TERM PAPER

OF

ACCOUNTING FOR
MANAGERS

TOPIC:-TATA TELESERVICES
MAHARASHTRA LIMITED

SUBMITTED TO: -

Lect. Miss Sukhwinder kaur

SUBMITTED
BY:-
KART
HIKVARMA (B63)
SECTION: T1001
Tata Teleservices (Maharashtra) Limited:
• Tata Teleservices is part of the Tata Group. Tata Teleservices spearheads the Group’s
presence in the telecom sector. Incorporated in 1996, Tata Teleservices was the first to
launch CDMA mobile services in India with the Andhra Pradesh circle.

• The company acquired Hughes Telecom (India) Limited [now renamed Tata
Teleservices (Maharashtra) Limited] in December 2002. With a total Investment of Rs
19,924 Crore, Tata Teleservices has created a Pan India presence spread across 20
circles that includes Andhra Pradesh, Chennai, Gujarat, J & K, Karnataka, Delhi,
Maharashtra, Mumbai, North East, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab,
Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata,
Madhya Pradesh and West Bengal.

• Tata Teleservices Maharashtra Limited (TTML) spearheads the Tata group's

presence in the telephony sector in the telecom circles of Maharashtra and Goa
including Mumbai.

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

• It commenced full mobility wireless services on the CDMA-1X platform in 2004-

5, and has over 11 million wireless subscribers today, with over 16.9% market
share.

• It is also a market leader in wireless data cards, with its pioneering Plug2Surf 1-X
data cards and its recent launch of mobile broadband services with Photon+.
 • TTML’s network has been rated as the only congestion-free network across
Maharashtra and Mumbai in 5 consecutive reports issued by the Telecom
Regulatory Authority of India (TRAI).
• TTML has also recently been rated the No.1 wireless telecom service provider in
terms of overall customer satisfaction across Mumbai and Maharashtra in
independent studies commissioned by the Telecom Regulatory Authority of India.
• The Company has been responsible for a number of innovations over the years,
including its market introductions last year of 1 GB memory USB wireless
modems, the world’s first CDMA AM/FM Radio Phone, the Ganesha-motif
Sumukha phone, the launch of the Novatium sub-$100 PC in Mumbai, and, for
the first time, a 100 Mbps to the home ethernet-based broadband service called
Power Launcher.
• Leveraging its high quality buried fibre Next Generation Network extending over
1600 kms in Mumbai, TTML recently announced its vision for Digital
MumbaiTM – broadband anytime, anywhere, in Mumbai city.
• The Company has recently rolled out its GSM services under the brand name
TATA DOCOMO in Mumbai, Maharashtra and Goa.
•

Tata Teleservices Provides mobile services under 3 Brand names:

• Tata Indicom (CDMA Mobile operator)

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

Tata Sky

VISION:
• To be the most admired Telecom service provider in MAHARASHTRA
AND GOA.

MISSION:
• To become most admired company delivering sustainable value.

. Rural Telephony:
 • TTSL also maintains a distribution network across villages , where in people are
appointed and trained by TTSL - who visit villages on a bicycle or a two-wheeler
at defined times on defined days of the week, selling recharge vouchers and
servicing equipment; each runner covers between 200 to 300 customers.
The company joined hands with Tata Chemicals, Tata Kisaan Sansar network,
disseminating information through these centres and using them as local
distributors
Market Data:

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

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

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

Mr. Amal
Mr. N. S. Ramachandran Ganguli
Designation : Independent Director Designation : Inde
pendent Director

Mr. S. Ramadorai Prof. Ashok

Designation : Director Jhunjhun
 wala

Mr. D. T. Joseph
Mr. Nadir Godrej Designation :
Designation : Independent Director Independent
Director

Mr. Koichi Takahara

Designation: Director

Business Areas:

Tata Teleservices offers multiple tariff plans in both the Post-paid and
Pre-Paid category. It also offers Mobile Value Added Services to
subscribers.

Branding:

The Tata Indicom brand is endorsed by bollywood actress Kajol &

cricketers Irfan Pathan and Yousuf Pathan.

Tata Teleservices has recently launched the Virgin Mobile Brand to

target the youth segment.

