PROJECT REPORT ON FINANCIAL COMPARISON OF BSNL WITH OTHER MAJOR PLAYERS IN THE INDUSTRY A Report submitted in partial fulfillment

of requirements for Master in Business Administration, GGSIPU Training Period: June-July, 2009 Submitted By: PUNEET JAIN Enroll. No. 0821233908 Summer Training Project Report

UNDER THE GUIDANCE OF Internal Guide: Mrs. Haritika Chhatwal (Faculty) DIAS (GGSIPU) External Guide:Mr. Raj Pal Nanda C.A.O (NTR region) BSNL

DELHI INSTITUTE OF ADVANCE STUDIES (APPROVED BY AICTE, HRD MINISTRY, GOVT. OF INDIA) AFFILIATED TO GURU GOBIND SINGH INDRAPRASTHA U N IV E R SIT Y , D E L H I PLOT NUMBER- 6, SECTOR- 25, ROHINI, DELHI- 110085

STUDENT UNDERTAKING

I, Puneet Jain hereby declares that the project report “Financial comparison of BSNL with other Major players in telecom industry” assigned to me at BSNL during my training session for the partial fulfillment of MBA degree from DELHI INSTITUTE OF ADVANCE STUDIES, affiliated to IP UNIVERSITY is the original work of me and the information provided by me is authentic and true to the best of my knowledge.

This project work has not been submitted by anyone to any other institution or university for the award of MBA or any other degree.

PUNEET JAIN
(MBA III SEMESTER)

Acknowledgement
The success of any project study depends upon a number of factors among which the proper guidance from the experts in the industry and a faculty plays an important role.

I take this opportunity to convey my sincere thanks and gratitude to all those who have directly or indirectly helped and contributed towards the completion of this project.

I take here a great opportunity to express my sincere and deep sense of gratitude to Lecturer Mrs. Hartika Chhatwal , for giving us an opportunity to work on this project. The support & guidance from madam, was of great help & it was extremely valuable. I would like to express my gratitude to madam for her constant support and encouragement.

I take this platform to convey my gratitude to the officials of BSNL for their prompt response and guidance. I would like to express my gratitude to Mr. Raj Pal Nanda (Chief Accounts Officer, TR Section, Finance) for his constant support and encouragement. Without his outright support and prompt response, it would not be possible to do any justice as well as bring authenticity to the project.

Puneet Jain

Hence it have been advised for the company to use cost cutting like voluntary retirement of useless chunk employees as it is having highest no. of useless employees and having golden handshake with the highly intellectual professionals in the industry especially form Bharti Airtel. . it is high time for the company to take some strict measure to meet the intense competitive industry. Company’s performance have been deteriorated over the years and if the trend remains continue than it have been projected that company will have to suffer net losses in the upcoming year 2009-10. Similarly various other recommendations have been given in the project. Then data of all these companies are arranged in the uniform manner so that financial factors can be drawn out easily. After a thorough study and discussion with the company’s professional. all the relevant ratios of each and every company for past five years have been founded. Idea. and BSNL. With the help of theoretical knowledge on the part of ratios and cash flow. This report examines the analysis of the statement like Balance sheets and Profit and Loss A/c of past five years to know the performance of the company in comparison with other players in the industry. comments were taken so that Interpretation of these ratios became easy and accurate. With the help of regression analysis projected performance of various companies for 2009-10 have been forecasted. Eastern Court. it can be concluded that despite of having good liquid assets BSNL is having weak financial position as compared to any other private player in the industry. TATA and MTNL is searched on their websites. After analyzing the project.Executive Summary This is a brief report of eight weeks Summer Internship project titled “Financial Comparison of BSNL with Other major players in Telecom Industry” conducted in Northern Telecom Region. So. Data of BSNL is collected from the company’s annual reports and the data of other players like Airtel.

3.4 Accounting Policies of 2.2.3 Tools of Financial Analysis 4.2 Parties Interested 4.8 HFCL Infotel Literature Review Conceptual Framework 4.1 Research Design 1.3 Vodafone 2.1 Ratio Analysis 4.4 Idea Cellular 2.1 Current Ratio 5.3.3.3.3.2.1 Bharti Airtel 2.3 Competitors Profile 2.7 BPL Mobile 2.1 Objectives of Study 1.2 Reliance Comm 2.2 ResearchMethodology 1.2 Basic Service offered 2.2 Earning Per Share 5.3 Organisation Structure 2.3 Debtor Turnover Ratio Chapter 2 Chapter 3 Chapter 4 Chapter 5 .3.3.3.2.1 Essentials of Financial Statement 4.6 MTNL 2.1 Board of Directors 2.1 Industry Profile 2.2.3.2.2 Cash Flow Statements Finding And Analysis 5.2 Company Profile (BSNL) 2.2 Data collection Company Profile 2. No. Chapter 1 Particulars Research Study 1.3.2.5 Aircel 2.TABLE OF CONTENT S.

8.8.2 Net Cash Used in Investing Activities 5.1 Net Cash From operating Activities 5.7 5.4 5.8.3 Net Cash Used in Financing Activities Chapter 6 Conclusion 6.5.6 5.5 5.2 Suggestions Limitations Bibliography Annexure BSNL P&L (5 Years) BSNL Balance Sheet (5 Years) BSNL Cash Flows (5 Years) Bharti Airtel Balance Sheet (5 Years) Bharti Airtel P&L (5 Years) Bharti Airtel Cash Flows (5 Years) MTNL Balance Sheet (4 Years) MTNL P&L (4 Years) MTNL Cash Flows (4 Years) Idea Balance Sheet (4 Years) Idea P&L (4 Years) Idea Cash Flows (3 Years) Tata Comm P&L (5 Years) Tata Comm Balance Sheet (5 Years) Tata Comm Cash Flows (5 Years) Miscellaneous Chapter 7 Chapter 8 Chapter 9 Chapter 10 .1 Conclusion 6.8 Debt Equity Ratio Return on Capital Employed Price Earning Ratio Net Profit Margin Ratio Analysis of Cash Flows 5.

Chapter 1 RESEARCH STUDY .

Intra firm Comparison: Ratio Analysis provides the data for inter-firm comparison as well as intra firm comparison. Ratios highlight the factors associated with successful and unsuccessful firms. They also reveal attractiveness and unattractiveness of the firm in the industry. Help in planning: Financial Analysis helps in planning and forecasting. 2. .1 OBJECTIVES OF THE STUDY The basic objective of doing the project is to : Analyze the financial statements of past 5 years of BSNL and Other major competitors in the telecom industry. over-valued and under-valued firms. a firm or industry develops certain norms that indicate future success & failure. Describe the trends of various financial factors of BSNL over past 5 years. Over a period of time. Minor objectives are: 1. Know the Financial Position: The basic objective of studying the Financial statements of the company is to know the financial position of the company. Predict the performance in next year (2009-10) on the basis of last 5 year performance. Inter.1. 3. Studying the relationship among the various financial factors as disclosed in the financial statements of various companies in the Indian telecomm Industry.

These are as follows: . Research is a diligent and systematic inquiry or investigation into a subject in order to discover or revise facts. In the present project report type of research conducted is Quantitative research. applications etc. Research Methodology is the way how we conduct our research. Exploratory research is undertaken which involves extensive scanning of secondary data. The best websites are considered which gives all the efficient and effective information.2. For my project most of the finance related books have been considered . References for the project are from the websites and books and the company’s annual reports. from where and how it has been collected. theories. Methodology is system of methods followed by particular discipline.. It is assured that the project has been completed with full dedication.2 RESEARCH METHODOLOGY Methodology is the basic framework and the approach that has to be followed to carry out the approach used to collect the data.e. Thus. the sources of primary data. i. sincerity and required intensity of hard work.1 RESEARCH DESIGN It helps to tackle the problem of bringing various phases of research under control. 1.1. The research design helps to design the decision with respect to: • • • • • • What type of data is needed? From where data can be found? What period of time study include? How much material will be needed? What technique of gathering data will be adopted? How will data be analyzed? Generally three types of research are included in research design.

2006-07.2. (b) Annual reports provided by BSNL.Companies which are taken as a sample of Indian Telecom Industry is based on the market share. . 2005-06.2 from the Top five companies and 2 from the Bottom five companies (Ratings have been provided to 10 companies in the telecom industry according to their respective market share )have been considered for comparison with BSNL. 2007-08. 2008-09.2 DATA COLLECTION Sources of secondary data are (a) Authenticated company’s website on Internet. This research focuses on discovery of insights and relationships among various financial factors among various companies.Exploratory research Descriptive and diagnostic research Experimental research In the present project report both primary and secondary data is taken so descriptive and exploratory research is done.Bharti Airtel and MTNL of financial year 2004-05. 1.

Chapter 2 COMPANY PROFILE .

2.1

INDUSTRY PROFILE

Today the Indian telecommunications network with over 375 Million subscribers is second largest network in the world after China. India is also the fastest growing telecom market in the world with an addition of 9- 10 million monthly subscribers. The teledensity of the Country has increased from 18% in 2006 to 33% in December 2008, showing a stupendous annual growth of about 50%, one of the highest in any sector of the Indian Economy. The Department of Telecommunications has been able to provide state of the art world-class infrastructure at globally competitive tariffs and reduce the digital divide by extending connectivity to the unconnected areas. India has emerged as a major base for the telecom industry worldwide. Thus Indian telecom sector has come a long way in achieving its dream of providing affordable and effective communication facilities to Indian citizens. As a result common man today has access to this most needed facility. The reform measures coupled with the proactive policies of the Department of Telecommunications have resulted in an unprecedented growth of the telecom sector.

The thrust areas presently are: 1. Building a modern and efficient infrastructure ensuring greater competitive environment 2. With equal opportunities and level playing field for all stakeholders. 3. Strengthening research and development for manufacturing, value added services. 4. Efficient and transparent spectrum management 5. To accelerate broadband penetration 6. Universal service to all uncovered areas including rural areas. 7. Enabling Indian telecom companies to become global players.

Recent things to watch in Indian telecom sector are: 1. 3G and BWA auctions 2. MVNO 3. Mobile Number Portability 4. New Policy for Value Added Services

5. Market dynamics once the recently licensed new telecom operators start rolling out 6. Services. 7. Increased thrust on telecom equipment manufacturing and exports. 8. Reduction in Mobile Termination Charges as the cost per line has substantially reduced 9. Due to technological advancement and increase in traffic.

India's telecom sector has shown massive upsurge in the recent years in all respects of industrial growth. From the status of state monopoly with very limited growth, it has grown in to the level of an industry. Telephone, whether fixed landline or mobile, is an essential necessity for the people of India. This changing phase was possible with the economic development that followed the process of structuring the economy in the capitalistic pattern. Removal of restrictions on foreign capital investment and industrial de-licensing resulted in fast growth of this sector. At present the country's telecom industry has achieved a growth rate of 14 per cent. Till 2000, though cellular phone companies were present, fixed landlines were popular in most parts of the country, with government of India setting up the Telecom Regulatory Authority of India, and measures to allow new players country, the featured products in the segment came in to prominence. Today the industry offers services such as fixed landlines, WLL, GSM mobiles, CDMA and IP services to customers. Increasing competition among players allowed the prices drastically down by making the mobile facility accessible to the urban middle class population, and to a great extend in the rural areas. Even for small shopkeepers and factory workers a phone connection is not an unreachable luxury. Major players in the sector are BSNL, MTNL, Bharti Teleservices, Hutchison Essar, BPL, Tata, Idea, etc. With the growth of telecom services, telecom equipment and accessories manufacturing has also grown in a big way.

Indian Telecom sector, like any other industrial sector in the country, has gone through many phases of growth and diversification. Starting from telegraphic and telephonic systems in the 19th century, the field of telephonic communication has now expanded to

make use of advanced technologies like GSM, CDMA, and WLL to the great 3G Technology in mobile phones. Day by day, both the Public Players and the Private Players are putting in their resources and efforts to improve the telecommunication technology so as to give the maximum to their customers.

TELECOM SUBSCRIBER BASE IN INDIA
Indian telecommunication Industry is one of the fastest growing telecom market in the world. The mobile sector has grown from around 10 million subscribers in 2002 to reach 150 million by early 2007 registering an average growth of over 90%. The two major reasons that have fuelled this growth are low tariffs coupled with falling handset prices.

Surprisingly, CDMA market has increased it market share upto 30% thanks to Reliance Communication. However, across the globe, CDMA has been loosing out numbers to popular GSM technology, contrary to the scenario in India.

