Tuesday, July 10, 2012

Satyam Computer Services Ltd. - Company News

Satyam Computer Services Ltd.

Satyam Computer Services Ltd.


Recent News
12.1.2009, The Economic Times, Page 1
The government on Sunday appointed a three member board comprising HDFC chairman Deepak Parekh, former Nasscom president Kiran Karnik and former Sebi member C. Achutan to steer tained Satyam Computers. They will meet on Monday morning.
11.1.2009 Hndustan Times, page 1 
Satyam Ex. CEO was arrested. Ex. MD, Rama Raju was also arrested. CFO V. Srinivas was also taken into custody.
10.1.2009 Mint, Page 1
Satyam Board was dissolved by Government of India. India's Ministry of Corporate Affairs (MCA) dissolved the company's board and a new board with 10 nominee directors will be announced by MCA.
Satyam Computer Services was removed from the BSE Sensex List and NSE Nifty list  of stocks.
30th December 2008, Mint, Page 1
Satyam faces director exodus
Vinod Dham, Executive Managing Director, NEA-Indo US  Ventures resigned
Krishna Palepu, Professor, Harvard Business School, resigned
M. Ramamohan Rao, Dean, Indian School of Business, resigned
Mangalam Srinivasan resigned
Satyam has a high institutional shareholding to the extent of 62%.
30th Decemer 2008, Economic Times, page 1
PEs for Satyam stake buy
Big buyout firms such KKR, Carlyle, Silver Lake, Apax and TPG have become active since Satyam appointed DSP Merrill Lynch to explore strategic options.
TPG Capital's partner Vivek Paul was a former CEO at WIPRO.
KKR's portfolio investment Aricent Technologies is being managed by Wipro's former M&A head, Sudip Nandy. Thus PE firms have high level talent in their ranks to manage Satyam.
News 2008

India - BSE Sensex Companies - Information and Equity Research

India - BSE Sensex Companies - Information and Equity Research

India - BSE Sensex Companies - Information and Equity Research

This knol is an index to the knols of companies included in the list of 30 companies whose share prices are used in calculating the sensitive index of Bombay Stock Exchange, India.


(This knol and related knols will provide information and equity research developed by my students in the subject as class assignments of their course. This dissemination plan is as per my paper  "Independent Equity Research from Business Schools: A Possibility" published in AIMS International Journal on Management www.aims-international.org/AIJM/2-2-5.pdf).

Company Name




H D F C Bank Ltd.


Hindustan Lever Ltd.


Housing Development Finance Corpn. Ltd.


I T C Ltd.




Larsen & Toubro Ltd.


Maruti Udyog Ltd.


N T P C Ltd.


Oil & Natural Gas Corpn. Ltd.

Reliance Communications Ltd.



State Bank Of India


Tata Steel Ltd.



A C C Ltd


Bajaj Auto Ltd.


Bharat Heavy Electricals Ltd.

Cipla Ltd.


Dr. Reddy'S Laboratories Ltd.


Grasim Industries Ltd.


Gujarat Ambuja Cements Ltd.

Hero Honda Motors Ltd.


Hindalco Industries Ltd.

I C I C I Bank Ltd.

Ranbaxy Laboratories Ltd.

Reliance Energy Ltd.

Tata Consultancy Services Ltd.


Tata Motors Ltd.



Satyam Computer Services Ltd.


good work

Hello Mr. Narayana,

I analyzed the knol created by your on the BSE companies.
its full of data but it will be nice if you could express opinion as well on this analysis because the data can be read/retrieved by the users elsewhere too.


Ravish Ojha - 03 Feb 2010






Assocation of Investment Management and Research (now CFA institute) gave  the following format some time back for providing industry analysis.

Industry Classification

Life cycle position

Business cycle


External Factors







Demand Analysis

End users

Real and Nominal Growth

Trends and Cyclical variation around trends


Supply Analysis

Degree of Concentration

Ease of entry

Industry capacity



Supply/Demand Analysis

Cost Factors



International competition and markets

I ask my students to follow the format and prepare the analysis for the following industries as a part of their Investment Analysis or Security Analysis Course.
I presented a conference paper and published a journal article on the theme independent equity research from business schools. In that paper I argued that business schools can publish the equity research reports being prepared by their students on their web sites. No doubt disclaimer is there that it is a learning exercise only and not a professional output. The benefit of such academic institute reports will be that they will be more close to rigorous text book methods than the opportunistic reports from sellside companies.
I plan to publish the reports of my students on knol demonstrating my commitment to the suggestion that I have made.


