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)

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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

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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

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

BOARD OF DIRECTORS:

Executive Chairman

Sunil Bharti Mittal

Director

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 No. of Shares Percent share (%) Promoter Holding Indian Promoters 1735453890 45.7 Foreign Promoters 865673286 22.8

Non-Promoter holdings (Other than

Public)

Financial Institutions/Banks 166287643 4.38

FII/Foreign Fin Inst/Foreign Banks 665436317 17.52

Corporate Bodies 154418700 4.07

Government Holdings 0 0

OCB 5082710 0.13

NRI 55 0

Mutual Funds 144077538 3.79

Other Foreign Holdings 3366737 0.09

General Public

Individual Holding Upto Rs. 1 lakh 41017834 1.08

Individual Holding Excess of Rs. 1 lakh 10783182 0.28

Others 5932204 0.16 Total 3797530096 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

NSE

Price Market Cap (Rs Crore)

Sales

Turnover Net Profit

Total assets Bharti Airtel 313.75 125418.43 45350.90 5096.30 67126.00 Idea Cellular 158.10 52437.29 22036.87 818.26 23072.72 Reliance Communication 139.50 28793.17 11267.00 624.00 73068.00 Tata Communication 161.70 4608.45 4416.12 475.24 8087.80 MTNL 10.75 677.25 3428.66 -5321.12 12184.20

i. On The Basis Of NSE Price:

Comparing on the basis of NSE Price, Bharti Airtel is highest priced, MTNL being the

cheapest.

0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00

NSE Price

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.

iii. On The Basis Of Sales Turnover:

Comparing on the basis of Sales Turnover, Bharti Airtel’s turnover of the sales is the highest.

0.00 20000.00 40000.00 60000.00 80000.00 100000.00 120000.00 140000.00

Market Cap (Rs Crore)

Market Cap (Rs Crore)

0.00 5000.00 10000.00 15000.00 20000.00 25000.00 30000.00 35000.00 40000.00 45000.00 50000.00

Sales Turnover

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.

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.

-6000.00 -4000.00 -2000.00 0.00 2000.00 4000.00 6000.00

Net Profit

Net Profit 0.00 10000.00 20000.00 30000.00 40000.00 50000.00 60000.00 70000.00 80000.00

Total assets

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 Mar '10 Mar '11 Mar '12 Mar '13

Current Ratio 1.06 0.5 0.81 0.54

Quick Ratio 1.06 0.5 0.81 0.54

Debtors' Turnover Ratio 15.3 16.97 18.45 20.7 Inventory Turnover Ratio 1307.05 1105.11 1296.07 21595.67

i. 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.

0 0.2 0.4 0.6 0.8 1 1.2

Mar '10 Mar '11 Mar '12 Mar '13

Current Ratio

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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.

iii. 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.

0 0.2 0.4 0.6 0.8 1 1.2

Mar '10 Mar '11 Mar '12 Mar '13

Quick Ratio

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iv. 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. 0 5 10 15 20 25

Mar '10 Mar '11 Mar '12 Mar '13

Debtors' Turnover Ratio

Debtors' Turnover Ratio 0 5000 10000 15000 20000 25000

Mar '10 Mar '11 Mar '12 Mar '13

Inventory Turnover Ratio

Inventory Turnover Ratio

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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 Mar '10 Mar '11 Mar '12 Mar '13

Net Profit Margin 26.47 20.3 13.77 11.24

Operating Profit Margin 39.08 35.25 32.98 29.7

Return On Equity 29.42 19.2 12.33 9.9

Return On Capital Employed 26.27 18.51 13.97 12.41

i. 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.

0 5 10 15 20 25 30

Mar '10 Mar '11 Mar '12 Mar '13

Net Profit Margin

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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.

iii. 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.

0 5 10 15 20 25 30 35 40 45

Mar '10 Mar '11 Mar '12 Mar '13

Operating Profit Margin

Operating Profit Margin 0 5 10 15 20 25 30 35

Mar '10 Mar '11 Mar '12 Mar '13

Return On Equity

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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.

0 5 10 15 20 25 30

Mar '10 Mar '11 Mar '12 Mar '13

Return On Capital Employed

Return On Capital Employed

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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 Mar '10 Mar '11 Mar '12 Mar '13

Debt Equity Ratio 0.14 0.27 0.29 0.24

Debt To Total Asset Ratio 0.08 0.14 0.13 0.15

Interest Coverage -17.84 27.92 5.98 4.91

i. 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.