Market Data

• Tata Indicom in April 2009, crossed the 35 million subscribers

mark in the wireless category with an overall subscriber base of
over 36 million.
• Tata Teleservices is no. 2 slot in terms of Market Share in Delhi
NCR region with a subscriber base of 5 million

BUSINESS TREND:
• Sales growing at 30% CAGR & subscriber base at 68%
 CAGR over last five years.

OFFICES:
MUMBAI

Corporate Office

Tata Teleservices (Maharashtra) Limited

D 26, TTC Industrial Area,
Sanpada, Turbhe.
Navi Mumbai 400 703

Tel No: 91 22 6661 5445

Fax No: 91 22 6660 5516 / 5517

Registered office

Tata Teleservices (Maharashtra) Limited

Voltas Premises,
T.B. Kadam Marg, Chinchpokali,
Mumbai 400 033

PUNE

Al Aqmar Building ,
5 GaneshKhind Road,
Shivaji Nagar
Pune - 411005

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

Fax no - 020-66096300

Balance sheet
 2008/03 2007/03 2006/03 2005/03 2004/03
SOURCES OF FUNDS :
Share Capital 44.39 44.39 82.28 82.28 82.28
Reserves Total 391.78 283.05 150.3 94.96 82.85
Total Shareholders Funds 436.17 327.44 232.58 177.24 165.13
Secured Loans 188.11 172.67 148.84 193.52 203.91
Unsecured Loans 69.78 74.34 119.09 124.67 203.1
Total Debt 257.89 247.01 267.93 318.19 407.01

Total Liabilities 694.06 574.45 500.51 495.43 572.14

APPLICATION OF FUNDS :
Gross Block 558.06 515.49 420.43 400.08 393.41
Less : Accumulated
Depreciation 285.61 264.34 243.97 234.95 220.12
Less: Impairment of Assets 0 0 0 0 0
Net Block 272.45 251.15 176.46 165.13 173.29
Lease Adjustment 0 0 0 0 0
Capital Work in Progress 10 15.97 19.56 9.78 4.07
Investments 47.39 27.02 27.02 27.02 27.58
Current Assets, Loans & Advances
Inventories 1021.08 677.48 374.39 271.62 164.12
Sundry Debtors 96.45 92.06 90.12 77.09 148.16
Cash and Bank 51.92 50.73 38.29 44.18 27.15
Loans and Advances 99.17 63.42 143.96 171.63 194.58
Total Current Assets 1268.62 883.69 646.76 564.52 534.01
Less : Current Liabilities and Provisions
Current Liabilities 805.8 536.87 333.13 245.17 149.25
Provisions 73.89 53.27 26.72 20.93 15.73
Total Current Liabilities 879.69 590.14 359.85 266.1 164.98
Net Current Assets 388.93 293.55 286.91 298.42 369.03
Miscellaneous Expenses not
written off 0 4.21 14.31 24.4 33.31
Deferred Tax Assets 12.17 16.95 7 5.91 2.9
Deferred Tax Liability 36.88 34.4 30.75 35.23 38.04
Net Deferred Tax -24.71 -17.45 -23.75 -29.32 -35.14

Total Assets 694.06 574.45 500.51 495.43 572.14

Contingent Liabilities 40.95 56.99 58.47 30.7 57.65

CASH FLOW
 2008/03 2007/03 2006/03 2005/03 2004/03
Cash Flow Summary
Cash and Cash Equivalents at Beginning of the
year 50.32 38.46 43.72 27.66 24.12
Net Cash from Operating Activities 102.21 126.03 121.79 164.62 116.15
Net Cash Used in Investing Activities -61.75 -90.63 -34.36 -14.83 2.26
Net Cash Used in Financing Activities -38.6 -23.54 -92.69 -133.73 -114.91
Net Inc/(Dec) in Cash and Cash Equivalent 1.86 11.86 -5.26 16.06 3.5
Cash and Cash Equivalents at End of the year 52.18 50.32 38.46 43.72 27.62

FUND FLOW

2008/03 2007/03 2006/03 2005/03 2004/03

Sources of funds

Cash profit 171.54 114.49 82.64 39.78 31.65

Increase in equity 0 2.11 0 0 0
Increase in other net
worth 0 61.21 0 0 0
Increase in loan funds 10.88 0 0 0 0
Decrease in gross block 0 0 0 0 0
Decrease in
investments 0 0 0 0.56 9.51
Decrease in working
capital 0 0 5.94 64.79 20.63
Others 4.21 10.1 10.09 8.91 12.85
Total Inflow 186.63 187.91 98.67 114.04 74.64

