Bharti Airtel Report

FINANCIAL ANALYSIS OF BHARTI AIRTEL LTD.

COMPILED BY: AMAN RAWAT (07304) BHAVIK VYAS (07311) IPSHITA VERMA (07325) HARDIK MARFATIA (07329) RADHIKA GUPTA (07346) VITRAG SHELADIA (07352) YASHMITA GOEL (07358)

CONTENTS 1. SECTION I     

Introduction ........................................................................................................04 Products ............................................................................................................04 Board of Directors .............................................................................................05 Worldwide Presence .........................................................................................06 Shareholding Pattern ........................................................................................07

2. SECTION II 

Peer Comparison .............................................................................................09

3. SECTION III   

Ratio Analysis ..................................................................................................13 Trend Analysis .................................................................................................25 Analysis of Cash Flow Statement ....................................................................31

4. SECTION IV 

SWOT Analysis ...............................................................................................33

5. ANNEXURES   

Consolidated Balance Sheet ..........................................................................35 Consolidated Profit And Loss Account ...........................................................36 Cash Flow Statement .....................................................................................37

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SECTION I

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 INTRODUCTION: Bharti Airtel Limited, commonly known as Airtel, is an Indian multinational telecommunications Service Company headquartered in New Delhi, India. In 1983, Sunil Bharti Mittal founded the Bharti Group. It operates in 20 countries across South Asia, Africa, and the Channel Islands. Airtel has GSM network in all countries in which it operates, providing 2G, 3G and 4G services depending upon the country of operation. Airtel is the world's fourth largest mobile telecommunications company by subscribers with over 275 million subscribers across 20 countries as of July 2013. It is the largest cellular service provider in India, with 191.39 million subscribers as of July 2013. Airtel is the largest provider of mobile telephony and second largest provider of fixed telephony in India, and is also a provider of broadband and subscription television services. It offers its telecom services under the Airtel brand, and is headed by Sunil Bharti Mittal. Bharti Airtel is the first Indian telecom service provider to achieve Cisco Gold Certification. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. Airtel launched "Hello Tunes", a Caller ring back tone service (CRBT), in July 2004 becoming to the first operator in India to do so. The Airtel theme song, composed by A.R. Rahman, was the most popular tune on that year. On 26 February 2013, Airtel announced that it had deployed Ericsson’s Mobile Broadband Charging (MBC) solution and completely modernized its prepaid services for its subscribers in India. As a part of the deal, Ericsson’s multi service MBC suite allows prepaid customers to have personalized profile based data charging plans. Prepaid customers will be able to customize their data plans across mobility, fixed line and broadband by cross bundling across multiple domains (2G, 3G, 4G/LTE & Wi-Fi). It will also offer flexible multi service charging in geographical redundant mode, making Airtel the first operator to implement geographical redundancy at such a large scale.

 PRODUCTS: 1. Fixed line and mobile telephony 2. Broadband and fixed-line internet services 3. Digital television 4. IPTV

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 BOARD OF DIRECTORS: Executive Chairman

Sunil Bharti Mittal Director

Ajay Lal Chua Sock Koong Pulak Chandan Prasad Rajan Bharti Mittal

Managing Director

Manoj Kohli

Director

Nikesh Arora Craig Edward Ehrlich Tan Yong Choo Tsun Yan Hsieh

Company Secretary

Mukesh Bhavnani

Additional Director

Manish Kejriwal Obiageli Oby Ezekwesili

Additional Director & JMD Gopal Vittal

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 WORLDWIDE PRESENCE: a. The Indian Subcontinent:   

Airtel Bangladesh, in Bangladesh Airtel, in India Airtel Sri Lanka, in Sri Lanka

b. Airtel Africa, which operates in 17 African countries: 

Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Seychelles, Sierra Leone, Tanzania, Uganda and Zambia.