The other reason that has tremendously helped the telecom Industry is the regulatory changes and reforms that have been pushed for last 10 years by successive Indian governments. According to Telecom Regulatory Authority of India (TRAI) the rate of market expansion would increase with further regulatory and structural reforms. Even though the fixed line market share has been dropping consistently, the overall (fixed and mobile) subscribers have risen to more than 200 million by first quarter of 2007. The telecom reforms have allowed the foreign telecommunication companies to enter Indian market which has still got huge potential. International telecom companies like Vodafone have made entry into Indian market in a big way. Currently the Indian Telecommunication market is valued at around $100 billion (Rupees 400,000 crore). Two telecom players dominate this market - Bharti Airtel with 27% market share and Reliance Communication with 20% along with other players like BSNL

(Bharat Sanchar Nigam Limited) and AT&T. the scope for growth in this Industry is unprecedented.9%. India’s rural telephone density has been languishing at around 1. So. a very healthy net addition rate infact. The Ministry of Communications and Information Technology (MCIT) is has very aggressive plans to increase the pace of growth. However the recent regulatory developments are seem to be negative for the telecom companies as it will increase the number operators per circle which will intensify competition. Most of the expansion in subscribers is set to occur in rural India. The sector provides very strong revenue as well as earnings visibility over the next 12 months. All the private operators GSM as well as the CDMA operators have been very consistent in their performance. India’s move into high-speed broadband Internet access has been distinctly slow. Despite this surge. The subscriber addition rate has been strong in the last 12 months but the regulatory developments will increase competition and thus curtail the long-term growth rates of individual companies.2%. The Telecommunications sector has been consistently adding more than 7 million subscribers for the last 6 months. The savings through the setting of tower companies will partly go towards the higher capex and opex costs from more stringent spectrum allocation norms for the incumbents. . targeting 250 million telephone subscribers by end-2007 and 500 million by 2010. Despite the manner in which the country’s Internet market has been booming. And. still in itself comparatively low. while there appears to be considerable enthusiasm amongst the population for the Internet itself. broadband penetration in India still remains around only 0. One segment of the market that has been puzzling is broadband Internet. In 2006 India witnessed a good surge in broadband users with the total subscriber base in the country expanding by almost 200% to just over 2 million by years end. if 70% of total population is rural. broadband services still account for only 25% of the total Internet subscriber base. this has not been reflected in broadband subscription numbers.

PSU Operators Subscriber Base Private Operators Subscribers Base .

The company offers vide ranging & most transparent tariff schemes designed to suite every customer. is World's 7th largest Telecommunications Company providing comprehensive range of telecom services in India: Wireline. Internet.1 Million GSM Capacity. GSM Mobile. That means that almost every fourth mobile user in the country has a BSNL connection. In basic services. Carrier service. CellOne. 4 million WLL capacity. 18000 BTS. formed in October. Broadband. BSNL is numero uno operator of India in all services in its license area. MPLS-VPN. more than 37382 fixed exchanges.2. 480196 Rkm of OFC Cable. VSAT. 287 Satellite Stations. Within a span of five years it has become one of the largest public sector unit in India. 2000. CDMA mobile. 63730 Rkm of Microwave Network connecting 602 Districts.3 million line basic telephone capacity. In fact there is no telecom operator in the country to beat its reach with its wide network giving services in every nook & corner of country and operates across India except Delhi & Mumbai. VoIP services. 20.8 million cellular customers. has more than 17. making focused efforts and planned initiatives to bridge the Rural-Urban Digital Divide ICT sector. IN Services etc. 7330 cities/towns and 5. It has about 47. BSNL is miles . BSNL is the only service provider. garnering 24 percent of all mobile users as its subscribers.5 Lakhs villages. BSNL cellular service.2 COMPANY PROFILE BSNL( BHARAT SANCHAR NIGAM LIMITED) Bharat Sanchar Nigam Ltd.

data and video through the same Backbone and Broadband Access Network.ahead of its rivals. Human Resource (HR). Board of Directors Shri Kuldeep Goyal Shri S. Consumer Fixed Access. Leased Line.Enterprise Director (HR) Govt. with 35. BSNL has set up a world class multi-gigabit. BSNL has been adjudged as the NUMBER ONE ISP in the country.S.Aggarwal Shri Rajendra Singh Shri Gopal Das Shri J.e. DIAS. Dial-up. Consumer Mobility. Finance.A. Account Less Internet (CLI). BSNL has more than 2.2.Deepak (I. There are five other Directors in the full Board of BSNL. multi-protocol convergent IP infrastructure that provides convergent services like voice.K. 85 per cent share of the subscriber base and 92 percent share in revenue terms. Enterprise. 2. At present there are 0.) Director .6 million DataOne broadband customers.5 million Internet Customers who access Internet through various modes viz. who manage the entire gamut of BSNL operations. Saxena Shri Rajesh Wadhwa Designation CMD Director (Finance) Director (CFA) Shri R. Director Consumer Fixed Access .D.S.1 BOARD OF DIRECTORS Corporate structure of BSNL Board consists of CMD & Five full time Directors.Consumer Mobility (CM) Director .1 million Basic Phone subscribers i.5 million WLL subscribers and 2.

If you desire to make outgoing calls. ISDN: Integrated Service Digital Network Service of BSNL utilizes a unique digital network providing high speed and high quality voice.Tele-voting . Intelligent Network Service: Intelligent Network Service (In service) offers various value-added services such as: .2 Basic Services offered by the BSNL The Basic telephone Services offered by the BSNL are: 1. 3. Sulabh: It is the best available incoming-only plan. BSNL brings you Sulabh Plan.India Telephone Card (Prepaid Card) . 2. data and image transfer over the same line.Virtual Private Network (VPN) . this facility can also be given separately (or one can also use ITC Cards with Sulabh Plan). It can facilitate both desktop video & high quality video conferencing. These plans are now very popular. the countrywide Internet Services of BSNL includes Internet dial up/Leased Access service.2.Universal Access Number (UAN) 4.Premium Rate Service (PRM) . for web browsing and E-mail Applications. If anyone require the landline b-fone predominantly for receiving incoming calls only.2. .Free Phone Services (FPH) . Internet: Keeping the global network networked. The rentals in this plan are extremely low.Account Card Calling (ACC) .

Internet Service Provider.5. There is no Telephone copper wire connection as in the conventional telephone. WLL (Wireless Land Line): There are two versions of WLL. this is the most reliable and affordable service giving one’s the best of both fixed line & mobile telephone. provides Internet service throughout the country (except Delhi and Mumbai). Subscriber can carry a small handset of CDMA technology. 7. This ambitious service uses state-of-the-art GSM technology to attain global excellence and leadership. This card is a prepaid Internet Access Card. BSNL Broadband: The Broadband service from BSNL is widely used by almost all the companies of India. Mobile Services: BSNL’s Cellular Service is the India’s growing Cellular Service. India’s no. 8. There is no antenna or any other equipment at your premises. BSNL Internet Service: BSNL. These are explained as follows: - WLL Fixed (FWT): It is the Fixed Wireless Transmission. Sancharnet Card: BSNL has also launched Internet Card.07 crores Cellular customers. there is a small box fitted with a small antenna at one’s premises and a normal telephone instrument is connected to the box. Branded as Tarang. Customers have respond tremendous faith in BSNL and it has enrolled over 1. BSNL’s Cellular Service has taken the cellular telephone to the masses through innovative technology and strategic pricing. . In this case.1. - WLL Mobile: In this case. BSNL’s entry into this sector has brought GSM cellular service at an affordable cost to the common man. 6.

3 Organizational Structure of BSNL .2.2.

2.2. Accordingly. Prepaid Calling Cards. to the extent considered necessary by the management. d) Sale proceeds of scrap arising from maintenance and project works are taken into miscellaneous income in the year of sale. e) Income from SIMs. . the charges for telecommunication services and other infrastructural services provided by BSNL to DoT are neither being billed nor provided for. Provision is made in respect of bills considered to be disputed (by the management). REVENUE RECOGNITION Income from services is accounted for on accrual basis and in conformity with Accounting Standard– 9 of ICAI. b) Installation Charges recovered from subscribers at the time of new telephone connections are recognized as income in the first year of the billing.4 ACCOUNTING POLICIES OF BSNL 1. recharge coupons of Mobile. c) In terms of an arrangement between the Department of Telecommunications (“DoT”) and the Company. debts outstanding for more than two years and for debts due for less than 2 years. Unbilled revenues from the billing date to the end of the year are recorded as accrued revenue during the period in which the services are provided. 2. and Prepaid internet connection cards are treated as income of the year in which the payment is received since the extent of use of these cards within the financial year could not be ascertained. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements of Bharat Sanchar Nigam Limited(BSNL) are prepared under the historical cost convention adopting the accrual method of accounting in accordance with Indian Generally Accepted Accounting Principles and in accordance with the provisions of the Companies Act. 1956 (the “Act”). a) Revenue for all services is recognized when earned and are realizable at the time of billing.

3. 3. wherever applicable. Accordingly depreciation is charged uniformly. 3.5Cables are capitalized as and when ready for connection to the main system.00. 5. 2. FIXED ASSETS 3.4 The cost of stores and materials at the time of issue to a project is debited to CWIP. it results in enhancement of revenue generating capacity.1 Fixed assets are carried at cost less depreciation. 3.. Similarly. directly identifiable to the construction or creation of the assets. claims on Government Departments & local authorities etc. in the opinion of the management. equipments. Assets costing up to Rs. DEPRECIATION/AMORTIZATION Depreciation is provided based on the Written Down Value Method at the rates prescribed in Schedule XIV to the Companies Act. 3.f) Wherever there is uncertainty in realization of income. these are recognized on collection basis.6Intangible assets are stated at cost of acquiring the same less accumulated depreciation /amortization. such as liquidated damages. Cost includes directly related establishment and other expenses including employee remuneration and benefits. 1956 except for Subscriber Installation.3 Assets are capitalized to the extent completion certificates have been obtained. The Subscriber Installation is depreciated over the useful life of 5 years on Written Down Value method. 4. instruments and rehabilitation works is capitalized if. All telephone exchange buildings.000 are depreciated fully in the year of purchase. The depreciation on machinery & tools used both for project and maintenance work is charged to profit and loss account instead of capitalization.000 are depreciated fully in the year of construction. 3. Intangible assets such as Entry License Fee for Telecom Service operations are amortized over the license .2 Expenditure on replacement of assets. partition works costing up to Rs. administrative offices and captive consumption assembling premises/workshops are considered as normal building and not as factory building.

INVENTORIES Inventories are valued at cost or net realizable value as the case may be . which are impaired by disuse or obsolescence. it is more likely than not that an outflow of resources will be required to settle the obligation. obsolete/non moving inventories are valued at net realizable value. due to the difference between their net carrying cost and the net realizable value. 6. In accordance with the AS-22. . TAXES ON INCOME Taxes on Income for the current period are determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act. 5.cost ascertained generally on weighted average method. and the amount has been reliably estimated. after providing for any diminution in value. 20 years) and standalone computer software applications are amortized over the license period subject to maximum of 10 years as per straight line method. 9. if any. IMPAIRMENT OF ASSETS Assets. 7.e. if such diminution is of a permanent nature. INVESTMENTS Long-term investments are carried at cost. 1961. PROVISIONS Provisions are recognized when the Company has a present obligation as a result of past events. 8. Deferred Tax Assets are recognized and carried forward to the extent there is a virtual certainty that such deferred tax assets can be realized.period (i. are segregated from the concerned assets category and shown as ‘Decommissioned Assets’ and provision made for the loss. Deferred Tax Liability is recognized on the timing differences between accounting income and the taxable income for the period taking into consideration the contents of Accounting Standard Interpretations 3 and quantified using the tax rates in force or substantively enacted as on the Balance Sheet date.

. The number of shares used in computing Basic & Diluted EPS is the weighted average number of shares outstanding during the year. EARNING PER SHARE Earning Per Share ("EPS") comprises the Net Profit after tax (excluding extraordinary income net of tax). 11. though contingent. Other contingent liabilities and claims. are disclosed by way of notes.10. not acknowledged as debts. are provided for if there are reasonable chances of maturing such liabilities as per management. CONTINGENT LIABILITIES Liabilities.

2. Idea Cellular + Spice . 2009 are: 1. BSNL 5. Reliance Communications Ltd. on the basis of ‘Market Share’ as on 31st January. 2. Vodafone Essar Ltd. Bharti Airtel Ltd. 4.3 COMPETITOR PROFILE Market Share of Telecom Companies as on 31st Jan’09 TOP FIVE COMPANIES The Top five companies. 3.

270.3.Mobile Services. of whom 85. based on the number of subscribers as of December 31. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 95 cities and has recently launched India's best Direct-to-Home (DTH) service. Bharti Airtel is the largest wireless service provider in the country. Airtel Telemedia Services & Enterprise Services.619.1 BHARTI AIRTEL LTD. Airtel comes from Bharti Airtel Limited. They also offer an integrated suite of telecom solutions to their enterprise customers. . Bharti Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The company served an aggregate of 88. 2008. in addition to providing long distance connectivity both nationally and internationally.194 customers as of December 31. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. Airtel digital TV. Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. All these services are rendered under a unified brand "Airtel". 2008. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) .733 subscribed to GSM services and 2. The Bharti Group has a diverse business portfolio and has created global brands in the telecommunication sector. India’s largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. They have recently forayed into media by launching their DTH and IPTV Services.461 use the Telemedia Services either for voice and/or broadband access delivered through DSL.650. All these services are provided under the Airtel brand.2.

