‘Mahindra Satyam working to become US GAAP compliant again'

Mr Vasant Krishnan is one of the many Mahindra group insiders sent to set the troubled Satyam house in order after the financial crisis hit it. Vasant, as he is known among peers, has taken over as Mahindra Satyam's Chief Financial Officer from Mr Durgashankar, who moved back to the group corporate headquarters.

In an interview, he talks of the jobs on hand, challenges faced by the company and plans to become current according to US accounting standards. Excerpts.

You have taken over as CFO at a very important juncture as Mahindra Satyam settles legal issues and braces for merger with Tech Mahindra. What are your immediate challenges?

Most of the financial mess (created by Mr B Ramalinga Raju, the former Chairman) has been cleared up.

The first challenge I see is that we have to keep up the momentum achieved in the last two years.

We should be able to continue robustness, quality and timeliness of numbers. We should make continuous efforts to ensure that whatever happened to the company never happens again.

How are you going to achieve this?

We are attempting to strengthen the processes and systems. The company had a number of non-integrated systems that led to a situation where controls broke down. We need to maintain integrity of data and integrity of controls. This is the paramount duty as a CFO here.

Internally, we need to strengthen Management Information System. We were not able to focus on this for a while because the total attention of management was to make our financial reports current to clear the mess.

When are you planning to be US GAAP compliant again and report numbers according to IFRS in India?

We are no longer listed in the US. There is a process to become US GAAP compliant, to get current there.

We have to agree (upon the plan) with US market regulator SEC.

Once we are able to establish a framework, we will attempt to get current according to US GAAP. That is a stated objective. We will achieve this in due course. With regard to IFRS compliance, we will do it when that is made mandatory here.

What is your hedging strategy and how it is faring?

We are extremely cautious on this. We look at contracts ranging up to 18 months. The current level of hedge book stands at about $345 million.

EBIDTA margin, though improving, is still a cause of concern. How do you view this?

It is a journey undertaken two years ago. What is important is to see where we were then and where we are now. We are continuously taking a series of steps and this resulted in a series of improvement in top line and bottom line.

How is the merger plan taking shape?

We see a happy situation as Mahindra Satyam is strong in Enterprise applications while TechM is strong in network operations and security operations. There is a lot of opportunity we can go together.

Till such time when merger happens, both the companies are working on joint go-to-market strategies and virtual merger. We see increasing traction, going forward. This is increasing month by month. We are going to participate in much larger projects that we otherwise could not attempt to bag if we bid for them independently.

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