Term Papaer Acc Extra

8/8/2019 Term Papaer Acc Extra

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TERM PAPER

OF

ACCOUNTING FOR

MANAGERS

TOPIC:-TATA TELESERVICES

MAHARASHTRA LIMITED

SUBMITTED TO: -

Lect. Miss Sukhwinder kaur

SUBMITTEDBY:-

KARTHIKVARMA (B 63)

SECTION: T1001


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Tata Teleservices (Maharashtra) Limited:

Tata Teleservices is part of the Tata Group. Tata Teleservices spearheads the Groups

presence in the telecom sector. Incorporated in 1996, Tata Teleservices was the first to

launch CDMA mobile services in India with the Andhra Pradesh circle.

The company acquired Hughes Telecom (India) Limited [now renamed Tata

Teleservices (Maharashtra) Limited] in December 2002. With a total Investment of Rs19,924 Crore, Tata Teleservices has created a Pan India presence spread across 20

circles that includes Andhra Pradesh, Chennai, Gujarat, J & K, Karnataka, Delhi,

Maharashtra, Mumbai, North East, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab,

Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata,

Madhya Pradesh and West Bengal .

Tata Teleservices Maharashtra Limited (TTML) spearheads the Tata group's presence in the telephony sector in the telecom circles of Maharashtra and Goaincluding Mumbai.

TTML commenced landline operations in 1998 and today has the largest wireline base in Mumbai and Maharashtra amongst all private operators, with over 600,000 subscribers, and with over 50% market share.

It commenced full mobility wireless services on the CDMA-1X platform in 2004-5, and has over 11 million wireless subscribers today, with over 16.9% market

share.

It is also a market leader in wireless data cards, with its pioneering Plug2Surf 1-Xdata cards and its recent launch of mobile broadband services with Photon+.


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TTMLs network has been rated as the only congestion-free network acrossMaharashtra and Mumbai in 5 consecutive reports issued by the TelecomRegulatory Authority of India (TRAI).

TTML has also recently been rated the No.1 wireless telecom service provider interms of overall customer satisfaction across Mumbai and Maharashtra in

independent studies commissioned by the Telecom Regulatory Authority of India. The Company has been responsible for a number of innovations over the years,

including its market introductions last year of 1 GB memory USB wirelessmodems, the worlds first CDMA AM/FM Radio Phone, the Ganesha-motif Sumukha phone, the launch of the Novatium sub-$100 PC in Mumbai, and, for the first time, a 100 Mbps to the home ethernet-based broadband service calledPower Launcher.

Leveraging its high quality buried fibre Next Generation Network extending over 1600 kms in Mumbai, TTML recently announced its vision for DigitalMumbaiTM broadband anytime, anywhere, in Mumbai city.

The Company has recently rolled out its GSM services under the brand name

TATA DOCOMO in Mumbai, Maharashtra and Goa.

Tata Teleservices Provides mobile services under 3 Brand names:

Tata Indicom (CDMA Mobile operator) Tata DoCoMo (GSM Mobile operator) Virgin Mobile (CDMA Mobile operator) Virgin Mobile (GSM Mobile operator)

Tata Sky

VISION: To be the most admired Telecom service provider in MAHARASHTRA

AND GOA.

MISSION:

To become most admired company delivering sustainable value.

. Rural Telephony:
http://wapedia.mobi/en/Tata_Indicomhttp://wapedia.mobi/en/Tata_DoCoMohttp://wapedia.mobi/en/Virgin_Mobile_Indiahttp://wapedia.mobi/en/Virgin_Mobile_Indiahttp://wapedia.mobi/en/Tata_Skyhttp://wapedia.mobi/en/Tata_DoCoMohttp://wapedia.mobi/en/Virgin_Mobile_Indiahttp://wapedia.mobi/en/Virgin_Mobile_Indiahttp://wapedia.mobi/en/Tata_Skyhttp://wapedia.mobi/en/Tata_Indicom


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TTSL also maintains a distribution network across villages , where in people areappointed and trained by TTSL - who visit villages on a bicycle or a two-wheeler at defined times on defined days of the week, selling recharge vouchers andservicing equipment; each runner covers between 200 to 300 customers.