2.3.2 RELIANCE COMMUNICATIONS LTD.
Reliance Communications is the flagship company of the Anil Dhirubhai Ambani Group (ADAG) of companies. Listed on the National Stock Exchange and the Bombay Stock Exchange, it is India’s leading integrated telecommunication company with over 71 million customers.

Their business encompasses a complete range of telecom services covering mobile and fixed line telephony. It includes broadband, national and international long distance services and data services along with an exhaustive range of value-added services and applications. Our constant endeavour is to achieve customer delight by enhancing the productivity of the enterprises and individuals we serve.

Reliance Mobile (formerly Reliance India Mobile), launched on 28 December 2002, coinciding with the joyous occasion of the late Dhirubhai Ambani’s 70th birthday, was among the initial initiatives of Reliance Communications. It marked the auspicious beginning of Dhirubhai’s dream of ushering in a digital revolution in India. Today, the company can proudly claim that they were instrumental in harnessing the true power of information and communication, by bestowing it in the hands of the common man at affordable rates.

They endeavour to further extend their efforts beyond the traditional value chain by developing and deploying complete telecom solutions for the entire spectrum of society. It was established in the year 2004 as Reliance Infrastructure Developers Private Limited, Reliance Communications started laying 60,000 route kilometers of a pan-India fibre optic backbone with high capacity, integrated (wireless and wireline), convergent (voice, data and video) digital network and to offer services spanning the entire infocomm value chain. It is capable of delivering a range of services spanning the entire infocomm (information and communication) value chain, including infrastructure and services for enterprises as well as individuals, applications, and consulting.

2.3.3 VODAFONE ESSAR LTD.
Vodafone Essar in India is a subsidiary of Vodafone Group Plc and commenced operations in 1994 when its predecessor Hutchison Telecom acquired the cellular license for Mumbai. Vodafone Essar now has operations in 22 circles with over 65.92 million customers**. The company is a joint venture of Essar Communication Holdings Ltd and the UK-based Vodafone Group. Vodafone has partnered with the Essar Group as their principal joint venture partner for the Indian market. They are in the business of cellular telephony. Over the years, Vodafone Essar, under the Hutch brand, has been named the ‘Most Respected Telecom Company’, the ‘Best Mobile Service in the country’ and the ‘Most Creative and Most Effective Advertiser of the Year’.

Vodafone is the world’s leading international mobile communications company. It currently has equity interests in 27 countries across 5 continents and 40 partner networks with over 289 million proportionate customers worldwide. Vodafone has partnered with the Essar Group as its principal joint venture partner for the Indian market.

Essar Global Limited (EGL) is a diversified business group spanning the manufacturing and services sectors of Steel, Energy, Power, Communications, Shipping & Logistics, and Projects. The group has operations and investments in India, Canada, USA, Africa, the Middle East, the Caribbean and South East Asia and employs 30,000 people worldwide.

Vodafone Essar Ltd provides services like 2G, which are based on 1800 Mhz and 900Mhz GSM digital technology. They offers voice and data services. In addition, they offers postpaid connections activation, prepaid SIM cards and recharge coupons sale, service activation/deactivation, postpaid tariff plan change, customer query resolution, prepaid/postpaid SIM card replacement and upgradation, mobile number change, and information on and subscription of value added services through stores.

**Figures from Cellular Operators Association of India, February 28, 2009

2.3.4 IDEA CELLULAR LTD. + SPICE
DEA Cellular is a publicly listed company, having listed on the Bombay Stock Exchange (BSE and the National Stock Exchange (NSE) in March 2007. Idea Cellular Ltd. is India's leading GSM mobile services operator. It has licenses to operate in 11 circles. The company has a customer base of over 17 million. It is the first cellular company to launch music messaging with Cellular Jockey, Background Tones, Group Talk, a voice portal with Say IDEA and a complete suite of mobile email Services.

A brand known for many firsts, Idea was the first to launch GPRS and EDGE in the country. Idea has received international recognition for its path-breaking innovations when it won the GSM Association Award for "Best Billing and Customer Care Solution" for 2 consecutive years.

IDEA Cellular is part of the Aditya Birla Group, India's first truly multinational corporation. The group operates in 25 countries, and is anchored by over 1,25,000 employees belonging to 25 nationalities.

The Indian telecommunications market for mobile services is divided into 22 "Service Areas" classified into "Metro", Category "A", Category "B" and Category "C" service areas by the Government of India. These classifications are based principally on a Service Area's revenue generating potential

Customer Service and Innovation are the drivers of this Cellular Brand. A brand known for their many firsts, IDEA is the only operator to launch General Packet Radio Service (GPRS) and EDGE in the country. IDEA has seen phenomenal growth since its inception, the company's footprint idea is to first achieve critical mass, then drill deep instead of spreading thin, however, does not increasing geographic footprint only, it also drills deep and successfully attempts to provide excellent network coverage in all its circles of operations.

Andhra Pradesh. Assam. with Maxis Communications holding a majority stake of 74%. 4. on the basis of ‘Market Share’ as on 31st January.BOTTOM FIVE COMPANIES The Bottom five companies. In December 2003. 5. + Dishnet 2. Mumbai (Metro). North East. Tamil Nadu. Govt. Himachal Pradesh. the company gained a foothold in 14 circles including Chennai. Orissa. Aircel commenced operations in 1999 and became the leading mobile operator in Tamil Nadu within 18 months. HFCL Infotel Ltd. Karnataka and Delhi. BPL Mobile Communications Ltd.5 AIRCEL + DISHNET The Aircel Group is a joint venture between Maxis Communications Berhad of Malaysia and Apollo Hospital Enterprise Ltd of India. Till today. 2. Mahanagar Telephone Nigam Ltd. it launched commercially in Chennai and quickly established itself as a market leader – a position it has held since. Andhra Pradesh. The Company has currently gained a momentum in the space of telecom in India post the allocation of additional spectrum by the Department of Telecom. of India for 13 new circles across India. Jammu & Kashmir. . Kerala. Aircel Cellular Ltd. Kolkata. Aircel began its outward expansion in 2005 and met with unprecedented success in the Eastern frontier circles. These include Delhi (Metro). (MTNL) 3. West Bengal.3. 2009 are: 1. Shyam Telecom Ltd. Bihar. It emerged a market leader in Assam and in the North Eastern provinces within 18 months of operations.

MTNL as a company. has revved up plans to become a full-fledged national operator by end of 2009. Maharashtra & Goa.Gujarat. grew rapidly by modernizing the network. Additionally. The Company providing various types of telecommunication services including Telephone. Kerala. Delhi (the political capital) and Mumbai (the business capital of India). the fastest growing telecom company in India. wireless. Madhya Pradesh.6 MTNL Mahanagar Telephone Nigam Limited (MTNL) was set up in 1st April of the year 1986 by the Government of India to upgrade the quality of telecom services. expand the telecom network. incorporating the State-of-the-art technologies and a customer friendly approach. data communication. UP (West) and UP (East). telex. Karnataka. Aircel.net recognized Aircel as the best regional operator in 2008. over last nineteen years. The company has also been in the forefront of technology induction by converting 100% of its telephone exchange network into the state-of-the-art digital mode. First digital exchange world technology brought to India by the company during the year . Voice and Data gave Aircel the highest rating for overall customer satisfaction and network quality in 2006. Tele. Punjab. Haryana. 2. Rajasthan. telematic and other like forms of communication (Internet). Aircel emerged as the top mid-size utility company in Business world’s ‘List of Best Mid-Size Companies’ in 2007.3. Aircel has won many awards and recognitions. introduce new services and to raise revenue for telecom development needs of India's key metros. With over 16 million customers in the country.

MTNL bagged the award for excellence in cost reduction in the year 2004. . The Company introduced the broadband services under the brand name of 'TRI BAND' during the year 2005. During the year 1999. MTNL had introduced the Integrated Services Digital Network (ISDN) services in the period of 1996. the extreme level of information exchange. The Company has restructured Millennium Telecom Ltd (MTL) as a Joint Venture company of MTNL and BSNL with 51% and 49% equity participation respectively. the company partaking its all efforts in the same business area and MTNL wants to become a global player. To remain market leader in providing world class Telecom and IT related services at affordable prices. Phone Plus services was offered by the company in the year 1988. MTNL-STPI IT Services Ltd is a 50:50 Joint Venture between Software Technology Parks of India (STPI) and the company. Apart from this IVRS (Interactive Voice Response System) like local assistance changed number information. the company introduced Voice Mail Service. State of the art training centre of the company 'CETTM' was commissioned in the year of 2004. the company launched GSM Cellular Mobile service under the brand name Dolphin and in the same year MTNL also launched Wireless in Local Loop (WLL) Mobile services under the brand name Garuda. it gives multiplied benefits to telephone users. also find a place in the Fortune 500' companies. MTNL brought in the most widely using service called Internet (Network of Networks). and fault booking system ensuring round the clock service. During the year 2001. To facilitate the clientele. MTNL launched the country's first toll-free service in Delhi in the period of 1998. During the year 1992. a CD-ROM version of the telephone directory and an on-line directory enquiry through PC was introduced during the year 1997.1986. The Company established Wi-Fi & digital certification services in the identical year.

BPL Mobile Communications Limited popularly known as BPL Mobile is an India-based telecommunication service providing company. heads this leading telecommunication company of India. Camel Phase 2 Intelligent Network (IN) platform and GPRS facilitating ultra modern services like Multimedia Messaging Services (MMS). through the use of state-of-the-art technology and network and this includes use of unique network design. the Qualnet. Within a short span of time the subscriber base of BPL Mobile Communications Limited has reached the 1 million mark. This gigantic mobile telecommunication company of India has grown in leaps and bounds and it offers seamless service to its customers spread across Mumbai. voice quality etc and was thus ranked first in the category of Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA) of mobile service providers.7 BPL MOBILE COMMUNICATIONS LTD. Further.2.3. BPL Mobile Communications Limited has revolutionized the Indian mobile telecommunication industry. billing performance. BPL Mobile Communications Limited was established in the year 1995 and it is presently operating in only in the city of Mumbai. The products and services offered by BPL Mobile Communications Limited are as follows • Prepaid Connections . it ranks very high on parameters like. BPL Mobile offers high-class mobile service to its wide pool of Mumbai subscribers. BPL Mobile Communications Limited provides its customers with world class mobile services. BPL Mobile Communications Limited is an offshoot of the legendary business conglomerate ESSAR group. Mr. CEO of the company. Further. S. Subramaniam. mobile browsing and Java based mobile phone games. customer satisfaction. BPL Mobile has gained tremendous popularity due to its competitive pricing of tariffs. Superior coverage and optimum sound clarity are the strengths of BPL Mobile. operating in Mumbai.

ITI's business activities include sugar. lease financing and investments. ITI has invested 55% of its capital in ITI Pioneer .'94. petrochemicals. industrial alcohol. ITI Pioneer AMC has promoted Kothari Pioneer Mutual Fund.79 lac shares (premium: Rs 30) aggregating Rs 8. HFCL Infotel Ltd ('transferor Company') a telecommunication Company operating in the Punjab Circle merged with the Company through a Scheme of Amalgamation and decided to hive off the business of Hire Purchase. The company is mainly engaged in hire purchase. In Sep. Leasing and Securities Trading by way of an outright sale with effect from 1st September 2002 to its wholly owned subsidiary 'Rajam Finance & Investments Company (India) Ltd' now renamed as 'The Investment Trust of India Ltd' Other group companies are Kothari Sugars and Chemicals and Madras Safe Deposit. as part of Company's diversification and restructuring programme. During 2002-03 the name of the Company changed to HFCL Infotel Ltd. etc.8 HFCL INFOTEL LTD. Finance. Incorporated on 2 Aug.ITI Pioneer AMC and ITI Capital Markets. It has two subsidiaries -. to augment long-term working capital. firms as well as corporate bodies.'46. Its clients include individuals. The Investment Trust of India (ITI) is managed by chairman and managing director B K Kothari. it came out with a rights issue of 21.3.• • • • • • • Postpaid Connections Prepaid Recharge Coupons Bill Payments Value Added Services (VAS) Service Inquiries SIM Replacements Handset Sales 2.72 cr.

