dessert at ion report on telecom

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A

Dissertation Report

OnA STUDY 0F COMPARTIVE ANALYSIS OF TELECOM SECTOR COMPANIES (BHARTI

AIRTEL ,RELIANCE COMMUNICATION & IDEA CELLULAR) ON THE BASIS OF

NETWORH ,EPS,CURRENT RATIO& DEBT EQUITY RATIO FOR LAST FIVE YEARS (2005-

09)

SUBMITTED TO:

KURUKSHETRA UNIVERSITY, KURUKSHETRA

In Partial Fulfilment for the Degree of Masters in Business Administration

(Session 2008-2010)

Under Guidance of: Submitted By:-Mrs.Shaili Gupta Dharamveer Faculty, MBA S/O Sh. Sunehra RamTIMT Uni. Regn. No. 04-UC-128

Roll No 1106/08Univ.RollNo.___________

Tilak Raj Chadha Institute of Management & Technology (TIMT)(Affiliated to Kurukshetra University, Kurukshetra and Approved By AICTE)

MLN College Educational Complex, Yamuna Nagar- 135001 (Haryana)Ph. 01732-220103, 234110. Fax:+91-1732-220103E-mail: [email protected], Web Site: www.timt.ac.in
mailto:[email protected]://www.timt.ac.in/mailto:[email protected]://www.timt.ac.in/


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PREFACE

The conceptual knowledge acquired by management students is best manifested in the projects

and training they undergo. As a part of curriculum of MBA, I have got a chance to undergo to

make a research report on telecom sector . The present research project give a perfect knowledge

to my understanding of the TELECOME SECTOR specially the most modern concept of

comparative analysis.

Theoretical knowledge without the practical exposure is of little value. Theoretical studies in

classroom are not sufficient to understand the functioning and nature of research. Therefore it

becomes necessary to undergo any research project work. Practical project supplements the

theoretical studies i.e. it covers what is left uncovered in the classroom. It exposes a student to

invaluable pleasure of experiences.

I choose my dissertation topic. A STUDY 0F COMPARTIVE ANALYSIS OF TELECOMSECTOR COMPANIES (BHARTI AIRTEL ,RELIANCE COMMUNICATION & IDEA

CELLULAR) ON THE BASIS OF NETWORH ,EPS,CURRENT RATIO& DEBT

EQUITY RATIO FOR LAST FIVE YEARS (2005-09)

During the research project I got an opportunity to learn valuable things, which I could have

been able to learn from theory classes.

In nutshell, whole of my project was invaluable experience in the pursuit of knowledge .In the

forthcoming pages attempt has been made to present a comprehensive report concerning

different aspects of my research. The overall gain to me will be reflected in the report it self.


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Acknowledgement

I take this opportunity to express my profound debts of gratitude and obligation, to my

esteemed guide Mrs. Shaili Gupta faculty of Tilak Raj Chadha Institute Of Mgt. &

Technology, Yamuna Nagar, for her most valuable help and creative suggestions at all stages

of my work. Her learned advice and guidance always kindled inspiration in the face of

difficulties encountered in the course of this research work.

I am also thankful to my mentor Dr. Vikas Daryal, (Director), Tilak Raj Chadha

Institute of Mgt. & Technology, Yamuna Nagar, for allowing me to work on this project work

and for his kind help always.

I am also thankful to my HODMrs.Vandana Madan Tilak Raj Chadha Institute

of Mgt. & Technology, Yamuna Nagar, for allowing me to work on this project work and for hiskind help always.I am highly grateful to my all lecturers and dedicated staff of Tilak Raj Chadha

Institute of Mgt. & Technology, Yamuna Nagar for their kind help from time to time.

I am also thankful to the respondents, all my friends and also to various experts for their kind

and valuable guidance, whom I consulted for my present work.

(Dharamveer)

Executive summary


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Management ideas without any action based on them mean nothing. That is why practical

experience is vital for any management studies. Theoretical studies in the class room are not

sufficient to understand the functioning climate and the real problems coming in the way of

management. So, practical exposures are indispensable to such courses. Thus, practical

experience acts as a supplement to the classroom studies.

This report deals with A STUDY 0F COMPARTIVE ANALYSIS OF TELECOM

SECTOR COMPANIES (BHARTI AIRTEL ,RELIANCE COMMUNICATION & IDEA

CELLULAR) ON THE BASIS OF NETWORH ,EPS,CURRENT RATIO& DEBT

EQUITY RATIO FOR LAST FIVE YEARS (2005-09)

The number of telephone subscribers in India rose to 509.03 million, according to data compiled

by the Telecom Regulatory Authority of India (TRAI).

Tariffs had hit all-time lows, with the telecom service providers competing to outbid each other

in launching the lowest fare in the country. Low tariffs, even though would bleed the players,

was a welcoming initiative to the industry and users. To the industry as it would lead to

increasing telecom penetration and to users as telecom services became more affordable.

The Telecom Sector at present growing at a very fast speed . There are many players in the

telecom industry and they are different kind of schemes every time. At present it is very difficult

for a company to survive in the market only the companies survive on the basis of the volume of

sales. Bharti Airtel was on the first position on the basis of the sales in the year 2009. Reliance

Communication was at the second position on the basis of sales volume & Idea Cellular was on

the third position. This was the reason that is why I choose these companies. In my study i will

analysis the financial position of these companies during last five years on the basis of networth

of shareholders , earning per share ,current ratio & debt equity ratio. These will do with help of

balance sheet & profit &loss Account of these companies.

This helps the company to manufacture the product like wise for each customers expectations.


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CONTENTS

Introduction

Company Profile

Topic

Theoretical Frame work

Construct

Variables

Literature Review

Research Objective

Research Methodology

Research design

Type of Research Design

Study Setting

Measurement of Scaling

Flow Chart for solution of Statistical Tools

Hypothesis Development of testing

Sample and Sample design

Data collection

Analytical Tools

Statistical tools

Data Analysis

Result and Finding


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Policy Implications

Recommendations

Bibliography

Annexure

Introduction About Indian Telecom Sector

The Indian telecommunications industry is one of the fastest growing in the world and India is

projected to become the second largest telecom market globally.

According to the Telecom Regulatory Authority of India (TRAI), the number of telecom

subscribers in the country increased to 562.21 million in December 2009, an increase of 3.5 per

cent from 543.20 million in November 2009. With this the overall teledensity (telephones per

100 people) has touched 47.89.

The telecom industry notched up US$ 8.56 billion in revenues during the quarter ended

December 31, 2009 helped by a recovery in earnings from both mobile and landline services.

According to Business Monitor International, India is currently adding 8-10 million mobile

subscribers every month. It is estimated that by mid 2012, around half the country's population

will own a mobile phone. This would translate into 612 million mobile subscribers, accounting

for a tele-density of around 51 per cent by 2012.

Moreover, according to a study conducted by Nokia, the communications sector is expected to

emerge as the single largest component of the country's GDP with 15.4 per cent by 2014.

The Indian equipment market was estimated at US$ 24 billion in FY09. Finnish giant Nokia is

the market leader, with over US$ 3.4 billion revenues in 2008-09, followed by Ericsson at US$

2.11 billion.

With the availability of the 3G spectrum, about 275 million Indian subscribers will use 3G-


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enabled services, and the number of 3G-enabled handsets will reach close to 395 million by

2013-end, estimates the latest report by Evalueserve.

According to a Frost & Sullivan industry analyst, by 2012, fixed line revenues are expected totouch US$ 12.2 billion while mobile revenues will reach US$ 39.8 billion in India.

Moreover, in an attempt to boost auction of 3G spectrum, the government has allowed

prospective bidders to raise short-term funds from domestic market, which could be refinanced

through external commercial borrowings (ECBs) within 12 months. The government is expected

to mop up US$ 7.53 billion through the auction of 3G spectrum, which is likely to be completed

by March 2010. It has fixed the reserve price at US$ 753.74 million.

State-run telecom operator BSNL has rolled out 3G services in 318 cities with 856,000

subscribers. BSNL has plans to cross 400 cities by March 31, 2010 and this will be increased to

760 cities by September 2010. And even as debate on 3G continues, TRAI has started

consultation on the next level of telecom services. Fourth generation or 4G offers download at

faster speeds.

Value-Added Services Market

Currently, mobile value-added services (MVAS) in India accounts for 10 per cent of the

operator's revenue, which is expected to reach 18 per cent by 2010. According to a study by

Stanford University and consulting firm BDA, the Indian MVAS is poised to touch US$ 2.74

billion by 2010.

In a bid to increase revenue from add-on services, India's top two mobile firms, Bharti Airtel

Limited and Reliance Communications both plan to launch online mobile applications stores.

Bharti Airtel will provide more than 1,250 applications across 25 categories including games,

books and social networking on its applications store.

Reliance Communications first version of its applications store would go live for GSM

customers by the end of February 2010, and by the end of March 2010 an expanded version


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would be available to its code division multiple access (CDMA) customers as well.