The company joined hands with Tata Chemicals, Tata Kisaan Sansar network,disseminating information through these centres and using them as localdistributors

Market Data:

Tata Indicom in April 2009, crossed the 35 million subscribers mark in the wireless

category with an overall subscriber base of over 36 million.

Tata Teleservices is no. 2 slot in terms of Market Share in Delhi NCR region with a

subscriber base of 5 million.

Board of Directors:

The Board of Directors for TTSL includes Tata Sons Chairman Ratan Tata , whilethe company is currently headed by its Managing Director, Mr. Anil Kumar Sardana

Mr. N. S. RamachandranDesignation : Independent Director

Mr. AmalGanguli

Designation : Inde pendent Director

Mr. S. RamadoraiDesignation : Director

Prof. AshokJhunjhun
http://wapedia.mobi/en/Ratan_Tatahttp://www.tatateleservices.com/t-aboutus-ttml-bod-jhunjhunwala.aspxhttp://www.tatateleservices.com/t-aboutus-ttml-bod-ramadorai.aspxhttp://www.tatateleservices.com/t-aboutus-ttml-bod-ganguli.aspxhttp://www.tatateleservices.com/t-aboutus-ttml-bod-ramachandran.aspxhttp://wapedia.mobi/en/Ratan_Tata


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wala

Mr. Nadir GodrejDesignation : Independent Director

Mr. D. T. JosephDesignation :IndependentDirector

Mr. Koichi TakaharaDesignation: Director

Business Areas:

Tata Teleservices offers multiple tariff plans in both the Post-paid andPre-Paid category. It also offers Mobile Value Added Services tosubscribers.

Branding:

The Tata Indicom brand is endorsed by bollywood actress Kajol &cricketers Irfan Pathan and Yousuf Pathan .

Tata Teleservices has recently launched the Virgin Mobile Brand totarget the youth segment.

Market Data

Tata Indicom in April 2009, crossed the 35 million subscribersmark in the wireless category with an overall subscriber base of over 36 million.

Tata Teleservices is no. 2 slot in terms of Market Share in Delhi NCR region with a subscriber base of 5 million

BUSINESS TREND: Sales growing at 30% CAGR & subscriber base at 68%
http://www.tatateleservices.com/t-aboutus-ttml-bod-takahara.aspxhttp://www.tatateleservices.com/t-aboutus-ttml-bod-joseph.aspxhttp://www.tatateleservices.com/t-aboutus-ttml-bod-godrej.aspx


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CAGR over last five years.

OFFICES:MUMBAI

Corporate OfficeTata Teleservices (Maharashtra) Limited

D 26, TTC Industrial Area,

Sanpada, Turbhe.

Navi Mumbai 400 703

Tel No: 91 22 6661 5445

Fax No: 91 22 6660 5516 / 5517

Registered office

Tata Teleservices (Maharashtra) Limited

Voltas Premises,

T.B. Kadam Marg, Chinchpokali,

Mumbai 400 033

PUNE

Al Aqmar Building ,

5 GaneshKhind Road,

Shivaji Nagar

Pune - 411005

Contact no - 9225525252 (From Monday to Friday 9:30 am to 6:00 pm)

Fax no - 020-66096300

Balance sheet


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2008/03 2007/03 2006/03 2005/03 2004/03SOURCES OF FUNDS :Share Capital 44.39 44.39 82.28 82.28 82.28Reserves Total 391.78 283.05 150.3 94.96 82.85

Total Shareholders Funds 436.17 327.44 232.58 177.24 165.13Secured Loans 188.11 172.67 148.84 193.52 203.91Unsecured Loans 69.78 74.34 119.09 124.67 203.1Total Debt 257.89 247.01 267.93 318.19 407.01

Total Liabilities 694.06 574.45 500.51 495.43 572.14

APPLICATION OF FUNDS :Gross Block 558.06 515.49 420.43 400.08 393.41Less : Accumulated

