Project Report on Financial comparison of various Telecom Companies in India

8/9/2019 Project Report on Financial comparison of various Telecom Companies in India

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A PROJECT REPORT

ON

COMPARATIVE FINANCIAL ANALYSIS AMONG VARIOUS TELECOM COMPANIES IN THE MARKET

(A Project Report submitted in the partial fulfillment of requirements for Master in Business Administration)

(GGSIPU)

Submitted By:

SUMIT HANDA

Enroll. No. 1661563908

PROJECT R EPORT

NORTHERN INDIA ENGINEERING COLLEGE

UNDER THE GUIDANCE OF

Internal Guide: - External Guide:-

Mrs. Deepti Laroia Mr. Anand Verma(Faculty) A/O (Finance), BSNL

NIEC (GGSIPU) New Delhi-110001



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 havedirectly 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 toLecturer Mrs. Deepti Laroia, for giving us an opportunity to work on this project. Thesupport & 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 promptresponse and guidance. I would like to express my gratitude to Mr. Anand Verma

(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.



INDEX

S. NO. PARTICULARS

1 INTRODUCTION TO THE TELECOMMUNICATION SECTOR

2

COMPANY PROFILE

BSNL

Bharti Airtel

Tata Communications Ltd.

Reliance Communications Ltd.

MTNL

3 OBJECTIVES OF THE STUDY

4

RESEARCH METHODOLOGY

RESEARCH DESIGN

DATA COLLECTION

5 LIMITATIONS OF THE STUDY

6 DATA FINDINGS AND ANALYSIS

7 CONCLUSION

8 RECOMMENDATIONS

9 BIBLIOGRAPHY

10 ANNEXURE



Introduction to the

Telecommunication

Sector



INTRODUCTION OF TELECOM INDUSTRY

History -India’s telecom renaissance has been remarkable. After 44 years of government

monopoly, market liberalization introduced in 1991 has led to a 7-fold increase in thenumber of phones in just 12 years. The mobile market recently topped 31millioncustomers. India is one of the fastest growing telecom markets with an average annualgrowth of about 22% for basic telephony and over 100% for cellular and Internetservices. Indian Telecom industry is one of the fastest growing telecom markets in theworld. In telecom industry, service providers are the main drivers; whereas equipmentmanufacturers are witnessing growth and decline in successive quarters as sales isdependent on order undertaken by the companies.

HISTORY OF TELECOMMUNICATION

History of Indian Telecommunications started in 1851 when the first operational landlines were laid by the government near Calcutta. After independence in 1947, all theforeign telecommunication companies were nationalized to form the Posts, Telephoneand Telegraph (PTT), a monopoly run by the government's Ministry of Communications.Telecom sector was considered as a strategic service and the government considered it best to bring under state's control. In 1986, two wholly government-owned companieswere created: the Videsh Sanchar Nigam Limited (VSNL) for internationaltelecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service inmetropolitan areas. Mahanagar Telephone Nigam Limited (MTNL), to serve Delhi andBombay, and Videsh Sanchar Nigam Limited (VSNL), to operate international telecomservices. In 1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI

was formed to act as a regulator to facilitate the growth of the telecom sector.

Year-1851: First operational land lines were laid by the government near Calcutta(seat of British power).

Year-1881: Telephone service introduced in India.

Year-1923 Formation of Indian Radio Telegraph Company (IRT).

Year-1947: Nationalization of all foreign telecommunication companies to formthe Posts, Telephone and Telegraph (PTT), a monopoly run by the government's

Ministry of Communications.

Year-1997: Telecom Regulatory Authority of India created.

Year-1999: Cellular Services are launched in India. New National Telecom Policyis adopted.



Year-2000: Formation of India's largest Telecommunication Company, BSNL.



TRAI

The Telecommunications Regulatory Authority of India or TRAI (established 1997)is the independent regulator established by the Government of India to regulate the

telecommunications business in India.

TRAI Mission: The mission of Telecom Regulatory Authority of India (TRAI) is toensure that the interests of consumers are protected and at the same time to foster conditions for growth of telecommunications, broadcasting and cable services in amanner and at a pace which will enable India to play a leading role in the emergingglobal information society.

ABOUT TRAI

The Telecom Regulatory Authority of India Act, 1997, as amended vide the Telecom

Regulatory Authority of India (Amendment) Act, 2000, specifies that the Authority shallconsist of a Chairperson and not more than two whole-time Members and not more thantwo part-time Members. The Chairperson and Members of the Authority are as follows:

Sh. Nripendra Misra - Chairperson

Sh. A. K. Sawhney - Member

Sh. R. N. Prabhakar - Member

Prof. N. Balakrishnan - Part-time Member

Dr. Rajiv Kumar - Part-time Member

TRAI's mission is to create and nurture conditions for growth of telecommunications inthe country in a manner and at a pace which will enable India to play a leading role inemerging global information society. One of the main objectives of TRAI is to provide afair and transparent policy environment which promotes a level playing field andfacilitates fair competition. In pursuance of above objective TRAI has issued from time totime a large number of regulations, orders and directives to deal with issues coming before it and provided the required direction to the evolution of Indian telecom marketfrom a Government owned monopoly to a multi operator multi service open competitive

market. The directions, orders and regulations issued cover a wide range of subjectsincluding tariff, interconnection and quality of service as well as governance of theAuthority.



POLICIES AND ACTS

The telecom industry is regulated by the following acts:

1. TRAI ACT, 1997

2. INDIAN WIRELESS ACT, 1933

3. CABLE TELEVISION NETWORKS ACT, 1995

Also the following government policies help the government to enjoy its control over thetelecoms:

1. NATIONAL TELECOM POLICY, 1994

2. NEW TELECOM POLICY, 1999

3. BROADBAND POLICY, 2004

4. Unlinking Guidelines

5. Down linking Guidelines

6. DTH guidelines



PUBLIC PLAYERS

The Government of India has played a major role in the development of telecommunication sector. Established in 1985, Department of Telecommunications(DOT) was the first government division to provide domestic and long-distance

telephone service in India. In 1986, DOT created Mahanagar Telephone Nigam Limited(MTNL) for telephone services in metropolitan cities and Videsh Sanchar Nigam Limited(VSNL) for international telecommunications as its wholly owned subsidiaries. Later on,in 1997 Telecom Regulatory Authority of India was formed. DOT has now become acorporation named BSNL.

Growth of Public Players in Mobile Telephony

In India, Public Players in mobile telephony have 22% market share. MTNL started itsmobile services in 2000, with its Garuda telecom service. It now owns three brands i.e.Garuda, Trump and Dolphin in mobile segment. BSNL entered mobile segment in 2001

with Cellone and Excel mobile services. Public Players are in the process of expandingtheir networks to provide more coverage. They are focusing on providing services to theinnermost parts of the country.

Growth Trend of Public Players of Indian Mobile Telephony

Financial Year

Subscriber Base

(in millions)

Growth

(over preceding FY)

2001-02 0.26 12%

2002-03 2.64 915.38%

2003-04 5.99 126.89%

2004-05 10.98 83.30%

2005-06 19.7 79.41%

Indian Telecom sector, like any other industrial sector in the country, has gone throughmany phases of growth and diversification. Starting from telegraphic and telephonicsystems 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 3GTechnology in mobile phones. Day by day, both the Public Players and the PrivatePlayers are putting in their resources and efforts to improve the telecommunicationtechnology so as to give the maximum to their customers.



PRIVATE PLAYERS

Private Players are dominating the mobile segment with 78% market share. Withtechnological advancements, Private Players have brought in WLL, CDMA, and GSM

mobile telephony in Indian telecom sector. They are now in the process of launching 3Gtechnology in India. Bharti Airtel, Reliance Communications, Tata Tele-services, IdeaCellular, Vodafone, etc, are the leading Private Players in Indian mobile telephony. Theyare capturing more and more customers with their special discount schemes and lower tariffs. They are also offering many value added services in special rental schemes.

Growth of Public Players in Mobile Telephony

Private Players have shown a high growth rate, adding more and more customers everyyear, taking the total subscriber base to 70.44 million. Private Players are expanding their networks providing more coverage areas. They are offering special rentals and tariff

plans for value added services and outgoing calls to widen their customer base.

Growth Trend of Private Players in Indian Mobile Telephony

Financial Year

Subscriber Base

(in millions)

Growth

(over preceding FY)

2001-02 6.158 120.71%

2002-03 8.948 45.30%

2003-04 27.36 205.76%

2004-05 41.24 50.73%

2005-06 70.44 70.80%

Bharti Airtel has the largest customer base with 31% market share, followed by Vodafoneand BSNL with each holding 22% market share. The 2007 budget has brought further relief to the customers with the reduction in the tariffs, both local and long distance, andwith slashing down the roaming rentals. This is likely to lead to even more people goingfor cellular services and more and more use of the value added services. However,

landline telephony is likely to remain popular, too, in the foreseeable future. MTNL, thelargest landline service provider, has recently taken some bold initiatives to retain itsmarket share and, if possible, expand it.



The leading cellular service providers have the following number of subscribers:

Service Provider No. of CDMA Subscribers No. of GSM Subscribers

Reliance 2.75 crores 38.76 lakhs

Tata 1.07 crores

Airtel 3.37 crores

MTNL 24.98 lakhs

BSNL 2.44 crores

Hutch 2.44 crores

Idea 1.3 crores

Spice 25.56 lakhs

BPL 10.62 lakhs

Aircel 48 lakhs



INDUSTRY PROFILE

Market Share of Telecom Companies as on 31st Mar 2009

BOTTOM FIVE COMPANIES

1. Aircel Cellular Ltd. + Dishnet2. Mahanagar Telephone Nigam Ltd. (MTNL)

3. BPL Mobile Communications Ltd.4. HFCL Infotel Ltd.5. Shyam Telecom Ltd.

TOP FIVE COMPANIES

1. Bharti Airtel Ltd.2. Reliance Communications Ltd.3. Vodafone Essar Ltd.

4. BSNL5. Idea Cellular + Spice

TRENDS OF SUBSCRIBER BASE IN THE PUBLIC AND PRIVATE SECTORS



PSU OPERATORS SUBSCRIBER BASE

PRIVATE OPERATORS SUBSCRIBERS BASE



OBJECTIVEOF THE

STUDY



The basic objective of doing the project is to analyze the financial statements of varioustelecom companies and evaluate their performance in the market over the last 3 years(2006-07, 2007-08, 2008-09)

The objective of this project is to describe the growth trends in the telecom industry and

to present an analysis of different parameters by studying the relationship among thevarious financial factors as disclosed in the financial statements of various companies inthe Indian telecom market.

Major objectives are:

1. Know the Financial Position : The basic objective of studying the financialstatements of the company is to know the financial position of the company.

2. Know the Borrowing & Liquidity Position : The objective is to know the borrowings of the company as well as the liquidity position of the company.

Minor Objectives are:

1. Study the Current Assets & Liability Position: The objective of study is to reviewthe position of the current assets and current liabilities of the company during therelevant years.

2. Help in planning: Financial Analysis helps in planning and forecasting. Over a period of time, a firm or industry develops certain norms that indicate future success& failure. If the relationship changes in firm’s data over different time periods, thevarious tools of financial analysis such as ratios may provide clues on trends andfuture problems.

3. Represent Inter-firm Comparison: Financial Analysis provides the data for inter-firm comparison. Ratios highlight the factors associated with successful and

unsuccessful firms. They also reveal strong firms & weak firms, over-valued andunder-valued firms. The various tools of financial analysis provides inter-firm andintra-firm comparison.



RESEARCH

METHODOLOGY



RESEARCH METHODOLOGY

Research is a diligent and systematic inquiry or investigation into a subject in

order to discover or revise facts, theories, applications etc. Methodology is the basic framework and the approach that has to be followed to carry out theapproach used to collect the data, the sources of primary data, i.e., from whereand how it has been collected. Methodology is system of methods followed by particular discipline. Thus, Research Methodology is the way how we conduct our research.

For my project I have considered most of the finance related books. The bestwebsites are considered which gives all the efficient and effective information.References for the project are from the websites and books and the company’s

annual reports. It is assured that the project has been completed with fulldedication, sincerity and required intensity of hard work. All the data is gatheredfrom the secondary methods of data collection. Like mostly the books and internetfacilities, i.e., websites are used. All the books and websites used are mentioned in bibliography.

RESEARCH DESIGN

The type of the research that will be used in this research is quantitative research.The writers will get the data by analysis and interpretation of themes, words andalso using case as the base, as for the research design.

The descriptive form of research method is adopted for the study. The descriptiveresearch is being used in this research.

Descriptive research is a research in which specific predictions has been made.

The major purpose of descriptive research is the description of the state of affairsof the company as it exits at present.