Industries to be Covered as a Learning Exercise by Students



Automobiles - Viklap

Banks - Vidushi Aggarwal, Himanshu Gupta


Capital goods




Consumer durables
Engineering - Venu Yaramshetti
FMCG - Prakash Chadhury


Housing Finance  - Varun Singh
Infotech -software and ITES - Vicky Gosar, Rajat Viz
Infrastructure   - Bhagyashri Bhide and Naresh Dhingra





Oil & Gas - Anshul Srivastava
Petroproducts - Saurabh Nagda


Power - Saravanan
Realty  - Dilip S.Anand


Steel  - Megha Gupta


Telecommunication services - Akanksha Mittal, Ashish Anand

Tobacco - Lakxmikant Ramawat

              Economic Times Sectoral  (Industry) Indices - December 2008

Index Days Close Days Close Days Close  
  5th Dec 08 12th Dec 08 19th Dec 08 P/E ratio
ET 100     3204.09 12.13
Sectoral Indices        
Auto-Ancillaries     4483.36 8.59
Automobiles     2424.13 8.51
Banks     5633.29 9.53
Capital goods     8653.69 17.44
Cement     4699.77 5.31
Chemicals     3968.69 5.32
Construction     9378.76 17.15
Consumer durables     3568.39 6.36
FMCG     3311.64 19.01
Fertiliser     3311.18 5.5
Hospitality     4267.23 10.3
Infotech     1948.15 9.36
Logistics     10875.04 10.8
Media     2412.8 19.71
Metals     6096.29 3.58
NBFC     10675.91 12.01
Oil & Gas     3186.18 15.86
Pharma     3119.78 13.34
Power     3612.03 19.36
Realty     3952.32 5.77
Retail     671.22 55.38
Shipping     5871.53 3.39
Sugar     8070.69 4.51
Teleservices     1655.4 15.11
Textiles     2922.81 17.97
Conglomerates     6600.24 8.25
Bollywood     784.71 9.76


Monday, July 9, 2012

Questions and Answers on Basics of Accounting Process

Questions and Answers on Basics of Accounting Process

Questions and Answers on Basics of Accounting Process


You can write your questions on basics of accounting process from posting of journal to preparation of balance sheet in this open collaboration knol.

You can use

Financial Accounting - Knol Book of Readings (new blog link)


Write your question in comments


Short urls


Narayana Rao - 25 Apr 2011

Financial Accounting - Knol Book of Readings

http://nraombakc.blogspot.in/2012/04/financial-accounting-knol-book-of.html (new blog link given)

You can use the accounting book as the basis to learn basics of journal entries, ledger posting, trial balance and preparing financial statements in a simple manner.
Narayana Rao - 14 Apr 2011

Some More Adjustments

Some More Adjustments

Some More Adjustments

Adjustments - Financial Accounting


Adjustment entries have to be made for the following items also before arriving at profit
Provision for Bad debts
provisions  for  discount on debtors and creditors
Interest on capital
Interest on drawings by partners

Important Adjustments to Ledger Account Balances to Arrive at Proper Profit

Important Adjustments to Ledger Account Balances to Arrive at Proper Profit

Important Adjustments to Ledger Account Balances to Arrive at Proper Profit

Adjustments - Financial Accounting



Fixed assets have a certain life period after which they are no longer useful for efficient production. So we can visualize that fixed assets getting used up every year and their value to the business is coming down every year. It means every year, the firm is using some portion of the value of the fixed assets. Hence, to determine the profit may be a business in any period or year, the profit and loss account must contain an item as fixed asset expense in that period.
Depreciation is the name given to the expense item that reflects usage of fixed assets in a period for producing goods or services.
The amount of depreciation is determined at the end of the period and recorded in the books as adjustment entry. In various countries company law or act and income tax act specify the percentage on the fixed assets that can be charged as depreciation every year.

Outstanding expenses

Normally, only those transactions that are recorded on documents are entered in account books. If some expenses are incurred but are not recorded on documents, ledger will not have any entries related to them. Accountants have to find out if any expenses are outstanding for payment and they have to show them on the profit and loss account to arrive at proper profit.