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 SHAREHOLDING PATTERN: Shareholding pattern of a company shows how its shares are split among the entities that make up its owners. Shareholding pattern of Bharti Airtel is as follows:

Particulars Promoter Holding Indian Promoters Foreign Promoters Non-Promoter holdings (Other than Public) Financial Institutions/Banks FII/Foreign Fin Inst/Foreign Banks Corporate Bodies Government Holdings OCB NRI Mutual Funds Other Foreign Holdings General Public Individual Holding Upto Rs. 1 lakh Individual Holding Excess of Rs. 1 lakh Others Total

No. of Shares

Percent share (%)

1735453890 865673286

45.7 22.8

166287643 665436317 154418700 0 5082710 55 144077538 3366737

4.38 17.52 4.07 0 0.13 0 3.79 0.09

41017834 10783182 5932204 3797530096

1.08 0.28 0.16 100

Shareholding Pattern (%) Promoter Holding Indian Promoters Foreign Promoters Non-Promoter holdings (Other than Public) Financial Institutions/Banks FII/Foreign Fin Inst/Foreign Banks

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SECTION II

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OPERATING PERFORMANCE I.

PEER COMPARISON: Peer comparison is an investment rating used by analysts when given security is expected to provide returns that are consistent with those of other companies within its sector. We will be comparing Bharti Airtel with its Peers –Idea Cellular, Reliance communication, Tele Communication and MTNL.

COMPETITION Name Bharti Airtel Idea Cellular Reliance Communication Tata Communication MTNL

i.

NSE Sales Total Price Market Cap (Rs Crore) Turnover Net Profit assets 313.75 125418.43 45350.90 5096.30 67126.00 158.10 52437.29 22036.87 818.26 23072.72 139.50 28793.17 11267.00 624.00 73068.00 161.70 4608.45 4416.12 475.24 8087.80 10.75 677.25 3428.66 -5321.12 12184.20

On The Basis Of NSE Price: Comparing on the basis of NSE Price, Bharti Airtel is highest priced, MTNL being the cheapest.

NSE Price 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00

NSE Price

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ii.

On The Basis Of Market Capture: Comparing on the basis of Market Capture, we can see that Bharti Airtel has the largest market share, whereas the peers are nowhere close to it.

Market Cap (Rs Crore) 140000.00 120000.00 100000.00 80000.00 60000.00 40000.00 20000.00 0.00

iii.

Market Cap (Rs Crore)

On The Basis Of Sales Turnover: Comparing on the basis of Sales Turnover, Bharti Airtel’s turnover of the sales is the highest.

Sales Turnover 50000.00 45000.00 40000.00 35000.00 30000.00 25000.00 20000.00 15000.00 10000.00 5000.00 0.00

Sales Turnover

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iv.

On The Basis Of Net Profit: Comparing on the basis of Net Profit, we observe that Bharti Airtel’s Net Profit is the highest, while its peers’ Net Profit is a few thousands, MTNL’s being in negative.

Net Profit 6000.00 4000.00 2000.00 Net Profit

0.00 -2000.00 -4000.00 -6000.00

v.

On The Basis Of Total Assets: Comparing on the basis of Total Assets, Bharti Airtel is ranked Two, Reliance Communication being the First and Tata Communication being Fifth.

Total assets 80000.00 70000.00 60000.00 50000.00 40000.00 30000.00 20000.00 10000.00 0.00

Total assets

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SECTION III

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RATIO ANALYSIS Ratio Analysis is a tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis.

I.

LIQUIDITY RATIOS: Liquidity Ratios measure the ability of a company to repay its short-term debts and meet unexpected cash needs. Liquidity Ratios Current Ratio Quick Ratio Debtors' Turnover Ratio Inventory Turnover Ratio

i.

Mar '10 Mar '11 Mar '12 Mar '13 1.06 0.5 0.81 0.54 1.06 0.5 0.81 0.54 15.3 16.97 18.45 20.7 1307.05 1105.11 1296.07 21595.67

CURRENT RATIO: The Current Ratio measures a company's ability to pay short-term obligations. It gives an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. Ideally it is 2:1. Bharti Airtel had a healthy Current Ratio in March 2010, but it declined steeply to 0.5 in March 2011 and has been on a lower side since then due to inadequate Working Capital. This indicates that the firm might not be able to meet its current liabilities.

Current Ratio 1.2 1 0.8 0.6

Current Ratio

0.4 0.2 0 Mar '10

Mar '11

Mar '12

Mar '13

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ii.