Application of funds

Cash loss 0 0 0 0 0
Decrease in net worth 6.03 0 2.24 1.57 0.96
Decrease in loan funds 0 20.92 50.26 88.82 60.05
Increase in gross block 36.6 28.2 30.13 12.38 6.08
Increase in investments 20.37 0 0 0 0
Increase in working
capital 88.12 12.94 0 0 0
Dividend 35.51 22.58 16.04 11.27 7.55
Others 0 103.27 0 0 0
Total Outflow 186.63 187.91 98.67 114.04 74.64
 PROFIT AND LOSS ACCOUNTS
2008/03 2007/03 2006/03 2005//03
(12) (12) (12) (12) 2004/03 (12)
INCOME :
Sales Turnover 3098.19 2181.69 1509.91 1150.89 961.12
Excise Duty 85.55 84.5 68.19 37.94 63.64
Net Sales 3012.64 2097.19 1441.72 1112.95 897.48
Other Income 84.69 9.3 7.16 10.66 9.53
Stock Adjustments 297.89 246.22 72.58 87.91 34.67

Total Income 3395.22 2352.71 1521.46 1211.52 941.68

EXPENDITURE :
Raw Materials 2389.92 1586.68 955.33 729.15 579.09
Power & Fuel Cost 13.9 11.55 10.02 9.97 8.9
Employee Cost 185.9 154.49 108.13 94.47 84.44
Other Manufacturing Expenses 49.36 42.37 31.1 25.83 17.21
Selling and Administration Expenses 324.89 273.13 197.59 173.57 107.76
Miscellaneous Expenses 175.38 102.82 84.07 89.71 64.52
Less: Pre-operative Expenses
Capitalised 0.02 0.52 0.89 0.49 0.81

Total Expenditure 3139.33 2170.52 1385.35 1122.21 861.11

Operating Profit 255.89 182.19 136.11 89.31 80.57

Interest 23.85 24.95 29.57 37.33 45.07
Gross Profit 232.04 157.24 106.54 51.98 35.5
Depreciation 29.73 25.59 19.66 19.61 21.47
Profit Before Tax 202.31 131.65 86.88 32.37 14.03
Tax 41.06 37.15 15.82 13.24 9.29
Fringe Benefit tax 3.71 3.24 3.01 0 0
Deferred Tax 7.27 -2.86 -5.57 -5.82 -6.44
Reported Net Profit 150.27 94.12 73.62 24.95 11.18
Extraordinary Items -19.54 -18.2 -21.92 -28.78 -25.9
Adjusted Net Profit 169.81 112.32 95.54 53.73 37.08

Adjst. below Net Profit 0 0 0 0 0

P & L Balance brought forward 130.93 77.5 29.62 19.56 17.18
Statutory Appropriations 0 0 0 0 0
Appropriations 62.65 40.69 25.74 14.89 8.8
P & L Balance carried down 218.55 130.93 77.5 29.62 19.56