Accrued income receivable

Similar to outstanding expenses, there can be outstanding income. The employee of a firm went and provided a service to a firm but the bill was not raised. Or the practice of raising the bill is not there. But this outstanding income is to be shown on the profit and loss account.
A more realistic example of this nature is the fixed deposit with a bank. If the fixed deposit is a cumulative deposit, bank will pay interest and principal on the maturity date. There will not be any entries related to interest in the ledger account of the firm. But when a profit and loss account is to be made, accountant has to ascertain the interest due as on that date and show it as a credit entry on the profit and loss account.


Short urls


Narayana Rao - 13 May 2011

Guidelines for Managers from Vedas and Vedic Literature

Guidelines for Managers from Vedas and Vedic Literature

Guidelines for Managers from Vedas and Vedic Literature


Bhagavad Gita And Management
By M.P.Bhattathiry
Retd. Chief Technical Examiner To The Govt. Of Kerala, Kerala, India
Aligning personal and organisational vision and values: A Vedic perspective.


Dr. Shailendra Vyakarnam[1], University of Cambridge Entrepreneurship Centre, 4a Trumpington Street, Cambridge, CB2 1QA



Vedic Management by Krishan Saigal - Book Information and Review

This book has good content on vedic management and also the author pointed out that Gandhi practiced vedic management and succeeded in forcing British to leave the country.


Special Journals and Ledgers

Special Journals and Ledgers

Special Journals and Ledgers


If only journal is used, the number of transactions that can be recorded in a journal by one man will be small. Hence,  special journals are created and several persons write journals that contain a specific category of transactions. These special journals reduce the work involved in journal writing because of their special formats. Use of thes special journals also makes it easy to use them as ledger accounts also and therefore instead of making one ledger entry for each transaction only summary entry for a day etc. can be posted in the general ledger (main ledger as there will be special ledgers also similar to special journals).
The special journals are:
1. Purchases journal (purchases book)
2.Sales journal (sales day book)
3. Purchase returns journal
4.Sales return journal
5. Bills receivable book
6. Bills payable book
7. Cash book
8. Petty cash book
Special Ledgers
1. Debtors ledger
2. Creditors ledger
3. Fixed asset ledger or register

Investment Banking Related to M & A in India

Investment Banking Related to M & A in India

Investment Banking Related to M & A in India


Mergers and Acquisitions advisory is an important practice area for investment banks.

Statutory Provisions Relating to M & A in India

Company Act, 1956
Sections 391-394 deals with the provisions related to mergers or amalgamations.
Section 327A gives powers of investment to the board of directors of a company to the extent of 60% of the company's paid up capital and free reservers or 100% of its free reserves, whichever is higher. The board can use this provision to acquire companies. Beyond these limits, a special resolution of members would be necessary.
Sections 108B and 108D are also relevant for M&A transactions.
Foreign Exchange Management Act (FEMA) Provisions
SAST Provisions
Securites Contracts Regulation Act provisions
IT Act Provisions
Stamp Duty Act Provisions
To be developed under various heads indicated

Sunday, July 8, 2012

Business Cycles and Counter Cyclic Measures in India

Business Cycles and Counter Cyclic Measures in India

Business Cycles and Counter Cyclic Measures in India


3.6.2009 Economic Times
Core sector has bounced back in April 2009.
Indian government announced a fiscal stimulus package on  December 07, 2008.

Following are the highlights of the stimulus package  announced by the government to boost the economy:

  • Additional plan expenditure of up to Rs 20,000 crore (Rs 200 billion)
  • Excise duty reduced across the board by 4 per cent.
  • IIFCL authorised to raise Rs 10,000 crore (Rs 100 billion)  via tax-free bonds.
  • PSU banks to announce package for borrowers of home loans.
  • Rs 350 crore (Rs 3.50 billion) additional funds for export incentives.
  • Back-up guarantee to ECGC for up to Rs 350 crore.
  • 2 per cent interest subvention for labour-intensive exports.
  • Rs 1,100 crore (Rs 11 billion) to ensure full refund of Terminal Excise duty.
  • Additional Rs 1,400 crore (Rs 14 billion)  for textile sector under TUF Scheme.
  • The guarantee cover for loans to MSME doubled to Rs 1 crore (Rs 10 million).
  • The lock-in period for such collateral-free loans reduced.
  • Government departments allowed to take up replacement of vehicles.
  • Import duty on naphtha for power sector eliminated.
  • Export duty on iron ore fines eliminated.
 (For more details: The Economic Times, 8 December 2008)
Monetary Actions for Providing stimulus

The Reserve Bank of India (RBI) announced monetary policy measures in response to the deteriorating economic condition in India on December 06, 2008.