Telecom Sector

The telecom network in India is the fifth largest network in the world meeting upwith global standards. Presently, the Indian telecom industry is currently slated to anestimated contribution of nearly 1% to Indias GDP.The Indian Telecommunications network with 110.01 million connections is the fifth

largest in the world and the second largest among the emerging economies of Asia.Today, it is the fastest growing market in the world and represents uniqueopportunities for U.S. companies in the stagnant global scenario. The total subscriberbase, which has grown by 40% in 2005, is expected to reach 250 million in 2007.According to Broadband Policy 2004, Government of India aims at 9 millionbroadband connections and 18 million internet connections by 2007. The wirelesssubscriber base has jumped from 33.69 million in 2004 to 62.57 million in FY2004-2005. In the last 3 years, two out of every three new telephone subscribers werewireless subscribers. Consequently, wireless now accounts for 54.6% of the totaltelephone subscriber base, as compared to only 40% in 2003. Wireless subscribergrowth is expected to bypass 2.5 million new subscribers per month by 2007. The

wireless technologies currently in use are Global System for Mobile Communications(GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5CDMA operators providing mobile services in 19 telecom circles and 4 metro cities,covering 2000 towns across the country.

Evolution of the industry-Important Milestones

History of Indian Telecommunications

Year1851 First operational land lines were laid by the government near Calcutta (seatof British power)1881 Telephone service introduced in India1883 Merger with the postal system1923 Formation of Indian Radio Telegraph Company (IRT)1932 Merger of ETC and IRT into the Indian Radio and Cable CommunicationCompany (IRCC)


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1947 Nationalization of all foreign telecommunication companies to form thePosts, Telephone and Telegraph (PTT), a monopoly run by thegovernment's Ministry of Communications1985 Department of Telecommunications (DOT) established, an exclusiveprovider of domestic and long-distance service that would be its own

regulator (separate from the postal system)1986 Conversion of DOT into two wholly government-owned companies: theVidesh Sanchar Nigam Limited (VSNL) for international telecommunications3and Mahanagar Telephone Nigam Limited (MTNL) for service inmetropolitan areas.1997 Telecom Regulatory Authority of India created.1999 Cellular Services are launched in India. New National Telecom Policy isadopted.2000 DoT becomes a corporation, BSNL4

Major PlayersThere are three types of players in telecom services: -State owned companies (BSNL and MTNL) -Private Indian owned companies (Reliance Infocomm, Tata Teleservices,) -Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures,Escotel, Idea Cellular, BPL Mobile, Spice Communications


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The Year of the Telecom Industry: 2009

The year 2009 was not all that bad for the Indian telecom industry,

even though the industry had its share of troubles also.

What we believe one of the major achievements for the Indian telecom industry was it added 500

million subscribers in September, at least a year in advance. The industry was expecting user

numbers to cross 500 million the end of 2010.

The number of telephone subscribers in India rose to 509.03 million, according to data compiled

by the Telecom Regulatory Authority of India (TRAI).

Tariffs had hit all-time lows, with the telecom service providers competing to outbid each other

in launching the lowest fare in the country. Low tariffs, even though would bleed the players,

was a welcoming initiative to the industry and users. To the industry as it would lead to

increasing telecom penetration and to users as telecom services became more affordable.
http://telecomtalk.info/india-officially-scaled-the-500-million-telecom-subscriber-base/11971/http://telecomtalk.info/india-officially-scaled-the-500-million-telecom-subscriber-base/11971/http://telecomtalk.info/wp-content/uploads/2009/05/mnp-telecom-operator.jpghttp://telecomtalk.info/india-officially-scaled-the-500-million-telecom-subscriber-base/11971/http://telecomtalk.info/india-officially-scaled-the-500-million-telecom-subscriber-base/11971/


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Bsnl slotted down to 4th place PSU tried to buy some foreign company, later moved on at the

end of the year we saw stel- shiva is back in telecom town targeting c circles then Rcom made

sms tariff as low as 1p/sms to .20p/sms wondering who will follow Rcoms sms tariff we are

waiting operators are you listing ..When we come to wireless internet Rcom, Tata and MTS

introduced groundbreaking 3.1 Mbps wireless internet. Then new ISPs lowered down internet

tariff, most of them r cable based biting BSNL a lot!! Broadband for BSNL is just one thing for

what it is working, landline required for BSNL broadband!!

Companies like Aircel, Bharti Airtel, Idea Cellular and Reliance Communications were among

others slashed call rates during the year. Many of the companies followed Tata DoCoMo to

launch per second billing in across various circles in the country, a move that resulted in further

fall of telecom tariffs across the country.

Many companies like Bharti Airtel, Reliance Communications, Tata Communications, Pacnet,

announced new submarine cable systems. Most of the cable systems were new networks to carry

data and telecom tariff to India. The year also witnessed entry of new operators like MTS,

Uninor, Aircel (launching services in new circles).

Disappointments

The much talked about allocation of 3G and BWA spectrum, the mobile number portability weredelayed to 2010, while Internet Telephony and MVNO were put off indefinitely.

Bharti Airtel lost out the opportunity to acquire South Africas MTN Group, and in turn, become

one of the largest mobile service provider in the world. Now, the company is in talks with Warid

Telecom to acquire a majority stake in the latters Bangladesh operations.

However, 2010 holds much promise and hope for the industry. Post in your comments on your

predictions in 2010.

Categories: GENERAL

December 2009 Adds 12.51 Million New GSM Subscribers in India India Telecom User Base Rises To 525 Million Dishnet Wireless Most Congested Network,Says Regulator
http://telecomtalk.info/category/general/http://telecomtalk.info/december-2009-adds-12-51-million-new-gsm-subscribers-in-india/17068/http://telecomtalk.info/india-telecom-user-base-rises-to-525-million/13379/http://telecomtalk.info/dishnet-wireless-most-congested-network-says-regulator/11366/http://telecomtalk.info/category/general/http://telecomtalk.info/december-2009-adds-12-51-million-new-gsm-subscribers-in-india/17068/http://telecomtalk.info/india-telecom-user-base-rises-to-525-million/13379/http://telecomtalk.info/dishnet-wireless-most-congested-network-says-regulator/11366/


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Introduction about Bharti Airtel

Bharti Airtel Ltd is a provider of telecommunication services with presence in all the 22 licensedjurisdictions in India and in Sri Lanka. The company is the largest GSM mobile service providein India. The company offers an integrated suite of telecom solutions to enterprise customers, inaddition to providing long distance connectivity both nationally and internationally. Thecompany has fourteen subsidiary companies. The company provides all the services under theAirtel brand.

The company operates in four strategic business units, namely Mobile, Telemedia, Enterpriseand Digital TV. The mobile business offers services in India, Sri Lanka and Bangladesh. The

Telemedia business provides broadband, IPTV and telephone services in 95 Indian cities. TheDigital TV business provides Direct-to-Home TV services across India. The Enterprise businessprovides end-to-end telecom solutions to corporate customers and national and international longdistance services to telcos.

The company also provides Passive Infrastructure Services segment, through Bharti Infratel Ltd,which deploys, owns and manages passive infrastructure in 11 circles of India. The company wasranked among the six best performing technology companies in the world by BusinessWeek.

Bharti Airtel Ltd was incorporated in the year 1995 with the name Bharti Tele-Ventures Ltd.The company was promoted by Bharti Telecom Ltd, a company incorporated under the laws of

India. The name of the company was changed from Bharti Tele-Ventures to Bharti Airtel Ltdwith effect from April 24, 2006 in order to reflect their brand essence, objective and the nature oftheir business activities.

During the year 1995-96, the company launched mobile services under the brand name 'Airtel'for the first time in Delhi and Himachal Pradesh. During the year 1997-98, the company becamethe first private telecom operator to obtain a license to provide basic telephone services in thestate of Madhya Pradesh. They incorporated Bharti BT VSAT Ltd and Bharti BT Internet Ltd


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during the year.

During the year 1999-2000, the company acquired JT Mobiles for providing cellular servicesoperator in Punjab, Karnataka and Andhra Pradesh. Also, they acquired Skycell, Chennai andthus, they expanded their South Indian footprint. During the year 2001-02, they launched

IndiaOne, India's first private sector national and international long distance service. Theyacquired licenses for eight new circles across India. In July 2001, the company acquired 100%equity interest in Bharti Mobitel Ltd (erstwhile Spice Cell Ltd), which provided mobile servicesin the Kolkata circle.

During the year 2002-03, the company launched cellular mobile services in the circle ofMumbai, Maharashtra, Tamil Nadu, Kerala, Madhya Pradesh, Uttar Pradesh (West), Haryanaand Gujarat, fixed line services in the circles of Tamil Nadu and Karnataka and InternationalLong Distance Services. They also commenced commercial operations for their submarine cablelanding station.

During the year 2003-04, the company obtained the new licenses for providing the UnifiedAccess Services, which include telecom circles of West Bengal (including Andaman & Nicobarand Sikkim), Bihar (including Jharkhand), Orissa, Jammu & Kashmir and UP (East). They alsoacquired interest in the telecom circles of Rajasthan and North Eastern States, through theacquisition of 67.5% equity stake in Bharti Hexacom Ltd.