0 0.05 0.1 0.15 0.2 0.25 0.3 0.35

Mar '10 Mar '11 Mar '12 Mar '13

Debt Equity Ratio

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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.

iii. 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. 0.00 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16

Mar '10 Mar '11 Mar '12 Mar '13

Debt To Total Asset Ratio

Debt To Total Asset Ratio

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Mar '10 Mar '11 Mar '12 Mar '13

Interest Coverage

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IV. CAPITAL MARKET RATIOS:

Capital Market Ratios Mar '10 Mar '11 Mar '12 Mar '13 Earnings Per Share 24.82 20.32 15.09 13.42

Earnings Yield 0.08 0.06 0.04 0.05

Dividend Yield 0 0 0 0

Price Earning Ratio 12.57 17.59 22.32 21.74

i. 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.

0 5 10 15 20 25 30

Mar '10 Mar '11 Mar '12 Mar '13

Earning Per Share

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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.

iii. 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. 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09

Mar '10 Mar '11 Mar '12 Mar '13

Earnings Yield

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iv. 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.

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Mar '10 Mar '11 Mar '12 Mar '13

Dividend Yield

Dividend Yield 0 5 10 15 20 25

Mar '10 Mar '11 Mar '12 Mar '13

Price Earning Ratio

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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 Mar-10 Mar-11 Mar-12 Mar-13

Shareholder's Funds

Share Capital 100 100.00 100.00 100.00

Share Warrants & Outstandings 100 149.70 157.50 152.66

Total Reserves 100 121.01 136.32 149.96

Shareholder's Funds 100 120.07 134.55 147.39

Long-Term Borrowings

Secured Loans 100 43.40 7.36 5.08

Unsecured Loans 100 149.05 164.63 196.80

Deferred Tax Assets / Liabilities 100 15987.88 25354.55 34857.58

Other Long Term Liabilities 0 100.00 100.21 126.17

Long Term Provisions 0 100.00 140.22 149.10

Total Non-Current Liabilities 100 210.42 232.62 283.83

Current Liabilities

Trade Payables 100 63.71 57.96 65.99

Other Current Liabilities 100 191.31 182.21 136.21

Short Term Borrowings 0 100.00 213.27 113.55

Short Term Provisions 100 128.17 154.81 180.60

Total Current Liabilities 100 131.51 152.48 161.85

Total Liabilities 100 131.13 148.20 163.26

ASSETS Mar-10 Mar-11 Mar-12 Mar-13

Non-Current Assets

Gross Block 100 138.96 151.33 172.36

Less: Accumulated Depreciation 100 128.10 163.50 204.01

Net Block 100 145.23 144.30 154.09

Capital Work in Progress 100 89.80 57.88 64.64

Intangible assets under development 0 100.00 70.21 0.00

Non Current Investments 100 104.94 105.83 243.14

Long Term Loans & Advances 0 100.00 119.78 126.19

Other Non Current Assets 0 100.00 357.11 461.29

Total Non-Current Assets 100 162.54 162.57 200.33

Current Assets Loans & Advances

Currents Investments 100 2.34 11.55 23.38

Inventories 100 126.47 118.01 7.72

Sundry Debtors 100 69.45 101.40 106.74

Cash and Bank 100 16.31 58.92 44.41

Other Current Assets 100 1546.23 1584.34 1654.97

Short Term Loans and Advances 100 80.66 159.28 95.69

Total Current Assets 100 62.46 116.76 82.20

Net Current Assets (Including Current Investments) 100 -1148.19 -509.59 -1314.30 Total Current Assets Excluding Current Investments 100 82.26 151.42 101.58

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

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 EXPENDITURE : 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

Expenses Capitalised 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

Exceptional Income / Expenses 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

Adjustment to Profit After Tax 0 0.00 0.00 0.00

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I. INCOME-EXPENDITURE ANALYSIS:

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:

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. 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 500000 Total Income Total Expenditure Operating Profit (PBDIT)

0 50 100 150 200 250 300 350 400 450 मार्च-10 मार्च-11 मार्च-12 मार्च-13 Other Income Total Expenditure Operating Profit (PBDIT)

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II. PROFIT ANALYSIS:

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:

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.