According to RBI, The primary liquidity made available to the system through these measures is worth over Rs 3,00,000 crore (Rs 3,000 billion),


The  repo rate by 100 basis points to 6.5 per cent and reverse repo by 100 basis points to 5 per cent.

  • In view of the need to enhance credit delivery to the employment- intensive micro and small enterprises sector, it has been decided to provide refinance of an amount of Rs  7,000 crore (Rs 70 billion) to the Small Industries Development Bank of India  under the provisions of Section 17(4H) of the Reserve Bank of India Act, 1934.

This refinance will be available against: (i) the Sidbi's incremental direct lending to MSE; and (ii) the Sidbi's's loans to banks, NBFCs and State Financial Corporations against the latter's incremental loans and advances to MSEs. The incremental loans and advances will be computed with reference to outstandings as on September 30, 2008.


The facility will be available at the prevailing repo rate under the LAF for a period of 90 days.

During this 90-day period, the amount can be flexibly drawn and repaid. At the end of the 90-day period, the drawal can also be rolled over. This refinance facility will be available up to March 31, 2010.

The utilisation of funds will be governed by the policy approved by the Board of the Sidbi.

  • The RBI is working on a similar refinance facility for the National Housing Bank of an amount of Rs 4, 000 crore (Rs 40 billion). It will announce the details after consideration of the proposal by the Central Board of the Reserve Bank which is meeting next week.
  • On November 15, 2008, the Reserve Bank had announced that proposals by Indian companies for premature buyback of foreign currency convertible bonds would be considered under the approval route, provided that the buyback is financed by the company's foreign currency resources held in India or abroad and/or out of fresh external commercial borrowings raised in conformity with the current norms for ECBs.

Extension of FCCBs was also permitted at the current all-in cost for the relevant maturity.

On a review, it has now been decided to permit Authorized Dealers Category - I banks to consider applications for premature buyback of FCCBs from their customers, where the source of funds for the buyback is: i) foreign currency resources held in India (including funds held in EEFC accounts) or abroad and/or ii) fresh ECB raised in conformity with the current ECB norms, provided there is a minimum discount of 15 per cent on the book value of the FCCB.

In addition, the Reserve Bank will consider applications for buyback of FCCBs out of rupee resources provided that: (i) there is a minimum discount of 25 per cent on the book value; (ii) the amount of the buyback is limited to US $ 50 million of the redemption value per company; and (iii) the resources for buyback are drawn out of internal accruals of the company as certified by the statutory auditor.

  • It has been decided that loans granted by banks to Housing Finance Companies for on-lending to individuals for purchase/construction of dwelling units may be classified under priority sector, provided the housing loans granted by HFCs do not exceed Rs 20 lakhs (Rs 2 million) per dwelling unit per family.

However, the eligibility under this measure will be restricted to five per cent of the individual bank's total priority sector lending. This special dispensation will apply to loans granted by banks to HFCs up to March 31, 2010.

  • Under the current guidelines, exposures to commercial real estate, capital market exposures and personal/ consumer loans are not eligible for the exceptional regulatory treatment of retaining the asset classification of the restructured standard accounts in standard category.

As the real estate sector is facing difficulties, it has been decided to extend exceptional/ concessional treatment to the commercial real estate exposures which are restructured up to June 30, 2009.

  • In the face of the current economic downturn, there are likely to be more instances of even viable units facing temporary cash flow problems.

To address this problem, it has been decided, as a one time measure, that the second restructuring done by banks of exposures (other than exposures to commercial real estate, capital market exposures and personal/ consumer loans) up to June 30, 2009, will also be eligible for exceptional regulatory treatment.

  • In view of the difficulties faced by exporters on account of the weakening of external demand, it was decided that the interest rate on Post-shipment Rupee Export Credit up to 180 days will not exceed BPLR minus 2.5 percentage points.

In respect of overdue bills, banks have been permitted to charge the rates fixed for Export Credit Not Otherwise Specified for the period beyond the due date.


It has now been decided that the prescribed interest rate as applicable to post shipment rupee export credit (not exceeding BPLR minus 2.5 percentage points) may also be extended to overdue bills up to 180 days from the date of advance.


(Source: http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=19612  or http://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/88786.pdf)