47 lacs subscribers in Punjab. US. During 2004-05. Broadband Internet Access and Data Networking Access are offered under the brand name 'CONNECT'. The Company launched its Prepaid Mobile product and a complete range of innovative value Added Services and Data products were launched in May 2004. The Company's services namely. The company is planning a venture into Video and Cable TV Services and making triple play services by an expansion into the neighbouring states of Punjab. by the introduction of DSL-high speed Internet product. During 2003-04. The Company expanded its services to 125 cities/towns with 2.AMC and the remaining 45% has been subscribed to by Pioneering Management Corporation. A wholly owned subsidiary. ITI Pioneer AMC Limited ceased to be a subsidiary of the company. Connect Broadband Services Limited was formed on July 2004. Mobile Telephoney. The company became the first service provider to have launched DSL services in the state of Punjab and Chandigarh. During 1995-96. . The Company’s holding in ITI Capital Market Ltd was sold to Kothari Pioneer AMC Ltd. During 1997-98. Fixed Line Telephoney. for the above purpose.

Chapter 3 LITERATURE REVIEW .

Hutch India” suggests that managers need to go beyond traditional approaches to serving the poor. and has provided has provided development support to other partners such as distributors. It also discusses a number of spillover effects for the rest of the economy and one of the more important effects is the potential to develop a major manufacturing hub in the country for telecom equipment and for downstream industries such as semiconductor devices. Narayana (2008) estimates the contribution of telecommunication (or telecom) services to aggregate economic growth in India. and has seen gaps in local infrastructure or missing services as potential opportunities rather than barriers to growth. Knowledge of policy determinants of demand of telecom services is shown to be essential to enhance growth contribution of telecom services. The company has seen the rural market as an opportunity – not just an obligation to be served because of universal service obligations. The benefits to the Indian economy from having both a strong services and manufacturing segments in the telecom sector cannot be undermined. The company has proactively established relationships with individual entrepreneurs. A beginning towards this has been made. no effort should be lost in strengthening the powers of the TRAI. . The company has recognized the value of leveraging existing local institutions. Estimated contribution is distinguished between public and private sectors to highlight the impact of telecom privatization on economic growth. price and income determinants of demand for telecom services are estimated by capacity of telephone exchanges. Operations Director. The telecom industry in India could slowly become an example of the service sector acting as a fillip to the growth of the manufacturing sector. in his single executive interview titled “Developing a route to market strategy for mobile communications in rural India An interview with Gurdeep Singh. Mani (2008) addresses a number of issues arising from the growth of telecom services in India since the mid-1990s. Success crucially depends on the response of the private sector to these incentives.Anderson (2008). His practical implication says that the experience of Hutchison Essar in India provides some important lessons for mobile network operators (MNOs) and other firms in other developing markets who are hoping to serve the rural poor: Hutchison has recognized the value of corporate and noncorporate partners. The formation of a Telecom Equipment Export Forum and the announcement of the Indian Semiconductor Policy 2007 are steps in this direction. Using a recent sample survey data from Karnataka State in South India. Uttar Pradesh. Given the importance that a regulatory agency can play in this crafting. and innovate by taking into account the unique institutional context of developing markets. Also this article demonstrates that MNOs can deliver availability and affordability to achieve increased individual or household penetration through business model innovation.

The article has also described the cause of being relatively safe of this industry. R. The study suggests that though there is no sign of slowdown in this sector. While the 3G / Broadband adoption would ensure long term growth momentum. substantially low tariffs & established brand/distribution. pricing pressure. rising affordability. declining handset/subscription costs. This is not favourable to long-term sustained growth of the telecom sector. which is basically fuelling the growth of the sector. high capital intensity & substantial regulatory uncertainties currently faced by the industry. Sharma (2009) deals with the major challenges faced by India’s telecom equipment manufacturing sector. which lags behind telecom services. has analysed Indian telecom industry and studied the sector keeping in mind three companies. but surely a strong turmoil is going on in the industry. 65% of the total consumption of equipment was met through imports. namely Bharti. . This trend has far-reaching implications for the economy and should not be allowed to continue for long. the study also cautions the telecom industry that a steeper economic slowdown could start impacting the subscriber usage patterns as well as operator capital investments & thereby could substantially restrict revenue growth rates going forward. The study states that the sector is fairly immune from the current economic downturn & does provide a good defensive bet in medium term. better quality doctoral education and incentives to entrepreneurs for start-ups in telecom equipment manufacturing. In 2006-07. the article has thoroughly investigated about the intense competitive scenario. The causes described by Shah are increasing rural coverage. Shah (February. wireless penetration is expected to increase in the near future. 2009).Comm and idea in the background of recent global meltdown. The country is also far behind in R&D spending when compared to other leading countries. In a country like India which has a problem of massive unemployment. However. the manufacturing sector should be promoted to create more employment opportunities. industry-academia-government partnership. Only 35% of the total demand for telecom equipment in the country is met by domestic production.Estimation results offer evidence for significant negative own price elasticity and positive income elasticity of demand for telecom services. India needs to see an increase in R&D investment. With the help of newer technologies.

Chapter 4 CONCEPTUAL FRAMEWORK .

Investors and Potential Investors 2. Government and its Agencies 6.Analysis of Financial Statements/Financial Analysis/Financial Statements Analysis Financial Statements are the summarized statements of accounting data produced at the end of the accounting process by an enterprise through which it communicates accounting information to the external users. government and their agencies. Stock Exchange . lenders. Accurate information 2. Creditors 3. Relevant 6.2 Parties interested in Financial Statements or Users of Financial Statements 1. Verifiable 5. Timeliness 4.1 Essentials of Financial Statements 1. Comparable 4. Analysis of Financial Statements is a systematic process of the critical examination of the financial information contained in the financial statements in order to understand and make decisions regarding the operations of the firm. The external users can be investors. Customers 4. public at large and employees. Customarily. Employees and Trade Unions 5. customers. Understandability 3. a set of financial statements include: (i) (ii) (iii) Balance Sheet Profit and Loss Account Schedules and notes forming part of the Balance Sheet and Profit & Loss Account 4. suppliers and trade creditors.

Profitability Ratios 4. This ability can be measured by Liquidity Ratios. Current Ratio and Quick Ratio are the two ratios which directly measure Liquidity. Ratios are classified as follows: 1. Ownership Ratios 1.1 RATIO ANALYSIS A Ratio gives the mathematical relationship between one variable and another. Current ratio = Current Assets Current Liabilities Current assets which are converted into cash within one year. Turnover Ratios 3.3. Liquidity Ratios 2.3 Tools of Analysis of Financial Statements Ratio Analysis Cash Flow Statements 4. IDEAL RATIO = 2:1 . Ratio analysis helps in valuing the firm in quantitative terms. Receivables turnover Ratio and Inventory Turnover Ratio are the two ratios which in directly measure Liquidity. A. Liquidity Ratios Liquidity implies firm’s ability to pay its debts in short run. Current liabilities are liabilities which are to be repaid within a period of 1 year.4.

Inventory Turnover Ratio = Cost of goods Sold Average Inventory It indicates no. of times stock has been turned into sales in a year Ideal Ratio = 8 Cost of goods sold = Sales – gross profit Opening Stock + Closing Stock 2 Stock Conversion Period = Cost of goods Sold * No of days in a year/Average Inventory Average Inventory = C. Quick liabilities are liabilities which have to be necessarily paid with in 1 year. Quick assets which can be converted into cash very quickly. Quick ratio or Liquid ratio or Acid Test ratio = Quick Assets/Liquid Assets Current Liabilities Quick Assets = Current Assets – Inventories. Turnover Ratios (Activity Ratios) A. IDEAL RATIO = 1:1 2.Prepaid expenses Ratio of quick assets to quick liabilities.B. Accounts Receivable Turnover ratio or Debtors Turnover Ratio = Net Credit Sales Average Accounts Receivables Average Accounts Receivables = Opening receivables + Closing receivables 2 It shows the Relationship between debtors and sales B. Creditors Turnover ratio = Net Credit Purchases Average Creditors .

financing. (ii) Net Profit Margin Ratio = Net Profit Net Sales It measures the overall efficiency of production. (i) (ii) (iii) Gross Profit Margin Ratio Net Profit Margin Ratio Return On Equity (i) Gross Profit Margin Ratio = Gross Profit Net Sales Gross Profit = Sales – Cost of goods sold Net Sales = Sales – Sales Return . Higher the ratio better will be the performance of the business. 4. Ownership Ratios Capital Structure Ratios a) Debt Equity Ratio = Debt Equity Long Term Liabilities + Current Liabilities Share Holders Funds = Ratio 2 or Less – Exposes Its Creditors Lesser Risk Ratio >2 – Exposes Its Creditors Higher Risk . Profitability or Efficiency Ratios These Ratios measure the efficiency of forms activities and its ability to generate profits.Excise Duty There is no Ideal Ratio. selling. administration.Average Creditors = Opening Creditors + Closing Creditors 2 Relation ship between Creditors and Purchases 3. pricing and tax management. It shows the result of overall operation of the firm.

Cash Flow Statement is classified under operating activities. . Its efficient management is crucial to the solvency of business because cash is the focal point of the fund flow in a business. and also referred to as the life blood of a business enterprise is of vital importance to the daily operation of business firms. Cash Flow Statement is prepared with an objective to highlight the sources and uses of cash and cash equivalents for a period. While the profits reflects the earning capacity of the company and cash reflects its liquidity position. Introduction of Cash Flow CASH FLOW is the movement of cash and its equivalents. It includes the inflow and the outflow of cash during a particular period. as reflected in the balance sheet of the company. investing activities and financing activities. the most liquid asset. ‘Cash’ refers to the cash as well as bank balance of the company to the end of the accounting period.2 CASH FLOW STATEMENT Introduction of Cash Cash.3. All transactions which lead to increase in cash and cash equivalents are classified as inflows of cash and all those transactions which lead to decrease in cash and cash equivalents are classified as outflows of cash.4.

Chapter 5 ANALYSIS AND INTERPRETATION .

No.47 1. 1 2 Telecom Players BSNL MTNL.34 1.25 1.29 1.69 0.98 1.47 2.37 1.70 0.45 2005-06 1.63 1.84 0.87 2007-08 2.1 CURRENT RATIO Projected S.74 2006-07 2.46 1.75 1.RATIO ANALYSIS 5.1 .43 2008-09 2009-10 2.21 3 4 5 2.34 1.35 1.19 0.57 0.44 0. TATA TELECOM BHARTI AIRTEL IDEA CELLULAR 2004-05 1.31 0.35 1.08 0.44 0.13 0.36 IDEAL RATIO = 2:1 Figure 5.47 0.

generally. bills payable. The idea of having double the current assets as compared to current liabilities is to provide for the delays and losses in the realization of current assets. inventories. A ratio equal to or near 2 : 1 is considered as a standard or normal or satisfactory. If a firm's current assets include debtors which are not recoverable or stocks which are slow-moving or obsolete. bills receivables. etc. . dividend payable. accrued expenses. Current assets include cash and those assets which can be easily converted into cash within a short period of time. work in progress. This is because of the reason that current ratio measures the quantity of the current assets and not the quality of the current assets. Firms having less than 2 : 1 ratio may be having a better liquidity than even firms having more than 2 : 1 ratio. However. An increase in the current ratio represents improvement in the liquidity position of the firm while a decrease in the current ratio represents that there has been a deterioration in the liquidity position of the firm. A relatively high current ratio is an indication that the firm is liquid and has the ability to pay its current obligations in time and when they become due. such as marketable securities or readily realizable investments. (excluding bad debts or provisions). short term advances. income tax payable. Prepaid expenses should also be included in current assets because they represent payments made in advance which will not have to be paid in near future.1 The two basic components of this ratio are current assets and current liabilities. the rule of 2 :1 should not be blindly used while making interpretation of the ratio. Current liabilities are those obligations which are payable within a short period of tie generally one year and include outstanding expenses. sundry creditors.Interpretation of figure 5. one year. bank overdraft. On the other hand. the current ratio may be high but it does not represent a good liquidity position. sundry debtors. etc. a relatively low current ratio represents that the liquidity position of the firm is not good and the firm shall not be able to pay its current liabilities in time without facing difficulties.

63. This means that the company is having fewer assets to cover the liability and also the investors should be weary of the fact that the company cannot pay off its short-term debt if necessary and hence company’s liquidity position is very bad as compared to any other telecom operator.75 in year 2004-05 to 2.35 is the actual of 2008-09 for the MTNL.Current Ratio of BSNL is increasing for each subsequent year i.37 is projected for 2009-10 and 1. This means that the company is having fewer assets to cover the liability and also the investors should be weary of the fact that the company cannot pay off its short-term debt if necessary Current Ratio of IDEA is declining over the period of time i. Conclusion From the above figure we can easily state that among all the telecom operator BSNL is having highest current ratio and it represent that BSNL is having very good liquidity and can pay off their short term liability very easily as they are marinating huge cash reserves.21 for the year 2009-10. This indicates that the company can successfully pay off its debt while at the same time still have cash left over to continue operating.e. Current Ratio of Bharti Airtel Ltd. This is also because of slow nature of Debt collection which makes company less liquid than what it looks like in the trend. .e. Their projected current ratio of the year 2009-10 is somewhat similar to the 2008-2009 i.e.69 for the year 2008-2009. 2.36 for the year 2008-2009 and projected to be reduced till 0.25 in 2008-09. is 0. Forecast on the basis of regression analysis for the year 2009-10 current ratio is 2. 1. from 1. The Current Ratio of MTNL and Tata Telecom is flatter over the subsequent year which means company is maintaining significant liquidity over the period of time.45in the year 2004-05 to .