The nature and characteristics of the financial statements of various telecomcompanies have been described in this study.



DATA COLLECTION

SOURCES OF DATA

The study undertaken to be based on the secondary data i.e. data from authenticatedwebsites, company’s annual report and books for the latest updates just to gain an insightfor the views of various experts.

METHODS OF DATA COLLECTION

This study is based on the annual reports of various telecom companies. Hence, theinformation related to the profitability, short - term and long - term solvency and turnover

were very much required for attaining the objectives of the present study. But at the sametime, information related to the past performance and present performance of thecompany and its cash reserves information is also essential for attaining the objectives of the study.

TOOLS APPLIED

To have a meaningful analysis and interpretation of various data collected, the followingtools were used for this study:

Comparative Statements

Common Size Statements

Ratio Analysis

Cash Flow Statements





Lack of experience on the part of the researchers.

Lack of enthusiasm on the part of officials to provide the required data.

Uniformity of Content and Mode of preparation of financial statements was notthere among the various companies. So it became difficult to compare amongeach other.



COMPANYPROFILE



BSNL( BHARAT SANCHAR NIGAM LIMITED)

Bharat Sanchar Nigam Limited (known as BSNL, India Communications CorporationLimited) is a public sector communications company in India. It is the India'slargest telecommunication company with 24% market share as on March 31, 2008.Its headquarters are at Bharat Sanchar Bhawan, Harish Chandra Mathur Lane,Janpath, New Delhi. It has the status of Mini-ratna-a status assigned to reputedPublic Sector companies in India. BSNL is India's oldest and largestCommunication Service Provider (CSP). Currently BSNL has a customer base of 72.34 million (Basic & Mobile telephony). It has footprints throughout India exceptfor the metropolitan cities of Mumbai and New Delhi which are managed byMTNL. As on March 31, 2008 BSNL commanded a customer base of 31.55million Wire line, 4.58 million CDMA-WLL and 36.21 million GSM Mobilesubscribers. BSNL's earnings for the Financial Year ending March 31, 2007 stoodat INR 397.15b (US$ 9.67 b) with net profit of INR 78.06b (US$ 1.90 billion).Today, BSNL is India's largest Telco and one of the largest Public Sector Undertaking with estimated market value of $ 100 Billion. The company is planning an IPO with in 6 months to offload 10% to public. Bharat Sanchar NigamLimited was formed in October,2000, is the World's 7th largestTelecommunications Company providing comprehensive range of telecom servicesin India: Wire line, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN Services etc. Within a span of fiveyears it has become one of the largest public sector units in India. BSNL hasinstalled Quality Telecom Network in the country and now focusing on improvingit, expanding the network, introducing new telecom services with ICT applicationsin villages and wining customer's confidence. Today, it has about 47.3 million line basic telephone capacity, 4 million WLL capacity, 20.1 Million GSM Capacity,more than 37382 fixed exchanges, 18000 BTS, 287 Satellite Stations, 480196 kmof OFC Cable, 63730 km of Microwave Network connecting 602 Districts, 7330cities/towns and 5.5 Lakhs villages. BSNL is the only service provider, makingfocused efforts and planned initiatives to bridge the Rural-Urban Digital DivideICT sector. In fact there is no telecom operator in the country to beat its reach withits wide network giving services in every nook & corner of country and operatesacross India except Delhi & Mumbai. Whether it is inaccessible areas of Siachenglacier and North-eastern region of the country. BSNL serves its customers with itswide bouquet of telecom services.BSNL is numero uno operator of India in all services in its license area. Thecompany offers vide ranging & most transparent tariff schemes designed to suiteevery customer.BSNL cellular service, Cell One, has more than 17.8 million cellular customers,garnering 24 percent of all mobile users as its subscribers. That means that almostevery fourth mobile user in the country has a BSNL connection. In basic services,BSNL is miles ahead of its rivals, with 35.1 million Basic Phone subscribers i.e. 85 per cent share of the subscriber base and 92 percent share in revenue terms. BSNL



has more than 2.5 million WLL subscribers and 2.5 million Internet Customerswho access Internet through various modes viz. Dial-up, Leased Line, DIAS, andAccount Less Internet (CLI). BSNL has been adjudged as the NUMBER ONE ISPin the country. BSNL has set up a world class multi-gigabit, multi-protocolconvergent IP infrastructure that provides convergent services like voice, data and

video through the same Backbone and Broadband Access Network. At presentthere are 0.6 million Data One broadband customers. The company has vastexperience in Planning, Installation, network integration and Maintenance of Switching & Transmission Networks and also has a world class ISO 9000 certifiedTelecom Training Institute. The turnover, nationwide coverage, reach,comprehensive range of telecom services and desire to excel has made BSNL No. 1Telecom Company of India.

MISSION

"To provide in its area of operation, in a leading way, world class telecom services which

are demanded, keeping always the customer's delight as its aim, so that it continues to be

the premier Indian Telecom Company".

VISION

• Become a total solution provider company and to provide world class

telecom services at affordable prices.

• Become a global telecom company and to find a place in the ‘Fortune 500’

companies.• Enter into expend new services via, long distance, cellular mobile, W-

CDMA, internet /broadband and ‘IN’ – services and development of telecom

software.

• Become the largest provider of private networks and lines.

• Venture into other areas in India and abroad on the strength of our core

competency.

CORPORATE OBJECTIVES

• To expend customer base and services.

• To achieve the highest level of customer satisfaction and delight.



• To diversify in other area for providing telecom services at national and

international level.

• To provide convergence of telecom, information, technology and related

services.

• To improve productivity by training and redeployment of manpower.



BHARTI AIRTEL LIMITED

“Bharti Airtel” formerly known as Bharti Tele-Ventures Limited (BTVL) is among

India's largest mobile phone and Fixed Network operators. With more than 60 million

subscriptions as of 30th December 2008. It offers its mobile services under the Airtel

brand and is headed by Sunil Mittal. The company also provides telephone services and

Internet access over DSL in 14 circles. The company complements its mobile, broadband

& telephone services with national and international long distance services. The company

also has a submarine cable landing station at Chennai, which connects the submarine

cable connecting Chennai and Singapore. The company provides reliable end-to-end data

and enterprise services to the corporate customers by leveraging its nationwide fiber optic

backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and

international bandwidth access through the gateways and landing station. Airtel is the

largest cellular service provider in India in terms of number of subscribers. Bharti Airtel

owns the Airtel brand and provides the following services under the brand name Airtel:

Mobile Services (using GSM Technology), Broadband & Telephone Services (Fixed line,

Internet Connectivity (DSL) and Leased Line), Long Distance Services and Enterprise

Services (Telecommunications Consulting for corporates). Leading international

telecommunication companies such as Vodafone and SingTel held partial stakes in BhartiAirtel. In April 2006 Bharti Global Limited was awarded a telecommunications license in

Jersey in the Channel Islands by the local telecommunications regulator the JCRA. In

September 2006 the Office of Utility Regulation in Guernsey awarded Guernsey Airtel

with a mobile telecommunications license. In May 2007 Jersey Airtel and Guernsey

Airtel announced the launch of a relationship with Vodafone for island mobile

subscribers. In July 2007, Bharti Airtel signed an MoU with Nokia-Siemens for a 900

million dollar expansion of its mobile and fixed network. In August 2007, the company

announced it has launched a customized version of Google search engine that will

provide an 'array of services' to its broadband customers.





MTNL (Mahanagar Telephone Nigam Limited)

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, introduce new services and to raise revenue for telecom development

needs of India's key metros, Delhi (the political capital) and Mumbai (the business capital

of India). 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.

MTNL as a company, over last nineteen years, grew rapidly by modernizing the network,

incorporating the State-of-the-art technologies and a customer friendly approach. The

Company providing various types of telecommunication services including Telephone,

telex, wireless, data communication, telematic and other like forms of communication

(Internet). First digital exchange world technology brought to India by the company

during the year 1986. Phone Plus services was offered by the company in the year 1988,

it gives multiplied benefits to telephone users. During the year 1992, the companyintroduced Voice Mail Service. MTNL had introduced the Integrated Services Digital

Network (ISDN) services in the period of 1996. Apart from this IVRS (Interactive Voice

Response System) like local assistance changed number information, and fault booking

system ensuring round the clock service, a CD-ROM version of the telephone directory

and an on-line directory enquiry through PC was introduced during the year 1997. To

facilitate the clientele, MTNL launched the country's first toll-free service in Delhi in the

period of 1998. During the year 1999, MTNL brought in the most widely using service

called Internet (Network of Networks), the extreme level of information exchange.

During the year 2001, 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. The Company established Wi-Fi

& digital certification services in the identical year. MTNL bagged the award for

excellence in cost reduction in the year 2004. State of the art training centre of the

company 'CETTM' was commissioned in the year of 2004. The Company introduced the

broadband services under the brand name of 'TRI BAND' during the year 2005. MTNL-

STPI IT Services Ltd is a 50:50 Joint Venture between Software Technology Parks of

India (STPI) and the company. The Company has restructured Millennium Telecom Ltd

(MTL) as a Joint Venture company of MTNL and BSNL with 51% and 49% equity

participation respectively. To remain market leader in providing world class Telecom andIT related services at affordable prices, the company partaking its all efforts in the same

business area and MTNL wants to become a global player, also find a place in the

Fortune 500' companies.



RELIANCE COMMUNICATIONS LTD

HISTORY

Reliance Infocomm was founded by Dhirubhai Ambani. Between 1999 to 2002 Reliance

Infocomm built 60,000 km of fibre optic backbone in India. This network was

commissioned on December 28, 2002.

BUSINESS REVIEW

During the twelve months ended March 31, 2007, revenues of the Wireless business

increased by 46% to Rs. 10,728 crore (US$ 2,489 million) from Rs. 7,364 crore (US$

1,709 million). Wireless EBITDA increased to Rs. 3,984 crore (US$ 924 million) from

Rs. 2,250 crore (US$ 522 million). Margins expanded to 37% from 31%. EBITDA of the

Global business increased by 98% during the twelve months ended March 31, 2007 to Rs.

1,271 crore (US$ 295 million). EBITDA margins increased to 24% from 12% last year.

In the same period, the Broadband business achieved revenue growth of 123% to Rs.

1,144 crore (US$ 265 million), and EBITDA increased by more than 6 times, to Rs. 519

crore (US$ 120 million). The EBITDA margin crossed 45% in the twelve months ended

March 31, 2007, from 15% in the corresponding period in the previous year.

RELAINCE GROUPReliance – Anil Dhirubhai Ambani Group, an offshoot of the Reliance Group founded by

Shri Dhirubhai H Ambani (1932-2002), ranks among India’s top three private sector

business houses in terms of net worth. The group has business interests that range from

telecommunications (Reliance Communications Limited) to financial services (Reliance

Capital Ltd) and the generation and distribution of power (Reliance Energy Ltd).

Reliance – ADA Group’s flagship company, Reliance Communications, is India's largest

private sector information and Communications Company, with over 55 million

subscribers. It has established a pan-India, high-capacity, integrated (wireless and

wireline), convergent (voice, data and video) digital network, to offer services spanning

the entire infocomm value chain. Other major group companies — Reliance Capital and

Reliance Energy — are widely acknowledged as the market leaders in their respective

areas of operation.



DATA FINDINGS

AND

ANALYSIS



Analysis of Financial Statements/Financial Analysis/Financial Statements Analysis

Financial Statements are the summarized statements of accounting data produced at theend of the accounting process by an enterprise through which it communicates

accounting information to the external users. The external users can be investors, lenders,suppliers and trade creditors, customers, government and their agencies, public at largeand employees. Analysis of Financial Statements is a systematic process of the criticalexamination of the financial information contained in the financial statements in order tounderstand and make decisions regarding the operations of the firm.

Customarily, a set of financial statements include:

(i) Balance Sheet(ii) Profit and Loss Account(iii) Schedules and notes forming part of the Balance Sheet and Profit & Loss Account

(i) Balance Sheet is a statement of assets and liabilities indicating the financial position of an enterprise at a given date.

(ii) Profit and Loss Account shows the net result of business operations during anaccounting period.

(iii) Schedules have the details of amounts in the Balance Sheet and Profit and LossAccount, while the Notes are the statement of accounting policies adopted andexplanation of material information.