During the year 2004-05, Bharti Cellular Ltd and Bharti Infotel Ltd, subsidiaries of thecompany, merged with the company with effect from April 1, 2004. Prior to merger of BhartiCellular Ltd with the company, Bharti Mobile Ltd operated in circles of Karnataka, AndhraPradesh and Punjab merged with Bharti Cellular Ltd. The company acquired an additional stakeof 1% from Fouad M T Al Ghanim Trading & Cont Co Kuwait one of the shareholder of BhartiHexacom Ltd.

During the year, the company and Videsh Sanchar Nigam Ltd entered into an agreement toshare the company's national long distance network for a period of 15 years for a considerationof Rs 5,000 million. They entered into a regional mobile services agreement with six otherleading mobile operators, namely Globe Telecom, Philippines; Maxis, Malaysia; Optus,Australia; SingTel, Singapore; Taiwan Cellular Corporations, Taiwan and Talkomsel, Indonesiaand formed a regional alliance, namely Bridge Alliance.

In April 2005, the company through their erstwhile 100% subsidiary Bharti Infotel Ltd, whichwas merged with the company acquired 100% equity stake in Bharti Broadband Ltd (formerlyknown as Comsat Max Ltd) by acquiring their holding company Satcom Broadband EquipmentLtd (formerly known as CMax Infocom Ltd). Also, Satcom Broadband Equipment Ltd andBharti Broadband Ltd were amalgamated with the company with effect from October 1, 2005.

During the year 2005-06, the company signed a managed capacity expansion contract withEricsson for providing managed services and expands their GSM /GPRS network into rural Indiain 15 circles. Also, they entered into an agreement with Nokia to expand their managed GSM/GPRS/ EDGE networks in eight circles. The company and IBM launched Managed Services


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under their joint go-to-market program.

During the year, Vodafone acquired 10% economic interest in the company by way ofsubscription of convertible debentures in Bharti Enterprises Ltd. Also, the company entered intostrategic partnership outsourcing agreements for their customer care call center operations with

four international BPOs - Hinduja TMT (HTMT), IBM Daksh, Mphasis and TeleTech Services.

During the year 2006-07, the company incorporated seven wholly owned subsidiaries namelyBharti Airtel (USA) Ltd, Bharti Airtel (UK) Ltd, Bharti Airtel (Hong Kong) Ltd and BhartiAirtel (Canada) Ltd, Bharti Infratel Ltd, Bharti Telemedia Ltd and Bharti Airtel Lanka (Pvt) Ltd.They received letter of offer from Telecommunications Regulatory Commission of Sri Lanka forproviding 2G and 3G mobile services in Sri Lanka.

During the year, the company entered into agreement with Microsoft to offer software andservices for the Small and Medium Business (SMB) market in India and to offer Microsoft'slatest Windows Mobile 5.0 technology to its customer. They entered into agreement with Google

to offer search services on Airtel Mobile. Also, they entered agreement with Adani Group toconnect Mundra Port and Special Economic Zone and with IBM to deliver India's first 'ServiceDelivery Platform'.

In July 2006, the company launched 'Airtel Mega' Fixed Wireless Phone (FWP) services. InSeptember 14, 2006, they acquired 43,750 thousand shares of Bharti Hexacom Ltd for anaggregate consideration of Rs 875,000 thousand thereby increasing their stake from 68.5% to68.89%.

In December 2006 the company announced their foray into USA with the launch of AirtelCallHome service for Non-Resident Indians. In March 2007, they introduced BlackBerry8800TM business phone. In April 3, 2007, Bharti Airtel (Singapore) Pvt Ltd, Singapore, wasincorporated for providing Voice Interconnection, Prepaid International Calling Services,International Private Leased Circuits and VSAT Trading.

During the year 2007-08, Bharti Airtel Services Ltd (erstwhile Bharti Comtel Ltd), the whollyowned subsidiary of the company, sold their entire shareholding in Bharti Telemedia Ltd to thecompany and Bharti Enterprise Ltd in the ratio of 40% and 60%, respectively. The companyacquired 2% stake in a subsidiary of IFFCO Ltd called IFFCO Kissan Sanchar Ltd at aconsideration of Rs 50,125 thousand. Also, they invested USD 1,200 thousand towards 1,200thousand shares, of Bridge Mobile Pte Ltd, Singapore (Bridge Mobile).

During the year, the company entered into a joint venture agreement with Vodafone Essar Ltdand Idea Cellular Ltd and formed an independent tower company namely, Indus Towers Ltd forproviding passive infrastructure services in 16 circles of India.

In September 7, 2007, the company acquired 49% of the equity in Bharti Aquanet Ltd, India, ata consideration of Rs 159,549 thousand making Bharti Aquanet Ltd a 100% subsidiary of thecompany. In September 28, 2007, they acquired 100% of the equity in Network i2i Ltd,Mauritius, at a consideration of USD 133,400 thousand.


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In October 1, 2007, the company incorporated a new company namely, Bharti Airtel Holding(Singapore) Pte Ltd in Singapore as an investment holding company of the company. In January2008, the company transferred the passive telecom infrastructure business of the company toBharti Infratel Ltd.

During the year 2008-09, the company made their foray into media and television by redefininghome entertainment with Airtel digital TV. They launched their virtual calling card service'Airtel CallHome' in UK, Singapore and Canada. The service is targeted at the huge IndianDiaspora, Non-Resident Indians (NRIs) and Indian students in these markets.

The company launched their mobile services in Sri Lanka under the Airtel brand. Theyexpanded their footprint by launching their Mobile Services in Lakshadweep. They alsolaunched VeriSign Identity Protection (VIP) Services for their enterprise customers in India inpartnership with VeriSign.

In February 19, 2009, the company increased their stake in Bharti Hexacom Ltd by 1.11%through acquisition of 2,780,306 equity shares for an aggregate consideration of Rs 166,818thousand. In March 4, 2009, the company subscribed 1,470,000 equity shares (49% stake) inBharti Teleports Ltd for an aggregate consideration of Rs. 14,700 thousand.

In October 2009, the company launched live mobile comic service on their mobile entertainmentportal, Airtel Live. In October 23, 2009, they acquired an additional 55% equity stake in theirsubsidiary, Bharti Telemedia Ltd for a consideration of Rs 7.38 crore. Consequently, the totalequity interest of the company in Bharti TelemediaLtd increased to 95%.

In January 12, 2010, the company agreed to acquire 70% stake in Warid Telecom, Bangladesh, awholly owned subsidiary of the Dhabi Group. Warid Telecom is offering mobile services acrossall the 64 districts of Bangladesh. As of January 2010, the company had an aggregate of over 131million customers in South Asia, including 121.7 million mobile customers in India.

In March 11, 2010, the company made their debut into Media & Entertainment with the launchof the Airtel Digital Media Business. With this, the company is able to offer Content DeliverySolutions for media and entertainment sector.

Bharti Airtel LtdIndustry :Telecommunications - Service Provider

Incorporation Year 1995Chairman Sunil Bharti MittalManaging DirectorCompany Secretary Vijaya SampathAuditor S R Batliboi & AssociatesRegistered Office Aravali Crescent,

1 Nelson Mandela Road Phase II,


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New Delhi, 110070, New DelhiTelephone 91-11-46666100/42666500Fax 91-11-41666137E-mail [email protected] http://www.airtel.in

Face Value (Rs) 5BSE Code 532454BSE Group ANSE Code BHARTIARTLBloomberg BHARTI INReuters BRTI.BOISIN Demat INE397D01024Market Lot 1Listing Mumbai,NSEFinancial Year End 3Book Closure Month Jul/Aug

AGM Month Aug

Registrar's Name & Address

Karvy Computershare Pvt Ltd, Plot No 17-24, VittalRao Nagar, Madhapur, Hyderabad-500081.

91-040-23420815/6/7/91-040-23420814

Bharti Airtel LtdIndustry :Telecommunications - Service Provider

Designation Name RemunerationsChairman & Managing Director Sunil Bharti Mittal 228,977,242.00

Non Executive Director Akhil Gupta 21,488,690.0Director Ajay Lal 1,602,755.00Director Arun Bharat Ram 1,608,050.00Director Bashir Abdulla Currimjee 1,601,850.00Director Chua Sock Koong -Director Mauro Sentinelli 2,592,750.00Director N Kumar 2,107,750.00Director Pulak Chandan Prasad 1,621,850.00Director Rajan Bharti Mittal -Director Rakesh Bharti Mittal -Company Secretary Vijaya Sampath -

Joint Managing Director & CEO Manoj Kohli 25,958,292.00Additional Director Nikesh Arora 656,495.00Additional Director Craig Ehrlich -Director Lim Chuan Poh -Director Tan Yong Choo -
mailto:[email protected]://www.airtel.in/mailto:[email protected]://www.airtel.in/


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Introduction About Reliance Communication Limited

Reliance Communication LtdIndustry :Telecommunications - Service Provider

Reliance Communications Limited (RCL) is the flagship company of the Anil Dhirubhai AmbaniGroup (ADAG), is India's largest private sector information and communications company withover 48 million subscribers. It was established in the year 2004 as Reliance InfrastructureDevelopers Private Limited, Reliance Communications started laying 60,000 route kilometres of

a pan-India fibre optic backbone with high capacity, integrated (wireless and wireline),convergent (voice, data and video) digital network and to offer services spanning the entireinfocomm value chain. It is capable of delivering a range of services spanning the entireinfocomm (information and communication) value chain, including infrastructure and servicesfor enterprises as well as individuals, applications, and consulting.