Depreciation 285.61 264.34 243.97 234.95 220.12

Less: Impairment of Assets 0 0 0 0 0Net Block 272.45 251.15 176.46 165.13 173.29Lease Adjustment 0 0 0 0 0Capital Work in Progress 10 15.97 19.56 9.78 4.07Investments 47.39 27.02 27.02 27.02 27.58Current Assets, Loans & AdvancesInventories 1021.08 677.48 374.39 271.62 164.12Sundry Debtors 96.45 92.06 90.12 77.09 148.16Cash and Bank 51.92 50.73 38.29 44.18 27.15Loans and Advances 99.17 63.42 143.96 171.63 194.58Total Current Assets 1268.62 883.69 646.76 564.52 534.01

Less : Current Liabilities and ProvisionsCurrent Liabilities 805.8 536.87 333.13 245.17 149.25Provisions 73.89 53.27 26.72 20.93 15.73Total Current Liabilities 879.69 590.14 359.85 266.1 164.98Net Current Assets 388.93 293.55 286.91 298.42 369.03Miscellaneous Expenses not

written off 0 4.21 14.31 24.4 33.31Deferred Tax Assets 12.17 16.95 7 5.91 2.9Deferred Tax Liability 36.88 34.4 30.75 35.23 38.04Net Deferred Tax -24.71 -17.45 -23.75 -29.32 -35.14

Total Assets 694.06 574.45 500.51 495.43 572.14

Contingent Liabilities 40.95 56.99 58.47 30.7 57.65

CASH FLOW


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2008/03 2007/03 2006/03 2005/03 2004/03Cash Flow SummaryCash and Cash Equivalents at Beginning of the

year 50.32 38.46 43.72 27.66 24.12Net Cash from Operating Activities 102.21 126.03 121.79 164.62 116.15Net Cash Used in Investing Activities -61.75 -90.63 -34.36 -14.83 2.26Net Cash Used in Financing Activities -38.6 -23.54 -92.69 -133.73 -114.91Net Inc/(Dec) in Cash and Cash Equivalent 1.86 11.86 -5.26 16.06 3.5Cash and Cash Equivalents at End of the year 52.18 50.32 38.46 43.72 27.62

FUND FLOW

2008/03 2007/03 2006/03 2005/03 2004/03Sources of funds

Cash profit 171.54 114.49 82.64 39.78 31.65Increase in equity 0 2.11 0 0 0Increase in other net

worth 0 61.21 0 0 0Increase in loan funds 10.88 0 0 0 0Decrease in gross block 0 0 0 0 0Decrease in

investments 0 0 0 0.56 9.51Decrease in workingcapital 0 0 5.94 64.79 20.63

Others 4.21 10.1 10.09 8.91 12.85Total Inflow 186.63 187.91 98.67 114.04 74.64

Application of funds

Cash loss 0 0 0 0 0Decrease in net worth 6.03 0 2.24 1.57 0.96Decrease in loan funds 0 20.92 50.26 88.82 60.05Increase in gross block 36.6 28.2 30.13 12.38 6.08

Increase in investments 20.37 0 0 0 0Increase in workingcapital 88.12 12.94 0 0 0

Dividend 35.51 22.58 16.04 11.27 7.55Others 0 103.27 0 0 0

Total Outflow 186.63 187.91 98.67 114.04 74.64


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PROFIT AND LOSS ACCOUNTS

2008/03(12)

2007/03(12)

2006/03(12)

2005//03(12) 2004/03 (12)

INCOME :

Sales Turnover 3098.19 2181.69 1509.91 1150.89 961.12Excise Duty 85.55 84.5 68.19 37.94 63.64Net Sales 3012.64 2097.19 1441.72 1112.95 897.48Other Income 84.69 9.3 7.16 10.66 9.53Stock Adjustments 297.89 246.22 72.58 87.91 34.67

Total Income 3395.22 2352.71 1521.46 1211.52 941.68

EXPENDITURE :Raw Materials 2389.92 1586.68 955.33 729.15 579.09Power & Fuel Cost 13.9 11.55 10.02 9.97 8.9Employee Cost 185.9 154.49 108.13 94.47 84.44

