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PRESENTATION

OF FINANCIAL

MANAGEMENTPresented by:Shalvi mahajan

&

Simran aggarwal

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TOPICS

SATYAM SCANDAL

AGENCY COST

BHOPAL GAS

TRAGEDY

ENRON SCAM

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THESATYAM

SCAM

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COMPANY PROFILE Satyam was establishedin 1987 by Mr. B

Ramalinga Raju. .

4th fastest growing ITcompany in India.

It serves over 654 globalcompanies.

40,000 employees.

On 26th August, 1991 itwas converted into aPublic LimitedCompany.

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ACHIEVEMENTS

First IT Company in the World Certifiedunder ISO9001:2000.

Corporate Citizen award for CorporateSocial Responsibility.

Top 13 Best-Managed Companies in India.

Satyam Wins golden peacock award forexcellence in Corporate Governance 2008on Global level for 2nd time (revoked afterthe fraud was confessed).

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Satyam Clients

A total of 650+ Clients

185 of the top fortune

500 Companies

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HOW DID IT HAPPENED?

Floated two other companies for their ownpurpose.

Without taking permission of the shareholders.

Raju had used dummy accounts to trade

in Satyam's shares.On 7th Jan., 09, Chairman (Ramalinga raju)resigned after announced involvement in

fraud.

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Reasons for Satyam Scam:-

1. Raju wanted to take over his MAYTASINFRA and MAYTAS

PROPERTIES.(company of his sons).

2. He was blamed that he was using thefunds of the investors for the family

business.

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UNDERSTANDING THE SCAM!

The balance sheet as of september 30, 2008 showed-

inflated (non-existent) cash and bank balances of

rs. 5040 crore (as against rs. 5312 crore reflected in

the books)an accrued interest of rs. 376 crore which is non-

existent

an understated liability of rs.1230 crore on account

of funds arranged by br raju.

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Fabricated Income

StatementsCreative Account Practice

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5,040 + 376+ 490 (Rs.

Cr)Rs. 1,230 Cr

Rs.7,136

Cr

Overstated cash

balances, Income

receivables

Understated

LiabilitiesFraud Amount

FRAUD

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IMPACT OF SCAM

Before the scandal its share price

was Rs 300 in oct 2008. Just after

this scandal, the share price go down

to Rs 6.30..

Before the scandal Satyam was the

4th ranked among IT companies of

India and on 9th jan2009 itbecame

least valuable IT company in India.

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Finally Satyam acquiredby tech mahindra.

All well thats end well

Anand mahindra- new owner of the

satyam. Post rs 2890crore as takeover.

July 2009, satyam rebranded its serviceas MAHINDRA SATYAM.

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AGENCYCOSTAgency cost is the cost incurred

to the company or share

holders in monitoring theactivities of the managers.