Essentials of Financial Statements

1. Accurate information2. Understandability3. Comparable4. Verifiable5. Relevant6. Timeliness

Parties interested in Financial Statements or Users of Financial Statements

1. Investors and Potential Investors2. Lenders3. Creditors4. Customers5. Employees and Trade Unions6. Government and its Agencies7. Stock Exchange8. Public



Tools of Analysis of Financial Statements

1. Comparative Statements2. Common Size Statements

3. Ratio Analysis4. Cash Flow Statements5. Funds Flow Statements

I. Comparative Statements/ Comparative Financial Statements

Comparative Financial Statement is a tool of financial analysis that depicts change ineach item of the financial statement in both absolute and percentage term, taking the itemin preceding accounting period as base. Although it may be said that any statement can be prepared in comparative form, But in practice, only Balance Sheet and Profit and Loss

Account is prepared in this form. Comparative Statements may be prepared to show:

(i) Absolute Data-Rupee amount only(ii) Increase or Decrease in Absolute Data in terms of money value(iii) Increase or Decrease in Absolute Data in terms of percentage(iv) Comparisons expressed in ratios(v) Percentage of Totals

A. Comparative Balance Sheet

Comparative Balance Sheets analysis of an enterprise is the study of the trend of the sameitems, group of items and computed items in two or more balance sheets of the same business enterprise on different dates. A Comparative Balance Sheet shows the effects of business operation on its assets, liabilities and capital.

Particulars Previous Year

(Rs.)

Current Year

(Rs.)

Absolute Change

(Rs.)

Percentage Chang

(%)

Sources of Funds

Total ____________ ____________ _

______________ _

________________

Application of Funds

Total ____________ ____________

_

______________

_

________________



B. Comparative Profit and Loss Account

Comparative Profit and Loss Account shows the operating results for a number of accounting periods so that changes in absolute data in terms of money and percentagefrom one period to another may be known. The Comparative Income Statement shows:

(i) Increase or Decrease in Gross Sales(ii) Increase or Decrease in Net Sales(iii) Increase or Decrease in Cost of goods sold and its causes(iv) Increase or Decrease in Gross Profit(v) Increase or Decrease in Operating Profit(vi) Increase or Decrease in operating expenses(vii) Increase or Decrease in non- operating expenses

(viii) Analysis of various items of income(ix) Analysis of Net Profit and its percentage with sales

Particulars Previous Year

(Rs.)

Current Year

(Rs.)

Absolute Change

(Rs.)

Percentage Chang

(%)

Sales (Net)

Less: Cost of goodssold

Gross Profit

Less: OperatingExpenses

Net Operating Profit

Other Income

Profit before Interestand Tax

Less: Interest Paid

Profit before Tax

Income Tax Payable

Profit after Tax

II. Common Size Statements

Common-size Financial Statements are the statements in which amounts of individualitem of Balance Sheet and Profit and Loss Account for two or more years are written.These amounts are further converted into percentages to some common base. It can be Net Sales in this case of Profit and Loss Account and total of Balance Sheet for theBalance Sheet.



A. Common-size Balance Sheet

Particulars

Amount (Rs.) Percentage of Balance Sheet Total (%

PreviousYear

CurrentYear

Previous Year Current Year

Sources of Funds

Total Capital and Liabilities ________ _________

_

________________

_

_____________


Total Assets ________ _________

_

________________

_

_____________

B. Common-size Profit and Loss Account

Particulars

Amount (Rs.) Percentage of Balance Sheet Total(%)

Previous Year Current Year Previous Year Current Year

Sales (Net)

Less: Cost of goodssold

Gross Profit

Less: OperatingExpenses

Net Operating Profit

Other Income

Profit before Interestand Tax

Less: Interest Paid

Profit before Tax

Income Tax Payable

Profit after Tax





III. RATIO ANALYSIS

A Ratio gives the mathematical relationship between one variable and another. Ratioanalysis helps in valuing the firm in quantitative terms. Ratios are classified as follows:

1. Liquidity Ratios2. Turnover Ratios3. Profitability Ratios4. Ownership Ratios

1. Liquidity Ratios

Liquidity implies firm’s ability to pay its debts in short run. This ability can be measured by Liquidity Ratios. Current Ratio and Quick Ratio are the two ratios which directlymeasure Liquidity. Receivables turnover Ratio and Inventory Turnover Ratio are the two

ratios which in directly measure Liquidity.

A. Current ratio = Current AssetsCurrent Liabilities

Current assets which are converted into cash within one year.Current liabilities are liabilities which are to be repaid within a period of 1 year.

Current Assets Current Liabilities

Cash Loans And Advances

Marketable Securities Trade Creditors

Debtors O.S. Expenses

Inventories Provisions

Loans and Advances Pre Received incomes

Prepaid Expenses

O/S Incomes

IDEAL RATIO = 2:1

B. Quick ratio or Liquid ratio or Acid Test ratio = Quick Assets/Liquid AssetsCurrent Liabilities



Quick Assets = Current Assets – Inventories- Prepaid expenses

Ratio of quick assets to quick liabilities. Quick assets which can be converted into cashvery quickly. Quick liabilities are liabilities which have to be necessarily paid with in 1year.

IDEAL RATIO = 1:1

2. Turnover Ratios (Activity Ratios)

A. Accounts Receivable Turnover ratio or Debtors Turnover Ratio = Net Credit SalesAverage

Accounts Receivables

Average Accounts Receivables = Opening receivables + Closing receivables2

It shows the Relationship between debtors and sales

B. Inventory Turnover Ratio = Cost of goods SoldAverage 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

Average Inventory = Opening Stock + Closing Stock 2

Stock Conversion Period = Cost of goods Sold * No of days in a year/Average Inventory

3. Profitability or Efficiency Ratios

These Ratios measure the efficiency of forms activities and its ability to generate profits.

(i) Gross Profit Margin Ratio(ii) Net Profit Margin Ratio(iii) Return On Equity

(i) Gross Profit Margin Ratio = Gross ProfitNet Sales



Gross Profit = Sales – Cost of goods sold Net Sales = Sales – Sales Return - Excise DutyThere is no Ideal Ratio. Higher the ratio better will be the performance of the business.

(ii) Net Profit Margin Ratio = Net Profit

Net Sales

It measures the overall efficiency of production, administration, selling, financing, pricing and tax management. It shows the result of overall operation of the firm.

(iii) Return on Equity = Net IncomeAverage Equity

Net income = PAT (Profit after Tax) is an important profit indicator to share holders of the firm.

4. Ownership Ratios/ Capital Structure Ratios

a) Debt Equity Ratio = DebtEquity

= Long Term Liabilities + Current LiabilitiesShare Holders Funds

Ratio 2 or Less – Exposes Its Creditors Lesser Risk Ratio >2 – Exposes Its Creditors Higher Risk

b) Debt Assets Ratio = DebtAssets



IV. CASH FLOW STATEMENT

Introduction of Cash

Cash, the most liquid asset, and also referred to as the life blood of a business enterpriseis of vital importance to the daily operation of business firms. Its efficient management iscrucial to the solvency of business because cash is the focal point of the fund flow in a business. ‘Cash’ refers to the cash as well as bank balance of the company to the end of the accounting period, as reflected in the balance sheet of the company. While the profitsreflects 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 theoutflow of cash during a particular period. All transactions which lead to increase in cashand cash equivalents are classified as inflows of cash and all those transactions whichlead to decrease in cash and cash equivalents are classified as outflows of cash.

Introduction of Cash Flow Statement

Cash Flow Statement is a statement that shows flow of cash and cash equivalents duringa period. Cash Flow Statement is prepared with an objective to highlight the sources anduses of cash and cash equivalents for a period. Cash Flow Statement is classified under operating activities, investing activities and financing activities.

Cash from operating activities includes the cash effects of those transactions which leadto calculation of net profit or loss such as cash receipts from sale of goods & rendering of services, royalties, fees, commission & other revenue and cash payments to suppliers,employees, and cash relating to future contracts for dealing purposes.

Cash from investing activities include transactions involving purchase and sale of long-term productive assets like machinery, land and building and cash payments for capitalized research and development costs.

Cash from financing activities includes cash proceeds from issue of shares, debenturesand other short-term borrowings, payment of dividend and cash repayments of theamounts borrowed.



I. COMPARATIVE STATEMENTS

COMPARATIVE BALANCE SHEET OF BSNL

(Rs. in Lakhs)

Particulars 2008(Rs.) 2009(Rs.) Absolute Change

(Rs.)

Percentage Change

(%)

Sources of Funds

Shareholder’s Funds

Capital 1,250,000 1,250,000 --------------- ---------------

Reserves And Surplus 7,562,825 7,613,358 50,533 0.66

Loan Funds

Unsecured Loans 338,887 341,384 2,497 0.73

Deferred Tax Liability-Net 131,053 64,484 (66,569) (50.79)

Total 9,282,765 9,269,226 (13,539) (0.14)


Fixed Assets

Gross Block 12,457,823 13,224,291 766,468 6.15

Less:-Depreciation 6,987,974 7,792,203 804,229 11.51

Net Block 5,469,849 5,432,088 (37,761) (0.69)

Capital Work-In-Progress 266,562 492,864 226,302 84.89

Decommissioned Assets 389 4,644 4,255 1093.83

5,736,800 5,929,596 192,796 3.361

INVESTMENTS 20,000 20,000 --------------- ---------------

Current Assets, Loan and

Advances

Inventories 322,006 457,258 135,252 42.00

Sundry Debtors 546,551 472,054 (74,497) (13.63)

Cash and Bank Balances 4,055,158 3,813,430 (241,728) (5.96)

Other Current Asset -Accrued interest

137,687 87,239 (50,448) (36.63)

Loans and Advances 744,441 944,880 200,439 26.92

5,805,843 5,774,861 (30,982) (0.53)

Less : Current Liabilities

and ProvisionsCurrent Liabilities 1,739,788 2,072,702 332,914 19.16

Provisions 606,321 493,878 (112,443) (18.545)

2,346,109 2,566,580 220,471 9.39

Net Current Assets 3,459,734 3,208,281 (251,453) (7.267)Inter/Intra Circle Remittance 66,231 111,349 45,118 68.12

Total 9,282,765 9,269,226 (13539) 0.15



COMPARATIVE BALANCE SHEET OF BHARTI AIRTEL

(Rs. in lakhs)

PARTICULARS 2008(Rs.) 2009(Rs.) Absolute

Change(Rs.)

Percentage

Change (%)Sources Of Funds

Total Share Capital 1,897.91 1,898.24 0.33 0.02

Equity Share Capital 1,897.91 1,898.24 0.33 0.02

Share Application Money 57.63 116.22 58.59 101.67

Preference Share Capital 0.00 0.00 0.00 0.00

Reserves 18,283.82 25,627.38 7,343.56 40.16

Revaluation Reserves 2.13 2.13 0.00 0.00

Net worth 20,241.49 27,643.97 7,402.48 36.57

Secured Loans 52.42 51.73 (0.69) (1.32)

Unsecured Loans 6,517.92 7,661.92 1,144.00 17.55Total Debt 6,570.34 7,713.65 1,143.31 17.40

Total Liabilities 26,811.83 35,357.62 8,545.79 31.87

Application Of Funds

Gross Block 28,115.65 37,266.70 9,151.05 32.55

Less: AccumulatedDepreciation

9,085.00 12,253.34 3,168.34 34.87

Net Block 19,030.65 25,013.36 5,982.71 31.44

Capital Work in Progress 2,751.08 2,566.67 (184.41) (6.70)

Investments 10,952.85 11,777.76 824.91 7.53

Current Assets

Inventories 56.86 62.15 5.29 9.30

Sundry Debtors 2,776.46 2,550.05 (226.41) (8.15)

Cash and Bank Balance 200.86 153.44 (47.42) (23.61)

Total Current Assets 3,034.18 2,765.64 (268.54) (8.85)

Loans and Advances 5,103.13 5,602.83 499.70 9.79

Fixed Deposits 302.08 2,098.16 1,796.08 594.57

Total CA, Loans &

Advances8,439.39 10,466.63 2,027.24 24.02

Deferred Credit 0.00 0.00 0.00 0.00

Current Liabilities 12,400.38 13,832.49 1,432.11 11.55Provisions 1,961.95 634.40 (1,327.55) (67.66)

Total CL & Provisions 14,362.33 14,466.89 104.56 0.73

Net Current Assets (5,922.94) (4,000.26) 1,922.68 (32.46)

Miscellaneous Expenses 0.20 0.09 (0.11) (55.00)

Total Assets 26,811.84 35,357.62 8,545.78 31.87



COMPARATIVE BALANCE SHEET OF TATA COMMUNICATIONS LIMITED

(Rs. in lakhs)

PARTICULARS 2008(R S.) 2009(R S.) ABSOLUTE CHANGE

(R S.)