Other Manufacturing Expenses 49.36 42.37 31.1 25.83 17.21Selling and Administration Expenses 324.89 273.13 197.59 173.57 107.76Miscellaneous Expenses 175.38 102.82 84.07 89.71 64.52Less: Pre-operative Expenses

Capitalised 0.02 0.52 0.89 0.49 0.81

Total Expenditure 3139.33 2170.52 1385.35 1122.21 861.11

Operating Profit 255.89 182.19 136.11 89.31 80.57Interest 23.85 24.95 29.57 37.33 45.07Gross Profit 232.04 157.24 106.54 51.98 35.5Depreciation 29.73 25.59 19.66 19.61 21.47

Profit Before Tax 202.31 131.65 86.88 32.37 14.03Tax 41.06 37.15 15.82 13.24 9.29Fringe Benefit tax 3.71 3.24 3.01 0 0Deferred Tax 7.27 -2.86 -5.57 -5.82 -6.44Reported Net Profit 150.27 94.12 73.62 24.95 11.18Extraordinary Items -19.54 -18.2 -21.92 -28.78 -25.9Adjusted Net Profit 169.81 112.32 95.54 53.73 37.08

Adjst. below Net Profit 0 0 0 0 0P & L Balance brought forward 130.93 77.5 29.62 19.56 17.18Statutory Appropriations 0 0 0 0 0Appropriations 62.65 40.69 25.74 14.89 8.8

P & L Balance carried down 218.55 130.93 77.5 29.62 19.56

Dividend 35.51 22.19 13.32 8.46 4.23Preference Dividend 0 0.39 2.72 2.81 3.32Equity Dividend % 80 50 30 20 10

Earnings Per Share-Unit Curr 32.49 20.25 16.24 4.87 1.63Earnings Per Share(Adj)-Unit Curr 32.49 20.25 16.24 4.74 1.59Book Value-Unit Curr 98.26 73.76 45.55 32.46 29.6