QUICK RATIO: Quick Ratio determines whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory. Since Current Ratio and Quick Ratio of Bharti Airtel has been identical, it indicates that the quantum of inventory is sufficient for the company.

Quick Ratio 1.2 1 0.8 0.6

Quick Ratio

0.4 0.2 0 Mar '10

iii.

Mar '11

Mar '12

Mar '13

DEBTORS’ TURNOVER RATIO: Debtors’ Turnover Ratio signifies how fast the debtors can be converted into equivalent cash. This ratio for Bharti Airtel has been increasing which means that the company has been able to convert debtors into cash at a faster rate each year, which leads to an increase in cash balance which the company can use for its day to day operations.

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Debtors' Turnover Ratio 25 20 15 Debtors' Turnover Ratio

10 5 0 Mar '10

iv.

Mar '11

Mar '12

Mar '13

INVENTORY TURNOVER RATIO: Inventory Turnover Ratio shows that how many times in a year, a company’s inventory changes. This ratio has been moreover a constant one from March 2010 to March 2012 but increased steeply in March 2013 indicating that the sales of Bharti Airtel have been increasing.

Inventory Turnover Ratio 25000 20000 15000 Inventory Turnover Ratio

10000 5000 0 Mar '10

Mar '11

Mar '12

Mar '13

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II.

PROFITABILITY RATIO: Profitability ratios measure a company's operating efficiency, including its ability to generate income and therefore, cash flow. Cash flow affects the company's ability to obtain debt and equity financing.

Profitability Ratios Net Profit Margin Operating Profit Margin Return On Equity Return On Capital Employed

i.

Mar '10 Mar '11 Mar '12 Mar '13 26.47 20.3 13.77 11.24 39.08 35.25 32.98 29.7 29.42 19.2 12.33 9.9 26.27 18.51 13.97 12.41

NET PROFIT MARGIN: Net Profit Ratio establishes the relationship between net profit and sales, that is, it shows the percentage of net profit earned on sales. It is an indicator of overall efficiency of the business. It has been on a decline since March 2010 indicating that the company’s overall efficiency has suffered a downfall.

Net Profit Margin 30 25 20 15

Net Profit Margin

10 5 0 Mar '10

Mar '11

Mar '12

Mar '13

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ii.

OPERATING PROFIT MARGIN: Operating Profit Margin measures the operational efficiency of a firm. It has also been decreasing which again means that the company’s earnings have been declining.

Operating Profit Margin 45 40 35 30 25 20 15 10 5 0

Operating Profit Margin

Mar '10

iii.

Mar '11

Mar '12

Mar '13

RETURN ON EQUITY: The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. It has been decreasing since March 2010 indicating that Bharti Airtel has not generated much profit with the money invested by shareholders.

Return On Equity 35 30 25 20 Return On Equity

15 10 5 0 Mar '10

Mar '11

Mar '12

Mar '13

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iv.

RETURN ON CAPITAL EMPLOYED: Return on Capital Employed judges the overall performance of the enterprise, that is, the efficiency and the profitability. It has been declining since March 2010.

Return On Capital Employed 30 25 20 15

Return On Capital Employed

10 5 0 Mar '10

Mar '11

Mar '12

Mar '13

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III.

SOLVENCY RATIO: The solvency ratio measures the size of a company's after-tax income; excluding non-cash depreciation expenses, as compared to the firm's total debt obligations. It provides a measurement of how likely a company will be to continue meeting its debt obligations.

Solvency Ratios Debt Equity Ratio Debt To Total Asset Ratio Interest Coverage

i.

Mar '10 Mar '11 Mar '12 Mar '13 0.14 0.27 0.29 0.24 0.08 0.14 0.13 0.15 -17.84 27.92 5.98 4.91

DEBT EQUITY RATIO: A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets. Debt Equity Ratio of Bharti Airtel initially increased from March 2010 to March 2012, but gradually decreased in March 2013. The gradual decline in debt/equity ratio shows that the company is less dependent on debt for its financing activities.

