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| Tech Mahindra pushes up BT associates' profits by 33 mn pounds |
| Press Trust of India / London Jun 01, 2009, 15:59 IST |
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Indian IT firm Tech Mahindra contributed nearly 85 per cent to the total profit of British Telecom from associates and joint ventures in 2008-09.
British Telecom has a profit of 39 million pounds from its associates and JVs in FY'09, of which 33 million pounds were contributed by Tech Mahindra, in which the British telecom major has 34.5 per cent stake.
"Our share of the post tax profit (loss) from associates and joint ventures was a profit of 39 million pounds in 2009 (2008: 11 million pounds loss, 2007: 15 million pounds profit).
"Our most significant associate is Tech Mahindra Ltd, which contributed 33 million pounds of post tax profit in 2009 (2008: 11 million pounds loss, 2007: 21 million pounds profit)," BT has said in its annual report for the year ended March 31, 2009.
Interestingly, BT's loss from associates and joint ventures in 2008 was primarily due to Tech Mahindra's investment in global capabilities expansion.
"The loss in 2008 reflects Tech Mahindra's investment in the expansion of its global capabilities during the year," it said.
The telecom major noted that profits from associates and joint ventures in 2009 was mainly due to the focus on efficiency and cost.
In 2009, BT recorded a loss before taxation of 134 million pounds whereas the entity had a profit of 1.97 billion pounds in 2008.
During 2009, the telecom group purchased services worth 296 million pounds from Tech Mahindra.
"... The group purchased services in the normal course of business and on an arm’s length basis from its principal associate, Tech Mahindra Limited.
"The net value of services purchased was 296 million pounds (2008: 305 million pounds, 2007: 178 million pounds) and the amount outstanding and payable for services at March 31, 2009 was 89 million pounds (2008: 125 million pounds, 2007: 97 million pounds)," the annual report said.
According to the annual report, profit on the sale of associates stood at 9 million pounds and 22 million pounds in 2008 and 2007, respectively.
BT noted that in 2007, the 22 million pounds profits were mainly on account of the disposal of 6 per cent of the group's equity interest in Tech Mahindra.
Tech Mahindra recently acquired crisis-ridden Indian IT firm Satyam Computer Services.
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