EPS) EPS=PAT/No.of Shares2007 PAT No.of Shares EPS 1423.23 654852959 21.73 2008 1458.54 668673978 25.66

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Inter Company AnalysisIncome Statement (Inter Firm) 2008 Rs(in crores) Infosys Satyam Tcs Sales 16331 8394.48 15656.2 less Expenses 8876 5051.48 8923 GROSS PROFIT 7455 3343 6733.2 less Opex 1809 1263.2 1546 PBDITA 5646 2079.8 5187.2 Less Dep & Amt 546 137.94 458.78 PBIT 5100 1941.86 4728.42 Less Interest 0 0 0 PBT 5100 1941.86 4728.42 Less Taxes 630 226.12 457.58 PAT 4470 1715.74 4270.8403/08/09

Condensed Balance Sheet (Inter Firm) 2008 Rs(in crores) Infosys Satyam Tcs Net worth 13,391.00 7270 11004.81 LongTermLiab -- 23.67 18.25 Current Liab 3731 1441 3713 Total 17,122.00 8734.7 15146.43 Fixed Assets 3931 883.12 3240.64 Investments 964 493.8 4509.33 Current Assets 12227 7357.7 7396.46 Total 17,122.00 8734.7 15146.4321

Ratio AnalysisRatio Analysis (Inter Firm) 2008 Infosys Satyam Tcs Current Ratio 3.28 5.1 Quick Ratio 3.28 5.1 Absolute Cash Ratio 2.45 5.76 DER NA 1.49 EPS 78.24 25.59 ICR NA NA NA WAAC (%) 13.32 12.95 ROCE (%) 38.09 26.09 RONW (%) 33.38 26.1 ROTA (%) 31.56 12

1.99 1.98 1.97 0.01 50.76 13.12 33.76 29.23 28.19

Cash Flow Statement (Inter Firm) 2008 Rs(in crores) Infosys Satyam TCS Op CIH 5,470.00 3959.82 557.14 CFO -777 1412.92 3827.91 CFI -978 -641.22 -2404.9 CFF 3,816.00 -227.79 -1424.77 Cl CIH 7,531.00 4503.73 555.3822

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RATIO ANALYSIS The current ratio of Satyam is more as compare with Infosys and TCS. The quick ratio or liquid assets of Satyam is more compare as Infosys and TCS. The absolute Cash ratios is more in Satyam. The EPS of Infosys is more as compared with others which The profitability ratios are compared for the three companies. Infosys have greater profitability ratios as compared with other interfirm companies.23

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