Debt Equity Ratio 0.35 0.3 0.25 0.2 Debt Equity Ratio

0.15 0.1 0.05 0 Mar '10

Mar '11

Mar '12

Mar '13

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ii.

DEBT TO TOTAL ASSET RATIO: A Debt to Total Asset Ratio is a measurement representing the percentage of a corporation's assets that are financed with loans and financial obligations lasting more than one year. It has been increasing since March 2010 indicating that the percentage of Bharti Airtel’s assets that are financed with loans and financial obligations lasting more than one year has increased.

Debt To Total Asset Ratio 0.16 0.14 0.12 0.10 0.08

Debt To Total Asset Ratio

0.06 0.04 0.02 0.00 Mar '10

iii.

Mar '11

Mar '12

Mar '13

INTEREST COVERAGE:

Interest Coverage Ratio shows how efficiently a company can pay off its interest expenses over and above the principle amount. In March 2011, it was the highest of these four years but again declined in the consecutive years indicating the company’s ability to pay off its interest expenses has decreased.

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Interest Coverage 40 30 20 10 Interest Coverage 0 Mar '10

Mar '11

Mar '12

Mar '13

-10 -20 -30

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IV.

CAPITAL MARKET RATIOS: Capital Market Ratios Earnings Per Share Earnings Yield Dividend Yield Price Earning Ratio

i.

Mar '10 Mar '11 Mar '12 Mar '13 24.82 20.32 15.09 13.42 0.08 0.06 0.04 0.05 0 0 0 0 12.57 17.59 22.32 21.74

EARNINGS PER SHARE: Earnings Per Share is portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company's profitability. Bharti Airtel’s earnings per share have shown a decline since March 2010 indicating that its profitability has decreased.

Earning Per Share 30 25 20 15

Earning Per Share

10 5 0 Mar '10

Mar '11

Mar '12

Mar '13

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ii.

EARNINGS YIELD RATIO: The Earnings Yield shows the percentage of each unit of money invested in the stock that was earned by the company. It has been on a decline since March 2010, but shown a slight increase in March 2013.

Earnings Yield 0.09 0.08 0.07 0.06 0.05 Earnings Yield

0.04 0.03 0.02 0.01 0.00 Mar '10

iii.

Mar '11

Mar '12

Mar '13

DIVIDEND YIELD RATIO: Dividend Yield Ratio is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. It has been constant at 0 since March 2010 as dividend per share was 0.

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Dividend Yield 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0

Dividend Yield

Mar '10

iv.

Mar '11

Mar '12

Mar '13

PRICE EARNING RATIO: Price Earning Ratio conveys the number of times market is willing to pay to buy a firm compared to its current net profits. If a firm has a bright future compared to its present performance then it would have a high P/E ratio. In case of Bharti Airtel, this ratio has been increasing from March 2010 to March 2012 but showed a slight decline in March 2013. Nonetheless, according to the price earning ratio we can say Bharti Airtel has a strong position in the market.

Price Earning Ratio 25 20 15 Price Earning Ratio

10 5 0 Mar '10

Mar '11

Mar '12

Mar '13

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TREND ANALYSIS Trend analysis is important in the business and financial sectors. Trend analysis is often used to make projections and assessments of financial health. Financial analysts examine the past performance of their company, along with current financial conditions, to determine how their company will perform in the future. Trend analysis is one of the tools for the analysis of the company’s monetary statements for the investment purposes. In a trend analysis, the financial statements of the company are compared with each other for the several years after converting them in the percentage.

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 BALANCE SHEET LIABILITIES Shareholder's Funds Share Capital Share Warrants & Outstandings Total Reserves Shareholder's Funds Long-Term Borrowings Secured Loans Unsecured Loans Deferred Tax Assets / Liabilities Other Long Term Liabilities Long Term Provisions Total Non-Current Liabilities Current Liabilities Trade Payables Other Current Liabilities Short Term Borrowings Short Term Provisions Total Current Liabilities Total Liabilities ASSETS Non-Current Assets Gross Block Less: Accumulated Depreciation Net Block Capital Work in Progress Intangible assets under development Non Current Investments Long Term Loans & Advances Other Non Current Assets Total Non-Current Assets Current Assets Loans & Advances Currents Investments Inventories Sundry Debtors Cash and Bank Other Current Assets Short Term Loans and Advances Total Current Assets Net Current Assets (Including Current Investments) Total Current Assets Excluding Current Investments Total Assets

