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Indian Institute of Management, Lucknow

BHARTI AIRTELFinancial Analysis and Accounting Policies

Submitted to: Prof. Madhumita Chakraborty

On th Se!tember "##

Submitted by

Hashim S (PGP!"#$%

Himanshu Ag&awal (PGP!"#!%

Saba&eesh 'enugoal (PGP!")!%

Saumya *ai& (PGP!"$%

S&a+ani Polina (AM"-"")%

Section .A/ G&ou

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Tab$e of Content%AS01A20................................................................................................................................................3

A23G145*6.............................................................................................................................................4

I NTRODUCTION TO AIRTEL.........................................................................................................................5

A2245*0I*G P4LI2I7S.......................................................................................................................6

Depreciation / Amortization....................................................................................................................6

Revenue Reconition an! Receiva"#e$....................................................................................................6

Inventor%& Ratio$ an! Co$tin 'et(o!o#o%...........................................................................................)

Inve$tment................................................................................................................................................)

Licen$e *ee$+ Revenue ,(are..................................................................................................................)

*orein Currenc% Tran$#ation an! Accountin........................................................................................)

Operatin Lea$e$.....................................................................................................................................-

Taation...................................................................................................................................................-

orro0in Co$t........................................................................................................................................1

2arrant% rovi$ion$.................................................................................................................................1

ALA*27 SH770 A*AL8SIS................................................................................................................1

Tota# ,(are(o#!er$ *un!$.....................................................................................................................

Lon Term Loan$...................................................................................................................................

Tota# Lia"i#itie$......................................................................................................................................

,(are Capita#..........................................................................................................................................

Tota# Re$erve Ec#u!in Retaine! Earnin$.........................................................................................7

#ant an! 'ac(iner% 89ro$$ #oc:;......................................................................................................3

9ro$$ #oc:...........................................................................................................................................3

Current A$$et$........................................................................................................................................4

De

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Operatin ro

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ABSTRACT

*inancia# ana#%$i$ i$ a u$e

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BAC&'RO()*

T(e In!ian te#ecommunication$ in!u$tr% i$ one o< t(e

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INTRODUCTION TO AIRTEL

(arti Airte# Lt! i$ a provi!er o< te#ecommunication $ervice$ 0it( pre$ence in a## t(e 77 #icen$e!

 uri$!iction$ in In!ia an! in ,ri Lan:a. T(e compan% i$ t(e #are$t 9,' mo"i#e $ervice provi!er in

In!ia. T(e compan% o

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ACCO()TI)' POLICIES

*e!re+iation , Amorti-ation

• Depreciation on

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• ACTIVATION  INCOME  + Activation revenue an! re#ate! !irect activation co$t$ not ecee!in t(e

activation revenue are !e

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  C!versi!

*orein currenc% monetar% item$ are reporte! u$in t(e c#o$in rate. Non+monetar% item$ 0(ic( are

carrie! in term$ o< (i$torica# co$t !enominate! in a

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a$$et$ are reconize! on#% i< t(ere i$ virtua# certaint% $upporte! "% convincin evi!ence t(at t(e% can

 "e rea#ize! aain$t

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! De

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$ca#e$ "ot(

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Tota$ Re%ere E2+$udin/ Retained Earnin/%

6ebentu&e 1edemtion

1ese&+e

2aital 1ese&+es

 040AL 17'AL5A0I4*

17S71'7

Gene&al 1ese&+es Sha&e P&emium 6ebentu&e 1edemtion 1ese&+e

2aital 1ese&+es

P&o=t > Loss Account

alance

 0otal 1ese&+es

T(e t(ree p#ot$ $(o0 t(at Retaine! Earnin$

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P$ant and Ma+hinery 7'ro%% B$o+k8

G&oss lock

Less ? Accumulated6e&eciation

*et lock

T(e rapi! increa$e in 9ro$$ #oc: come$ 0it( t(e M9oo!0i## Intani"#e a$$et 874 cr. Increa$e; comin

out o< t(e ac=ui$ition o< C'a In

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Goodwill

2omute&s

F&eehold Landuildings

T(e p#ot $(o0$ t(e $ini

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T(e compan%

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T(e Ana#%$i$ i$ !one on a common+$ize ro

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O!eratin/ Pro9t

 0otal Income 0otal 7@enditu&e

It i$ $een t(at t(e ro

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T(e Ca$( *#o0 ,tatement

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Ca%h 0$o3 from 0inan+in/ A+tiitie%

P&oceed f&om "the& Long

 0e&m o&&owings

1eayment 4f the Long

 0em o&&owings

6i+idend Paid

T(e *inancin Activitie$ $(o0 a net neative ca$(

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""$D" ""!D" ""-D" ""D" ""D" "#"D"

"D""

"D"$

"D#"

"D#$

"D"

"D$

"DE"

"DE$

ha&ti Ai&tel

T(e Operatin pro

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""$D" ""!D" ""-D" ""D" ""D" "#"D"

"

"D

"D)

"D!

"D

#

#D

#D)

ha&ti Ai&tel

1eliance 2ommunications

T(i$ ratio ive$ an in!ication o< (o0 e

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ha&ti Ai&tel

1eliance 2ommunications

De"tor$ turnover ratio in!icate$ t(e e

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Intere%t Coer

Intere$t Coverae Ratio IT / Intere$t Epen$e

ha&ti Ai&tel

1eliance 2ommunications

A ratio u$e! to !etermine (o0 ea$i#% a compan% can pa% intere$t on out$tan!in !e"t. T(e #o0er t(e

ratio t(e more t(e compan% i$ "ur!ene! "% !e"t epen$e. An intere$t coverae ratio "e#o0 in!icate$

t(e compan% i$ not eneratin $u

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THE *(PO)T RATIO Ana$y%i%T(e t(ree component$ o< t(e Duont ratio a$ repre$ente! in e=uation cover t(e area$ o< pro

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Leera/e: The Leera/e Mu$ti!$ier 7Tota$ A%%et%,Ca!ita$ Em!$oyed8

Leverae ratio$ mea$ure t(e etent to 0(ic( a compan% re#ie$ on !e"t

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MA?OR AC

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Assuming ma&ket g&ows by ", *etaddition of Subsc&ibe&s E mn

Assuming 9a&id catu&es " of newsubsc&ibe&s !D) mn

A1P5 D$

Annual 1e+enue # mnha&tiJs 2u&&ent 1ese&+e -D) bn

9a&id &e+enue, as of Ai&telJs2u&&ent 1e+enue D$"

Even i< 0e a$$ume t(at an#a!e$( ac(ieve$ 5 penetration "% *Q7 an! 2ari! a!!$ 7 o

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@ain A

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0it( mar:et $(are$ 0e## in ece$$ o< 3 per cent. Operatin pro

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CO)CL(SIO)

T(e Ana#%$i$ o< t(e *inancia# ,tatement$ o< Airte# revea#$ a $tor% o< a compan% 0(o (a$ 0eat(ere!

$ucce$$