Mahindra Satyam, formerly Satyam Computer Services, announced the audited financial results for 2008-09 and 2009-10 on Wednesday. The performance of the first two quarters of the current fiscal will be announced on November 15. Thereafter, it will approach the High Courts of Andhra Pradesh and Maharashtra to commence the process for merger. “It will take 9-10 months for the process to be completed,” said Vineet Nayyar, Chairman.

The company reported a total income of Rs.5,481 crore and consolidated loss of Rs.124.60 crore for 2009-10. The re-stated accounts projected a net loss of Rs.8,176.80 crore on net sales of Rs.8,812.60 crore during 2008-09, which was largely driven by the exceptional items including over Rs.7,900 crore on account of fraud-related expenses. The company initiated several measures, including right sizing of employees and operations which brought down the losses significantly.

Mahindra Satyam, which inherited a negative net worth in addition to loans worth Rs.814 crore, found after forensic investigations that the overall impact of fictitious entries and unrecorded transactions, entries of advance tax payments and other irregularities at Rs.6,763.1 crore impacting the financial results.

The company's net worth improved to Rs.1,800 crore with a cash balance of Rs.2,178 crore while the margins improved to 8.33 per cent by the end of 2009-10 from 3.42 per cent in the previous year.

Replying to queries, Mr. Nayyar refused to comment on Maytas Infra's claim that funds worth Rs.390 crore had flown from it to Satyam's accounts claiming the matter to be sub judice.

Mahindra Satyam is all set to merge with Tech Mahindra, the company which took over the reins few months after former Satyam Chairman B. Ramalinga Raju admitted to committing an accounting fraud.

Mr. Nayyar said the merger was on track and the company would initiate the process once its “current results” were announced. “We have announced our intentions to merge earlier and that intention remains,” he said. The two companies share strong synergies as Tech Mahindra has its core competencies in the telecom and communication sectors and Mahindra Satyam in the IT field.

To comply with U.S. regulations

Within weeks of its announcement on delisting its American Depository Receipts (ADRs) from the New York Stock Exchange, Mahindra Satyam has announced that the company would shortly initiate steps to comply with the U.S. regulations.

Mr. Nayyar said the company was firm on complying with the Indian GAAP (generally accepted accounting principles) which were no less stringent. Asked about the decision to delist the ADRs, shares issued by non-U.S. companies to raise money in the U.S., he said “we are left with two options either opt for delisting voluntarily or allow the NYSE to delist”.

The company had reported to the exchanges its inability to meet the October 15 deadline set by the U.S. regulator for filing its re-stated U.S.-GAAP financial statements. But it was firm on meeting the requirements and it would be U.S.-GAAP compliant in 6-8 months.

Mr. Nayyar and the company's chief executive officer C. P. Gurnani told reporters here on Wednesday that the company's strength had come down from 44,000 to 27,000 at present and this was because of voluntary and involuntary attrition. The number of clients too had declined from 500 to 350 now.

On bidding for the government projects, he said the firm was part of the Unique Identification Authority of India's project, the most visible project, which reflected its stability and the confidence of the government in it.


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