The Company's business encompasses a complete range of telecom services covering mobileand fixed line telephony. It includes broadband, national and international long distance servicesand data services along with an exhaustive range of value-added services and applications.During the year 2004, International wholesale telecommunications service provider, FLAGTelecom amalgamates with Reliance Gateway, a wholly owned subsidiary of Reliance

Infocomm, the company launched RIM Prepaid with attractive offer, Reliance Infocommintroduced World Card - a Prepaid International calling card for affordable and convenient ISDcalls from India, the first regional Customer Contact Centre was launched in Chennai. In thesame year the company made partnership with MCI to offer India's First MPLS Global VPNSolution. Introduced Railway Ticket booking from R World data applications suite of RelianceIndia Mobile.

In 2005, RCL only the company introduced, first e-recharge facility in CDMA in India, the


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company has had joins hands with Air Deccan to offer air ticket booking facility at RelianceWebWorld. Reliance Infocomm rolls out international roaming facility across several countriesto become the first Indian CDMA operator to offer its customers such a service. The companytied-up with the Bombay Stock Exchange to make available livestock quotes on its mobilephones during the same year 2005. The status of the company was changed to Public Limited in

July 2005. Name of the company was changed from Reliance Infrastructure Developers PrivateLimited to Reliance Communication Ventures Limited in August 2005. RCL, UK launchedReliance IndiaCall service in England and Wales enabling callers to make high-quality calls toIndia from any landline or mobile phone at economical rates. Reliance Infocomm and ChinaTelecom signed agreement for telecom services to provide direct telecommunication service,including a global hubbing service, to subscribers in the both two countries.

India's first Talking Message Service (TMS) enabling the mobile users to send voice messagesto not only other mobiles but also fixed wireless phones (FWP) and landlines in Reliancecommunications network were launched during the year 2006. In the same year 2006, RCL listedon the Bombay Stock Exchange and National Stock Exchange, the company ties up with Disney

to offer on Reliance Mobile World India's first 3D animation on mobile, launched 'Hello CapitalPlan' to enable its subscribers in 19 state capitals to call each other at the local call rate of 40 paise per minute, T-Com signs contract with FLAG Telecom for Europe-US bandwidth,Reliance Communications' FALCON Cable System was initiated in the same year. RCLlaunched Free Group Term Life Cover for its CDMA subscribers. RCL and Nokia have joinedhands to market the Nokia 1255 mobile handset in India at a price of Rs 1,999 during the periodof 2006.

Reliance Infocomm Limited, Ambani Enterprises Private Limited, Reliance BusinessManagement Private Limited, Formax Commercial Private Limited, Reliance CommunicationsTechnologies Limited, Reliance Software Solutions Private Limited, Reliance CommunicationsSolutions Private Limited and Panther Consultants Private Limited was amalgamated and theNetwork division of the Reliance Communications Infrastructure Limited was demerged with theCompany during the year 2006. The name of the Company was changed from RelianceCommunication Ventures Limited to Reliance Communications Limited with effect from 7thJune 2006. The Company joined Lenovo and Intel for 'Internet on the Move' in the year 2007.Also in the same year, RCL ties up with Naukri.com for Search Jobs & Classified Ads fromReliance Mobile World. The demerger of Passive Infrastructure division RelianceCommunications & Reliance was approved in March of the year 2007.

Sunny Days And Nights For Reliance Mobile Subscribers as Reliance Communications ties upwith SUN TV to offer video streaming of all SUN TV programs online 24x7. In May of the year2007, the company bagged West Bengal E-Governance Project. RCL slashed its call rate to USand Canada. It's now just Rs 1.99 per minute and also launched Lifetime Validity Recharge @Just Rs.499. The tie up was made with Cisco to launch Business Internet Services for SMEs inPune in the year. After, in July of the same year 2007, the company and QUALCOMM wasmade collaboration on CDMA2000 Expansion. The biggest acquisition deal so far, the companybought US data Communication Company Yipes Holdings' in an all-cash deal for 4300 million(Rs 1200 crore) in July 2007. RCL came forwarded to sale of equity stake in its TowerCompany-Reliance Telecom Infrastructure Limited in July of the year. For air and hotel


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bookings, the company has had joins hands with Yatra.com. The money transfer also available inthe RCL, such facility was started in September of the year 2007. The company made strategic partnership with Vanco.

As on April 2008, RCL launched Exam Guru, the educational portal, which provides

information on exam result, college admissions, exam schedules, admission deadlines, mocktests and also tips for bettering performance. RCL made ties up with International CricketCouncil for rankings in the next eight years. During the same month and same year, the companyhas acquired UK based eWave World, which offers wireless telephony services using WIMAXtechnology. In May 2008, Reliance Globalcom, a subsidiary of the company, has acquiredLondon based managed network services provider, Vanco Group, for about $77 million (Rs 324crore).


Incorporation Year 2004Chairman Anil D Ambani

Managing DirectorCompany Secretary Hasit ShuklaAuditor Chaturvedi & Shah / BSR & Co

Registered OfficeH Block 1st Floor,Dhirubhai Ambani Knowledg City,Navi Mumbai, 400710, Maharashtra

Telephone 91-022-30386010/6286/30373333Fax 91-022-30376622E-mail [email protected] http://www.rcom.co.inFace Value (Rs) 5

BSE Code 532712BSE Group ANSE Code RCOMBloomberg RCOM INReuters RLCM.BOISIN Demat INE330H01018Market Lot 1Listing Luxembourg,Mumbai,NSE,Singapore
mailto:[email protected]://www.rcom.co.in/mailto:[email protected]://www.rcom.co.in/


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Financial Year End 3Book Closure Month SepAGM Month Sep


Karvy Computershare Pvt Ltd, Plot No 17-24, VittalRao Nagar, Madhapur, Hyderabad-500081.

91-040-23420815/6/7/91-040-23420814


Designation Name RemunerationsChairman Anil D Ambani 300,220,000.00Director J Ramachandran 1,840,000.00Director S P Talwar 1,860,000.00

Director Deepak Shourie 1,740,000.00Company Secretary Hasit Shukla -Director A K Purwar 1,840,000.00
http://popmen1%28%29/http://popmen%28%29/


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Introduction About Idea Cellular Limited

Idea Cellular LtdIndustry :Telecommunications - Service Provider

IDEA Cellular Limited, a part of the Aditya Birla Group and an India's leading Global Systemfor Mobile communication (GSM) Mobile Services operator was began its journey in the year1995 as in the name of Birla Communications Limited for providing GSM-based services in theGujarat and Maharashtra Circles. Later the company has licenses to operate in all 22 ServiceAreas. Presently, operations exist in 11 Service Areas covering Delhi, Maharashtra, Goa,Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttaranchal, Haryana, UP-West,

Himachal Pradesh, UP-East, Rajasthan and Kerala. With a customer base of over 24 million,IDEA Cellular's footprint currently covers approximately 60% of India's telecom population. Thecompany's operational 11 Service Areas are broken up into Established and New Service Areas.The established service areas are Delhi, Andhra Pradesh, Gujarat and Maharashtra, Haryana,Kerala, Madhya Pradesh and Uttar Pradesh (West) and the New Service Areas are Uttar Pradesh(East), Rajasthan and Himachal Pradesh.

Changed its name to Birla AT&T Communications Limited followed by joint venture betweenGrasim Industries and AT&T Corporation in the year 1996. After a year, in 1997, commenced itsoperations in the Gujarat and Maharashtra. Migrated to revenues share license fee regime underNew Telecommunications Policy ('NTP') Circles in the year 1999. During the year 2000, the

company merged with Tata Cellular Limited, thereby acquired original license for the AndhraPradesh Circle. IDEA acquired RPG Cellular Limited and consequently the license for theMadhya Pradesh (including Chattisgarh) Circle in the year 2001, and in the same year changedits name from Birla AT&T Communications Limited to Birla Tata AT&T Limited. Obtainedlicense for providing GSM-based services in the Delhi Circle. Again in year later, in 2002, thecompany altered its name to Idea Cellular Limited and launched 'Idea' brand name andcommenced its commercial operations in Delhi Circle. During the year, the company reachedone million subscriber mark consecutively in the year 2003, reached two million subscriber


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mark.

During the year 2004, the company acquired Escotel Mobile Communications Limited(subsequently renamed as Idea Mobile Communications Limited), reached the four millionsubscriber mark and the first operator in India to commercially launched EDGE services 2005.