08 2.68 32.94 4.15 5.44 21.2 Earning Per Share Projected S.44 6.79 3.662 5.96 1.46 10.1 15.1 40.54 6.96 1.65 15.03 7. 1 2 Telecom Players BSNL MTNL.53 0.45 18. No.809 49. TATA TELECOM BHARTI AIRTEL IDEA CELLULAR 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 15.27 1.4 16.9 3.44 3 4 5 Figure 5.83 10.28 9.05 26.129 10.62 0.5.56 14.21 16.2 .

EPS ratio calculated for a number of years indicates whether or not the earning power of the company has increased.e. This may be mainly because of decrease in income of services over the period of time.This is because of improvement of technology by the company over the years as compared to other players like BSNL which made the company to capture the market share of these companies who doesn’t go in tandem with the changing technology. EPS of majority of the company have been reduced significantly except Bharti Airtel and Idea Cellular. Market leaders of 2004-05 like BSNL and MTNL are having tough time because their market share as well as profit margins has been reduced over the period of time which leads to significant reduction in the earning power of the companies. 6. Conclusion From Earning per Share perspective Bharti Airtel is considered to be most attractive company as the company’s earning potential have been increased irrespective of the increase in competition in the Indian telecom market.2 The earnings per share is a good measure of profitability and when compared with EPS of similar companies. Earning Per Share of BSNL have been reduced from 15.79 (2008-09) and projected to be 49. . Decrease in income from services can be attributed to increase in competitive rivalry as various international players like Vodafone and Reliance came into the Indian market with improved technology and made tariff wars to attract the customers.15 (2008-09) and projected from the regression analysis that it will reduce in 2009-10 to 1. it gives a view of the comparative earnings or earnings power of the firm. EPS of Bharti Airtel have been increased significantly over the years i.Interpretation of Figure 5.53 (200405) to 40.65 (2004-05) to 1.08.662(2009-10).

12 12.365 3.74 2005-06 5. TATA TELECOM BHARTI AIRTEL IDEA CELLULAR 2004-05 5.28 38.89 2007-08 5.995 13.5. 1 2 Telecom Players BSNL MTNL.3 .31 35.105 3 4 5 Figure 5.28 2008-09 6.3 11.78 14.01 2006-07 6.92 4.29 6.95 3.25 12.355 2009-10 6.51 5.38 17.03 3.57 20.62 12.743 5.417 55.41 5.12 4.924 1.2 4.73 3.78 47.3 Debtor Turnover Ratio S. No.

41 for the year 2008-2009. Debtor Turnover Ratio of Bharti Airtel Ltd. Accounts receivable turnover ratio or debtor’s turnover ratio indicates the number of times the debtors are turned over a year. The volume of sales can be increased by following a liberal credit policy.78 which comes out as 28. . Debtor Turnover Ratio of BSNL is 6. So the debtor velocity is 365/12. Hence.41 which comes out as 56.94 days i. BSNL takes on an average 57 days to collect its money back from the debtors. is 12. There is no rule of thumb which may be used as a norm to interpret the ratio as it may be different from firm to firm. The effect of a liberal credit policy may result in tying up substantial funds of a firm in the form of trade debtors (or receivables).56 days i. So the debtor velocity is 365/6.78 for the year 2008-2009. which is again higher than the industry standards. Credit is one of the important elements of sales promotion. Bharti takes on an average 28 days to collect its money back from the debtors. Similarly.e. which is again lower than as compared to the industry. the liquidity position of concern to pay its short term obligations in time depends upon the quality of its trade debtors. It is the reliable measure of the time of cash flow from credit sales.41 which mean 27 days to convert debtor into cash.Interpretation of Figure 5.3 represents the Debtor Turnover Ratio of companies over past five year and the projected ratio for 2009-2010. Trade debtors are expected to be converted into cash within a short period of time and are included in current assets. Projected Debtor turnover ratio to improve and reach to 13. low debtors turnover ratio implies inefficient management of debtors or less liquid debtors.3 Figure 4.74 which mean on average 54 days to convert the debtors into cash.e. A concern may sell goods on cash as well as on credit. The higher the value of debtor’s turnover the more efficient is the management of debtors or more liquid the debtors are. Projected Debtor turnover for 2009-10 to improve and reach to 6.

which is a good sign for the company and highest amongst the industry.Debtor Turnover Ratio of IDEA is 47. BSNL is maintaining very low debtor turnover ratio which can be because of liberal credit which they offer to their customers.36 for the year 2008-2009. which is again higher when compared to the industry standards of 57 days (BSNL). IDEA takes on an average 8 days to collect its money back from the debtors.33 which comes out as 7.e.33 for the year 2008-2009.12 in 2008-09 which means now they take 117 days to convert debtors into cash.10 which means only 6 days are taken to convert debtors into cash. So the debtor velocity is 365/47. Projection for 2009-10 is 55. So the debtor velocity is 365/5. Debtor Turnover Ratio for Tata Telecom is worse amongst the industry and its position to convert debtors into cash has been deteriorating over the years ie from 6. Conclusion Among all the players of telecom industry Idea and Bharti both have good liquidity position because their ability to convert debtors into cash is better from any other player in the industry which also signifies that their risk of loss due to bad debt will becomes low.e. . Debtor Turnover Ratio of MTNL is. So it is the sign of unattractiveness of the company.3 in 2004-05 to 3. MTNL takes on an average 68 days to collect its money back from the debtors.71 days i.5.36 which comes out as 68 days i.

95 2007-08 0.28 1.39 0.4 .96 2006-07 0.31 ------1.27 0.29 0.84 2008-09 2009-10 0.33 1. 1 2 3 Telecom Players BSNL TATA TELECOM BHARTI AIRTEL IDEA CELLULAR 2004-05 0.4 Debt Equity Ratio Projected S.02 0.235 0.5.525 4 Figure 5.34 0.002 0.65 4.22 1. No.24 0.12 0.03 0.26 0.47 1.58 2005-06 0.1 2.

Interpretation of Figure 5. the financial position is highly solvent. This also indicates the company’s assets are primarily supplied with equity. is 0.28 for the year 2008-2009 which means that company is not using its debt instruments while it is relying more on the shareholders capital. There is the continuous trend in the use of debt instrument by the company ie. The owners want to do the business with maximum of outsider's funds in order to take lesser risk of their investment and to increase their earnings (per share) by paying a lower fixed rate of interest to outsiders.4 Debt to equity ratio indicates the proportionate claims of owners and the outsiders against the firms assets.39 till 2009-10. Debt-to-Equity Ratio of Tata telecom is 0. However. The purpose is to get an idea of the cushion available to outsiders on the liquidation of the firm. Company was not using debt in 2004-05 and .34 for the year 2008-2009 which means that company is using its debt instruments in very less quantity while it is relying more on the shareholders capital. the interpretation of the ratio depends upon the financial and business policy of the company. . The outsider’s creditors) on the other hand.02 in 2005-06 and expected to be . Debt-to-Equity Ratio of Bharti Airtel Ltd. Debt-to-Equity Ratio of BSNL is 0. A ratio of 1:1 is usually considered to be satisfactory ratio although there cannot be rule of thumb or standard norm for all types of businesses. This also indicates the company’s assets are primarily supplied with equity. In analysis of the long-term financial position it enjoys the same importance as the current ratio in the analysis of the short-term financial position. Theoretically if the owner’s interests are greater than that of creditors. want that shareholders (owners) should invest and risk their share of proportionate investments.27 for the year 2008-09 which means that company is using very less debt instruments while it is relying more on the shareholders capital.

Debt-to-Equity Ratio for MTNL is 0 for the year 2009-2010. . Conclusion It can be concluded that all the major telecom companies are relying more on the equity capital and not using debt instrument as the major source for financing the assets. Public players like MTNL are not using at all and other companies like BSNL are using them in very low quantity because of risky nature of return of telecom sector over the period of time.52 for the year 2008-2009. This also indicates the company’s assets are primarily supplied with debt.Debt-to-Equity Ratio of Idea cellular is 1. which means the company is totally dependent on Equity. which means that company using more of debt instruments.

95 11.5 .92 20.44 14.64 Figure 5.16 11.52 10.48 6.4 5 7.912 3 4 10.23 28. TATA TELECOM BHARTI AIRTEL IDEA CELLULAR 2004-05 10.433 3.785 6.53 27.06 6.41 19.5 RETURN ON CAPITAL EMPLOYED Projected S.28 29.94 2006-07 9.52 20.27 5.74 6.96 16.97 2008-09 1.77 10.763 4.589 32.95 4.05 2007-08 4.46 2009-10 0. 1 2 Telecom Players BSNL MTNL.5. No.09 2005-06 9.725 23.

Return on Capital Employed Ratio of BSNL is 1.Interpretation of Figure 5. which indicate that the company is earning 1. Return on Capital Employed Ratio of MTNL is 4. Further more investments are required by the co. Hence. investments and net working capital. higher the return on capital employed. It indicates the percentage of return on capital employed in the business and it can be used to show the overall profitability and efficiency of the business. the more efficient the firm is in using its funds.46 percent return on the net capital employed by company that consists of fixed assets. Return on Capital Employed Ratio of Tata telecom is 6. which indicate that the company is earning 6. As the primary objective of business is to earn profit. Projected return on capital is even worse ie. investments and net working capital.5 The prime objective of making investments in any business is to obtain satisfactory return on capital invested. Return on capital employed ratio is considered to be the best measure of profitability in order to assess the overall performance of the business. to acquire new technology like 3g which will provide return in coming years.2 percent return on the total capital . ROCE of the company is deteriorating with each succeeding year because increase in number of competitor with each year which lead to decrease in market share in due to which income from services have been declining. It indicates how well the management has used the investment made by owners and creditors into the business. 3.46 for the year 2008-2009. As the trend says the Return on capital will fall in the coming years and will be around . the return on capital employed is used as a measure of success of a business in realizing this objective.76 for 2009-10. Return on capital employed establishes the relationship between the profit and the capital employed.23 for the year 2008-2009.785 for the year 2008-2009. which indicate that the company is earning 4.8 percent return on the total capital employed that consists of fixed assets .433 percent. It is commonly used as a basis for various managerial decisions.

e. Projected return on capital is even better i. Only few of the private players like Bharti and Idea have improved their return on capital and have positive trend in the returns over the past 5 years.76 For 2009-10. investments and net working capital. So it is obvious that for the survival of the major public players like BSNL and MTNL rapid changes in strategies need to be adopted and structure and polices adopted by Bharti and IDEA needs to be considered and reviewed by them.4 percent return on the total capital employed that consists of fixed assets . Projected return on capital is even better ie. 4. investments and net working capital.4 percent return on the total capital employed that consists of fixed assets . Conclusion Return on capital employed is one of the key ratios that determine the fate of the company in the future.64 for the year 2008-2009. Return on Capital Employed Ratio of Bharti is 28. Projected return on capital is even worse ie. . which indicate that the company is earning 28. Return on Capital Employed Ratio of Idea is 20. 32.4 for the year 2008-2009. which indicate that the company is earning 28. Through the graphs we can easily see that most of the companies are having negative trend in the past years due to their inability to meet the competition and rapid changes in technological environment. investments and net working capital.58 For 2009-10. 23.It is the one of the few company in telecom sector with positive trend of return on capital employed.91 for 2009-10.employed that consists of fixed assets. Company is having positive trend of return on capital employed.

6 . 1 2 Projected Telecom Players BSNL MTNL. TATA TELECOM BHARTI AIRTEL IDEA CELLULAR 2004-05 --------8% 13% 26% 2% 2005-06 59% 5% 7% 27% 18% 200607 34% 4% 7% 35% 23% 2007-08 8% 3% 4% 30% 29% 2008-09 2% 2009-10 1% 7% 28% 1% 1% 3 4 3% 31% 5 39% 48% Figure 5. No.5.6 Price Earning Ratio S.

the P/E ratio of Bharti Airtel and Idea is growing with each successive year but expectation from Idea is growing at increasing rate which means idea is one of the emerging leader in the industry and its expectations have been outperformed from the entire industry i.6 we can easily state that only expectation of investors of Bharti and Idea is growing i. a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E.Interpretation of Figure 5. However. According to the projection of 2009-10 P/E of Bharti is 31% whereas Idea is 48%. the P/E ratio doesn't tell us the whole story by itself. It's usually more useful to compare the P/E ratios of one company to other companies in the same industry.e. Conclusion From the figure 4. It would not be useful for investors using the P/E ratio as a basis for their investment to compare the P/E of a technology company (high P/E) to a utility company (low P/E) as each industry has much different growth prospects.e. to the market in general or against the company's own historical P/E. . P/E of BSNL was the highest in 2005-06 when it was the leader of the industry but as the time passes expectation of the investors have been declined and now it is only 8 % and projected to be only 5%.6 A valuation ratio of a company's current share price compared to its per-share earnings. Calculated as: In general.