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COMPARATIVE BALANCE SHEET

Particulars2008 2007 Absolute

Inc / decPercentage

Net worth 272.45 251.15 21.3 8.48

Capital(WIP) 10 15.97 - 5.97 37.4

Investment 47.39 27.02 20.37 75.3

Net currentassets 388.93 293.55 95.38 32.49

Total assets 694.06 574.45 119.61 20.82

Share capital 44.39 44.39 Nil Nil

Reserve 391.78 283.55 108.73 38.4

Secured loan 188.11 172.67 15.44 8.94

Unsecured loan 69.78 74.34 -4.56 6.13

Total

liabilities

694.06 574.45 119.61 20.82


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COMMONSIZE BALANCE SHEET

Particulars 2007 2007 % of total

2008 % of total

Net worth 251.15 43.72 272.45 39.25

Capital(WIP) 15.97 2.78 10 1.44

Investment 27.02 4.70 47.39

6.82

Net currentassets 293.55 51.10 388.93 56.03

Total assets 574.45 100 694.06 100

Share capital 44.39 7.72 44.39 7.72

Reserve 283.55 49.27 391.78 56.5

Secured loan 172.67 30 188.11 27.10

Unsecured loan 74.34 12.9 69.78 10.05

Totalliabilities

574.45 100 694.06 100


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TREND ANALYSIS

PARTICULARS 2008 2007 Trend%2007

Trend %2008

Net worth 272.45 251.15 100 108.5

Capital(WIP) 10 15.97 100 62.6

Investment 47.39 27.02 100 175.4

Net current assets388.93 293.55 100 132.50

Total assets

694.06 574.45 100 120.82

Share capital44.39 44.39 100 100

Reserve 391.78 283.55100

138.41

Secured loan 188.11 172.67100

108.94

Unsecured loan 69.78 74.34

100

93.86

Total liabilities 694.06 574.45100

120.82


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Ratios

Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Profitability ratios

Operating margin (%) 8.69 8.69 10.07 9.16 10.56

Gross profit margin (%) 7.72 7.49 8.73 7.37 8.17

Net profit margin (%) 4.92 4.40 4.98 2.25 1.23

Adjusted cash margin (%) 6.01 5.73 7.52 6.03 6.26

Adjusted return on net worth (%) 35.27 30.00 49.76 36.65 30.55

Reported return on net worth (%) 34.45 29.06 39.77 19.61 8.55

Return on long term funds (%) 43.48 39.64 40.07 24.58 23.72

Leverage ratios

Long term debt / Equity 0.25 0.29 0.75 1.58 1.66

Total debt/equity 0.59 0.75 1.60 2.61 3.57

Owners fund as % of total source 62.84 57.00 38.47 27.71 21.88

Fixed assets turnover ratio 6.17 4.72 3.49 2.74 2.28

Liquidity ratios

Current ratio 1.40 1.38 1.67 1.89 2.65

Current ratio (inc. st loans) 1.12 1.04 1.08 1.21 1.05

Quick ratio 0.27 0.42 0.69 0.97 1.82

Inventory turnover ratio 3.06 3.26 4.09 4.31 6.02

TURNOVER RATIO

Turnover Ratios 2008/03 2007/03 2006/03 2005/03 2004/03Fixed Assets 5.77 4.66 3.68 2.48 2.9Inventory 3.65 4.15 4.67 6.28 5.28Debtors 32.87 23.95 18.06 5.75 10.22

Interest Cover Ratio 10.51 7.29 4.83 2.93PBIDTM (%) 9.05 9.51 10.77 12.01 11.2PBITM (%) 8.09 8.34 9.46 9.78 9.5PBDTM (%) 8.28 8.37 8.81 7.32 7.96CPM (%) 6.44 6.32 7.63 6.09 6.37APATM (%) 5.48 5.15 6.33 3.86 4.67ROCE (%) 39.64 34.44 29.86 16.75 21.65RONW (%) 44.48 43.05 56.29 27.27 38.82


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ANALYSISRATIOS :-

Profitability ratiogross profit

6.5

7

7.5

8

8.5

9

2008 2007 2006 2005 2004

gross profit

The gross profit of the company always ups and down. In 2004 the profit is 8.17 in 2005 it decrease to 7.37 it means there is in the selling

rate of the goods sold and increase in the cost of good sold .but in2008 it increase to 7.72 it mean selling price of the goods has gone up.net profit

0

1

2

3

4

5

6

2008 2007 2006 2005 2004

net profit


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The net profit increase at the increasing rate. The ratio in 2004 is 1.23and in 2008 it is 4.92 it mean there is portion of sale is left for theowner after all the expenses have been met. More profit is available incompany .

operating ratio

0

2

4

6

8

10

12

2008 2007 2006 2005 2004

operating ratio

There is ups and down in the operating ratio. This ratio helps indetermine the ability of the management in running the business for different activities.

Leverage ratio :-

The debt equity ratio always decreases. It mean low debt equity provides more security to lenders accompanies by low leverage to theowner .there is no risk in extending a loan to a business.

The fixed assets turnover ratio increase in 2006 it is 2.49 but in 2008it is 6.17. It means fixed assets should be purchase out of long termfund. High the fund high the purchase of fixed assets.


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fixed assets turnover ratio

0

1

2

34

5

6

7

2008 2007 2006 2005 2004

fixed assets turnover ratio

LIQUIDITY RATIO :-

current ratio

0.95

1

1.05

1.1

1.15

1.2

1.25

2008 2007 2006 2005 2004

current ratio

The current ratio of the company is always near to 2:1 it shows thatthe company is at the good position and had sufficient fund for theliquidity. In 2004 it increase to 2.65 as increase in the current ratioreflects improvement in the liquidity position of the company.


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The quick ratio of the company is always fall. The ratio must be 1:1.if there is 1:1 it mean the company is having good current financial

position .In 2008 it is 0.27 this shows that liquidity assets is less ascompare to current assets.