Reached the five million subscriber mark in the year 2005 and IDEA won an Award for the 'BillFlash' service at GSM Association Awards in Barcelona, Spain. The Company became a part ofthe Aditya Birla Group in the year 2006, subsequent to the TATA Group transferred its entireshareholding in the Company to the Aditya Birla Group. In the same year 2006, IDEA acquiredEscorts Telecommunications Limited (subsequently renamed as Idea TelecommunicationsLimited). The Company reached the 10 million subscriber mark and also launched New Circlesfor obtain more and more customers. IDEA has extended its reach to 500 towns in AndhraPradesh in August of the year 2006. Received Letter of Intent from the DoT for a new UASLicense for both Mumbai and Bihar Circles. ABNL, the parent of Aditya Birla Telecom Limited,agreed to transfer its entire shareholding in Aditya Birla Telecom Limited to the Company forthe consideration of Rs. 100 million. In 2007, the company won an award for the 'CARE' service

in the 'Best Billing or Customer Care Solution' at the GSM Association Awards in Barcelona,Spain.

The Initial Public Offering aggregating to Rs. 28,187 million and the company listed in bothBombay Stock Exchange and the National Stock Exchange during the year 2007. IDEA mergedseven of its subsidiaries and reached the twenty million subscriber mark in the same year 2007.As on February 2008, IDEA Cellular Ltd tied up with Southern Biotechnologies Ltd to bio-dieselfor operating IDEA's gensets at all towers in the Andhra Pradesh region. The Company withGeodesic, an innovator in communication, collaboration and entertainment applications onmobile and Internet platforms jointly announced the launch of 'Idea Radio', a truly differentiatedmobile music service for IDEA customers in the same year 2008.

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


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Incorporation Year 1995Chairman Kumar Mangalam BirlaManaging Director Sanjeev Aga

Company Secretary Pankaj KapdeoAuditor Deloitte Haskins and Sells

Registered OfficeSuman Tower Plot No 18,Sector 11,Gandhinagar, 382011, Gujarat

Telephone 91-79-66714000Fax 91-79-23232251E-mail [email protected] http://www.ideacellular.comFace Value (Rs) 10BSE Code 532822

BSE Group ANSE Code IDEABloomberg IDEA INReuters IDEA.BOISIN Demat INE669E01016Market Lot 1Listing Mumbai,NSEFinancial Year End 3Book Closure Month DecAGM Month Dec


Bigshare Services Pvt Ltd, E-2/3 Ansa Indl Est, Saki

Vihar Road, Sakinaka Andheri(E), Mumbai - 400072.91-22-28470652/5391-22-28475207


Designation Name RemunerationsChairman Kumar Mangalam Birla 130,000.00Director Rajashree Birla 100,000.00Managing Director Sanjeev Aga 61,860,000.00
mailto:[email protected]://www.ideacellular.com/mailto:[email protected]://www.ideacellular.com/


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Director Arun Thiagarajan 130,000.00Director Tarjani Vakil 180,000.00Director Mohan Gyani 20,000.00Director Biswajit Anna Subramanian 120,000.00Director Gian Prakash Gupta 190,000.00

Company Secretary Pankaj Kapdeo -Director R C Bhargava 40,000.00Director P Murari 20,000.00Director Rakesh Jain - Nominee Juan Villalonga Navarro Alternate Director Shridhir Sariputta Hansa Wijayasuriya -


Axis Bank LtdDeutsche BankHDFC Bank LtdIDBI BankStandard Chartered Bank


Sr.No Address1 Suman Tower Plot No 18,Sector 11,

GandhinagarGujarat, 382011Tel: 91-79-66714000Fax: 91-79-23232251


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Theoretical Framework


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Literature Survey & Review

LITERATURE REVIEW

Literature Review is the way to express background of ideas that come to mind duringthe research formulation. I asked various employees of the company about the new technologicalinitiative taken by the company.The project being conducted was "Financial Analysis of International Tractors Ltd. Oncethe problem is formulated, the researcher undertakes an extensive literature review connectedwith the problem.Conceptual literature:-

Conceptual literature is that which relates with concepts and theories. Help from different booksshould be taken for different concepts and theories.Empirical literature:-

Empirical literature consists of study made by other in the same field. The published data in

newspapers books & magazines available for discussion with people of organization.Books:

1. Lev. Baruch1: In this how analysis of financial statements of organization is done

and on the basis of that comment upon the financial position of the organization.

2. Kothari, C.R2: Knowledge about the quantitative techniques of scaling the data &

different types of research and different types of research designs.

3. Kothari C.R2 : Knowledge about research process, sample design, research design

etc. The information regarding the basics of research and research methodology, what

are the different types of research designs, problem statement, sources of data

collection and methods of data collection are given in this section.6

4. Kothari C.R.2: I have taken the information about the ANOVA and Principal

Component Analysis (PCA), application of these tools and interpretation of these

tools.


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5. Gupta S.P3: The information regarding the statistical tools and their limitations in

different fields the research is given in this section. This section explains, why to use

correlation and the situations in which correlation can be used, and meaning of

correlation. This section also explains the Trend Analysis Technique.

6. Wilkinson & Bhandarkar4: In this section variousparts of research and research

methodology is given which tells about the techniques of doing research.

7. Schaums: Statistical Methods5: Sultan Chand Publication The information

regarding the statistical tools and their limitations in different fields the research is

given in this section. This section explains why to use trend analysis and what are the

situations in which correlation can be used, and what does correlation means.

8. Beri G.C.6-. - Marketing Research 3rd edition: This book helped in understanding the

different research designs and analytical tools used here.

9. Luck J. David7: from this book I got light on the meaning of the marketing research.

10. Pandey I.M.8: It tells the method of preparing of comparative P/L a/c and how can

we evaluate it.

11. Goel D.K9: this text book helps me out to understand the meaning of different ratios

and their meaning.

12. A.Bernstein Leobold and J.wild John10: This text book helps me to understand the

major concept like debt equity ratio and retained earnings.

13. Hooda R.P.11:- This text book helps me to understand the various methods of

Calculation of Trend Analysis and its interpretation.

14. Maheshwari, S.N12:- It explains ratio analysis as a tool to analyze the financial

statements of organization. Different ratios depict the position of firm in market.

15. Mittal.R.K13:- The knowledge I have taken is explanation about the preparing of

comparative Balance Sheet and way of interpreting it.

16. Ciaran Walsh14:- I have taken the knowledge about the analysis of liquidity of any

firm by calculating current & liquid ratio.

17. Gupta S.K. Accounting15:- By studying this text book I come to know about the

nature, guidelines, importance and limitation of ratio analysis.


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18. Jain T.R, Statistics for MBA16:- By going through this book I got information about

how to make Regression Analysis and its application in the business studies.

19. Jain T.R, Statistics for MBA16:- By going through this text book I come to know the

Information about how to calculate T Test & Fishers F-Test & how to apply these

tests.

20. Khan M.Y, Jain P.K17:- It describes and explains the formulation of various ratios

which give knowledge about the financial soundness of the business organization and

their interpretation.

21. Gupta C.B.18:- By studying this text book, I come to know about the personnel at

various levels in the organization & responsibilities of the key personnel towards

these employees and basic knowledge about the various departments of the

manufacturing unit.

22. Ashwathapa K.19:- I have taken the basic knowledge about the quality assurance,

various types of production systems, process validation, production operations,

material handling, rejects handling, various equipments and arrangement of the

equipments.

JOURNALS and MAGAZINES:-

1. Advance edge MBA, Oct. 2007.pg no. 51, 56-59.20: from this magazine I read

growth and trend of Telecommunication sector.

2.Annual report 2007-08, RBI bulletin, Sep.2007, Page no 71-79.21: these pages give light on the

growth of different sectors in India.

3. The ICFAI Journal of telecommunication trade, Jan-2007, Page No. 24-29, 22

success of telecommunication products in India.

4.Journal of business, (2001), Page no. 13-1423. The basic terminology of telecommunication

trade market


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5. ICFAI JOURNAL, page no 37-3924, Indian pharmaceutical sector 2007, and

edition November 2007, K S Meshwani: I have taken the information about the

overview of the Indian telecommunication sector industry.

6. Financial review, edition January 2008, page no 65-6625, performance of

Indian Telecommunication companies. G Ganesh: I have gotten the

information about the performance of Indian telecommunication industry in the

global market.

7. Chartered Secretary, February 2003, V.S.Datey pp-22-2426 :- Importance of

Telecom sector in Indian development: - I have taken the role and importance

of the telecom industry in the development of the India.

8. Management Accountant, May 2006 pp- 35927:- I have taken the information

about the accounting procedure in contractual job work.

9. Research management Jan 2004 , page 26,4728

I have taken the theory of hypothesis testing and type of data from thisjournal in my project. Like the theory of null hypothesis or alternative hypothesis.

WEBSITES:-

1. http://money.rediff.com/money/jsp/co_results_hy.jsp?company Code=152000029 : I

got financial statement of idea cellular ltd. I

2. http://money.rediff.com/money/jsp/p_l.jsp?companyCode=1520002230: I got financial

statement of Bharti airtel ltd. From this site

3. http://www.telecomtrakindia.com/reports/teleocom_sector.asp31:Introduction about

telecommunication history in India

4. http://ideacellular.com/IDEA.portal32: Introduction about idea cellular ltd.