8 1.58 20. TATA TELECOM BHARTI AIRTEL IDEA CELLULAR 2004-05 30.83 Figure 5.6 2005-06 24.2 2006-07 22. No.3 2008-09 2009-10 3 4 5 2 3.2 14.7 12.1 17.25 22.7 NET PROFIT MARGIN RATIO Projected S.7 .4 2007-08 9.2 -3.3 7.9 24 15.2 22.5.5 8. 1 2 Telecom Players BSNL MTNL.5 11.8 6.7 9.2 26.4 16.864 24.26 7.5 11.7 8.1 22.88 1.9 13.

Net Profit Ratio of IDEA is 20. which is lower in comparison with the industry ratio. Profits of the company are decreasing at an increasing rate which shows that highly negative trend for the company and if it continues than projected ratio for 2009-10 will be 1. Through fig 4. Net Profit Ratio of Bharti Airtel Ltd.2 for the year 2008-2009 which is higher in comparison with the industry ratio.58% for the year 2008-2009 which is higher in comparison with the industry ratio.88.86 % .If this trend continues than according to my projection company would be in net loss in 2009-10 and the ratio would be around -3. which is lower in comparison with the industry ratio. is 22.26. higher the ratio the better is the profitability. It shows the inefficiency amongst the public sector undertaking. Company’s trend line shows that company is earning greater profits in each successive year which makes company attractive in the industry. Net Profit Ratio of MTNL is 3.83 through regression analysis. So projection for 2009-10 will be 24. According to the previous five year trends this company is one of the fastest growing company and its profits are increasing at increasing rate as compared to Bharti Airtel. etc. Net Profit Ratio of BSNL is 2 for the year 2008-2009. so this goes to show the efficiency of the operation of the company.9 for the year 2008-2009. This shows that BSNL had to pay other indirect expenses which led to fall in the net profit. Obviously. If the trend continues than projected ratio for 2009-10 will be 26. low demand.8 we can also see that there is continuously negative trend from year 2004-05 to 2009-10.7 This ratio also indicates the firm's capacity to face adverse economic conditions such as price competition. . But while interpreting the ratio it should be kept in mind that the performance of profits also be seen in relation to investments or capital of the firm and not only in relation to sales.Interpretation of Figure 5.

Company’s like BSNL and MTNL have to work hard to break out their negative trend. Conclusion: Net profit ratio shows that Bharti Airtel and Idea cellular are having positive trend in past five years. Profits of the company is rebounded the year 2008-09 but on the whole company is providing negative trend line of its net profits and if it continues than projected ratio for 2009-10 will be 7.2 . which is lower in comparison with the industry ratio.25 for the year 2008-2009. .Net Profit Ratio of TATA Telecom is 13. Completely new attitude and professional management have to be adopted by these public sector undertakings to compete with the private players like Bharti & Idea.

89 cr as cash from operations which have increased to 11853.08 1086.2 303.96 cr in 2009-10.1 Net Cash From Operating Activities Projected S.215 2457.64 2487. TATA TELECOM BHARTI AIRTEL IDEA CELLULAR 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 3 4 5 17469.78 559.89 4547. In 2004-05 Bharti Airtel is having 3005.96 10981.275 323.5.31 357.81 1212.2 8107.11 2502.496 4935.15 1605.24 1013.22 3170.531 Interpretation Cash from operations represents the inflow of cash from primary activities of business.238 902. So. Public sector companies like BSNL and MTNL have to take cost cutting measures as adopted by Bharti and Idea to gain the revenues from its business.96 4010. 1 2 Telecom Players BSNL MTNL.8.85 11853.6 cr in 2004-05 but gradually it have been decreased to 6843.67 3005.6 18709. No.8 ANALYSIS OF CASH FLOWS 5.042 14676.15 ---822.81cr which represents the loss of revenue by the company in its primary activities.15 cr in 2008-09 and if this trend continues than it will reach to 14676.05 14139.81 2060.84 6843. On the other hand Companies like Bharti and Idea have increased their cash from operations in each subsequent year and gained majority of revenue of telecom sector.95 10459. . From the above figure it is clearly stated that Cash from operations is highest of BSNL 17496.71 213.

00 7.478.74 647.975.500.32 716.69 2.44) 2.26 2009-10 5.08 894. From the above figure it is clearly stated that Cash used in investing activities is highest of BSNL 6478 cr in 2004-05 but gradually it have been decreased which represents the lack of investments in long term assets by the company as compared to other players in the industry.224. On the other hand Companies like Bharti and Idea have increased their investments in assets in each subsequent year and due to which they have enjoyed better returns in telecom sector.88 Interpretation Cash used in investing activities represents cash outflow in procurement of Long term assets which will yield return in the future.96 400.19 5.18 7.83 7.275.005.702.14 2.956.993.2 Cash Used in Investing Activities Projected S.10 2. TATA TELECOM BHARTI AIRTEL IDEA CELLULAR 2004-05 2005-06 2006-07 2007-08 2008-09 3 4 5 6.00 5.17 785.88 259.09 3.69 11. In 2004-05 Bharti Airtel is having 2330.07 10.71 10.14 429. 1 2 Telecom Players BSNL MTNL.30 ---- 6.94 3.648.30 286.8.033.438.5.01 (76.894.000. .724.266.64 14.827.85 692.330.83 277.30 cr as cash from operations which have increased to 10894 cr in 200809 and if this trend continues than it will reach to 14702 cr in 2009-10. No.

8.09 4.38 672 -3106.50164 -3893.5.560 395.823 227. From the above figure it is clearly stated that Cash used by the BSNL in financing activities is highest in 2004-05 and it have been increasing in each subsequent years which represent that BSNL is continuously engaged in payment of dividends and interest for the borrowed funds and they are not raising funds from market.24 97. No.29 2008-09 1. 1 2 Telecom Players BSNL MTNL.35 3 4 5 Interpretation Cash used in financing activities represents the outflow of cash for the purpose of procurement of funds for business.03 -2131.07 2007-08 4.14 -898.49 52. On the other hand Companies like Bharti and Idea have decreased their cash used in financing activities in each subsequent year which means that they have raised equity and debt in the subsequent years to fund their assets due to which cash from financing activities is increased in each year . which is good indicator for these companies .7112 2009-10 3736.13 -2340.48 56.158 294.3 Cash Used in Financing Activities Projected S.23 -376.79 -340.35 -558.83 -389.2309 ---------- 2005-06 3.09 208.777 -1240.03 -1204.000 287.835 177.01 2006-07 4. TATA TELECOM BHARTI AIRTEL IDEA CELLULAR 2004-05 612 423.

Chapter 6 CONCLUSION .

Public players like MTNL are not using at all and other companies like BSNL are using them in very low quantity because of risky nature of return of telecom sector. • From Earning per Share perspective Bharti Airtel is considered to be most attractive company as the company’s earning potential have been increased irrespective of the increase in competition in the Indian telecom market. . • Market leader of 2004-05 BSNL is having tough time because its market share as well as profit margins has been reduced over the period of time which leads to significant reduction in the earning power of the companies.Conclusion From the above finding and analysis various inferences can be drawn out which are as follows : • BSNL is having highest current ratio which represents that BSNL is having very good liquidity position and can pay off their short term liability very easily as they are maintaining huge cash reserves. BSNL is maintaining very low debtor turnover ratio which can be because of liberal credit which they offer to their customers but it may prove dangerous to the company. Through the graphs we can easily see that most of the companies are having negative trend in the past years due to their inability to meet the competition and rapid changes in technological environment. • Among all the players of telecom industry Idea and Bharti both have good debt collection power because their ability to convert debtors into cash is better from any other player in the industry which also signifies that their risk of loss due to bad debt is least. • Return on capital employed is one of the key ratios that determine the fate of the company in the future. Only few of the private players like Bharti and Idea have improved their return on capital and have positive trend in the returns over the past 5 years. • All the major telecom companies are relying more on the equity capital and not using debt instrument as the major source for financing the assets.

• Cash from operations was highest of BSNL 17496. • Net profit ratio shows that Bharti Airtel and Idea cellular are having positive trend in past five years. Trends of previous 5 years have shown that company has slowly deteriorated his position ie. From the leader to loser. On the other hand Companies like Bharti and Idea have increased their investments in assets in each subsequent year and due to which they have enjoyed better returns in telecom sector. On the other hand Companies like Bharti and Idea have increased their cash from operations in each subsequent year and gained majority of revenue of telecom sector.6 cr in 2004-05 but gradually it had been decreased to 6843. • Cash used in investing activities is highest of BSNL 6478 cr in 2004-05 but gradually it have been decreased which represents the lack of investments in long term assets by the company as compared to other players in the industry. Company’s like BSNL and MTNL have to work hard to break out their negative trend. • Cash used in financing activities is highest in 2004-05 and it have been increasing in each subsequent years which represent that BSNL is continuously engaged in payment of dividends and interest for the borrowed funds and they are not raising funds from market.• P/E of BSNL was the highest in 2005-06 when it was the leader of the industry but as the time passes expectation of the investors have been declined and now it is only 2 % and projected to be only 1%. On the other hand Companies like Bharti and Idea have decreased their cash used in financing activities in each subsequent year which means that they have raised equity and debt in the subsequent years to fund their assets due to which cash from financing activities is increased in each year .81cr which represents the loss of revenue by the company in its primary activities. .If the same trend continues in the next few years than we can see death of this giant company. which is good indicator for these companies So from the above inferences it can be concluded that BSNL is having very weak financial position as compared to Bharti Airtel and Idea Cellular.

Telephonic. should be ready for new competition. NTT DoComo. by giving them voluntary retirement or by any other method and give chance to new guns. • Use better & high tech methods of advertising. Like Telenor. .6. • There are several global players keen to enter India. video messaging. • Provide better customer care service and provide them maximum satisfaction. China mobile. Their entry will make the market even more competitive.2 SUGGESTIONS From the personal observations and the above analysis various subjective recommendations which can be given to the company as follows: • It is the right time to cut down the employee’s force. gaming. SK telecom. So. Orson. • Should work towards 3 G phones. • Should try to decrease expenditure especially in the employee’s remuneration & benefit area. and even mobile TV. means high speed streaming video. so that more & more subscriber attract towards BSNL. • Should increase the service quality as well as better customer care service.

Chapter 7 LIMITATIONS .

so it became difficult to analyze and interpret the financial statements of the companies. Uniformity of Content and Mode of preparation of financial statements was not there among the various companies. Lack of enthusiasm on the part of officials to provide the required data. Lack of experience: There was no prior experience in the field of study . . Difficult to obtain the data of 2004-05 and 2005-06 as companies only maintains data of 3 years in their operating systems and rest at some other place.Although the staff at BSNL was highly cooperative and devoted their valuable time but because of time constraint they were not able to devote much time with us. So it became difficult to compare among each other.LIMITATIONS Though the project is completed with proper planning and guidance with full dedication but still various limitations that have to be faced in the process of research are as follows: • Limited Time:.

Chapter 8 BIBLIOGRAPHY .

Idea.com http://www. Financial Management. Edition 2006-07 T.co. Sharma Seema and Lokesh Singla (2009).org/ http://www.com http://www.trai.capitaline.legalserviceindia.dot.Vodafone.BIBLIOGRAPHY Information has been sourced from namely.com/ http://www.indianembassy.org/ http://www.perry4law.in http://www. books.co. Analysis of Financial Statements. journals.in http://www. newspapers.com/ http://www.com/ http://www.org/ http://www.Google.in/ Annual Reports of BSNL of the years: 2004-05. industry portals.wikipedia.gov.in http://www.traigov.N.pib.co. Financial Management.financialexpress.S Grewal.Reliance.ibef.gov.oecd.BSNL.domain-b. 2007-08 and 2008-09.nic.economictimes.indiatimes.org/ http://www.in http://www. Edition 2007-08 S.P. Edition 2007-08 .co.in/ http://www.com/ http://www.in http://www.in http://www. 2006-07. industry news and developments and through access to database. Rustagi. http://www. 2005-06.Airtel.in/ http://www.wordpress. government agencies. “Telecom equipment Industry: Challenges and Prospects” R.com/ http://www. Maheshwari.co.

