IDEA CELLULAR TELECOMMUNICATION

INTRODUCTION
Idea Cellular Services Limited is a 100% subsidiary of Idea Cellular Limited
and provides manpower services to the Holding Company & Fellow
Subsidiaries.
Idea cellular, a part of Aditya Birla group, is one of Indias leading GSM
mobile services operator.
This telecom company has licenses to operate in all 22 service areas.
Presently it is operating in 13 circles. Idea Cellular value-added services like
GPRS, call conference, GSM, GPS and also provides customized solutions
according to business specific needs.
With a customer base of 98 million as on August 2011, it is among top 25
telecom companies.
Through merger and acquisitions, Idea Cellular has received established
service areas for mobile operations. In January 2001 it merged with Tata
Cellular, which had service area in Andhra Pradesh. In June 2001, through its
acquisition of RPG Cellcom, it received Madhya Pradesh service area. In
January 2004 it received service areas of Haryana, Uttar Pradesh and Kerala
through its acquisition of Escotel Mobile Communication (Escotel). In 2006 it
became part of Aditya Birla Group. Idea Cellular has acquired 40.8% stake in
Spice Communication.
Idea has a network of over 70,000 cell sites covering the entire length and
breadth of the country. Idea has over 3,000 Service Centres servicing Idea
subscribers across the country, including 450 special Experience Zones for
3G promotion. Ideas service delivery platform is ISO 9001:2008 certified,
making it the only operator in the country to have this standard certification
for all 22 service areas and the corporate office.
Recent developments:
Idea Cellular has tied up with Taiwans handset manufacturer HTC offering
two touch phone models targeting the premium segment in India. The
two Taiwan made models called HTC Touch Pro and HTC Touch Viva are based
on Windows mobile platform offer elegant touch screen experience.

Idea Cellular has launched EDGE enabled USB Data card Netsetter for
prepaid and postpaid subscribers in Mumbai.This data card would be priced
at Rs.2,490. It will provide anywhere-anytime internet access and is only
Data Card having compatibility with multiple operating systems such as
Windows 2000, XP, Vista, and Mac.
SIGNIFICANT ACCOUNTING POLICIES
1) Basis of Preparation of Accounting Statements
The Financial Statements have been prepared on accrual basis under the
historical cost convention in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP) to comply with the Accounting
Standards notified under Section 133 of the Companies Act, 2013 and
relevant provisions of the Companies Act, 2013. All assets and liabilities have
been classified as current or non-current as per the operating cycle criteria
set out in the Schedule III to the Companies Act, 2013.
2) Revenue Recognition
Revenue on account of rendering of services is recognised when services are
rendered based on agreements/arrangements.
3) Fixed Assets
Fixed Assets are stated at cost of acquisition and installation less
accumulated depreciation. Cost is inclusive of freight, duties, levies and any
directly attributable cost of bringing the assets to their working condition for
intended use.
4) Depreciation
Depreciation on Fixed assets is provided on straight-line method on the basis
of estimated useful economic lives as given below:
Office Equipments 3-5 years
Assets costing upto ` 5,000/- are depreciated fully in the month of purchase.
5) Taxation
a) Current Tax: Provision for current income tax is made on the taxable
income using the applicable tax rates and tax laws
b) Deferred Tax: Deferred tax arising on account of timing differences and
which are capable of reversal in one or more subsequent periods is

recognised using the tax rates and tax laws that have been enacted or
substantively enacted. Deferred tax assets are not recognised unless
there is virtual certainty with respect to the reversal of the same in future
years. iii) Minimum Alternate Tax
c) (MAT) credit: MAT credit is recognised as an asset only when and to the
extent there is convincing evidence that the Company will pay normal
Income tax during the specified period. In the year in which the MAT
credit becomes eligible to be recognized as an asset in accordance with
the recommendations contained in Guidance Note issued by the ICAI, the
said asset is created by way of a credit to the Statement of Profit and
Loss and shown as MAT Credit Entitlement. The Company reviews the
same at each balance sheet date and writes down the carrying amount of
MAT Credit Entitlement to the extent there is no longer convincing
evidence to the effect that Company will pay normal Income tax during
the specified period.
6) Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities on the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
year. Differences between actual results and estimates are recognised in the
periods in which the results are known/materialize
7) Earnings Per Share (EPS):
The earnings considered in ascertaining the Companys Earnings Per Share
(EPS) comprises the Net Profit/(Loss) after tax, as per Accounting Standard20 on Earnings Per Share. The number of shares used in computing basic
EPS is the weighted average number of shares outstanding during the
period. The diluted EPS is calculated on the same basis as basic EPS, after
adjusting for the effects of potential dilutive equity shares unless the effect
of the potential dilutive equity shares is anti-dilutive.
8) Impairment of Assets
Assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised in accordance with Accounting Standard28 Impairment of Assets, for the amount by which the assets carrying
amount exceeds its recoverable amount as on the carrying date. The

recoverable amount is higher of the assets fair value less costs to sell vis-vis value in use. For the purpose of impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash flows
9) Provisions & Contingent Liability:
Provisions are recognised when the Company has a present obligation as a
result of past events; it is more likely than not that an outflow of resources
will be required to settle the obligation; and the amount has been reliably
estimated. A contingent liability is disclosed where there is a possible
obligation or a present obligation that may, but probably will not, require an
outflow of resources.