5 www.naukrihub.com/india/telecommunicationl 33: Overview of telecom sector

in Indian economy.

6 www.ucp.com/insidereport/companyknowas.hts 34

I have taken knowledge about working of various policies of company.
http://www.naukrihub.com/india/pharmacuticalhttp://www.ucp.com/insidereport/companyknowas.htshttp://www.naukrihub.com/india/pharmacuticalhttp://www.ucp.com/insidereport/companyknowas.hts


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Objective of the Study


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Introduction about Topic

MEANING OF FINANCIAL ANALYSIS: -

Financial analysis refer to such analysis which give financial information about anenterprise. They report the profitability and the financial position of the business at the end ofaccounting period. The term financial statement includes at least two statements which theaccountant prepares at the end of an accounting period. The two statements are:-

1. The Balance Sheet

2. Profit And Loss Account

They provide some extremely useful information to the extent that balance Sheet mirrors thefinancial position on a particular date in terms of the structure of assets, liabilities and ownersequity, and so on and the Profit And Loss account show s the results of operations during acertain period of time in terms of the revenues obtained and the cost incurred during the year.Thus the financial statement provides a summarized view of financial positions and operation of

a firm.

ANALYSIS OF FINANCIAL STATEMENTFinancial statements present a mass of complex data in absolute terms and reveal about theliquidity, solvency and profitability of the business. Actual the figure given in financialstatements do not speak anything themselves. The process of giving tongue to these mute heapsof figures is known as financial analysis. The focus of financial analysis is on key figures in thefinancial statement and the significant relationship that exists between them. The analysis offinancial statements is a process of evaluating the relationship between components part offinancial statement to obtain a better understanding of firms position and performance. The firsttask of financial analysis is to select the information relevant to the decision under considerationto the total information contained in the financial statement. The second step is to arrange theinformation in a way to highlight significant relationship. The final step is interpretation anddrawing of interferences and conclusions. Financial statement is the process of selection, relationand evaluation.


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PURPOSE OF FINANCIAL ANALYSIS

To know the earning capacity or profitability.

To know the solvency.

To know the financial strengths.

To know the capability of payment of interest and dividend.

To make comparative study with other firms.

To know the trend of business.

To know the efficiency of management.

METHODS OF FINANCIAL ANALYSIS1

A numbers of methods can be used for the purpose of analysis of financial statements.

These are also termed as tools and techniques of financial analysis. These are:-

1. Comparative financial statements

2. Common-size statements

3 Ratio analysis


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RESEARCH METHODOLOGY

Research is a systematic and continues method of defining a problem, collecting the facts andanalyzing them, reaching conclusion forming generalizations.Research methodology is a way to systematically solve the problem. It may be understood has ascience of studying how research is done scientifically. In it we study the various steps that allgenerally adopted by a researcher in studying his research problem along with the logic behindthem. 3

The scope of research methodology is wider than that of research method. Thus when we talk ofresearch methodology we not only talk of research methods but also consider the logic behindthe method we use in the context of our research study and explain why we are using a particular

method. 5

So we should consider the following steps in research methodology:

Problem statement

Research design

Sample design

Data Collection

Statistical tool

Limitation of study

PROBLEM STATEMENTThe research problems, in general refers to some difficulty with a researcher experience in thecontest of either a particular a theoretical situation and want to obtain a salutation for same, my problem statement are to The present project has been undertaken to do the Financialperformance of Bharti Airtel ,Reliance Communication and Idea Cellular Ltd..

RESEARCH DESIGNA research is the arrangement of the conditions for the collections and analysis of the data in amanner that aims to combine relevance to the research purpose with economy in procedure. Infact, the research is design is the conceptual structure within which research is conducted; it


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constitutes the blue print of the collection, measurement and analysis of the data. As search thedesign includes an outline of what the researcher will do from writing the hypothesis and itsoperational implication to the final analysis of data.The design is such studies must be rigid and not flexible and most focus attention on the

following:5

o What is the study about?

o Why is the study being made?

o Where will the study be carried out?

o What type of data is required?

o Where can be required data be found?

o What period of time will the study include?

o What will be sample design?

o What techniques of data collection will be used?

o How will the data be analyzed?

o In what style will the report be prepared?

Research design. has three type:

Exploratory research

Descriptive research

Casual research

SAMPLING DESIGN:


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A sample design is a definite plan for obtaining a sample from the sampling frame. It refers tothe technique or the procedure that is adopted in selecting the sampling units from whichinferences about the population is drawn. Sampling design is determined before the collection ofthe data.

Several decisions have to be taken in context to the decision about the appropriate sampleselection so that accurate data is obtained and efficient results are drawI chose descriptive research in my research because I use more secondary data. In this I take datafrom internet, books, and journals primary data is very less so it is the reason to chose thedescriptive research

DATA COLLECTIONThe task of data collection is begins after a research problem has been defined and researchdesigned/ plan chalked out. Data collection is to gather the data from the population. The datacan be collected of two types:

Primary data

Secondary data

PRIMARY DATAThe Primary data are those, which are collected afresh and for the first time, and thus happenedto be original in character. Methods of collection of Primary data are as follows:

o Interview

o Observation Method

SECONDARY DATA

The Secondary data are those which have already been collected by some one else and whichhave already been passed through the statistical tool. Methods of collection of Secondary dataare:-

Journals,

Websites

balance sheet

profit & loss

Analysis and Interpretation of Data


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The data collected in the aforesaid manner have been tabulated in condensed from to drawthe meaningful results. The different techniques are adopted to analyze the data. All the dataand material is arranged through internal resources and the last part of the project consists ofthe conclusions drawn from the report, a brief summary and recommendation and giving thefinal touch to the report by stating a conclusion.

MEANING OF RATIO ANALYSIS

A Ratio: A ratio is the mathematical relationship between two quantities in the form of a

fraction or percentage.

Ratio analysis: - Ratio analysis is essentially concerned with the calculation of relationships

which after proper identification and interpretation may provide information about the operations

and state of affairs of a business enterprise. The analysis is used to provide indicators of past

performance in terms of critical success factors of a business. This assistance in decision-making

reduces reliance on guesswork and intuition and establishes a basis for sound judgment.

Note: A ratio on its own has little or no meaning at all.

.. Steps involved in the Ratio Analysis

i) Selection of relevant data from the financial statements depending upon the objective

of the analysis.

ii) Calculation of appropriate ratios from the above data.

iii) Comparison of the calculated ratios with the ratios of the same firm in the past, or the

ratios developed from projected financial statements or the ratios of some other firms

or the comparison with ratios of the industry to which the firm belongs.


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iv) Interpretation of the ratios.

Significance of Ratio Analysis

i) Helps in decision making

ii) Helps in communicating

iii) Helps in co-ordination

iv) Helps in Control

OBJECTIVE OF USING RATIO ANALYSIS:

Helpful in analyzing financial statement

Simplification of accounting data

Helpful in comparative study

Helpful in locating the weak spots of business

To estimate the trend of the business

Fixation of ideal standards

Effective control


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GUIDELINES FOR USE OF RATIOS:

Accuracy of financial statement

Purpose of analysis

Selection of ratios

Use of standards

Caliber of Analyst

INTERPRETATION OF RATIO: -The importance of Interpretation of ratio lies when they prove as useful true to financial analyst.There are four different ways in which ratios may be interpreted.1) INDIVIDUAL RATIOS: - The single ratio by itself may have significance of its own.But one cannot draw any meaningful conclusions when a single ratio is considered in isolation.

2) GROUP RATIOS: - Ratios may be interpreted by expanding the analysis & consideringa group of several related ratios. In this way the ratio whose significance is not fully understoodare made more meaningful by calculating Group Ratios.3) HISTORICAL RATIOS: - This is the third approach of interpretation of Ratio-Analysis,which involves making comparisons over time. Under this the ratios are studied and comparedover a period of years with the results that significant trends indicating raise and falls on stabilityare indicated.4) 1NTERFIRM RATIOS: - In this approach the ratios of any given firm may be comparedwith the ratios of other firms in the same industry, such comparisons are very significant wheremembers of same industry face the similar financial problems.


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MEANING OF FINANCIAL STATEMENTS: -

Financial statements refer to such statements which contains financial informationabout an enterprise. They report the profitability and the financial position of the business at the

end of accounting period. The term financial statement includes at least two statements which theaccountant prepares at the end of an accounting period. The two statements are:-

3. The Balance Sheet

4. Profit And Loss Account

They provide some extremely useful information to the extent that balance Sheet mirrors thefinancial position on a particular date in terms of the structure of assets, liabilities and owners

equity, and so on and the Profit And Loss account show s the results of operations during acertain period of time in terms of the revenues obtained and the cost incurred during the year.Thus the financial statement provides a summarized view of financial positions and operation ofa firm.