Mar-10

Mar-11

Mar-12

Mar-13

100 100 100 100

100.00 149.70 121.01 120.07

100.00 157.50 136.32 134.55

100.00 152.66 149.96 147.39

100 100 100 0 0 100

43.40 149.05 15987.88 100.00 100.00 210.42

7.36 164.63 25354.55 100.21 140.22 232.62

5.08 196.80 34857.58 126.17 149.10 283.83

100 100 0 100 100 100

63.71 191.31 100.00 128.17 131.51 131.13

57.96 182.21 213.27 154.81 152.48 148.20

65.99 136.21 113.55 180.60 161.85 163.26

Mar-10

Mar-11

Mar-12

Mar-13

100 100 100 100 0 100 0 0 100

138.96 128.10 145.23 89.80 100.00 104.94 100.00 100.00 162.54

151.33 163.50 144.30 57.88 70.21 105.83 119.78 357.11 162.57

172.36 204.01 154.09 64.64 0.00 243.14 126.19 461.29 200.33

100 100 100 100 100 100 100 100 100 100

2.34 126.47 69.45 16.31 1546.23 80.66 62.46 -1148.19 82.26 131.13

11.55 118.01 101.40 58.92 1584.34 159.28 116.76 -509.59 151.42 148.20

23.38 7.72 106.74 44.41 1654.97 95.69 82.20 -1314.30 101.58 163.26 26 | P a g e

 PROFIT & LOSS ACCOUNT Particulars

Mar-10

Mar-11

Mar-12

Mar-13

INCOME: Gross Sales

100

106.76

116.83

127.36

Less :Inter divisional transfers

0

0

0

0

Less: Sales Returns

0

0

0

0

Less: Excise

0

0

0

0

Net Sales

100

106.76

116.83

127.36

Other Income

100

129.87

165.57

387.78

Total Income

100

107.01

117.34

130.09

Increase/Decrease in Stock

100

48.98

-15.65

-204.08

Raw Materials Consumed

100

66.57

45.71

-80.29

Power & Fuel Cost

100

111.40

131.25

157.61

Employee Cost

100

96.71

92.73

100.72

Other Manufacturing Expenses

100

111.21

128.87

149.68

General and Administration Expenses

100

117.34

131.76

146.64

Selling and Distribution Expenses

100

136.84

139.68

155.00

Miscellaneous Expenses

100

100.92

117.14

107.14

0

0.00

0.00

0.00

Total Expenditure

100

113.71

127.96

145.90

Operating Profit (PBDIT)

100

96.64

100.94

105.65

Interest

100

-57.06

-245.81

-290.90

PBDT

100

90.71

87.54

90.33

Depreciation

100

115.16

147.73

170.48

Profit Before Taxation & Exceptional Items

100

81.55

65.02

60.33

0

0.00

0.00

0.00

PBT

100

81.55

65.02

60.33

Provision for Tax

100

79.25

96.32

106.71

PAT

100

81.87

60.79

54.07

0

0.00

0.00

0.00

100

144.73

180.96

207.23

EXPENDITURE :

Expenses Capitalised

Exceptional Income / Expenses

Adjustment to Profit After Tax Profit Balance B/F

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I.

INCOME-EXPENDITURE ANALYSIS: 500000 450000 400000 350000 300000 250000 200000 150000 100000 50000 0

Total Income Total Expenditure Operating Profit (PBDIT)

As we can see in the above figure, there has been a continuous increase in Total Income of Bharti Airtel. It has increased from ₹ 36,693.09 Crore in March 2010 to ₹ 46,784.00 Crore in March 2013. Total Expenses have also increased from ₹ 21,608.29 Crore in March 2010 to ₹ 31,850.20 Crore in March 2013. The difference between the two, that is, the Operating Profit has been near about consistent over the years. The Rate of increase in revenue and expenditure has been shown below: 450 400 350 300

Other Income

250 Total Expenditure

200 150

Operating Profit (PBDIT)

100 50 0 मार्च-10

मार्च-11

मार्च-12

मार्च-13

Both Total Income and Total Expenses have been increasing over the years, but the rate of increase in Total Expense is higher than that of rate of increase in Total Income. Sales Turnover and Net Sales have driven the increase in Total Income and continuously high increase in Miscellaneous Expenses along with introduction of Power and Fuel Cost has contributed to increase in Total Expenses.