Dividend 35.51 22.19 13.32 8.46 4.23

Preference Dividend 0 0.39 2.72 2.81 3.32
Equity Dividend % 80 50 30 20 10

Earnings Per Share-Unit Curr 32.49 20.25 16.24 4.87 1.63

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

2008 2007 Absolute Percentage

Particulars Inc / dec

Net worth 272.45 251.15 21.3 8.48

Capital(WIP) 10 15.97 - 5.97 37.4

Investment 47.39 27.02 20.37 75.3

Net current
assets 388.93 293.55 95.38 32.49

Total assets 694.06 574.45 119.61 20.82

Share capital 44.39 44.39 Nil Nil

Reserve 391.78 283.55 108.73 38.4

Secured loan 188.11 172.67 15.44 8.94

Unsecured loan 69.78 74.34 -4.56 6.13

Total 694.06 574.45 119.61 20.82

liabilities
 COMMONSIZE BALANCE SHEET

Particulars 2007 2007 % of 2008 % of total

total

Net worth 251.15 43.72 272.45 39.25

Capital(WIP) 15.97 2.78 10 1.44

Investment 27.02 4.70 47.39 6.82

Net current
assets 293.55 51.10 388.93 56.03

Total assets 574.45 100 694.06 100

Share capital 44.39 7.72 44.39 7.72

Reserve 283.55 49.27 391.78 56.5

Secured loan 172.67 30 188.11 27.10

Unsecured loan 74.34 12.9 69.78 10.05

Total 574.45 100 694.06 100

liabilities
 TREND ANALYSIS

PARTICULARS 2008 2007 Trend% Trend %2008

2007

Net worth 272.45 251.15 100 108.5

Capital(WIP) 10 15.97 100 62.6

Investment 47.39 27.02 100 175.4

Net current assets

388.93 293.55 100 132.50

694.06 574.45 100 120.82

Total assets

44.39 44.39 100 100

Share capital

100
Reserve 391.78 283.55 138.41

100
Secured loan 188.11 172.67 108.94

100
Unsecured loan 69.78 74.34 93.86

100
Total liabilities 694.06 574.45 120.82
 Ratios
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Profitability ratios
Operating margin (%) 8.69 8.69 10.07 9.16 10.56
Gross profit margin (%) 7.72 7.49 8.73 7.37 8.17
Net profit margin (%) 4.92 4.40 4.98 2.25 1.23
Adjusted cash margin (%) 6.01 5.73 7.52 6.03 6.26
Adjusted return on net worth (%) 35.27 30.00 49.76 36.65 30.55
Reported return on net worth (%) 34.45 29.06 39.77 19.61 8.55
Return on long term funds (%) 43.48 39.64 40.07 24.58 23.72
Leverage ratios
Long term debt / Equity 0.25 0.29 0.75 1.58 1.66
Total debt/equity 0.59 0.75 1.60 2.61 3.57
Owners fund as % of total source 62.84 57.00 38.47 27.71 21.88
Fixed assets turnover ratio 6.17 4.72 3.49 2.74 2.28
Liquidity ratios
Current ratio 1.40 1.38 1.67 1.89 2.65
Current ratio (inc. st loans) 1.12 1.04 1.08 1.21 1.05
Quick ratio 0.27 0.42 0.69 0.97 1.82
Inventory turnover ratio 3.06 3.26 4.09 4.31 6.02

TURNOVER RATIO

Turnover Ratios 2008/03 2007/03 2006/03 2005/03 2004/03

Fixed Assets 5.77 4.66 3.68 2.48 2.9
Inventory 3.65 4.15 4.67 6.28 5.28
Debtors 32.87 23.95 18.06 5.75 10.22
Interest Cover
Ratio 10.51 7.29 4.83 2.93
PBIDTM (%) 9.05 9.51 10.77 12.01 11.2
PBITM (%) 8.09 8.34 9.46 9.78 9.5
PBDTM (%) 8.28 8.37 8.81 7.32 7.96
CPM (%) 6.44 6.32 7.63 6.09 6.37
APATM (%) 5.48 5.15 6.33 3.86 4.67
ROCE (%) 39.64 34.44 29.86 16.75 21.65
RONW (%) 44.48 43.05 56.29 27.27 38.82
 ANALYSIS
RATIOS :-

Profitability ratio
gross profit

8.5

8
gross profit
7.5

6.5
2008 2007 2006 2005 2004

• The gross profit of the company always ups and down. In 2004 the
profit is 8.17 in 2005 it decrease to 7.37 it means there is in the selling
rate of the goods sold and increase in the cost of good sold .but in
2008 it increase to 7.72 it mean selling price of the goods has gone up.
net profit

3 net profit

0
2008 2007 2006 2005 2004
 • The net profit increase at the increasing rate. The ratio in 2004 is 1.23
and in 2008 it is 4.92 it mean there is portion of sale is left for the
owner after all the expenses have been met. More profit is available in
company.
operating ratio

12

10

6 operating ratio

0
2008 2007 2006 2005 2004

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

Leverage ratio :-

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

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

4
fixed assets turnover ratio
3

0
2008 2007 2006 2005 2004

LIQUIDITY RATIO :-

current ratio

1.25

1.2

1.15

1.1 current ratio

1.05

0.95
2008 2007 2006 2005 2004

• The current ratio of the company is always near to 2:1 it shows that
the company is at the good position and had sufficient fund for the
liquidity. In 2004 it increase to 2.65 as increase in the current ratio
reflects improvement in the liquidity position of the company.
 2
• The quick ratio of the company is always fall. The ratio must be 1:1.if
there is 1:1 it mean the company is having good current financial

1.8
position .In 2008 it is 0.27 this shows that liquidity assets is less as
compare to current assets.