SHARE CAPITAL
a) Authorised, Issued, Subscribed and Paid-up Share Capital:

b) Rights attached to Equity Shareholders

The Company has only one class of equity shares having par value of ` 10/per share. Each holder of equity shares is entitled to one vote per share. In
the event of liquidation of the Company, the holder of equity shares will be
entitled to receive remaining assets of the Company, after distribution of
preferential amounts, if any. The distribution will be in proportion to the
number of equity shares held by the shareholders.

FINANCIAL ANALYSIS
RESERVES AND SURPLUS

Reserves and Surplus is seen to decrease from 7 .085 million to 2.571 million
in 2015, as a result of expansion purpose in the firm. Which include Improving
3G device penetration from current 8.9% and will help Idea to gain data traction
and better utilization of high investments in 3G
Active (VLR) Mobile subscriber penetration in India amongst lowest in the world @
59% ; voice growth stable for rural India, slated to sustain minutes growth. They
have been able to expand throughout india by making use of resource and surplus
for expansion purposes.

Improved rate realization & falling subscriber churn fuelling strong financial
performance, 97.6% YoY PAT growth and increasing return ratios
Idea has very comfortable Net Debt to EBITDA at 1.39 (Q1 FY14) in Indian telecom
industry including only $657 Mn unhedged forex debt.
Growth in revenue if 18.8% from922$Mn to 1095$Mn in 2014-2015
Growth in Net profit is 97.6% from 39 Mn$ to79 Mn$
Growth in EBDITA is 44.6% from 14.4 to 20.8Mn$

ITC FMCG SECTOR

INTRODUCTION
ITC Limited is one of India's foremost private sector companies with a market
capitalization in excess of US $ 16 billion and a turnover of more than US $
3.5 billion. ITC ranks third in pre-tax profits among Indias private sector
corporations. ITC is ranked among the World's Best Big Companies and Asia's
'Fabulous 50' by Forbes magazine, among India's Most Respected Companies
by Business World magazine and among India's Most Valuable Companies by
Business Today magazine.
ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty
Papers, Packaging, Agri Business, Packaged Foods & Confectionery, Branded
Apparel, Greeting Cards, Safety Matches and other FMCG products. While ITC
is an outstanding market leader in its traditional businesses of Cigarettes,
Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market
share even in its nascent businesses of Packaged Foods & Confectionery,
Branded Apparel and Greeting Cards & Stationery. The Company's successful
strategy of creating multiple drivers of growth leveraging the diverse
competencies residing in its portfolio of businesses is evident in its
impressive track record of growth in the last decade and its strong debt-free
balance sheet.
It is a measure of the continued trust reposed in the Company by its
consumers that the top two FMCG brands in the country today belong to ITC.
The Companys FMCG businesses leverage one of the largest retail networks
in the country, consisting of about 2 million directly serviced dealers. Its
reach covers a wide range of the retail spectrum, from premium outlets in

the metros to small shops in the interiors of rural India. The Cigarette
business continues to occupy its position of leadership on the strength of
continued value addition
ITC Limited hence is an India-based holding Company. The Company
operates through four segments: fast moving consumer goods (FMCG),
Hotels, Paperboards, Paper and Packaging, and Agri Business. The FMCG
segment includes cigarettes and cigars, and others, such as branded
packaged foods businesses (bakery and confectionery foods, snack foods,
staples, spices and ready to eat foods, among others), apparel, education
and stationery products, personal care products, safety matches and
agarbattis. Its Hotels segment includes Hoteliering. Its Paperboards, Paper
and Packaging segment include paperboards, paper, including specialty
paper and packaging, including flexibles. Its Agri Business segment includes
Agri commodities, such as soya, spices, coffee and leaf tobacco. Its brands
include Aashirvaad, Sunfeast Dark Fantasy, Bingo!, Yumitos, YiPPee!,
Candyman, GumOn, Classmate, Fiama Di Wills, Vivel, Superia, Engage, Wills
Lifestyle, John Players, Mangaldeep and Aim, among others.
SHARE CAPITAL

Reserves and Surplus of Year 2014-2015 was 30933 crores as compared to

Rs 26441 Crores.

Long Term borrowings stood at 61 Crores as opposed to 76.40 Crores.

SWOT ANALYSIS OF FMCG SECTOR
STRENGTHS:
1. Low operational costs
2. Presence of established distribution networks in both urban and
rural areas
3. Presence of well-known brands in FMCG sector
WEAKNESSES:
1. Lower scope of investing in technology and achieving economies of scale,
especially in small sectors
2. Low exports levels
3. "Me-too" products, which illegally mimic the labels of the established
brands,narrow the scope of FMCG products in rural and semi-urban market.
OPPORTUNITIES:
1. Untapped rural market
2. Rising income levels i.e. increase in purchasing power of consumers
3. Large domestic market - a population of over one billion
4. Export potential
5. High consumer goods spending
THREAT
1. Removal of import restrictions resulting in replacing of domestic brands
2. Slowdown in rural demand.
3. Tax and regulatory structure

ITC Product Segments

FINANCIAL ANALYSIS
Financial RATIOs

Formulas

Value

Current Ratio

1.17

Net Profit Margin

(current
Asset/current
Liabilitie)
(cash+account
receivables+shortter
m
investments)/curren
t liabilities
PAT-Dividend on
preference shares/
(Dividend on Normal
ordinary shares)
Net income/Revenue

Return On
Assets(ROA)

Net Income/Total
Asset

28.54

Return on
Equity(ROE)

Net profit/Equity

27.75

Earnings Per Share

(EPS)

PAT/No of shares

8.70

Price to Earnings
Ratio (P/E)

Market price/EPS

29.40

Acid Test Ratio

Dividend Coverage
Ratio

0.02

2.83

33.76