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II.

PROFIT ANALYSIS:

100 90 80 70 60

PBT

50

PAT

40 30 20 10 0 मार्च-10

मार्च-11

मार्च-12

मार्च-13

Both Profit Before Tax (PBT) and Profit After Tax (PAT) have been declining at a same rate over the years. PBT has declined from ₹10,703.53 Crores to ₹6,454.80 Crores whereas PAT has declined from ₹9,426.15 Crores to ₹5,096.30 Crores.

III.

EARNINGS PER SHARE AND DIVIDEND PER SHARE: 120 100 80 EPS

60

DPS 40 20 0 Mar '10

Mar '11

Mar '12

Mar '13

Earnings Per Share (EPS) has been falling continuously, though Dividend Per Share (DPS) has been constant over the years, the company has made efforts to maintain the Dividend paid despite the fall in EPS. The fall in EPS cannot be accounted to increase in number of shares as the shares in issue have not changed, but can be a result of the falling profit balance. 29 | P a g e

IV.

EQUITY-DEBT ANALYSIS:

600000 500000 400000

Shareholder's Funds

300000

Long Term Debt

200000 100000 0 Mar-10

Mar-11

Mar-12

Mar-13

Bharti Airtel has raised the major portion of funds through Shareholder’s Fund. The value of Shareholder’s Fund has been increasing over the years at a tremendous rate ranging from 100 to 150%. The above graph indicates Bharti Airtel’s heavy dependence on Shareholder’s Fund.

V.

LONG TERM LOAN AND INVESTMENT ANALYSIS:

300 250 200 150

Long Term Debt

100

Investments

50 0 Mar' 10

Mar' 11

Mar' 12

Mar' 13

Loans and Investments have been increasing over the years, but the increase in Investments was at more than 350%+ rate.

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ANALYSIS OF CASH FLOW STATEMENT  Cash Flow from Operating Activities Net cash flow from operating activities is positive which is good for the company. Company has generated income of ₹ 138847 Millions from operating activities which it can use in other activities. This means it has good financial flexibility and has a backup if it needs cash. It has the capacity to meet its daily operating expenses with ease. Increase in Inventories and increase in Trade and other payables accounts for cash generated from operating activities.

 Cash Flow from Investing Activities Bharti Airtel is purchasing fixed tangible and intangible assets which may be due to the fact that the company is expanding. This analysis can be supported by the fact that the company has received interest as well as provided loan to its subsidiaries. Also, it has received dividend from the subsidiary companies and has net movement of advances into the subsidiaries. A large amount is spent on acquisition/subscription/investment in subsidiaries/associate/joint venture.

 Cash Flow from Financing Activities The major components of financing activities are receipts from borrowings and repayment of borrowings. Since the company is highly dependent on equity, so it is important that it maintains good dividend payment policies and it can be seen that it is doing so. Moreover it has also been consistent in interest and other finance charges payment.

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SECTION IV

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SWOT ANALYSIS SWOT Analysis is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieving that objective.

 STRENGTHS 1. 2. 3. 4. 5.

Present in more than 20 countries. An integrated telecom company with complete tele-media solutions. Present in the country with second largest population globally. Largest operator in India and fourth largest in the world. Technology, infrastructure and skilled manpower.

 WEAKNESSES 1. High degree of financial leverage. 2. Inadequate infrastructure in rural regions pushing cost of operations. 3. Integration in operations across continents. 4. Understanding evolving customer perceptions in a multi-cultural and multi-lingual environment.

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 OPPORTUNITIES 1. 2. 3. 4.

Untapped telecom market in Africa and rural India. Underpenetrated broadband connectivity. Mandatory digitisation of cable television across the country. Increasing data consumption over voice consumption.