Chapter 9 ANNEXURE .

764 4.137.658 742.550 615.005 839.235.000 50. in Lakh) INCOME Income from Services Other Income EXPENDITURE Employees' Remuneration and Benefits Licence fee and Spectrum fee Administrative.940.130 --134.435.805.550 786.458 445. in Lakh) 3.136.387 3.511 730.091.890 3.485 20.689 108.621 509.669 3.340 (Rs.169 1.329 826.953 569.335 3.381 -----815.635 1.196 2.891 315.000 120.111.461.698 80.000 67.894 403.163 132.500 37.931 3.609.325 852.933 992 -130.026.017. in Lakh) 3.155 -----445.697 3.418 176.897 331.857 554.229 -19.402 58.171 6.939 145.610 3.323 264.581.381 96.254 969.566 (Rs.004 264.322 0 -66.800 125 57.643 Profit before Prior period items Prior period items (Net) Profit before Extraordinary items Extraordinary items Profit before taxation Current Tax MAT Credit Deferred Tax Fringe Benefit Tax Wealth Tax Profit for the year after taxation Appropriation : Interim Dividends on Equity Share Capital Proposed Dividends: On Equity & Preference 668.486 2.795 3700 130 780.018.002 4.341 3.100 501 893.816 -175.363.155 136.001 3.587 441.213 1.929 962.ANNEXURE BSNL CONSOLIDATED PROFIT AND LOSS ACCOUNT 31st March 2005 Particulars (Rs.163 127.302 330.305 1.971. in Lakh) 3.146.008 78.049.856 -40.421 31st March 2006 31st March 2007 31st March 2008 31st March 2009 880.500 80.941 914.628 77. in Lakh) 3.345.700 145 300.470 -45. Operating and Other Expenses Financial Expenses Depreciation 3.675 86.296 844.797 44.063 352.945 -9.00 0 0 .000 97.236 805.608 127.190.969 824.500 30.980 937.706 (Rs.149 (Rs.771 -18.564 815.569 3.613.196 1.192 1.952 -40.094 -2.448 3.590 792.

479 178.188 65.484 156.486 780.493 60.485 57.28 14.794 581.666 680.117 488.587 25.258 300.65 15.Share Capital Tax on Dividends Transfer to General Reserve Surplus carried to Balance Sheet Net Profit Earnings Per Share (In Rs.875 1.485 15.018.288 203.939 0 0 57.196 893.03 4.44 1.15 .969 18.) Basic earnings per equity share 16.329 16.

562 389 5.430 137.511 5.644 5.243 20.627 923.176.444.402 1.879 278.868 8.687 744.150.535 663.000 7.792.BSNL CONSOLIDATED BALANCE SHEET Particulars As at 31st March 2005 As at 31st March.849 382.000 9.250.250.765 12.160 3.250.368 752.374.861 Current Liabilities 1.596 20.258 472.703 2.739.410.642.324 1.444 11.940 1.702 .054 3.169.922 630.802 554.056.901 6.880 5.694 20.018.027.006 546.823 6.366 124.551 4.071.233.000 6.224.205 3.667.309 6.393 170.250.907 457.000 224.909 242. Loan and Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Asset Accrued interest Loans and Advances Less : Current Liabilities and Provisions 1.404.651 728.864.250.000 7.066 3.929.605 678.457.953.000 7.974.444 6.432.491 1.919 1.400 898.291 7.216 4.089 304. 2009 Shareholder’s Funds Capital Reserves And Surplus Loan Funds Unsecured Loans Deferred Tax LiabilityNet APPLICATIONS OF FUNDS Fixed Assets Gross Block Less:-Depreciation Net Block Capital Work-InProgress Decommissioned Assets INVESTMENTS Current Assets.088 492.825 338.887 131.226 8.358 341.793.774.813.793 1.057.055.974 5.788 322.788 2.461.148 714.000 9.203 5.745.805.296 114.045 6.193.053 469.847 558.562.158 137.687 944.431 5.126.373.987.178 20.773 11.269.849 266.000 9.612.000 8.354 6.390 256.072.048 7. 2007 As at 31st March.441 5. 2008 As at 31st March.408.736.402 10.843 457.346 6. 2006 As at 31st March.825.484 405.000 6.469.971 1.207 4.226 13.800 20.282.860 6.613.203 5.384 64.864 4.911 822.541 1.113 14.847.948 63.

777 3.444 514.068 9.281 111.346.321 2.200.566.226 Total .182.223 2.839 8.402 888.208.734 66.500.722 94.362 92.109 3.269.157 1.192.Provisions Net Current Assets Inter/Intra CircleRemittance 738.858 2.765 493.974.453.282.616 2.231 9.878 2.373.580 3.773 606.011 105.404.547 2.502 8.459.647.349 9.

971 1.165 91.844 1.567.929 937.797 102.800 1.803 -618 73.504 -2.576 176.837 -45.793 -237.565 -167.227 684.565 -388. in Lakh) Year ended 31st March 2008 (Rs.Trade and Other Payables -44.995 1.118 1.486 Prior period depreciation Interest/Finance charges Interest Income -80.Other Receivables .068.341 4.265.865 54.231 108.923 -12.Inter Circle Remittance -4.931 8.517 .867 -94.518 -19.875 -21.092 145.Prior Period item other than depreciation Net cash from operating activities 855 -1.905 - -152.277.960 -19.412 326.518 964.403 -39.570 1.669 21.899 -80.897 1.320 -58.453 85.155 1.080.189 44.637 -170.091 764.524 -175.155 127.590 -118.610 5.397 -131.276 -403.002 70.608 -59.052 Loss/(Profit) on Fixed Assets sold Debts / Advances Written off Provision for Bad and Doubtful Debts Excess provision written back Prior Period item other than depreciation Extraordinary Items Other Provision 258.184 -14.776 -62.465 -67.413.293 2.590 -173.437 26.676 1.796 65.941 Operating profit before working capital changes Adjustments for changes in working capital .228 1.838 -54.381 .825 176. in Lakh) A.Extraordinary Items -117.942 1.900 -685 -212.325 Year ended 31st March 2006 (Rs.640 891.381 445.098.335 -83.224.340 127.BSNL CASH FLOW STATEMENT PARTICULARS Year ended 31st March 2005 (Rs.870.872.296 59.276 -153.996 8.014 14.324 -2.Sundry Debtors -77.163 -Taxes paid .971 58.829 -8.595 832.808 .950.951 147.612 -152.123 -800 35.413 1.779.320 -79.419 -252.698 815.288 77.852 181.532 -855 -176.941 969.106 86.099 2.670 1.506 44. Cash flow from operating activities: Net (loss)/profit before tax but after Prior period and Extraordinary items Adjustments for: Depreciation 962.202 .059 159.687.254 852. in Lakh) Year ended 31st March 2007 (Rs.474 -117.805 936.340 -851 47.760 1.296 -281.926 47.746.980 914.869 1.008 844.419 3.640 -117. in Lakh) Year ended 31st March 2009 (Rs.175 Cash generated from operations -185.133 19. in Lakh) 792.663 -12.229 38.

811.759 -111.745.742.295 -41.057.589 4.000 -1.296 4.700 -50.813.409 36.193.049 -717.081 -650.592 3.000 -80.000 -20.505 107.242 -3.094 -647.430 .113 Cash and cash equivalents comprise Cash. Cash flow from Investing activities: Inventories Purchased/Sale -572 Purchase of fixed assets Capital Work in Progress 125.862 3.301 -54.094 2.057.000 -18.161 -355.704 2.313 -76.027 -77.174 -174.055.948 309.057.296 -241.948 3.837 -120.083 125.813.066 84.055.193.113 3.854 3.745.155.415 2.358 -42.500 -16.814 -976.013.689 Proceeds from Sale of fixed assets Interest Received Net cash used in investing activities C.015 3.835 2.441 24.569 2.000 -67.319 379.158 179.430 133.679 -3.120 2.817 78.231 50.068 -22.158 3.901 1.052.800 -61.296 4.712 -860.485 -226.614 -31.952 -743.767 -30.745.055.602 -326. Cash flow from financing activities: Proceeds from long term borrowings Interest Paid Interim Dividend Paid Dividend Paid Dividend Distribution Tax Paid Net cash used in financing activities Net Increase/(Decrease) in Cash and Cash Equivalents Opening Cash and cash equivalents Cash and cash equivalent 2.B.986 -93.597 438.948 3.054.723 -815. Cheques and Drafts (in hand) Balances with banks 3.960 -300.037.193.348 3.750 124.795 230.394 -182.785 -372.233 -399.309 -132.688 -9.570 -415.539 -882.696 -108.113 687.993 3.982 1.273 70.728 4.133 864.158 3.

103.61 3.042.241.006.458.338.566.898.643.085.12 17.570.030.22 0 25.17 2.533.777.30 0 4.437.45 5. 2008 Rs.63 0 18. in crore As at 31st March.357.863.33 37.60 3.661.83 1.160.92 4.42 2.466.39 0 12.36 2.602.713.37 1.32 4.13 27.74 174.85 56.735.36 537.92 6.796.76 62.754.895.70 12.82 47.13 4.28 1.52 239.034.67 11.076.515.63 2.550.44 2.898.295.751.85 1.92 7.88 1.96 922.375.41 4.46 931.994.93 30 0 9.89 1.951.74 4.13 11.141.49 634.853.44 7.00 19. 2009 Rs. in crore As at 31st March.80 26.893.34 26.38 1.17 201.944.266.439.88 2.65 2.56 2.81 0 9.44 3. Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions 13.54 105.25 719.08 10.034. 2007 Rs.49 52.253.74 1. in crore Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 1.86 3.91 1.959.88 12.764.16 10.08 1.67 28.36 5.9 31.811.013.708.705.82 705. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA.37 1.627.83 1.95 14.38 2.932.29 12.897.72 1.952.42 6.63 3.897.240.65 35.80 249.13 20.7 17.115.832.93 1.466.64 9.27 266.675.486.362.937.35 5.83 2.18 5.82 2.310.21 2.37 2.232.08 8.81 1.406.81 16.15 2.72 0 2.098.05 153.527.345.13 0 5.776.895.418.88 1.93 7.24 116.853.02 541.87 0 6. 2006 Rs.34 25.58 715.961.272.11 1. in crore As at 31st March.91 57.765.893.475.283.517.30 19.86 2.BHARTI AIRTEL BALANCE SHEET Particulars As at 31st March 2005 Rs.809.46 200.84 11.65 9.044. in crore As at 31st March.89 .99 994.62 Application Of Funds Gross Block Less: Accum.204.97 51.509.86 13.73 7.24 1.63 0 13.81 1.13 7.38 2.13 302.85 209.354.305.400.443.64 5.4 14.29 9.341.

811.357.25 145.59 106.635.754.62 4.09 35.88 3.44 -3.86 2.34 38.34 -4.84 7.527.04 60.26 0.221.19 -5.141.740.66 16.Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) -2.84 4.71 -5.017.07 7.000.922.615.93 7.140.01 .26 24.933.94 0.2 26.94 12.35 9.104.82 58.

791.20 42.57 4.75 353.299.065.05 25.70 1.30 137.61 0 17.64 2.761.16 0 1.662.142.837.038.78 7.134.261.85 314.12 0 11.072.627.286.268.017.84 0 34.50 535.94 13.72 317 972.86 2.32 0 34.82 8.24 0 PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend .366.206.397.95 11.48 444.153.46 0 15.43 6.107.828.76 3.879.66 0 11.030.57 6.91 566.81 3.45 393.34 2.73 2.851.94 -13.951.41 10.04 9.34 127.6 1.11 0 25.92 434.446.076.353.210.99 9.09 2.54 8.67 6.568.75 5.51 236.37 -60.206.940.37 0 7.88 7.272.08 7.44 0 8.16 11.033.39 2.22 53.67 1.19 15.15 8.289.07 6.89 0 20.373.54 7.98 0 25.804.987.28 0 10.23 -185.16 282.13 9.75 10.43 10.BHARTI AIRTEL PROFIT AND LOSS A/C 31st March 2005 31st March 2006 31st March 2007 31st March 2008 31st March 2009 PARTICULARS ---------------------------------------RS.259.32 -1.851.012.365.72 1.98 22.71 4.048.67 0 475.953.409.432.385.05 0 5.892.592.14 7. IN CRORE -------------------------------- Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit 8.29 32.215.68 2.156.36 161.84 11.339.084.142.07 7.25 280.244.30 52.8 4.11 104.06 83.23 10.997.97 17.166.088.67 11.79 4.2 3.621.92 4.56 0 734.70 632.51 321.84 20.874.019.51 1.44 -1.01 5.707.9 0 1.68 1.7 0 1.15 0 17.761.519.95 5.62 30.67 5.260.61 273.048.259.61 105.86 17.02 3.297.12 26.602.34 -207.66 -46.766.28 178.07 17.743.064.27 4.58 266.820.