ANALYSIS OF FINANCIAL STATEMENTFinancial statements present a mass of complex data in absolute terms and reveal about theliquidity, solvency and profitability of the business. Actual the figure given in financialstatements do not speak anything themselves. The process of giving tongue to these mute heapsof figures is known as financial analysis. The focus of financial analysis is on key figures in the

financial statement and the significant relationship that exists between them. The analysis offinancial statements is a process of evaluating the relationship between components part offinancial statement to obtain a better understanding of firms position and performance. The firsttask of financial analysis is to select the information relevant to the decision under considerationto the total information contained in the financial statement. The second step is to arrange theinformation in a way to highlight significant relationship. The final step is interpretation anddrawing of interferences and conclusions. Financial statement is the process of selection, relationand evaluation.

PURPOSE OF FINANCIAL STATEMENT ANALYSIS

To know the earning capacity or profitability.

To know the solvency.

To know the financial strengths.

To know the capability of payment of interest and dividend.


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To make comparative study with other firms.

To know the trend of business.

To know the efficiency of management.

METHODS OF FINANCIAL ANALYSIS1

A numbers of methods can be used for the purpose of analysis of financial statements.

These are also termed as tools and techniques of financial analysis. These are:-

3. Comparative financial statements

4. Common-size statements

4 Ratio analysis

RESEARCH METHODOLOGY

Research is a systematic and continues method of defining a problem, collecting the facts andanalyzing them, reaching conclusion forming generalizations.Research methodology is a way to systematically solve the problem. It may be understood has ascience of studying how research is done scientifically. In it we study the various steps that all


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generally adopted by a researcher in studying his research problem along with the logic behindthem. 3

The scope of research methodology is wider than that of research method. Thus when we talk ofresearch methodology we not only talk of research methods but also consider the logic behind

the method we use in the context of our research study and explain why we are using a particularmethod. 5

So we should consider the following steps in research methodology:

Problem statement

Research design

Sample design

Data Collection

Statistical tool

Limitation of study

PROBLEM STATEMENTThe research problems, in general refers to some difficulty with a researcher experience in thecontest of either a particular a theoretical situation and want to obtain a salutation for same, my problem statement are to The present project has been undertaken to do the Financialperformance of Bharti Airtel and Idea Cellular Ltd..

RESEARCH DESIGNA research is the arrangement of the conditions for the collections and analysis of the data in amanner that aims to combine relevance to the research purpose with economy in procedure. Infact, the research is design is the conceptual structure within which research is conducted; itconstitutes the blue print of the collection, measurement and analysis of the data. As search thedesign includes an outline of what the researcher will do from writing the hypothesis and its

operational implication to the final analysis of data.The design is such studies must be rigid and not flexible and most focus attention on the

following:5

o What is the study about?

o Why is the study being made?

o Where will the study be carried out?


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o What type of data is required?

o Where can be required data be found?

o What period of time will the study include?

o What will be sample design?

o What techniques of data collection will be used?

o How will the data be analyzed?

o In what style will the report be prepared?

Research design. has three type:

Exploratory research

Descriptive research

Casual research

SAMPLING DESIGN:

A sample design is a definite plan for obtaining a sample from the sampling frame. It refers to

the technique or the procedure that is adopted in selecting the sampling units from whichinferences about the population is drawn. Sampling design is determined before the collection ofthe data.Several decisions have to be taken in context to the decision about the appropriate sampleselection so that accurate data is obtained and efficient results are drawI chose descriptive research in my research because I use more secondary data. In this I take datafrom internet, books, and journals primary data is very less so it is the reason to chose thedescriptive research


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DATA COLLECTIONThe task of data collection is begins after a research problem has been defined and researchdesigned/ plan chalked out. Data collection is to gather the data from the population. The datacan be collected of two types:

Primary data

Secondary data

PRIMARY DATAThe Primary data are those, which are collected afresh and for the first time, and thus happenedto be original in character. Methods of collection of Primary data are as follows:

o Interview

o Observation Method

SECONDARY DATA

The Secondary data are those which have already been collected by some one else and whichhave already been passed through the statistical tool. Methods of collection of Secondary data

are:- Journals,

Websites

balance sheet

profit & loss

Analysis and Interpretation of DataThe data collected in the aforesaid manner have been tabulated in condensed from to drawthe meaningful results. The different techniques are adopted to analyze the data. All the dataand material is arranged through internal resources and the last part of the project consists of

the conclusions drawn from the report, a brief summary and recommendation and giving thefinal touch to the report by stating a conclusion.


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MEANING OF RATIO ANALYSIS

A Ratio: A ratio is the mathematical relationship between two quantities in the form of a

fraction or percentage.

Ratio analysis: - Ratio analysis is essentially concerned with the calculation of relationships

which after proper identification and interpretation may provide information about the operations

and state of affairs of a business enterprise. The analysis is used to provide indicators of past

performance in terms of critical success factors of a business. This assistance in decision-makingreduces reliance on guesswork and intuition and establishes a basis for sound judgment.

Note: A ratio on its own has little or no meaning at all.

.. Steps involved in the Ratio Analysis

v) Selection of relevant data from the financial statements depending upon the objective

of the analysis.

vi) Calculation of appropriate ratios from the above data.

vii) Comparison of the calculated ratios with the ratios of the same firm in the past, or the

ratios developed from projected financial statements or the ratios of some other firms

or the comparison with ratios of the industry to which the firm belongs.

viii) Interpretation of the ratios.


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Significance of Ratio Analysis

v) Helps in decision making

vi) Helps in communicating

vii) Helps in co-ordination

viii) Helps in Control

OBJECTIVE OF USING RATIO ANALYSIS:

Helpful in analyzing financial statement

Simplification of accounting data

Helpful in comparative study

Helpful in locating the weak spots of business

To estimate the trend of the business

Fixation of ideal standards

Effective control

GUIDELINES FOR USE OF RATIOS:

Accuracy of financial statement

Purpose of analysis

Selection of ratios


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Use of standards

Caliber of Analyst

INTERPRETATION OF RATIO: -The importance of Interpretation of ratio lies when they prove as useful true to financial analyst.There are four different ways in which ratios may be interpreted.1) INDIVIDUAL RATIOS: - The single ratio by itself may have significance of its own.But one cannot draw any meaningful conclusions when a single ratio is considered in isolation.

2) GROUP RATIOS: - Ratios may be interpreted by expanding the analysis & consideringa group of several related ratios. In this way the ratio whose significance is not fully understoodare made more meaningful by calculating Group Ratios.3) HISTORICAL RATIOS: - This is the third approach of interpretation of Ratio-Analysis,which involves making comparisons over time. Under this the ratios are studied and comparedover a period of years with the results that significant trends indicating raise and falls on stabilityare indicated.4) 1NTERFIRM RATIOS: - In this approach the ratios of any given firm may be comparedwith the ratios of other firms in the same industry, such comparisons are very significant wheremembers of same industry face the similar financial problems.


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Financial performance of Bharti Airtel,RelianceCommunication & Idea cellular (2005-09)

Bharti Airtel2005/3

2006/3

2007/3

2008/3

2009/3

Networth4533.

67345.

5611443

.2720241

.4927643

.97


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Bharti Airtel2005/3

2006/3

2007/3

2008/3

2009/3

Debt-Equityratio 1.1 0.65 0.47 0.33 0.28

Bharti Airtel2005/3

2006/3

2007/3

2008/3

2009/3

EPS 6.53 10.62 21.27 32.9 40.79


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Bharti Airtel2005/3

2006/3

2007/3

2008/3

2009/3

current Ratio 0.47 0.44 0.47 0.57 0.69

Reliancecommunication

2005/3

2006/3

2007/3

2008/3

2009/3

Networth 10285.01 15395.05 20525.54 24840.03 57690.32


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2005/3

2006/3

2007/3

2008/3

2009/3

Current Ratio 6.26742.8

1 1.77 0.95 1.45


2005/3

2006/3

2007/3

2008/3

2009/3


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EPS 8.25565.3

9 11.78 12.53 23.27

Reliancecommunicatio

n

2005/

3

2006/

3

2007/

3

2008/

3

2009/

3Debt-EquityRatio 0.2 0.32 0.71 0.82 0.6


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Idea Cellular2005/3

2006/3

2007/3

2008/3

2009/3

Networth1046.

791168.

532179.

153546.

0311294

.42

Idea Cellular2005/3

2006/3

2007/3

2008/3

2009/3

Current Ratio 2.45 0.74 0.87 0.43 0.98


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Idea Cellular2005/3

2006/3

2007/3

2008/3

2009/3

EPS 0.1 0.56 1.94 3.96 3.23

Idea Cellular2005/3

2006/3

2007/3

2008/3

2009/3

Debt EquityRatio 2.58 4.96 1.95 1.84 0.67


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COMPARATIVE FINANCIAL STATEMENT

When financial statement figures for two or more years are placed side-by-side to facilitatecomparison, these are called Comparative Financial Statement. Such statements not onlyshow the absolute figures of various years but also provide for columns to indicate theincrease or decrease in these from one year to another. In addition, these statements may alsoshow the change from one year to another in % form. Such statements are of great value informing the opinion regarding the process of the enterprise.