PERCENTAGE

CHANGE (%)

SOURCES OF FUNDS

TOTAL SHARE CAPITAL 285 285 0.00 0.00

EQUITY SHARE CAPITAL 285 285 0.00 0.00

SHARE APPLICATION MONEY 0 0 0.00 0.00

PREFERENCE SHARE CAPITAL 0 0 0.00 0.00

R ESERVES 6,262.34 6,513.05 250.71 4.00

R EVALUATION R ESERVES 0 0 0.00 0.00

NET WORTH 6,547.34 6,798.05 250.71 3.83

SECURED LOANS 0 1,288.82 1288.82 0.00

U NSECURED LOANS 777.8 1,039.05 261.25 33.59

TOTAL DEBT 777.8 2,327.87 1550.07 199.29

TOTAL LIABILITIES 7,325.14 9,125.92 1800.78 24.58

APPLICATION OF FUNDS

GROSS BLOCK 4,352.65 5,890.00 1537.35 35.32

LESS: ACCUMULATED

DEPRECIATION 1,363.75 1,792.06 428.31 31.41

NET BLOCK 2,988.90 4,097.94 1109.04 37.11

CAPITAL WORK IN PROGRESS 543.77 536.38 (7.39) (1.36)

I NVESTMENTS 2,103.77 2,723.67 619.90 29.47

CURRENT ASSETS

I NVENTORIES 5.45 1.56 (3.89) (71.38)

SUNDRY DEBTORS 1,063.13 1,342.22 279.09 26.25

CASH AND BANK BALANCE 79.63 109.21 29.58 37.15

TOTAL CURRENT ASSETS 1,148.21 1,452.99 304.78 26.54

LOANS AND ADVANCES 2,991.94 3,209.51 217.57 7.27FIXED DEPOSITS 0 263.16 263.16 0.00

TOTAL CA, LOANS &

ADVANCES

4,140.15 4,925.66 785.51 18.97

DEFERRED CREDIT 0 0 0.00 0.00

CURRENT LIABILITIES 2,200.17 2,869.12 668.95 30.40



PROVISIONS 251.28 288.61 37.33 14.86

TOTAL CL & PROVISIONS 2,451.45 3,157.73 706.28 28.81

NET CURRENT ASSETS 1,688.70 1,767.93 79.23 4.69

MISCELLANEOUS EXPENSES 0 0 0.00 0.00

TOTAL ASSETS

7,325.14 9,125.92 1800.78 24.58



COMPARATIVE PROFIT AND LOSS ACCOUNT OF BSNL

(Rs. in lakhs)

Particulars 2008(Rs.) 2009(Rs.)

Absolute

Change(Rs.)

Percentage

(%)

INCOME

Net Sales 3,235,953 3,026,857 (209096.00) (6.46)

Other Income 569,387 554,335 (15052.00) (2.64)

3,805,340 3,581,192 (224148.00) (5.89)

EXPENDITUREEmployees' Remuneration andBenefits

880,891 1,136,323 255432.00 29.00

License fee and Spectrum fee (Refer Note 13 on Schedule U) 315,213 264,635 (50578.00) (16.05)

Administrative, Operating and Other Expenses 1,111,675 1,137,797 26122.00 2.35

Financial Expenses 86,254 44,325 (41929.00) (48.61)

Depreciation 969,610 852,341 (117269.00) (12.09)

3,363,643 3,435,421 71778.00 2.13

Profit before Prior period items 441,697 145,771 (295926.00) (67.00)

Prior period items (Net) 3,458 (18,608) (22066.00) (638.11)

Profit before Extraordinary items 445,155 127,163 (317992.00) (71.43)

Extraordinary items ------ ------ 0.00 0.00

Profit before taxation 445,155 127,163 (317992.00) (71.43)

Current Tax 136,094 132,322 (3772.00) (2.77)

MAT Credit (2,171) 0 2171.00 (100.00)

Deferred Tax 6,448 (66,569) (73017.00) (1132.40)

Fringe Benefit Tax 3,700 3,800 100.00 2.70

Wealth Tax 145 125 (20.00) (13.79)

Profit for the year after taxation 300,939 57,485 (243454.00) (80.90)

Appropriation :



Interim Dividends on Equity ShareCapital 30,000 0 (30000.00) (100.00)

Proposed Dividends:

On Equity Share Capital 52,500 0 (52500.00) (100.00)

Tax on Dividends 25,493 0 (25493.00) (100.00)

Transfer to General Reserve 60,188 0 (60188.00) (100.00)

Surplus carried to Balance Sheet 65,258 57,485 (7773.00) (11.91)

Net Profit 300,939 57,485 (243454.00) (80.90)

Earnings Per Share (Rs.)

Basic earnings per equity share 4.44 1.15 (3.29) (74.10)



COMPARATIVE PROFIT AND LOSS ACCOUNT OF BHARTI AIRTEL

(Rs. in lakhs)


Change(Rs.)

Percentage

Change (%)Income

Sales Turnover 25,761.11 34,048.32 8287.21 32.17

Excise Duty 0 0 0.00 0.00

Net Sales 25,761.11 34,048.32 8287.21 32.17

Other Income 104.04 (1,261.75) (1365.79) (1312.75)

Stock Adjustments 9.05 5.29 (3.76) (41.55)

Total Income 25,874.20 32,791.86 6917.66 26.74

Expenditure

Raw Materials 42.9 17.7 (25.20) (58.74)

Power & Fuel Cost 0 0 0.00 0.00

Employee Cost 1,297.88 1,397.54 99.66 7.68

Other Manufacturing Expenses 7,339.01 8,627.13 1288.12 17.55

Selling and Admin Expenses 5,892.50 9,385.68 3493.18 59.28

Miscellaneous Expenses 535.46 1,409.89 874.43 163.30

Pre-operative Exp. Capitalized 0 0 0.00 0.00

Total Expenses 15,107.75 20,837.94 5730.19 37.93

Operating Profit 10,662.41 13,215.67 2553.26 23.95

PBDIT 10,766.45 11,953.92 1187.47 11.03

Interest 393.43 434.16 40.73 10.35PBDT 10,373.02 11,519.76 1146.74 11.06

Depreciation 3,166.58 3,206.28 39.70 1.25

Other Written Off 266.07 178.82 (87.25) (32.79)

Profit Before Tax 6,940.37 8,134.66 1194.29 17.21

Extra-ordinary items (60.67) (46.15) 14.52 (23.93)

PBT (Post Extra-ordinary Items) 6,879.70 8,088.51 1208.81 17.57

Tax 632.43 321.78 (310.65) (49.12)

Reported Net Profit 6,244.19 7,743.84 1499.65 24.02

Total Value Addition 15,064.84 20,820.24 5755.40 38.20

Preference Dividend 0 0 0.00 0.00

Equity Dividend 0 379.65 379.65 0.00Corporate Dividend Tax 0 64.52 64.52 0.00

Per share data (annualised)

Shares in issue (lakhs) 18,979.07 18,982.40

Earning Per Share (Rs) 32.9 40.79 7.89 23.98

Equity Dividend (%) 0 20 20.00 0.00

Book Value (Rs) 106.34 145.01



COMPARATIVE PROFIT AND LOSS ACCOUNT OF TATA COMMUNICATIONS LTD

(Rs. in lakhs)


Change(Rs.)

Percentage

Change (%)

Income

Sales Turnover 3,283.30 3,749.43 466.13 14.20


Net Sales 3,283.30 3,749.43 466.13 14.20

Other Income 173.25 473.58 300.33 173.35

Stock Adjustments 0 0 0.00 0.00

Total Income3,456.55 4,223.01 766.46 22.17

Expenditure

Raw Materials 10.63 11.2 0.57 5.36


Employee Cost 242.43 340.07 97.64 40.28

Other Manufacturing Expenses1,936.25 1,943.03 6.78 0.35

Selling and Admin Expenses 323.08 423.1 100.02 30.96

Miscellaneous Expenses 125.36 180.75 55.39 44.18

Pre-operative Exp. Capitalized0 0 0.00 0.00

Total Expenses 2,637.75 2,898.15 260.40 9.87

Operating Profit 645.55 851.28 205.73 31.87

PBDIT 818.8 1,324.86 506.06 61.81

Interest 44.82 196.7 151.88 338.87

PBDT 773.98 1,128.16 354.18 45.76

Depreciation 301.31 425.27 123.96 41.14

Other Written Off 0 0 0.00 0.00



Profit Before Tax 472.67 702.89 230.22 48.71

Extra-ordinary items 16.76 5.88 (10.88) (64.92)

PBT (Post Extra-ordinary Items)489.43 708.77 219.34 44.82

Tax 145.52 197.54 52.02 35.75

Reported Net Profit 304.46 515.95 211.49 69.46

Total Value Addition 2,627.12 2,886.95 259.83 9.89

Preference Dividend 0 0 0.00 0.00

Equity Dividend 128.25 128.25 0.00 0.00

Corporate Dividend Tax 21.8 21.8 0.00 0.00




Equity Dividend (%) 45 45 0.00 0.00

Book Value (Rs) 229.73 238.53



INTERPRETATION OF COMPARATIVE STATEMENTS

The comparative income statement (Profit & Loss A/c) of BSNL for the years 2007-08and 2008-09 shows that sales is decreased by 6% and Gross Profit is also decreased by

71%. Thus, the decrease in gross profit is not adequate to cover the decrease in operatingexpenses and leave to decrease in operating profit. The net profit is also decreaseddrastically by 81%. This shows that overall position of the company is not good enough.Whereas, the comparative income statement (Profit & Loss A/c) of Bharti Airtel for thesame year’s shows that sales is increased by 32% and gross profit is increased by 17%, itis adequate to cover the increase in operating expenses and leave to increase in operating profit. The net profit is also increased by 24% which depicts that the overall position of the company is good. Tata communication also shows the good sign of growth in market.

The comparative balance sheet of BSNL reveals that the shareholder’s funds have

increased by only 0.66%. This increase happens to be the result of an increase in reserveand surplus (0.66%), not due to the share capital. The loan funds have also increased dueto increase in unsecured loans by 0.73%. It means that the company tapped equity sharecapital, secured loans and unsecured loans in order to raise funds. Assets side of comparative balance sheet shows application of funds. Funds have been used to acquirefixed assets as the gross block of fixed assets shows an increase of 6%. There is noincrease or decrease in the company’s Investments. But, the net current assets have beendecreased by 7% which shows that current assets are decreasing and current liabilities areincreasing. As a result, this is not a good sign for the company. But in comparison toother companies, both Bharti Airtel and Tata communication Ltd. shows the positive signof growth as their liabilities and assets are not drastically increased or decreased. BSNL

have to adopt various strategies for effective functioning of its various departments.



II. COMMON SIZE STATEMENTS

COMMON-SIZE BALANCE SHEET OF BSNL

(Rs. in lakhs)

Particulars

Amount(Rs.) Percentage of Balance Sheet

Total (%)

2008 2009 2008 2009

Sources of Funds


Capital 1,250,000 1,250,000 13.47 13.49

Reserves And Surplus 7,562,825 7,613,358 81.47 82.14

Loan Funds

Unsecured Loans 338,887 341,384 3.65 3.68

Deferred Tax Liability-Net131,053 64,484 1.41 0.70

Total 9,282,765 9,269,226


Fixed Assets

Gross Block 12,457,823 13,224,291 134.20 142.67Less:-Depreciation 6,987,974 7,792,203 75.28 84.07

Net Block 5,469,849 5,432,088 58.92 58.60

Capital Work-In-Progress266,562 492,864 2.87 5.32

Decommissioned Assets 389 4,644 0.00 0.05

5,736,800 5,929,596 61.80 63.97

INVESTMENTS 20,000 20,000 0.22 0.22

Current Assets, Loan and

AdvancesInventories 322,006 457,258 3.47 4.93

Sundry Debtors 546,551 472,054 5.89 5.09

Cash and Bank Balances 4,055,158 3,813,430 43.68 41.14

Other Current Asset - Accrued

interest137,687 87,239 1.48 0.94

Loans and Advances 744,441 944,880 8.02 10.19



5,805,843 5,774,861 62.54 62.30

Less : Current Liabilities and

Provisions

Current Liabilities 1,739,788 2,072,702 18.74 22.36

Provisions 606,321 493,878 6.53 5.33

2,346,109 2,566,580 25.27 27.69

Net Current Assets 3,459,734 3,208,281 37.27 34.61

Inter/Intra Circle Remittance66,231 111,349 0.71 1.20

Total 9,282,765 9,269,226



COMMON-SIZE BALANCE SHEET OF BHARTI AIRTEL

(Rs. in lakhs)

Particulars


Total (%)

2008 2009 2008 2009

Sources Of Funds

Total Share Capital 1,897.91 1,898.24 7.08 5.36

Equity Share Capital 1,897.91 1,898.24 7.08 5.36



Reserves 18,283.82 25,627.38 68.19 0.19


Net worth 20,241.49 27,643.97 75.49 78.18Secured Loans 52.42 51.73 0.19 0.15

Unsecured Loans 6,517.92 7,661.92 24.31 21.67

Total Debt 6,570.34 7,713.65 24.51 21.82

Total Liabilities 26,811.83 35,357.62


Gross Block 28,115.65 37,266.70 104.86 105.39


9,085.00 12,253.34 33.88 34.65

Net Block 19,030.65 25,013.36 70.98 70.74

Capital Work in Progress 2,751.08 2,566.67 10.26 7.26

Investments 10,952.85 11,777.76 40.85 33.31

Current Assets

Inventories 56.86 62.15 0.21 0.17

Sundry Debtors 2,776.46 2,550.05 10.35 7.21

Cash and Bank Balance 200.86 153.44 0.75 0.43

Total Current Assets 3,034.18 2,765.64 11.32 7.82


Fixed Deposits 302.08 2,098.16 1.13 5.93

Total CA, Loans &

Advances

8,439.39 10,466.63 31.48 29.60

Deferred Credit 0.00 0.00 0.00 0.00

Current Liabilities 12,400.38 13,832.49 46.25 39.12

Provisions 1,961.95 634.40 7.32 1.79


Net Current Assets (5,922.94) (4,000.26) (22.09) (11.31)


Total Assets 26,811.83 35,357.62





COMMON-SIZE BALANCE SHEET OF TATA COMMUNICATIONS LTD.