9 0 106.67 6.34 379.71 0 0 18.53 0 24.52 18.533.Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 0 0 18.979.40 40.79 10.44 0 0 18.959.27 0 60.19 0 0 18.79 20 145.65 64.34 21.938.62 0 38.982.07 32.01 .

03 307.14 376.03 -290.13 473.46 898.43 780.BHARTI AIRTEL CASH FLOW STATEMENT Mar '05 Mar '06 Mar '07 Mar '08 Mar '09 12 mths 12 mths 12 mths 12 mths 12 mths ------------------------------IN RS CRORE------------------1564.94 -672 286.5 131.31 790.8 4601.89 -2330.37 6972.95 -7975.3 8107.53 793.43 340.77 503.14 307.2 -10894 Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents -423.9 -11648 11853.09 252.08 .63 384.2 -5000.28 2285.54 3005.3 4547.1 10459.71 384.54 8161.35 -76.47 502.

30 0 0 0 11.75 554.71 941.15 11.626.921.285.999.47 186.MTNL BALANCE SHEET Particulars As at 31st March 2005 As at 31st March.194.25 11.45 1.82 3.426.29 15.502.15 173.00 178.887.403.65 11.97 0 6.77 630 630 0 0 10.446.83 0 10.46 3.35 8.899.25 7.28 4.62 6.82 2.468.606.00 14.58 9.05 14.15 5.28 965.4 221.8 130.78 6.742.912.223.236.31 5.071.00 5.943.72 10.236.40 6.86 0 5.761.67 779.30 630 630 0 0 11.854.7 557. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA.6 1.36 0 11.13 0 5. 2008 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Aplication of Funds Gross Block Less: Accum.39 160.77 0 11.975.83 630 630 0 0 10.15 180.921.783.522.943.127.337.54 1.83 0 0 0 10.16 3.84 3.783.975.580.63 651.629.82 11.28 11.71 14.86 10.29 441.36 418.15 8. Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 630 630 0 0 10.236.72 189.445.415.27 184.11 2.37 3.60 11.395.289.17 11.233.36 14.27 221.05 13.44 5.10 159.73 0 5.369.36 0 0 0 11.105.712.921.129.36 15. 2006 As at 31st March.603.35 1.51 397.707.629.313.857. 2007 As at 31st March.348.72 137.27 10.83 6.78 7.31 159.758.319.2 161.30 0 11.22 0 10.23 .73 1.364.68 6.24 10.903.568.629.80 981.239.291.797.650.267.683.77 0 0 0 11.252.70 114.59 15.291.82 1.8 1.842.943.75 3.

95 93.017. in Crore) 5.21 31st March 2008 (Rs.7 580.41 0 5.171.273.042.300.41 380.83 (Rs.32 512.29 4.602.23 .34 1.27 0 252 37.580.34 0 140.95 179.31 4.005.932.38 4.392.47 24.59 12.03 646.65 466.50 704. in Crore) 4.430.20 77.95 1.222.32 0 4.09 1.97 0 4.09 93.24 948.28 6.675.83 406.57 1.017. in Crore) 4.38 683.79 326.56 224.421.86 0 252 35.11 0 5.2 299.17 1.27 892.05 1.96 588.43 4.71 6.90 0 188.007.21 1.18 0 709.426.171.300.MTNL Profit and Loss A/c 31st March 2005 Particulars Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 31st March 2006 (Rs.404.44 212.675.01 0 1.43 0 160.59 6.328.63 2.44 1.300.37 148.34 236 0 5.51 2.77 35.77 1.55 90.021. in Crore) 5.16 11.13 68.46 -96.838.93 0 5.36 6.05 45 173.00 7.34 0 155.33 84.00 9.01 3.949.568.799.57 1.602.34 31st March 2007 (Rs.52 0 4.55 -21.34 0 5.57 0 283.316.03 4.12 824.16 1.799.666.568.909.31 0 252 42.76 687.31 923.99 75.630.127.7 0 602.00 6.82 3.21 40 178.12 267.249.38 0 5.008.027.79 1.81 1.06 0 612.750.54 1.86 1.78 1.59 1.4 40 184.85 1.300.62 951.722.27 -64.722.00 15.909.52 405.87 892.46 40 189.5 39.941.

31 -277. ------------------Mar '05 Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 1215.4 2058.4 1868.4 2058.68 Mar '08 631.81 3369.4 1868.67 Mar '06 671.in Rs.1 2517.32 -463.08 357.83 1500.Mahanagar Telephone Nigam Cash Flow ------------------.7 2517.65 1212.81 -692.36 Mar '07 792.71 -395.59 -294.66 2553.36 .74 2487.71 -785.49 -189. Cr.64 -259.01 213.4 -35.24 -459 -287.

94 0 2.408.546. Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 2.429.817.539.060.47 109.157.91 152.577.084.74 0 1.234.975.92 3.73 0 4.13 569.259.3 0 1.14 0 2.81 90.53 0 483 1.62 307.592.84 2.454.38 1.15 3.49 899.33 6.695. ------------------Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum.IDEA CELLULAR Balance Sheet Particulars As at 31st March 2005 As at 31st March.85 0 3.22 3.75 1.8 151.742.75 1.79 1.76 0 478.635.67 373.005.05 316.03 3.742.89 0 6.53 2.744.74 4.742.7 0 3.444.87 13.168.677.53 2.250. Cr.174.696.03 8.80 -1.470.86 0 0 -413.43 1.36 2.99 2.82 Mar '05 3.82 2.36 3.592.00 0 1.692.637.03 13.59 147.637.83 9.308.91 307.060.62 198.82 1.93 27.50 64.698.64 88.79 2.11 1.117.57 8.229.82 2. 2008 ------------------.79 Mar '08 12.53 0 0 1.83 17.24 11.791.592.91 0 3.635.4 2.89 275.791.88 950.12 139.86 2. 2006 As at 31st March.48 122.28 2.77 710.39 941.53 1.21 53.85 2.16 899.66 Mar '07 8.15 560.51 6.76 293.52 13.03 5.43 506.76 10.709.915.97 2.46 0 478.63 2.15 213.88 349.76 0 906. 2007 As at 31st March.060.429.44 .97 1.67 1.046.39 773.514.18 5.084.63 863.674.66 0 10.744.98 81.in Rs.123.82 40. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA.13 Mar '06 3.180.60 4.667.236.75 1.48 95.03 2.71 0 2.61 2.179.550.36 0 762.76 695.574.

36 172.88 13.08 2.01 224.2 4.77 6.236.1 0 3.54 0 0 0 31st March 2007 4.78 84.116.36 4.87 0 4.26 0.04 348.9 125.61 3.40 0 4.88 8.6 1.353.61 478.61 1.425.67 108.33 604 255.33 959.54 5.163.031.88 84.388.675.27 0.64 756.67 0 1.49 695.85 72.23 1.904.82 22.366.102.22 -0.02 18.85 1.625.61 128.91 1.94 0 8.007.66 119.43 1.228.35 563.06 109.979.04 1.25 467.031.625.04 37.99 184.in Rs.34 38.99 0 6.42 0 1.2 -0.53 24. Cr.751.03 0 103.42 262.42 9.643.85 119.16 0 26.07 5.46 251.40 27.595. ------------------Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 1.14 491.08 626.44 0 1.96 237.719.392.03 25.06 0 0 0 27.41 439.56 0 3.47 775.4 26.64 -1.26 0 755.26 1.97 1.719.007.43 974.228.09 594.635.66 0 0 0 ------------------.613.5 1.69 -0.06 2.Idea Cellular Profit & Loss A/c Particulars 31st March 2005 31st March 2006 2.49 26.07 0 2.928.88 2.67 2.012.236.44 .27 0.4 332.49 2.59 770.23 496.09 0.641.16 0.96 0 13.17 0 6.16 0 0 0 31st March 2008 6.99 502.84 4.67 308.01 2.747.366.32 2.491.69 1.86 115.08 53.97 1.69 2.044.

73 1322.09 149.29 Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 22.in Rs.09 1670. -----------------125.01 1605.36 822.64 1819.8 151. Cr.07 2502.18 2131.67 1819.06 .6 502.94 558.73 497.11 2275.09 2340.15 286.06 1044.89 129.22 5956.Idea Cellular Cash Flow Mar '06 Mar '07 Mar '08 12 mths 12 mths 12 mths ------------------.

01 359.8 2.54 515.56 16.324.98 3.49 0 128.8 2.10 953.73 1.03 2.943.053.780.059.67 115.33 0 651.637.041.61 756.54 2.147.283.09 243.98 301.37 376.61 141.99 2.456.75 207.850.04 0 3.95 2.627.66 1.1 180.69 2.00 10.859.258.086.81 1.43 473.62 2.89 5.31 2.749.95 0 128.43 145.00 26.749.28 1.25 323.88 708.815.62 0 3.12 0 128.127.56 1.73 3. ------------------- .61 43.15 851.850.95 0 3.43 1.57 13.in Rs.55 818.83 0 4.303.58 0 4.283.00 16.Tata Communications Profit & Loss A/c 31st March 2005 Particulars Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 3.74 1.38 1.95 1.39 0 3.19 720.56 0 702.76 489.306.3 747.886.31 0 472.81 297.23 793.936.04 512.28 1.83 0 4.8 2.77 197.58 0 171 24.67 4.30 0 3.15 0 1.49 69.509.36 338.83 105.296.088.58 244.16 425.95 124.31 70.19 3.57 1.18 479.052. Cr.14 3.62 1.36 2.07 468.905.43 0 3.898.82 773.128.55 10.850.07 1.54 60 200.01 11.062.507.25 17.00 16.8 44.06 0 128.15 165.7 1.63 0 242.46 2.76 401.67 16.43 1.82 391.2 0 340.52 304.042.93 209.780.00 950.075.65 34.75 2.03 423.303.25 0 3.30 173.44 45 223.1 45 238.25 21.43 1.68 244.25 21.223.45 45.53 31st March 2006 31st March 2007 31st March 2008 31st March 2009 ------------------.86 196.68 45 229.83 45 212.27 0 702.95 37.08 125.20 9.06 2.37 2.850.041.828.00 18.830.25 21.56 3.75 645.850.

17 0 98.097.988.43 2.45 1.08 3.869.792.798.50 388.77 5.10 223.740.93 0 9.92 5.03 1.557.947.14 4.978.64 1.58 4.8 737.73 1.499.513.99 3.in Rs.058.94 0 4.66 0 2.87 1.17 0 6.21 1.447.359.26 633.50 0 197.34 0 777.673.140.51 263.148.779.061.451.288.17 1.991.159.61 197. 2009 ------------------.17 1.776.159. Cr.074.34 3.646.925. 2007 As at 31st March.05 2.262.90 543.383.363.428.25 98.327.05 0 0 0 5.32 2.557.713. ------------------Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum.28 0 5.728.200.58 1.8 7.125.42 0 1.11 4.72 0 6.19 11.25 6.17 340.31 1.209.70 265.14 5.28 2.65 1.81 2.02 229.95 22.10 1.16 4.50 0 6.Tata Communications Balance Sheet Particulars As at 31st March 2005 As at 31st March.65 2.13 2.06 4.17 251.73 285 285 0 0 6.68 835.05 0 5.98 1.063.347.325.11 11. 2008 As at 31st March.342.98 285 285 0 0 5.03 513.386.22 1.182.06 2.87 9.75 2.57 245.352.22 109.34 0 6.157.21 2.45 1.81 3. Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 285 285 0 0 5.82 1.12 288.280.09 238.728.63 1.688.92 8.200.039.72 503.723.15 0 1.582.00 1.099.624.14 285 285 0 0 6.547.40 265.05 0 6.56 147.728.13 79.140.67 285 285 0 0 6. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA.125.87 200.325.05 3.66 987.97 608.42 4.70 0 7.53 .443. 2006 As at 31st March.22 2.8 777.008.005.449.92 0 6.103.63 212.44 2.20 25 2.509.61 6.44 0 1.091.94 536.767.626.154.511.19 79.667.039.72 955.18 1.77 2.61 3.452.15 0 2.05 1.87 3.38 2.890.37 279.56 1.67 1.

54 323.87 .71 1204. ------------------754.14 1086.26 22.24 76.36 222.09 Mar '06 Mar '07 Mar '08 Mar '09 ------------------.78 -894.04 78.38 191.Tata Communications Cash Flow Mar '05 Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 632.26 244.35 744.2 -647.53 -141.67 -2005.44 1013.79 303.04 -24.53 363.44 -208.69 389.6 30. Cr.53 103.in Rs.51 103.19 -97.23 559.49 244.34 78.19 222.18 462.53 285.83 -52.54 461.08 -716.

Chapter 10 MISCELLANEOUS .

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