Importance of Comparative Statements1. To make the data simpler and more understandable.

2. To indicate the Trend.

3. To indicate the strong points and weak points of the concern.

4. To compare the firms performance with the average performance of the industry.

5. To help in forecasting.

Limitation of Comparative Statements1. These statements do not show the change in various items in relation to total assets,

total liabilities or net sales.

2. These statements are not for useful in comparing the financial statements of two or

more business because there is no common base for comparison.

Various types of financial statements are prepared in comparative form for the purpose ofanalysis. Out of these the most important financial statements are:-


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COMPARATIVE BALANCE SHEET:

The comparative balance sheet as on two or more different dates

can be prepared to show the increase or decrease in various assets, liabilities and capital. Such a

comparative balance sheet is very useful in studying the trends in a business enterprise.

COMPARATIVE PROFIT & LOSS A/C:Profit & Loss A/C shows the net profit or net

loss of a particular year whereas comparative profit and loss account for a number of yearsprovides the following information:-

1. Rate of increase or decrease in transaction income2. Rate of increase or decrease in operating profit

3 Rate of increase or decrease in gross profit.5 Rate of increase or decrease in operating profit.

Rate of increase or decrease in net profit


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Networth

Year2005/03

2006/03

2007/03

2008/03

2009/03

Bharti Airtel 4533.67345.5

611443.

2720241.

4927643.

97Reliance

Communication

10285.

01

15395.

05

20525.

54

24840.

03

57690.

32

Idea Cellular1046.7

91168.5

32179.1

53546.0

311294.

42


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EPS

Year2005/03

2006/03

2007/03

2008/03

2009/03

Bharti Airtel 6.53 10.62 21.27 32.9 40.79RelianceCommunication 8.25 565.39 11.78 12.53 23.27

Idea Cellular 0.1 0.56 1.94 3.96 3.23

Current Ratio

Year2005/03

2006/03

2007/03

2008/03

2009/03


Idea Cellular 2.45 0.74 0.87 0.43 0.98


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Debt-EquityRatio Year

2005/03

2006/03

2007/03

2008/03

2009/03


Idea Cellular 2.58 4.96 1.95 1.84 0.67


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Balance sheet of Bharti Airtel

Bharti AirtelBalance Sheet ------------------- in Rs. Cr. -------------------

Mar '05 Mar '06 Mar '07 Mar '08 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 1,853.37 1,893.88 1,895.93 1,897.91 1,898.24

Equity Share Capital 1,853.37 1,893.88 1,895.93 1,897.91 1,898.24

Share Application Money 2.72 12.13 30.00 57.63 116.22

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 2,675.38 5,437.42 9,515.21 18,283.82 25,627.38

Revaluation Reserves 2.13 2.13 2.13 2.13 2.13

Networth 4,533.60 7,345.56 11,443.27 20,241.49 27,643.97

Secured Loans 3,959.88 2,863.37 266.45 52.42 51.73

Unsecured Loans 1,034.41 1,932.92 5,044.36 6,517.92 7,661.92

Total Debt 4,994.29 4,796.29 5,310.81 6,570.34 7,713.65

Total Liabilities 9,527.89 12,141.85 16,754.08 26,811.83 35,357.62



Application Of Funds


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Gross Block 13,240.63 17,951.74 26,509.93 28,115.65 37,266.70

Less: Accum. Depreciation 3,475.64 4,944.86 7,204.30 9,085.00 12,253.34

Net Block 9,764.99 13,006.88 19,305.63 19,030.65 25,013.36

Capital Work in Progress 994.46 2,341.25 2,375.82 2,751.08 2,566.67

Investments 931.90 719.70 705.82 10,952.85 11,777.76

Inventories 31.58 17.74 47.81 56.86 62.15

Sundry Debtors 715.74 1,076.17 1,418.52 2,776.46 2,550.05

Cash and Bank Balance 174.96 201.81 239.11 200.86 153.44

Total Current Assets 922.28 1,295.72 1,705.44 3,034.18 2,765.64

Loans and Advances 1,354.85 1,937.54 3,160.02 5,103.13 5,602.83

Fixed Deposits 209.17 105.61 541.35 302.08 2,098.16

Total CA, Loans & Advances 2,486.30 3,338.87 5,406.81 8,439.39 10,466.63

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 4,458.80 6,735.36 9,809.83 12,400.38 13,832.49

Provisions 249.32 537.44 1,232.84 1,961.95 634.40

Total CL & Provisions 4,708.12 7,272.80 11,042.67 14,362.33 14,466.89

Net Current Assets -2,221.82 -3,933.93 -5,635.86 -5,922.94 -4,000.26

Miscellaneous Expenses 58.35 7.94 2.66 0.20 0.09

Total Assets 9,527.88 12,141.84 16,754.07 26,811.84 35,357.62

Contingent Liabilities 3,017.26 4,740.34 7,615.04 7,140.59 4,104.25

Book Value (Rs) 24.44 38.71 60.19 106.34 145.01

Source : Asian CERC


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Profit &loss AccountBharti Airtel

Previous Years

Profit & Loss account ------------------- in Rs. Cr. -------------------



Income

Sales Turnover 8,142.44 11,259.12 17,851.61 25,761.11 34,048.32

Excise Duty 0.00 0.00 0.00 0.00 0.00

Net Sales 8,142.44 11,259.12 17,851.61 25,761.11 34,048.32

Other Income -1,707.95 26.94 105.62 104.04 -1,261.75

Stock Adjustments 11.57 -13.84 30.07 9.05 5.29

Total Income 6,446.06 11,272.22 17,987.30 25,874.20 32,791.86

Expenditure

Raw Materials 83.67 53.56 52.16 42.90 17.70

Power & Fuel Cost 0.00 0.00 0.00 0.00 0.00

Employee Cost 475.86 734.20 1,076.95 1,297.88 1,397.54

Other Manufacturing Expenses 2,365.51 3,299.73 5,017.27 7,339.01 8,627.13

Selling and Admin Expenses 1,951.25 2,804.85 4,030.48 5,892.50 9,385.68

Miscellaneous Expenses 280.05 314.37 444.28 535.46 1,409.89

Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00

Total Expenses 5,156.34 7,206.71 10,621.14 15,107.75 20,837.94



Operating Profit 2,997.67 4,038.57 7,260.54 10,662.41 13,215.67

PBDIT 1,289.72 4,065.51 7,366.16 10,766.45 11,953.92

Interest 317.00 236.81 282.07 393.43 434.16

PBDT 972.72 3,828.70 7,084.09 10,373.02 11,519.76

Depreciation 1,019.36 1,432.34 2,353.30 3,166.58 3,206.28


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Other Written Off 161.34 127.39 137.80 266.07 178.82

Profit Before Tax -207.98 2,268.97 4,592.99 6,940.37 8,134.66

Extra-ordinary items 22.23 17.64 9.92 -60.67 -46.15

PBT (Post Extra-ord Items) -185.75 2,286.61 4,602.91 6,879.70 8,088.51

Tax 353.60 273.68 566.79 632.43 321.78

Reported Net Profit 1,210.67 2,012.08 4,033.23 6,244.19 7,743.84

Total Value Addition 5,072.66 7,153.15 10,568.98 15,064.84 20,820.24

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 0.00 0.00 0.00 0.00 379.65

Corporate Dividend Tax 0.00 0.00 0.00 0.00 64.52

Per share data (annualised)

Shares in issue (lakhs) 18,533.67 18,938.79 18,959.34 18,979.07 18,982.40

Earning Per Share (Rs) 6.53 10.62 21.27 32.90 40.79

Equity Dividend (%) 0.00 0.00 0.00 0.00 20.00

Book Value (Rs) 24.44 38.71 60.19 106.34 145.01

Source : Asian CERC

Balance sheet of RelianceCommunicationReliance Communications

Previous Years

Balance Sheet ------------------- in Rs. Cr. -------------------



Sources Of Funds

Total Share Capital 0.01 0.05 1,022.31 1,032.01 1,032.01


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Equity Share Capital 0.01 0.05 1,022.31 1,032.01 1,032.01

Share Application Money 0.00 611.57 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 0.00 14,783.43 19,503.23 23,808.02 50,658.31

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Networth 0.01 15,395.05 20,525.54 24,840.03 51,690.32

Secured Loans 0.00 0.00 5,113.57 950.00 3,000.00

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

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

Total Liabilities 0.01 15,395.05 35,093.38 45,126.46 82,593.93

Mar '05 Dec '05 Mar '07 Mar '08 Mar '09


Application Of Funds

Gross Block 0.00 198.09 20,625.82 21,576.32 37,941.15Less: Accum. Depreciation 0.00 31.85 2,527.37 4,688.69 6,533.38

Net Block 0.00 166.24 18,098.45 16,887.63 31,407.77

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

Investments 0.00 12,074.10 5,434.43 13,844.14 31,364.75

Inventories 0.00

dessert at ion report on telecom

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