(Rs. in lakhs)

ParticularsAmount(Rs.) Percentage of Balance Sheet

Total (%)

2008 2009 2008 2009

Sources Of Funds

Total Share Capital 285 285 3.89 3.12

Equity Share Capital 285 285 3.89 3.12

Share Application Money 0 0 0.00 0.00

Preference Share Capital 0 0 0.00 0.00

Reserves 6,262.34 6,513.05 85.49 71.37Revaluation Reserves 0 0 0.00 0.00

Net worth 6,547.34 6,798.05 89.38 74.49

Secured Loans 0 1,288.82 0.00 14.12

Unsecured Loans 777.8 1,039.05 10.62 11.39

Total Debt 777.8 2,327.87 10.62 25.51



Gross Block 4,352.65 5,890.00 59.42 64.54


1,363.75 1,792.06 18.62 19.64

Net Block 2,988.90 4,097.94 40.80 44.90

Ca pital Work in Progress 543.77 536.38 7.42 5.88

Investments 2,103.77 2,723.67 28.72 29.85

Current Assets 0.00 0.00

Inventories 5.45 1.56 0.07 0.02

Sundry Debtors 1,063.13 1,342.22 14.51 14.71

Cash and Bank Balance 79.63 109.21 1.09 1.20

Total Current Assets 1,148.21 1,452.99 15.67 15.92


Fixed Deposits 0 263.16 0.00 2.88

Total CA, Loans &

Advances4,140.15 4,925.66 56.52 53.97

Deferred Credit 0 0 0.00 0.00



Current Liabilities 2,200.17 2,869.12 30.04 31.44

Provisions 251.28 288.61 3.43 3.16


Net Current Assets 1,688.70 1,767.93 23.05 19.37

Miscellaneous Expenses 0 0 0.00 0.00Total Assets 7,325.14 9,125.92



COMMON-SIZE PROFIT AND LOSS ACCOUNT OF BSNL

(Rs. in lakhs)

Particulars


Total (%)

2008 2009 2008 2009

INCOME

Net Sales 3,235,953 3,026,857 100.00 100.00

Other Income 569,387 554,335 17.59 18.31

3,805,340 3,581,192

EXPENDITURE

Employees' Remuneration andBenefits

880,891 1,136,323 27.22 37.54

License fee and Spectrum fee(Refer Note 13 on Schedule U) 315,213 264,635 9.74 7.39

Administrative, Operating andOther Expenses

1,111,675 1,137,797 34.35 37.59

Financial Expenses 86,254 44,325 2.67 1.46

Depreciation 969,610 852,341 29.96 28.16

3,363,643 3,435,421 103.94 113.49

Profit before Prior period

items441,697 145,771 13.65 4.82

Prior period items (Net) 3,458 (18,608) 0.11 (0.61)

Profit before Extraordinary

items

445,155 127,163 13.76 4.20

Extraordinary items ------ ------ ------ ---------

Profit before taxation 445,155 127,163 13.76 4.20

Current Tax 136,094 132,322 4.21 4.37

MAT Credit (2,171) 0 (0.07) 0.00

Deferred Tax 6,448 (66,569) 0.20 (2.19)

Fringe Benefit Tax 3,700 3,800 0.11 0.13

Wealth Tax 145 125 0.005 0.004

Profit for the year after

taxation (Net Profit)300,939 57,485 9.30 1.89

Appropriation :

Interim Dividends on EquityShare Capital

30,000 0

Proposed Dividends:

On Equity Share Capital 52,500 0

Tax on Dividends 25,493 0

Transfer to General Reserve 60,188 0

Surplus carried to Balance Sheet 65,258 57,485

Net Profit 300,939 57,485 9.30 1.89



Earnings Per Share (In Rs.)

Basic earnings per equity share 4.44 1.15



COMMON-SIZE PROFIT AND LOSS ACCOUNT OF BHARTI AIRTEL

(Rs. in lakhs)

Particulars


Total (%)2008 2009 2008 2009

Income

Sales Turnover 25,761.11 34,048.32 100.00 100.00

Excise Duty 0.00 0.00 ------------ -------------

Net Sales 25,761.11 34,048.32 100.00 100.00

Other Income 104.04 (1,261.75) 0.40 (3.71)

Stock Adjustments 9.05 5.29 0.035 0.15

Total Income 25,874.20 32,791.86 100.43 96.31

ExpenditureRaw Materials 42.90 17.70 0.16 0.05

Power & Fuel Cost 0.00 0.00 ------------- -------------

Employee Cost 1,297.88 1,397.54 5.03 4.10

Other Manufacturing Expenses 7,339.01 8,627.13 28.48 25.34

Selling and Admin Expenses 5,892.50 9,385.68 22.87 27.56

Miscellaneous Expenses 535.46 1,409.89 2.07 4.14

Pre-operative Exp. Capitalized 0.00 0.00 ------------ ------------

Total Expenses 15,107.75 20,837.94 58.64 61.20

Operating Profit 10,662.41 13,215.67 41.38 38.81

PBDIT 10,766.45 11,953.92 41.79 35.11

Interest 393.43 434.16 1.52 1.27

PBDT 10,373.02 11,519.76 40.26 33.83

Depreciation 3,166.58 3,206.28 12.29 9.42

Other Written Off 266.07 178.82 1.03 0.52

Profit Before Tax 6,940.37 8,134.66 26.94 23.89

Extra-ordinary items (60.67) (46.15) (0.23) (0.13)

PBT (Post Extra-ordinary Items) 6,879.70 8,088.51 26.70 23.76

Tax 632.43 321.78 2.45 0.95

Reported Net Profit 6,244.19 7,743.84 24.23 22.74

Total Value Addition 15,064.84 20,820.24Preference Dividend 0.00 0.00

Equity Dividend 0.00 379.65

Corporate Dividend Tax 0.00 64.52



Earning Per Share (Rs) 32.90 40.79



Equity Dividend (%) 0.00 20.00

Book Value (Rs) 106.34 145.01



COMMON-SIZE PROFIT AND LOSS ACCOUNT OF TATA COMMUNICATIONS LTD.

(Rs. in lakhs)

Particulars Amount(Rs.) Percentage of Balance SheetTotal (%)

2008 2009 2008 2009

Income

Sales Turnover 3,283.30 3,749.43 100.00 100.00


Net Sales3,283.30 3,749.43 100.00 100.00

Other Income 173.25 473.58 5.28 12.63

Stock Adjustments 0 0 0.00 0.00

Total Income 3,456.55 4,223.01 105.28 112.63

Expenditure

Raw Materials 10.63 11.2 0.32 0.30


Employee Cost 242.43 340.07 7.38 9.07

Other ManufacturingExpenses

1,936.25 1,943.03 58.97 51.82

Selling and AdminExpenses

323.08 423.1 9.84 11.28


Pre-operative Exp.

Capitalized

0 0 0.00 0.00

Total Expenses 2,637.75 2,898.15 80.34 77.30

0.00 0.00

Operating Profit 645.55 851.28 19.66 22.70

PBDIT 818.8 1,324.86 24.94 35.33

Interest 44.82 196.7 1.37 5.25



PBDT 773.98 1,128.16 23.57 30.09

Depreciation 301.31 425.27 9.18 11.34

Other Written Off 0 0 0.00 0.00

Profit Before Tax472.67 702.89 14.40 18.75

Extra-ordinary items 16.76 5.88 0.51 0.16

PBT (Post Extra-ordinary Items)

489.43 708.77 14.91 18.90

Tax 145.52 197.54 4.43 5.27

Reported Net Profit 304.46 515.95 9.27 13.76

Total Value Addition 2,627.12 2,886.95

Preference Dividend 0 0

Equity Dividend 128.25 128.25

Corporate Dividend Tax21.8 21.8

Per share data(annualised)

Shares in issue (lakhs)2,850.00 2,850.00

Earning Per Share (Rs)10.68 18.1

Equity Dividend (%)45 45

Book Value (Rs) 229.73 238.53



INTERPRETATION OF COMMON-SIZE STATEMENTS

The common-size P & L A/c of BSNL shows that the gross profit and net profit isdecreasing drastically due to increase in the expenses. The reason behind that is

inefficient functioning of the purchase and production department. The common-size P &L A/c of Bharti Airtel shows that the gross profit is increasing by 27% and net profit by24% due efficient functioning of various departments. It is good for sign of growth in thecompetitive market. The common-size P & L A/c of TATA communication depicts thatthe company is doing well and having good growth in profits. So in comparison of thesecompanies, BSNL is not having a good position and it is required for it to take effectivesteps for efficient functioning of various departments in order to increase profits.

The common-size Balance sheet of BSNL shows that there are slight changes which haveoccurred in the sources of funds during two years. Capital as a percentage of total

liabilities is 13.47% in 2008 while it is 13.49% in 2009. As the amount of capital remainssame, the percentage change occurs only due to change in total liabilities. Reserves andsurplus has been slightly increased from 81.47% to 82.14%. As a result, shareholdersfunds have been increased from 94.94% to 95.36%. It means that share of total liabilitieshas declined. On the Assets side, both fixed and current assets are declining but not at therapid pace. It is a good opportunity for the company to maintain its liquidity in themarket. The common-size balance sheet of Bharti Airtel shows that net worth have beenincreased from 75.49% to 78.18% and total debt has declined from 24.51% to 21.82%. Itis good sign for the company. On the assets side, fixed assets are declining from 70.98%to 70.74% and current assets are declining from 11.32% to 7.82% which is not good for the company. The common-size balance sheet of Tata communication shows that net

worth decreases from 89.38% to 74.49% and total debt increases from 10.62% to25.51%, whereas on the assets side, both fixed assets and current assets are increasing. Itis good for the company, only it has pay attention towards the increasing debt. So incomparison of these companies, BSNL is having a normal position in the aggressivemarket.



III. RATIO ANALYSIS

FINANCIAL YEAR : 2006-07

S. No. RATIOS BSNL RELIANCE

COMM. LTD.

BHARTI

AIRTEL

TATA COMM.

LTD.

1 CURRENT RATIO 3.22 3.18 0.50 1.36

2 LIQUID RATIO 3.08 3.16 0.49 1.35

3 DEBTORS TURNOVER R ATIO 5.83 15.90 14.31 4.78

4 GROSS PROFIT R ATIO 23.55 27.02 25.73 16.12

5 NET PROFIT R ATIO 22.54 18.88 22.59 11.59

6 R ETURN ON EQUITY

8.98 11.74 35.25 7.657 DEBT EQUITY R ATIO 6.37 70.97 0.46 3.11

8 DEBT ASSETS R ATIO 5.91 41.51 31.69 3.01

FINANCIAL YEAR : 2007-08


COMM. LTD.BHARTI

AIRTEL

TATA COMM.

LTD.

1 CURRENT RATIO 3.33 2.56 0.66 1.88

2 LIQUID RATIO 3.15 2.54 0.65 1.87



5 NET PROFIT R ATIO 9.29 17.49 24.24 9.27

6 R ETURN ON EQUITY 3.41 10.41 30.85 4.65

7 DEBT EQUITY R ATIO 3.84 81.67 0.32 11.88




Financial Year: 2008-09


COMM.

LTD.

BHARTI

AIRTEL

TATA COMM.

LTD.