INVENTORY TURNOVER RATIO :-

debtor turnover ratio

0

1

2

3

4

5

6

7

2008 2007 2006 2005 2004



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Inventory turnover ratio is adequate. It should neither be too high nor too low. It shows that the company fund should be properly used.Stock turnover ratio really affects the company if high money is

blocked in stock .But there is no case for the titan industry.

Fixed Assets

0

1

2

3

4

5

6

7

2007/03 2006/03 2005/03 2004/03

Fixed Assets

The fixed assets ratio is always increases every year .It mean the saleis adequate. The money invested in fixed assets is properly used incompany.


2008

2007

2006

2005

2004


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Debtor turnover ratio is always increases every year. It is acomponent of current assets and as such has direct influence onworking capital position of the company. The company receives themoney from debtor at time. It shows that there will no effects on thecompany financial position. Normally higher turnover ratio is better for the company.

CASH FLOW STATEMENT :-

It shows that the cash has been increase every year. In 2004 the closing cash

is 27.62 and it is the opening cash for next year ie 2005 and so on. The cashhas been increase from 27.66 to 43.72 and then the flow of cash is less in2007 it reduces from 43.72 to 38.46. But after some time cash inflow andoutflow has been increase. It shows that the cash flow statement of the TitanIndustry is good.

FUND FLOW STATEMENT :-

Fund flow shows the financial operation and show the financial performanceof the Titan Industry. In this schedule of change in working capital isdecrease in 2004, 05, 06. It means current assets will be insufficient to meetthe current liability always nearer to 2:1. If the company is near to this isshow that the company financial is strong. It shows the additional fundreceived during the year. The cash profit has been increase rapidly. Andthere is no entrance of equity share except 2007. In 2007 there are2.1increases in the number of share holder.

In 2007 and 2008 there is increase in working capital indicates idleness of fund, so efforts should me made by the company to bring the ratio 2:1.in2003, 2004, and 2005 there is decrease in working capital and after 2005there is always increase in working capital. The company will pay dividendto shareholder. It always increases every year it shows the company willdone a lot for shareholder. In 2008 there is increase in the Investment.


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PROFIT AND LOSS ACCOUNT :-

The sale of the company increases every year. In 2007 the sale is 2181.69and increase to 3098.19. The incomes from other source also increase. Thecompany will spend a lot of money on row material. The amount of

Spend always increases. Expenditure on power and fuel is increases. Thecompany will spend a lot of money on the employee there is 29.1 increase inthe expenditure as compare to last year. The gross profit ratio increase everyyear. It mean the company was spent a lot of money on sales with effect the

production also increases. There is no gross loss. And the company will alsosave money for depreciation which is helpful for the purchase of new assets.The net profit of the company will also increase in 2007. the net profit is112.32 in 2008 its profit is 169.81 its shows the rapid increase in the profit.The profit and loss shows that the company is at the good position. Theequity dividend increase it mean there is increase in the shareholder in thecompany and the company will pay a dividend to shareholder. The companynot pays any dividend to preference shareholder in 2008.

COMPARATIVE BALANCE SHEET :-

The comparative balance sheet of the titan industry shows that theshare capital as compare to last year is not increase. This made noimprovement in financial position of the company.

There is increase in the reserve. It means company would have savemore money for the future.

Secured loan as compare to last year has increase it indicate increasedependence on borrowed fund which is not good sine.

The unsecured loan is decrease it indicates that loans and currentliability have been paid by the company.

The investment of the company as compare to last year increase itshows that the company will spend a lot on investment.


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The current assets of the company increase it is a good sine for thecompany.

COMMONSIZE BALANCE SHEET :- The above common size statement shows that the net block of titan

industry is reduce from 43.72% to 39.25% of total assets it hasdecrease against the previous.

The reserve fund increase as compare to last year. It increases to 56.5. The secured loan decrease from 30% to 27.10%.

TREND ANALYSIS :-

The trend analysis shows that the net block increase from the previousyear 2007 by 8.5%.

The work in progress is reducing to 62.6% this is not a good sine for the company.

The share capital constant as compare to last year.

The secured loan is increase 8.11 this shows company is depend on borrowing fund.

The unsecured loan is decrease to 93.86.

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