7/25/2019 Satyam Computers Turnaround Strategy Revised

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Satyam computers turnaround

strategy

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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*

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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*

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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*

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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

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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

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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