1 CURRENT RATIO 2.78 4.42 0.61 1.63

2 LIQUID RATIO 2.57 4.38 0.60 1.62



5 NET PROFIT R ATIO 1.89 31.83 22.74 13.76

6 R ETURN ON EQUITY 0.65 8.78 28.00 7.59

7 DEBT EQUITY R ATIO 3.85 59.79 27.90 34.24




1. LIQUIDITY RATIOS

A. CURRENT RATIO

Current Ratio

0

2

4

6

2006-07 3.22 3.18 0.5 1.36

2007-08 3.33 2.56 0.66 1.88

2008-09 2.78 4.42 0.61 1.63

BSNL Relience Comm. Bharti Airtel Tata Telecomm.

Comment:

Current Ratio of BSNL, Reliance Communications and Tata Communications indicatesthat the company can successfully pay off its debt while at the same time still have cashleft over to continue operating. Current Ratio of Bharti Airtel Ltd. indicates that thecompany 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.

B. QUICK RATIO OR LIQUID RATIO OR ACID TEST RATIO

Liquid Ratio

0

2

4

6

2006-07 3.08 3.16 0.49 1.35

2007-08 3.15 2.54 0.65 1.87

2008-09 2.57 4.38 0.6 1.62




Comment:

Liquid Ratio of BSNL, Reliance Communications and Tata Communications indicatesthat the company can successfully meet its current liability.

2. TURNOVER RATIOS (ACTIVITY RATIOS)

A. ACCOUNTS R ECEIVABLE TURNOVER RATIO OR DEBTORS TURNOVER R ATIO

Debtor Turnover Ratio

(In Times)

0

5

10

15

20

2006-07 5.83 15.9 14.31 4.78

2007-08 5.86 15.6 12.28 3.25

2008-09 5.95 11.72 12.78 3.12

BSNLRelience

Comm.Bharti Airtel

Tata

Telecomm.

Comment:

Debtor Turnover Ratio of BSNL is 5.95 for the year 2008-2009. So the debtor velocity

is 365/5.95 which comes out as 61 days i.e. BSNL takes on an average 61 days to collect

its money back from the debtors. It is highest among all the major players except Tata

Communication in the market.

3. PROFITABILITY OR EFFICIENCY RATIOS

A. GROSS PROFIT R ATIO

Gross Profit Ratio of BSNL is 4.20% for the year 2008-2009, means that BSNL is

making a profit before interest, depreciation and tax of 4.20%. BSNL has not been able to

generate gross profit more than the industry standards and also other major players.



Gross Profit Ratio

(In %)

0

20

40

2006-07 23.55 27.02 25.73 16.12

2007-08 13.75 26.91 26.94 14.39

2008-09 4.2 31.89 23.89 18.74


B. NET PROFIT R ATIO

Net Profit Ratio

(In %)

0

10

20

30

40

2006-07 22.54 18.88 22.59 11.59

2007-08 9.29 17.49 24.24 9.27

2008-09 1.89 31.83 22.74 13.76

BSNLRelience

Comm.Bharti Airtel

Tata

Telecomm.

Comment:

Net Profit Ratio of Bharti Airtel Ltd. is 22.74% for the year 2008-2009 which is higher

in comparison with the other players, so this goes to show the efficiency of the operationof the company. Net Profit Ratio of BSNL is 1.89 for the year 2008-2009, which is lower

in comparison with the other players. This shows that BSNL had to pay other indirect

expenses which led to fall in the net profit.



C. R ETURN ON EQUITY

Return on Equity

(In %)

0

10

20

30

40

2006-07 8.98 11.74 35.25 7.65

2007-08 3.41 10.41 30.85 4.65

2008-09 0.65 8.78 28 7.59

BSNLRelience

Comm.Bharti Airtel

Tata

Telecomm.

Comment:

Return on Net Worth of BSNL is 0.65 for the year 2008-2009, which is lower than the

other players and therefore shows a profit of 0.65 times per rupee invested by the

investors.

4. OWNERSHIP RATIOS/ CAPITAL STRUCTURE RATIOS

A. DEBT EQUITY R ATIO

Debt Equity Ratio

(In %)

0

20

40

60

80

100

2006-07 6.37 70.97 0.46 3.11

2007-08 3.84 81.67 0.32 11.88

2008-09 3.85 59.79 27.9 34.24

BSNLRelience

Comm.Bharti Airtel

Tata

Telecomm.



Comment:

Debt-to-Equity Ratio of Bharti Airtel Ltd. is 27.90% for the year 2008-2009 whichmeans that the company is not using its debt instruments while it is relying more on theshareholders capital. This also indicates the company’s assets are primarily supplied withequity. But, Debt Equity ratio of BSNL is 3.85% for the same year which is lower amongall players indicates that the company has employed 3.85 times long-term debts that of the shareholders funds.

B. DEBT ASSETS R ATIO

Debt Asset Ratio(In %)

0

10

20

30

40

50

2006-07 5.91 41.51 31.69 3.01

2007-08 3.65 44.95 24.51 10.62

2008-09 3.68 37.42 21.82 25.51

BSNLRelience

Comm.Bharti Airtel

Tata

Telecomm.

Comment:

The Debt Assets Ratio of Reliance is higher than all other players which indicate theclaims of investors against the assets are higher.



INTERPRETATION OF RATIOS

Current Ratio of BSNL and Tata Communications indicates that the company can

successfully pay off its debt while at the same time still have cash left over to continueoperating. Current Ratio of Bharti Airtel Ltd. indicates that the company is having fewer assets to cover the liability and also the investors should be weary of the fact that thecompany cannot pay off its short-term debt if necessary.

Liquid Ratio of BSNL and Tata Communications indicates that the company cansuccessfully meet its current liability.

Debtor Turnover Ratio of BSNL is 5.95 for the year 2008-2009. So the debtor velocity

is 365/5.95 which comes out as 61 days i.e. BSNL takes on an average 61 days to collect

its money back from the debtors. It is highest among all the major players except Tata

Communication in the market.

Gross Profit Ratio of BSNL is 4.20% for the year 2008-2009, means that BSNL is

making a profit before interest, depreciation and tax of 4.20%. BSNL has not been able to

generate gross profit more than the industry standards and also other major players.

Net Profit Ratio of Bharti Airtel Ltd. is 22.74% for the year 2008-2009 which is higher

in comparison with the other players, so this goes to show the efficiency of the operation

of the company. Net Profit Ratio of BSNL is 1.89 for the year 2008-2009, which is lower

in comparison with the other players. This shows that BSNL had to pay other indirectexpenses which led to fall in the net profit.

Return on Net Worth of BSNL is 0.65 for the year 2008-2009, which is lower than the

other players and therefore shows a profit of 0.65 times per rupee invested by the

investors.

Debt-to-Equity Ratio of Bharti Airtel Ltd. is 27.90% for the year 2008-2009 whichmeans that the company is not using its debt instruments while it is relying more on theshareholders capital. This also indicates the company’s assets are primarily supplied withequity. But, Debt Equity ratio of BSNL is 3.85% for the same year which is lower amongall players indicates that the company has employed 3.85 times long-term debts that of shareholders funds.



IV. CASH FLOW STATEMENT

CONSOLIDATED CASH FLOW STATEMENT OF BSNL

PARTICULARS Year ended 31st

March 2008

Year ended 31

March 2009

(Rs. in lakhs) (Rs. in lakhs)

A. Cash flow from operating

activities:

Net (loss)/profit before tax but after Prior period and Extraordinaryitems

445,155127,163

Adjustments for:Depreciation 969,610 852,341

Prior period depreciation 5,106 4,189

Interest/Finance charges86,254 44,325

Interest Income (403,324) (388,504)

Loss/(Profit) on Fixed Assets sold (2,002) (2,165)

Debts / Advances Written off 70,926 91,453

Provision for Bad and DoubtfulDebts

47,899 85,640

Excess provision written back (80,829) (117,014)Prior Period item other thandepreciation

(8,565) 14,419

Extraordinary Items ----------- 3,865

Other Provision 147,595 832,670 176,091 764,640

Operating profit before workingcapital changes

1,277,825 891,803

Adjustments for changes in workingcapital

- Inter Circle Remittance 38,837 (45,118)

- Sundry Debtors (62,838) (83,612)

- Other Receivables (54,335) (152,971)

- Trade and Other Payables 65,923 (12,413) 326,506 44,805

Cash generated from operations 1,265,412 936,608

-Taxes paid (175,793) (237,808)



- Prior Period item other thandepreciation

8,565 (167,228) (14,419) (252,227)

Net cash from operating activities 1,098,184 684,381

B. Cash flow from Investing

activities:

Inventories Purchased/Sale (76,049) (132,712)

Purchase of fixed assets (717,309) (860,242)

Capital Work in Progress (9,231) (226,409)

Proceeds from Sale of fixed assets 50,319 36,597

Interest Received 379,785 438,952

Net cash used in investing

activities(372,485) (743,814)

C. Cash flow from financing

activities:

Proceeds from long term borrowings

(300,000)

Interest Paid (1,767) (41,901)

Interim Dividend Paid (30,000) ----------

Dividend Paid (67,500) (120,000)

Dividend Distribution Tax Paid (16,570) (20,394)

Net cash used in financing

activities (415,837) (182,295)

Net Increase/(Decrease) in Cash

and Cash Equivalents309,862 (241,728)

Opening Cash and cash

equivalents3,745,296 4,055,158

Cash and cash equivalents as at31.03.2008 4,055,158 3,813,430

Cash and cash equivalents

comprise Cash, Cheques andDrafts (in hand)

2,569

2,415

Balances with banks 4,052,589 4,055,158 3,811,015 3,813,430



CONSOLIDATED CASH FLOW STATEMENT OF BHARTI AIRTEL

(Rs. in lakhs)

PARTICULARS 31st Mar 08 31st Mar 09

Net Profit Before Tax 6972.54 8161.54

Net Cash From Operating Activities 10459.85 11853.15

Net Cash (used in)/fromInvesting Activities (11648.41) (10894.38)

Net Cash (used in)/from Financing Activities 898.03 (672.00)

Net (decrease)/increase in Cash and Cash

Equivalents(290.53) 286.77

Opening Cash & Cash Equivalents 793.47 503.31

Closing Cash & Cash Equivalents 502.94 790.08



CONSOLIDATED CASH FLOW STATEMENT OF TATA COMMUNICATIONS LTD

(Rs. in lakhs)




Net Cash (used in)/fromInvesting Activities

(716.69) (2005.71)

Net Cash (used in)/from Financing Activities 389.14 1204.38







CONSOLIDATED CASH FLOW S TATEMENT OF R ELIANCE COMMUNICATIONS LTD.

(Rs. in lakhs)




Net Cash (used in)/fromInvesting Activities

(11263.87) (7650.54)

Net Cash (used in)/from Financing Activities 6234.75 6405.25







INTERPRETATION OF CASH FLOW STATEMENT

The Cash Flow statement of BSNL shows that net cash at the end of financial year is

declining at a rapid pace. This is because Cash from operating activities are decreasingdue to increase in non-cash and non-operating items such as depreciation, preliminaryexpenses, goodwill written off, interest on borrowing and debentures, loss on sale of fixed assets etc. and increase in current assets such as debtors. Cash from Investingactivities depicts that less cash is invested in the current year than the last year. Cashfrom Financing activities depicts that the payment of interest on debentures and finaldividend is made during this financial year which leads to decrease in cash. The cashflow statement of Bharti Airtel shows that net cash at the end of financial year isincreasing due to increase in cash from operating activities and sligthly increase in cashfrom investing activities, but cash from financing activities is declining due to payment of final dividend. The cash flow statement of Tata communication shows that net cash at the

end of financial year is increasing due to increase in cash from operating activities andinvesting activities, not due to financing activities. The cash Flow Statement of RelianceCommunications Ltd. shows that net cash at the end of financial year is increasing due toincrease in cash from Financing activities and Investing activities, not due to operatingactivities.

So in comparison of these companies, Bharti Airtel is considered to be the better oneamong all. Therefore, BSNL have to take effective steps to control its Flow of cash position in order to maintain its liquidity because it is a public sector enterprise whichmeans company’s loss leads to loss to the govt.



INTEGRATED ANALYSIS OF RATIOS

BHARTI AIRTEL

Particulars Years

2007-08 2008-09

EAT/EBT (times) (A) 0.8997 0.9519EBT/EBIT (times) (B) 0.9381 0.9439EBIT/Sales (%) (C) 0.2847 0.2517Sales/Assets (times) (D) 0.9608 0.9629Assets/Equity (times)(E) 14.1270 18.6265

EAT/Sales (times) (F) 0.2424 0.2274

ROA (F*D) 0.2329 0.2190

ROE (A*B*C*D*E) 3.2611 4.0563

BSNL( BHARAT SANCHAR NIGAM LIMITED)

Particulars Years

2007-08 2008-09

EAT/EBT (times) (A) 0.6760 0.45206EBT/EBIT (times) (B) 1.0078 0.8723EBIT/Sales (%) (C) 0.1365 0.0482Sales/Assets (times) (D) 0.5574 0.5241Assets/Equity (times)(E) 0.6588 0.6515EAT/Sales (times) (F) 0.0929 0.0189

ROA (F*D) 0.1669 0.0362

ROE (A*B*C*D*E) 0.0341 0.0065



TATA COMMUNICATIONS LTD.

