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Mahindra Satyam's Q4 loss at Rs 327 cr on lawsuit costs

During the fourth quarter, the company incurred an expenditure of Rs 571.5 crore related to restructuring, forensic investigation and litigation support, class action settlement consideration and provisioning for impairment losses in subsidiaries.

twitter-logoPTI | May 23, 2011 | Updated 12:48 IST

IT firm Mahindra Satyam posted a consolidated net loss of Rs 327 crore for the quarter ended March 31, 2011, on account of exceptional expenditure, including payments made to settle SEC and Upaid lawsuits in the US.

"Q4 is another quarter that demonstrated continuing progress on growth, operational efficiencies, high delivery standards and investments to capability building," Mahindra Satyam Chairman Vineet Nayyar said.

Income from operations stood at Rs 1,375.3 crore during the January-March quarter of 2011.

"The Company Law board, vide its order dated June 30, 2010, and July 6, 2010, has exempted the company from publication of financial results for the quarter ended from December 31, 2008, to March 31, 2010. As such, the corresponding quarterly figures for the previous year are not provided," Mahindra Satyam said in a filing to the Bombay Stock Exchange.

During the quarter, the company incurred an expenditure of Rs 571.5 crore related to restructuring, forensic investigation and litigation support, class action settlement consideration and provisioning for impairment losses in subsidiaries.

"This year has been a very satisfying one, given the impressive progress we made on various fronts, such as minimising the legal overheads, fortifying governance mechanisms and restoring customer and employee confidence," Nayyar added.

For the full year ended March 31, 2011, the company's consolidated net loss widened to Rs 147.3 crore from Rs 124.6 crore in the same period last year.

Income from operations declined to Rs 5,145 crore in the January-March period from Rs 5,481 crore in the same year-ago period.

In connection with the lawsuit filed by Upaid, the company deposited $70 million (nearly Rs 327.4 crore) during FY2009-10 into an escrow account pursuant to a settlement agreement with the company.

With respect to provisioning against taxation, the company is carrying a total amount of Rs 380.3 crore (Rs 368.6 as of March 31, 2010).

The company has also agreed to make a payment of $10 million (Rs 46.7 crore) to the US Securities and Exchange Commission (SEC) under a settlement agreement related to the accounting fraud perpetrated at the firm by its founder and former managing director B Ramalinga Raju.

On a standalone basis, the company has reported a net loss of Rs 325.9 crore for Q4, FY'11, while income from operations stood at Rs 1,277.7 crore during the period.

For the full year, the company posted a net loss of Rs 127.6 crore, as against Rs 71.2 crore in the previous year.

Income from operations also declined to Rs 4,776.1 crore during the year ended March 31, 2011, from Rs 5,100.5 crore in the same period last year.

Shares of Mahindra Satyam were trading at Rs 73.85 apiece on the BSE, down 3.78 per cent from their previous close.


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