A PROJECT REPORT ON WINDOW DRESSING OF SATYAM COMPANY

Submitted In Partial Fulfillment for The Award of degree of MASTER OF BUSINESS ADMINISTRATION

Submitted By :Chandrakant Jain MBA IInd Sem.

Submitted To :Mr. Deepak Khatri

2012-2013
INSTITUTE OF ENGINEERING & TECHANOLOGY ALWAR, RAJASTHAN

PREFACE

We investigate bank holding companies window dressing of quarter-end financial leverage through short-term borrowings, and the stock markets reaction around the public release of information that can be used to infer such window dressing. We find evidence of downward window dressing of repo and federal funds liabilities that appear material for a large fraction of the sample, particularly among the largest banks. Firms with greater financial leverage have more repo and federal funds liabilities in the makeup of their total liabilities and are more likely to engage in downward window dressing in these accounts. Finally, the stock market reacts negatively to information indicating greater downward window dressing in these accounts. The potential implications of our findings go beyond bank holding companies and the financial industry, and bear relevance to recent SEC deliberations regarding short-term borrowing disclosure regulations. Keywords: window dressing; financial leverage; short-term borrowing.

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ACKNOWLEDGEMENT
I express my sincere thanks to my project guide Mr. Deepak Khatri for guiding me right from the inception till the successful completion of the project. I sincerely acknowledge him for extending their valuable guidance, support for literature, critical review of project and the report and above all the moral support he provided to me with all stages of this project. I wish to express my appreciate to all those with whom I worked and whose thoughts and inspection contributed towards the completion of this project. I would like to thank the supporting staff members of Management Department, for their help and cooperative throughout our project. I am also very grateful to my Lect. for their valuable support and guidance. Last but not least I would like to thanks to my parents and friends who gave me valuable co-operation for completion of this project.

CHANDRAKANT JAIN MBA IInd Sem.

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DECLARATION
I CHANDRAKANT JAIN of IET College, Alwar hereby declares that this project work entitled WINDOW DRESSING OF SATYAM COMPANY is my work. This report neither full nor in part has ever been submitted for award of any other degree. I further declare that all the information and facts furnished in this project report are based on my intensive research and finding. They are first hand and original in nature. This information is not copied its my original project work.

CHANDRAKANT JAIN (MBA IInd Sem.)

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EXECUTIVE SUMMARY
The key construct in our study is the extent of bank window dressing. In concept, window dressing is a short-term deviation of a financial variable from its longer term level. Accordingly, any empirical measure of window dressing must measure both the deviation and a proxy for the longer-term level. Given the limited literature that examines this behavior, relatively few empirical measures of window dressing have been offered. The primary empirical measure used in Allen and Saunders (1992) indicates upward window dressing of assets whenever end-of-quarter assets are greater than quarterly average assets.13 However, an upward growth trend in assets in the absence of asset window dressing would give the appearance of upward window dressing using that measure.14 Kotomin and Winters (2006) analyze changes in weekly aggregate assets and liabilities for a group of weekly reporting banks, and examines whether the changes are consistent with window dressing. However, that study does not attempt to define an empirical measure of window dressing, per se. Our empirical measure of window dressing is motivated by the logic used by the Federal Deposit Insurance Corporation to scrutinize banks' quarterly average financial values as reported on quarterly Call Reports.

TABLE OF CONTENTS
WINDOW DRESSING METHODS USED FOR WINDOW DRESSING THE SATYAM SCANDAL SATYAM SCANDAL SHOCKS INDIA WHY DO FIRMS 'WINDOW DRESS'? CONCLUSION BIBLIOGRAPHY 1-8 9-10 11-13 14-16 17-18 19 20

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