Particulars Years2007-08 2008-09

EAT/EBT (times) (A) 0.6441 0.7340

EBT/EBIT (times) (B) 0.3718 0.3894

EBIT/Sales (%) (C) 0.2494 0.3533

Sales/Assets (times) (D) 0.4482 0.4109

Assets/Equity (times)(E) 1.1187 1.3424


ROA (F*D) 0.04155 0.05654

ROE (A*B*C*D*E) 0.06681 0.13556

MTNL (MAHANAGAR TELEPHONE NIGAM LIMITED)

Particulars Years

2007-08 2008-09

EAT/EBT (times) (A) 0.6571 0.6643

EBT/EBIT (times) (B) 0.0679 0.2152

EBIT/Sales (%) (C) 0.2860 0.2813

Sales/Assets (times) (D) 0.1627 0.0682

Assets/Equity (times)(E) 23.6710 23.7700


ROA (F*D) 0.5834 1.2628

ROE (A*B*C*D*E) 0.0491 0.0652



CONCLUSION



It is concluded that high Debt-Equity ratio of the company helps in getting benefit of trading on equity. But, BSNL is having low debt-equity ratio which shows the highdegree of indebtedness of the company and lower risk level. Among the comparison withother players, the Tata Communications is having high debt-equity ratio implies that the

firm having high degree of financial leverage which in turn indicates high risk. But,considering other ratios such as net profit ratio and return on equity, BSNL is not goodamong all other market players. The reason behind that is the profit of the company isfalling drastically every succeeding year and expenses are increasing rapidly. Net profitratio shows that Bharti Airtel and Tata Communications Ltd. are having positive trend in past two years. Reliance Communications Ltd. has shown an excellent performanceduring the last 3 years and achieved a landmark in the telecom industry. It is doing wellin the competitive environment of the telecom industry. Public Player like BSNL has towork hard to breakout their negative trend. Completely new attitude and professionalmanagement have to be adopted by these public sector undertakings to compete with the private players like Bharti & Tata Communications Ltd. Considering the comparative and

common-size statements of various companies, BSNL is also not having good outcome.Taking into consideration the cash flow statement of various companies, Tatacommunication is considered to be the better one among all. BSNL is not having better results over the last two years. BSNL’s market share is also declining year by year. It isalso concluded that BSNL also lags behind in providing customer services and handlingcomplaints. Some of the Key Facts of the telecommunication sector are highlighted as below:

1. Now-a-days, the telecom sector emerges as a fastest growing sector in the economy

2. A Very strong competition from the Private Players like Bharti Airtel, Reliancecommunication, Idea cellular, Vodafone, Tata Telecommunication etc. may leads hugedecline in the market share of Public Players like BSNL.

Some of the Key Opportunities are missed by the company which may leads it to the nexthigher level: BSNL fall short to gain more income during this competitive moment,although the income in addition to profits figure is continuously falling, but theexpenditure has continuously increased. FROM the year 2000 of its establishment to theyear 2009, in these 8 years company has shown many faces, threw out this journey. Atone time BSNL had a monopoly in the market. But now this company is facing a verytough competition from the giants like Bharti-Airtel, Reliance comm., Idea cellular,Vodafone, and Tata Telecommunication etc.

So, these are the drawbacks that have come from the analysis of financial

statements. From this, I can say that the company (BSNL) fails to have a good

financial management, in all fields.



RECOMMENDATIONS



Some of the necessary steps have to be taken immediately by various telecom companiesin order to improve its market share:

Bharat Sanchar Nigam Limited (BSNL)

Concentrates on Customer Service

BSNL has to concentrate on its customer care service as most of the customers are founddissatisfied with company service. Even some of them have called it the worst customer care service provider in the market. But it is also rated as best company for value of money. So the company can be competitive in the market by just investing in their customer care service. BSNL users also found not satisfied with the network service tosome extent. So, the company should also improve it.

Adopt Various Marketing Strategies

BSNL should adopt the diverse marketing strategies for the promotion of their productsand services. It should use the superior & high-tech methods of advertising. It shouldwork towards 3G phones, means high speed streaming video, gaming, video messaging,even mobile TV etc. It should be ready for innovative competition in the telecom market.

Control over Expenditure

It should try to reduce the expenditure especially in the employee’s remuneration & benefit area. It is the right time to cut down the employee’s force, by giving themvoluntary retirement. It is necessary for the company to have complete control over itsexpenditure because excess of expenditure towards the administration and employees benefits leads to reduction in the company’s funds.

Bharti Airtel

Concentrates on market share

Bharti Airtel has to concentrate on its market share because it is increasing at a rapid pacedue to its better customer service and various additional facilities provided to their customers. The company has to prove stability in their market share and make sure that itwill not go down in the ever-increasing competition in the telecom market. The companyshould adopt the wide-ranging marketing strategies for the promotion of their productsand services.



Draw attention towards increasing debts

Bharti Airtel has to draw attention towards increasing amount of debts year-by-year because it leads to increase in number of creditors which is not a good sign for the

company. As the company has been rated as an innovator in today’s competitive telecomindustry.

Tata Communications Ltd.


Tata Communications Ltd. has to concentrate on its market share because it is increasingat a rapid pace due to its better customer service and various additional facilities provided

to their customers. The company has to prove stability in their market share and makesure that it will not go down in the ever-increasing competition in the telecom market.The company should adopt the wide-ranging marketing strategies for the promotion of their products and services

Put Forward wide range of services

Tata Communications Ltd. should offer a wide of services in the new era of telecomindustry. It has look towards the various competitive brands and their marketingstrategies and implement their own effective strategy to compete with them.

Mahanagar Telephone Nigam Limited (MTNL)

Concentrates on Customer Service

MTNL has to concentrate on its customer care service as most of the customers are founddissatisfied with company service. Even some of them have called it the worst customer care service provider in the market. But it is also rated as best company for value of money. So the company can be competitive in the market by just investing in their

customer care service. MTNL users also found not satisfied with the network service tosome extent. So, the company should also improve it.

Control over Expenditure

It should try to reduce the expenditure especially in the employee’s remuneration & benefit area. It is the right time to cut down the employee’s force, by giving them



voluntary retirement. It is necessary for the company to have complete control over itsexpenditure because excess of expenditure towards the administration and employees benefits leads to reduction in the company’s funds.

RELIANCE COMMUNICATIONS LTD.


Reliance Communications Ltd. has to concentrate on its market share because it isincreasing at a rapid pace due to its better customer service and various additionalfacilities provided to their customers. The company has to prove stability in their marketshare and make sure that it will not go down in the ever-increasing competition in thetelecom market. The company should adopt the wide-ranging marketing strategies for the

promotion of their products and services

Adopt Various Marketing Strategies

Reliance Communications Ltd. should adopt the diverse marketing strategies for the promotion of their products and services. It should use the superior & high-tech methodsof advertising. It should work towards 3G phones, means high speed streaming video,gaming, video messaging, even mobile TV etc. It should be ready for innovativecompetition in the telecom market.



BIBLIOGRAPHY



WEBSITES

www.bsnl.co.in

www.traigov.in

www.airtel.co.in

www.mtnl.co.in

www.tatatelecommunication.co.in

www.reliancecommuniaction.co.in

www.Google.com

ANNUAL R EPORTS of various telecom companies (BSNL, MTNL, Bharti Airtel and Tata

Communications Ltd.) of the years: 2006-07, 2007-08 and 2008-09

BOOKS R EFERRED

R.P. Rustagi, Financial Management, Edition 2007-08

S.N. Maheshwari, Financial Management, Edition 2006-07

T.S Grewal, Analysis of Financial Statements, Edition 2007-08

Khan and Jain, Financial Management, Edition 2006-07

http://www.bsnl.co.in/

http://www.traigov.in/

http://www.airtel.co.in/

http://www.reliance.co.in/

http://www.google.com/

http://www.bsnl.co.in/

http://www.traigov.in/

http://www.airtel.co.in/

http://www.reliance.co.in/

http://www.google.com/



ANNEXURE



BB HARAT SANCHAR NIGAM LIMITED (BSNL)(BSNL)

CONSOLIDATED PROFIT AND LOSS ACCOUNT

(Rs. in lakhs)Particulars 31st March 2007 31st March 2008 31st March2009

INCOME

Income from Services 3,461,621 3,235,953 3,026,857

Other Income 509,890 569,387 554,335

3,971,511 3,805,340 3,581,192

EXPENDITURE

Employees' Remuneration and

Benefits

730,897 880,891 1,136,323

Licence fee and Spectrum fee 331,169 315,213 264,635

Administrative, Operating andOther Expenses

1,091,628 1,111,675 1,137,797

Financial Expenses 77,941 86,254 44,325

Depreciation 914,931 969,610 852,341

3,146,566 3,363,643 3,435,421

Profit before Prior period items 824,945 441,697 145,771

Prior period items (Net) (9,564) 3,458 (18,608)

Profit before Extraordinary items 815,381 445,155 127,163

Extraordinary items ------ ------ ----------

Profit before taxation 815,381 445,155 127,163

Current Tax 96,229 136,094 132,322

MAT Credit (19,470) (2,171) 0

Deferred Tax (45,795) 6,448 (66,569)

Fringe Benefit Tax 3700 3,700 3,800

Wealth Tax 130 145 125

Profit for the year after taxation 780,587 300,939 57,485

Appropriation :

Interim Dividends on Equity ShareCapital

50,000 30,000 0

Proposed Dividends:

On Equity & Preference Share 67,500 12,000 0



Capital

Tax on Dividends 18,484 25,493 0

Transfer to General Reserve 156,117 60,188 0

Surplus carried to Balance Sheet 488,486 65,258 57,485

Net Profit 780,587 300,939 57,485

Earnings Per Share (In Rs.)

Basic earnings per equity share 14.03 4.44 1.15



CONSOLIDATED BALANCE SHEET

(Rs. in lakhs)

Particulars As at 31st March

2007

As at 31st March

2008

As at 31st Mar

2009

SOURCES OF FUNDS


Capital 1,250,000 1,250,000 1,250,0

Reserves And Surplus 7,444,802 7,562,825 7,613,3

Loan Funds

Unsecured Loans 554,366 338,887 341,3

Deferred Tax Liability-Net 124,605 131,053 64,4

678,971 469,940 405,8

APPLICATIONS OF FUNDS

Fixed Assets 9,373,773 9,282,765 9,269,2

Gross Block 11,864,901 12,457,823 13,224,2

Less:-Depreciation 6,071,511 6,987,974 7,792,2

Net Block 5,793,390 5,469,849 5,432,0

Capital Work-In-Progress 256,860 266,562 492,8

Decommissioned Assets 6,444 389 4,6

6,056,694 5,736,800 5,929,5

Investments 20,000 20,000 20,0

Current Assets, Loan and Advances

Inventories 242,847 322,006 457,2

Sundry Debtors 558,066 546,551 472,0

Cash and Bank Balances 3,745,296 4,055,158 3,813,4



Other Current Asset - Accrued interest 114,148 137,687 137,6

Loans and Advances 714,431 744,441 944,8

5,374,788 5,805,843 5,774,8

Less : Current Liabilities and Provisions

Current Liabilities 1,667,919 1,739,788 2,072,7

Provisions 514,858 606,321 493,8

2,182,777 2,346,109 2,566,5

Net Current Assets 3,192,011 3,459,734 3,208,2

Inter/Intra Circle Remittance 105,068 66,231 111,3

Total 9,373,773 9,282,765 9,269,2



BHARTI AIRTELBHARTI AIRTEL


(Rs. in lakhs)

Particulars 31st

March 2007 31st

March 2008 31st

March 20

INCOME

Sales Turnover 17,851.61 25,761.11 34,048

Excise Duty 0 0

Net Sales 17,851.61 25,761.11 34,048

Other Income 105.62 104.04 (1,261.

Stock Adjustments 30.07 9.05 5

Total Income 17,987.30 25,874.20 32,791

EXPENDITURE

Raw Materials 52.16 42.9 1

Power & Fuel Cost 0 0

Employee Cost 1,076.95 1,297.88 1,397

Other Manufacturing Expenses 5,017.27 7,339.01 8,627

Selling and Admin Expenses 4,030.48 5,892.50 9,385

Miscellaneous Expenses 444.28 535.46 1,409

Pre-operative Exp. Capitalized 0 0

Total Expenses 10,621.14 15,107.75 20,837

Operating Profit 7,260.54 10,662.41 13,215

PBDIT 7,366.16 10,766.45 11,953

Interest 282.07 393.43 434

PBDT 7,084.09 10,373.02 11,519

Depreciation 2,353.30 3,166.58 3,206

Other Written Off 137.8 266.07 178

Profit Before Tax 4,592.99 6,940.37 8,134Extra-ordinary items 9.92 (60.67) (46.