0 10 20 30 40 50 60 70 80 90 100 मार्च-10 मार्च-11 मार्च-12 मार्च-13 PBT PAT 0 20 40 60 80 100 120

Mar '10 Mar '11 Mar '12 Mar '13

EPS DPS

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IV. EQUITY-DEBT ANALYSIS:

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:

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

0 100000 200000 300000 400000 500000 600000

Mar-10 Mar-11 Mar-12 Mar-13

Shareholder's Funds Long Term Debt

0 50 100 150 200 250 300 Mar' 10 _{Mar' 11} Mar' 12 Mar' 13

Long Term Debt Investments

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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. Present in more than 20 countries.

2. An integrated telecom company with complete tele-media solutions. 3. Present in the country with second largest population globally. 4. Largest operator in India and fourth largest in the world. 5. 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. Untapped telecom market in Africa and rural India. 2. Underpenetrated broadband connectivity.

3. Mandatory digitisation of cable television across the country. 4. Increasing data consumption over voice consumption.



THREATS

1. Falling Average Revenue per User.

2. Political and economic uncertainties in Africa and India. 3. Cost inflation across countries.

4. Continued regulatory stringency.

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ANNEXURES

I. CONSOLIDATED BALANCE SHEET

(Rs. In Millions)

LIABILITIES Mar-10 Mar-11 Mar-12 Mar-13

Shareholder's Funds

Share Capital 18988 18988 18988 18988

Share Warrants & Outstanding 1861 2786 2931 2841

Total Reserves 346523 419342 472377 519633

Shareholder's Funds 367372 441116 494296 541462

Long-Term Borrowings

Secured Loans 394 171 29 20

Unsecured Loans 49995 74516 82309 98388

Deferred Tax Assets / Liabilities 33 5276 8367 11503

Other Long Term Liabilities 0 25132 25184 31708

Long Term Provisions 0 1002 1405 1494

Total Non-Current Liabilities 50422 106097 117294 143113

Current Liabilities

Trade Payables 77844 49598 45121 51372

Other Current Liabilities 45004 86097 82000 106034

Short Term Borrowings 0 27644 58956 31390

Short Term Provisions 53531 68611 82874 96677

Total Current Liabilities 176379 231950 268951 285473

Total Liabilities 594173 779163 880541 970048

ASSETS Mar-10 Mar-11 Mar-12 Mar-13

Non-Current Assets

Gross Block 442125 614374 669068 762061

Less: Accumulated Depreciation 161875 207367 264660 330235

Net Block 280250 407007 404408 431826

Capital Work in Progress 15947 14320 9230 10308

Intangible assets under development 0 50472 35435 0

Non Current Investments 111537 117051 118041 271191

Long Term Loans & Advances 0 70812 84817 89358

Other Non Current Assets 0 3059 10924 14111

Total Non-Current Assets 407734 662721 662855 816794

Current Assets Loans & Advances

Currents Investments 46196 1079 5337 10800

Inventories 272 344 321 21

Sundry Debtors 21050 14619 21345 22468

Cash and Bank 8167 1332 4812 3627

Other Current Assets 664 10267 10520 10989

Short Term Loans and Advances 110090 88801 175351 105349

Total Current Assets 186439 116442 217686 153254

Net Current Assets (Including Current Investments) 10060 -115508 -51265 -132219 Total Current Assets Excluding Current Investments 140243 115363 212349 142454

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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 Net Sales 356095 380177 416038 453509 Other Income 3773 4900 6247 14631 Total Income 359868 385077 422285 468140 EXPENDITURE : Increase/Decrease in Stock -147 -72 23 300

Raw Materials Consumed 350 233 160 -281

Power & Fuel Cost 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

Selling and Distribution Expenses 21613 29576 30189 33500

Miscellaneous Expenses 5310 5359 6220 5689

Expenses Capitalised 0 0 0 0

Total Expenditure 218510 248462 279601 318802

Operating Profit (PBDIT) 141358 136615 142684 149338

Interest -5680 3241 13962 16523

PBDT 147038 133374 128722 132815

Depreciation 40045 46116 59160 68267

Profit Before Taxation & Exceptional Items 106993 87258 69562 64548

Exceptional Income / Expenses 0 0 0 0

PBT 106993 87258 69562 64548

Provision for Tax 12731 10089 12262 13585

PAT 94262 77169 57300 50963

Adj to Profit After Tax 0 0 0 0

37 | P a g e