INVENTORY TURNOVER RATIO :-

6
1.6 debtor turnover ratio

1.4
5

4
debtor turnover ratio
3

1.2
2008 2007 2006 2005 2004

1
• Inventory turnover ratio is adequate. It should neither be too high nor
too low. It shows that the company fund should be properly used.
Stock turnover ratio really affects the company if high money is
blocked in stock .But there is no case for the titan industry.

Fixed Assets

4
Fixed Assets
3

0
2007/03 2006/03 2005/03 2004/03

• The fixed assets ratio is always increases every year .It mean the sale
is adequate. The money invested in fixed assets is properly used in
company.

debtor turnover ratio

2008
2007
2006
2005
2004
 • Debtor turnover ratio is always increases every year. It is a
component of current assets and as such has direct influence on
working capital position of the company. The company receives the
money from debtor at time. It shows that there will no effects on the
company financial position. Normally higher turnover ratio is better
for the company.

CASH FLOW STATEMENT :-

It shows that the cash has been increase every year. In 2004 the closing cash
is 27.62 and it is the opening cash for next year ie 2005 and so on. The cash
has been increase from 27.66 to 43.72 and then the flow of cash is less in
2007 it reduces from 43.72 to 38.46. But after some time cash inflow and
outflow has been increase. It shows that the cash flow statement of the Titan
Industry is good.

FUND FLOW STATEMENT :-

Fund flow shows the financial operation and show the financial performance
of the Titan Industry. In this schedule of change in working capital is
decrease in 2004, 05, 06. It means current assets will be insufficient to meet
the current liability always nearer to 2:1. If the company is near to this is
show that the company financial is strong. It shows the additional fund
received during the year. The cash profit has been increase rapidly. And
there is no entrance of equity share except 2007. In 2007 there are
2.1increases in the number of share holder.

In 2007 and 2008 there is increase in working capital indicates idleness of

fund, so efforts should me made by the company to bring the ratio 2:1.in
2003, 2004, and 2005 there is decrease in working capital and after 2005
there is always increase in working capital. The company will pay dividend
to shareholder. It always increases every year it shows the company will
done a lot for shareholder. In 2008 there is increase in the Investment.
PROFIT AND LOSS ACCOUNT :-
The sale of the company increases every year. In 2007 the sale is 2181.69
and increase to 3098.19. The incomes from other source also increase. The
company will spend a lot of money on row material. The amount of

Spend always increases. Expenditure on power and fuel is increases. The

company will spend a lot of money on the employee there is 29.1 increase in
the expenditure as compare to last year. The gross profit ratio increase every
year. It mean the company was spent a lot of money on sales with effect the
production also increases. There is no gross loss. And the company will also
save money for depreciation which is helpful for the purchase of new assets.
The net profit of the company will also increase in 2007. the net profit is
112.32 in 2008 its profit is 169.81 its shows the rapid increase in the profit.
The profit and loss shows that the company is at the good position. The
equity dividend increase it mean there is increase in the shareholder in the
company and the company will pay a dividend to shareholder. The company
not pays any dividend to preference shareholder in 2008.

COMPARATIVE BALANCE SHEET :-

• The comparative balance sheet of the titan industry shows that the
share capital as compare to last year is not increase. This made no
improvement in financial position of the company.

• There is increase in the reserve. It means company would have save

more money for the future.

• Secured loan as compare to last year has increase it indicate increase

dependence on borrowed fund which is not good sine.

• The unsecured loan is decrease it indicates that loans and current

liability have been paid by the company.

• The investment of the company as compare to last year increase it

shows that the company will spend a lot on investment.
 • The current assets of the company increase it is a good sine for the
company.

COMMONSIZE BALANCE SHEET :-

• The above common size statement shows that the net block of titan
industry is reduce from 43.72% to 39.25% of total assets it has
decrease against the previous.
• The reserve fund increase as compare to last year. It increases to 56.5.
• The secured loan decrease from 30% to 27.10%.

TREND ANALYSIS :-

• The trend analysis shows that the net block increase from the previous
year 2007 by 8.5%.

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

• The share capital constant as compare to last year.

• The secured loan is increase 8.11 this shows company is depend on

borrowing fund.

• The unsecured loan is decrease to 93.86.