PBT (Post Extra-ordinary Items) 4,602.91 6,879.70 8,088

Tax 566.79 632.43 321

Reported Net Profit 4,033.23 6,244.19 7,743

Total Value Addition 10,568.98 15,064.84 20,820




Equity Dividend 0 0 379

Corporate Dividend Tax 0 0 64


Shares in issue (lakhs) 18,959.34 18,979.07 18,982Earning Per Share (Rs) 21.27 32.9 40

Equity Dividend (%) 0 0

Book Value (Rs) 60.19 106.34 145




(Rs. in lakhs)


2007

As at 31st March

2008

As at 31st Mar

2009

SOURCES OF FUNDS

Total Share Capital 1,895.93 1,897.91 1,898

Equity Share Capital 1,895.93 1,897.91 1,898

Share Application Money 30 57.63 116

Preference Share Capital 0 0.00 0

Reserves 9,515.21 18,283.82 25,627

Revaluation Reserves 2.13 2.13 2

Net worth 11,443.27 20,241.49 27,643

Secured Loans 266.45 52.42 51

Unsecured Loans 5,044.36 6,517.92 7,661

Total Debt 5,310.81 6,570.34 7,713

Total Liabilities 16,754.08 26,811.83 35,357


Gross Block 26,509.93 28,115.65 37,266

Less: Accumulated Depreciation 7,204.30 9,085.00 12,253

Net Block 19,305.63 19,030.65 25,013

Capital Work in Progress 2,375.82 2,751.08 2,566

Investments 705.82 10,952.85 11,777

Current Assets

Inventories 47.81 56.86 62



Sundry Debtors 1,418.52 2,776.46 2,550

Cash and Bank Balance 239.11 200.86 153

Total Current Assets 1,705.44 3,034.18 2,765

Loans and Advances 3,160.02 5,103.13 5,602

Fixed Deposits 541.35 302.08 2,098

Total CA, Loans & Advances 5,406.81 8,439.39 10,466

Deferred Credit 0.00 0.00 0

Current Liabilities 9,809.83 12,400.38 13,832

Provisions 1,232.84 1,961.95 634

Total CL & Provisions 11,042.67 14,362.33 14,466

Net Current Assets (5,635.86) (5,922.94) (4,000.

Miscellaneous Expenses 2.66 0.20 0

Total Assets 16,754.07 26,811.83 35,357



TATACOMMUNICATIONS LTD.


(Rs. in lakhs)

Particulars 31st

March 2007 31st

March 2008 31st

March 20

INCOME

Sales Turnover 4,041.83 3,283.30 3,749

Excise Duty 0 0

Net Sales 4,041.83 3,283.30 3,749

Other Income 105.83 173.25 473

Stock Adjustments 0 0

Total Income 4,147.66 3,456.55 4,223

EXPENDITURE

Raw Materials 1.61 10.63 1

Power & Fuel Cost 43.09 0

Employee Cost 243.69 242.43 340

Other Manufacturing Expenses 2,258.37 1,936.25 1,943

Selling and Admin Expenses 376.15 323.08 42

Miscellaneous Expenses 165.19 125.36 180

Total Expenses 3,088.10 2,637.75 2,898

Operating Profit 953.73 645.55 851

PBDIT 1,059.56 818.8 1,324

Interest 16.74 44.82 19

PBDT 1,042.82 773.98 1,128

Depreciation 391.33 301.31 425

Other Written Off 0 0

Profit Before Tax 651.49 472.67 702

Extra-ordinary items 69.19 16.76 5PBT (Post Extra-ordinary Items) 720.68 489.43 708

Tax 244.07 145.52 197

Reported Net Profit 468.56 304.46 515

Total Value Addition 3,086.49 2,627.12 2,886




Equity Dividend 128.25 128.25 128

Corporate Dividend Tax 21.8 21.8 2


Shares in issue (lakhs) 2,850.00 2,850.00 2,850

Earning Per Share (Rs) 16.44 10.68 1Equity Dividend (%) 45 45

Book Value (Rs) 223.14 229.73 238




(Rs. in lakhs)


2007

As at 31st March

2008

As at 31st Mar

2009

SOURCES OF FUNDS

Total Share Capital 285 285 2

Equity Share Capital 285 285 2

Share Application Money 0 0

Preference Share Capital 0 0

Reserves 6,074.50 6,262.34 6,513

Revaluation Reserves 0 0

Net worth 6,359.50 6,547.34 6,798

Secured Loans 0 0 1,288

Unsecured Loans 197.61 777.8 1,039

Total Debt 197.61 777.8 2,327

Total Liabilities 6,557.11 7,325.14 9,125


Gross Block 4,582.98 4,352.65 5,890

Less: Accumulated Depreciation 1,428.81 1,363.75 1,792

Net Block 3,154.17 2,988.90 4,097

Capital Work in Progress 340.44 543.77 536

Investments 2,673.58 2,103.77 2,723

Current Assets

Inventories 4.72 5.45 1



Sundry Debtors 955.19 1,063.13 1,342

Cash and Bank Balance 79.31 79.63 109

Total Current Assets 1,039.22 1,148.21 1,452

Loans and Advances 1,383.20 2,991.94 3,209

Fixed Deposits 25 0 263

Total CA, Loans & Advances 2,447.42 4,140.15 4,925

Deferred Credit 0 0

Current Liabilities 1,779.37 2,200.17 2,869

Provisions 279.13 251.28 288

Total CL & Provisions 2,058.50 2,451.45 3,157

Net Current Assets 388.92 1,688.70 1,767

Miscellaneous Expenses 0 0

Total Assets 6,557.11 7,325.14 9,125



Mahanagar Telephone Nigam Limited (MTNL)


(Rs. in lakhs)Particulars 31st March 2007 31st March 2008 31st March 20

INCOME

Sales Turnover 4,909.32 4,722.52

Excise Duty 0 0

Net Sales 4,909.32 4,722.52

Other Income 512.11 405.38

Stock Adjustments 0 0

Total Income 5,421.43 5,127.90

EXPENDITURE

Raw Materials 0 0

Power & Fuel Cost 160.79 188.34

Employee Cost 1,750.99 1,580.95

Other Manufacturing Expenses 75.95 93.62

Selling and Admin Expenses 1,021.57 951.86

Miscellaneous Expenses 1,007.97 1,005.55

Preoperative Exp Capitalised 0 (21.01)

Total Expenses 4,017.27 3,799.31

Operating Profit 892.05 923.21

PBDIT 1,404.16 1,328.59

Interest 11.78 12.09

PBDT 1,392.38 1,316.50

Depreciation 683.18 704.06

Other Written Off 0 0

Profit Before Tax 709.2 612.44

Extra-ordinary items 299.59 212.12

PBT (Post Extra-ord Items) 1,008.79 824.56Tax 326.65 224.83

Reported Net Profit 466.03 406.82

Total Value Addition 4,017.27 3,799.31


Equity Dividend 252 252

Corporate Dividend Tax 37.21 42.83





Earning Per Share (Rs) 7.4 6.46

Equity Dividend (%) 40 40

Book Value (Rs) 184.59 189.23




(Rs. in lakhs)


2007

As at 31st March

2008

As at 31st Mar

2009

SOURCES OF FUNDS

Total Share Capital 630 630

Equity Share Capital 630 630

Share Application Money 0 0

Preference Share Capital 0 0

Reserves 10,999.30 11,291.36

Revaluation Reserves 0 0

Net worth 11,629.30 11,921.36

Secured Loans 0 0

Unsecured Loans 0 0

Total Debt 0 0



Gross Block 15,291.35 15,842.58

Less: Accumulated Depreciation 8,887.68 9,522.78

Net Block 6,403.67 6,319.80

Capital Work in Progress 779.29 981.7

Investments 441.4 557.39

Current Assets

Inventories 221.28 160.71



Sundry Debtors 965.2 941.8

Cash and Bank Balance 161.8 130.73

Total Current Assets 1,348.28 1,233.24

Loans and Advances 11,857.45 10,502.84

Fixed Deposits 1,707.00 3,239.05

Total CA, Loans & Advances 14,912.73 14,975.13

Deferred Credit 0 0

Current Liabilities 5,683.31 5,626.00

Provisions 5,446.15 5,445.82

Total CL & Provisions 11,129.46 11,071.82

Net Current Assets 3,783.27 3,903.31

Miscellaneous Expenses 221.65 159.17

Total Assets 11,629.28 11,921.37



RELIANCE COMMUNICATIONS


(Rs. in Crores)

PARTICULARS 31st Mar

06

31st Mar

07

31st Mar 08 31st Mar 09

Income

Sales Turnover 0.00 12,756.30 14,792.05 15,086.66

Excise Duty 0.00 0.00 0.00 0.00

Net Sales 0.00 12,756.30 14,792.05 15,086.66

Other Income 13.26 231.89 520.53 4,148.13

Stock Adjustments 0.00 0.00 0.00 0.00

Total Income 13.26 12,988.19 15,312.58 19,234.79

ExpenditureRaw Materials 0.00 16.48 15.15 29.95

Power & Fuel Cost 0.00 266.74 91.76 138.32

Employee Cost 1.11 684.40 858.65 758.36

Other Manufacturing Expenses 0.00 3,091.60 4,052.45 5,837.25

Selling and Admin Expenses 0.23 2,841.53 2,622.58 3,673.92


Pre-operative Exp. Capitalized 0.00 0.00 0.00 0.00

Total Expenses 1.67 7,243.29 8,618.76 11,336.61

Operating Profit (1.67) 5,513.01 6,173.29 3,750.05PBDIT 11.59 5,744.90 6,693.82 7,898.18

Interest 0.00 456.55 870.05 1,153.24

PBDT 11.59 5,288.35 5,823.77 6,744.94

Depreciation 2.74 1,836.12 1,843.66 1,933.51

Other Written Off 0.00 0.00 0.00 0.00

Profit Before Tax 8.85 3,452.23 3,980.11 4,811.43

Extra-ordinary items 0.00 0.00 0.00 3.80

PBT (Post Extra-ordinary Items) 8.85 3,452.23 3,980.11 4,815.23

Tax 3.20 1,043.38 1,393.66 12.56

Reported Net Profit 5.65 2,408.85 2,586.45 4,802.67

Total Value Addition 1.66 7,226.81 8,603.61 11,306.66

Preference Dividend 0.00 0.00 0.00 0.00

Equity Dividend 0.00 102.23 154.80 165.12

Corporate Dividend Tax 0.00 17.37 26.31 28.06




Shares in issue (lakhs) 1.00 20,446.15 20,640.27 20,640.27


Equity Dividend (%) 0.00 10.00 15.00 16.00

Book Value (Rs) 347.67 100.39 120.35 250.43




(Rs. in Crores)

PARTICULARS 31st Mar 06 31st Mar 07 31st Mar 08 31st Mar 09

Sources Of FundsTotal Share Capital 0.05 1,022.31 1,032.01 1,032.01

Equity Share Capital 0.05 1,022.31 1,032.01 1,032.01



Reserves 14,783.43 19,503.23 23,808.02 50,658.31


Net worth 15,395.05 20,525.54 24,840.03 51,690.32

Secured Loans 0.00 5,113.57 950.00 3,000.00

Unsecured Loans 0.00 9,454.27 19,336.43 27,903.61

Total Debt 0.00 14,567.84 20,286.43 30,903.61

Total Liabilities 15,395.05 35,093.38 45,126.46 82,593.93


Gross Block 198.09 20,625.82 21,576.32 37,941.15

Less: Accumulated Depreciation 31.85 2,527.37 4,688.69 6,533.38

Net Block 166.24 18,098.45 16,887.63 31,407.77

Capital Work in Progress 0.00 2,185.60 7,117.56 3,643.86

Investments 12,074.10 5,434.43 13,844.14 31,364.75

Current Assets

Inventories 0.00 98.51 201.22 253.14

Sundry Debtors 0.00 802.11 1,093.21 1,482.22Cash and Bank Balance 0.05 28.08 192.65 534.89

Total Current Assets 0.05 928.70 1,487.08 2,270.25

Loans and Advances 3,158.91 19,137.97 17,028.20 23,272.50

Fixed Deposits 0.00 40.37 0.01 0.26

Total CA, Loans & Advances 3,158.96 20,107.04 18,515.29 25,543.01

f d di

Documents

Project Report on Financial comparison of various Telecom Companies in India