 THREATS 1. 2. 3. 4. 5.

Falling Average Revenue per User. Political and economic uncertainties in Africa and India. Cost inflation across countries. Continued regulatory stringency. Increasing competition and competitive pricing.

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ANNEXURES I.

CONSOLIDATED BALANCE SHEET

LIABILITIES Shareholder's Funds Share Capital Share Warrants & Outstanding Total Reserves Shareholder's Funds Long-Term Borrowings Secured Loans Unsecured Loans Deferred Tax Assets / Liabilities Other Long Term Liabilities Long Term Provisions Total Non-Current Liabilities Current Liabilities Trade Payables Other Current Liabilities Short Term Borrowings Short Term Provisions Total Current Liabilities Total Liabilities

Mar-10

ASSETS Non-Current Assets Gross Block Less: Accumulated Depreciation Net Block Capital Work in Progress Intangible assets under development Non Current Investments Long Term Loans & Advances Other Non Current Assets Total Non-Current Assets Current Assets Loans & Advances Currents Investments Inventories Sundry Debtors Cash and Bank Other Current Assets Short Term Loans and Advances Total Current Assets Net Current Assets (Including Current Investments) Total Current Assets Excluding Current Investments Total Assets

Mar-10

Mar-11

Mar-12

(Rs. In Millions) Mar-13

18988 1861 346523 367372

18988 2786 419342 441116

18988 2931 472377 494296

18988 2841 519633 541462

394 49995 33 0 0 50422

171 74516 5276 25132 1002 106097

29 82309 8367 25184 1405 117294

20 98388 11503 31708 1494 143113

77844 45004 0 53531 176379 594173

49598 86097 27644 68611 231950 779163

45121 82000 58956 82874 268951 880541

51372 106034 31390 96677 285473 970048

Mar-11

Mar-12

Mar-13

442125 161875 280250 15947 0 111537 0 0 407734

614374 207367 407007 14320 50472 117051 70812 3059 662721

669068 264660 404408 9230 35435 118041 84817 10924 662855

762061 330235 431826 10308 0 271191 89358 14111 816794

46196 272 21050 8167 664 110090 186439 10060 140243 594173

1079 344 14619 1332 10267 88801 116442 -115508 115363 779163

5337 321 21345 4812 10520 175351 217686 -51265 212349 880541

10800 21 22468 3627 10989 105349 153254 -132219 142454 970048 35 | P a g e

II.

CONSOLIDATED PROFIT & LOSS ACCOUNT (Rs. In Millions)

Particulars

Mar-10

Mar-11

Mar-12

Mar-13

INCOME: Gross Sales

356095

380177

416038

453509

Less :Inter divisional transfers

0

0

0

0

Less: Sales Returns

0

0

0

0

Less: Excise

0

0

0

0

356095

380177

416038

453509

Other Income

3773

4900

6247

14631

Total Income

359868

385077

422285

468140

Increase/Decrease in Stock

-147

-72

23

300

Raw Materials Consumed

350

233

160

-281

22650

25233

29727

35699

Employee Cost

15005.5

14512

13915

15113

Other Manufacturing Expenses

110418

122800

142300

165271

General and Administration Expenses

43310.5

50821

57067

63511

21613

29576

30189

33500

5310

5359

6220

5689

0

0

0

0

Total Expenditure

218510

248462

279601

318802

Operating Profit (PBDIT)

141358

136615

142684

149338

-5680

3241

13962

16523

147038

133374

128722

132815

40045

46116

59160

68267

106993

87258

69562

64548

0

0

0

0

106993

87258

69562

64548

Provision for Tax

12731

10089

12262

13585

PAT

94262

77169

57300

50963

0

0

0

0

185028

267785

334820

383438

Net Sales

EXPENDITURE :

Power & Fuel Cost

Selling and Distribution Expenses Miscellaneous Expenses Expenses Capitalised

Interest PBDT Depreciation Profit Before Taxation & Exceptional Items Exceptional Income / Expenses PBT

Adj to Profit After Tax Profit Balance B/F

36 | P a g e

III.

CASH FLOW STATEMENT

37 | P a g e

38 | P a g e

39 | P a g e