BAIBF 08007 Financial Accounting

BAIBF 08007
FINANCIAL ACCOUNTING
SUBMITTED BY
MANU VARGHESE
Introduction
Reliance Communications Ltd. (RCom) is an Indian Internet access and telecommunications
company headquartered in Navi Mumbai, India. It provides GSM (Voice, 2G, 3G, 4G) mobile
services, fixed line broadband and voice services, DTH depending upon the areas of operation.
Reliance Communications is the fifth largest telecom operator in India with 98.70 million
subscribers as of June 2016.
Established in 2002, it is a subsidiary of Reliance Anil Dhirubhai Ambani Group. Reliance

Communication IT Support is provided by Reliance Tech Services and Telecom network is
maintained and operated by Ericsson, transmission towers are maintained by its subsidiary
Reliance Infratel. Reliance Infocomm laid the largest Optic Fiber Cable network in the country
in 2003 to 2005, approximately 135,000 km, and touched almost all top broadband cities with the
help of their Franchisee's - Local Cable Operators (LCO's). On an average 1900 large LCO's
were connected to the Reliance Infocomm network to provide Voice, Data and Video services
known as Triple Play on IPTV platform. After the split of the Telecom business venture between
Mukesh Ambani and Anil Ambani, the telecom business was handed over to Anil Ambani, who
later christened the company as "Reliance Communications Limited". In September 2016, RCom
announced that it would merge its wireless business with Aircel.
Reliance Group, an offshoot of the Group founded by Shri Dhirubhai H Ambani (1932-2002),
ranks among India's top private sector business houses in terms of net worth. The group has
business interests that range from telecommunications (Reliance Communications Limited) to
financial services (Reliance Capital Ltd) and the generation and distribution of power (Reliance
Power Limited and Reliance Infrastructure Limited).Reliance Group's flagship company,
Reliance Communications is India's foremost and truly integrated telecommunications service
provider. The Company has a customer base of above 118 million including over 2.6 million
individual overseas retail customers. Reliance Communications corporate clientele includes over
39,000 Indian and multinational corporations including small and medium enterprises and over
290 global, regional and domestic carriers.
Subsidiaries of Reliance Communication

Reliance Telecom Limited (RTL) operates in Madhya Pradesh, West Bengal, Himachal Pradesh,
Odisha, Bihar, Assam and the northeast of India. It first offered GSM services in January 2003.
Reliance Tech Services is the IT services wing of Reliance ADAG. It provides IT consultancy,
business process outsourcing and software development for Reliance Communications and other
ADA group companies. Reliance Globalcom owns the Fiber-Optic Link Around the Globe
undersea cable system and RIDC provides Internet data centre (IDC) services located in
Mumbai, Bangalore, Hyderabad and Chennai. Reliance Communications also acquired FLAG
Telecom, Yipes ethernet service, Digicable and Vanco.
1. Reliance Digital TV Ltd
Percentage Holding: 100%
Reliance Digital TV Ltd is a direct to home (DTH) television operator offering services under
the brand name Reliance Digital TV.
2. Reliance Infratel Ltd.

Percentage Holding: 90.45%
Reliance Infratel Ltd. (RITL) handles RCom's mobile towers asset and related infrastructure.
RCom owns a 96% stake in the company and the rest is held by several minority investors -
Quantum (M), NSR Partners, Galleon, HSBC Daisy Investment (Mauritius), Drawbridge
Towers, Investment Partners B (Mauritius). Investment Partners B had invested $287 million in
2007.
RCom announced that it had signed a binding pact with Brookfield Infrastructure Group to sell a
51% stake in Reliance Infratel for ₹11,000 crore (US$1.6 billion). RCom will utilize the entire
amount earned from the deal to reduce its existing debt. Following the deal, Brookefield will
hold a 51% state in Reliance Infratel, RCom will retain a 49% stake and the minority partners
will exit.
3. Global Cloud Xchange

Global Cloud Xchange (GCX) offers a comprehensive portfolio of solutions customized for
carriers, enterprises and new media companies across the world’s largest private undersea cable
system spanning more than 67,000 route kilometres (“rkm”), integrated with Reliance
Communications’ 2,00,000 rkm of domestic fiber-optic backbone.
4. Reliance Global Call

Reliance Global Call offers international service in India, US, Canada, Australia, UK, Singapore,
Hong Kong, New Zealand, Singapore, France, Belgium, Austria, Spain, Ireland and Netherlands.
5. MTS India
Mobile TeleSystems India (MTS India), is the Indian subsidiary of the Russian mobile operator
MTS. The company is headquartered in New Delhi, India. It provides wireless voice, broadband
Internet, messaging and data services in India. MTS India is the tenth largest mobile operator in
the country with 6.71 million subscribers as of December 2016.
6. Digicable
Digicable Network India ltd. is a cable television company based in Mumbai, India, that also
provides telephone, data, and internet services. The company provides services in 46 cities and
14 states across India and, as of June 2012, had approximately 8.7 million subscribers. It was
founded in 2007.
7. Towercom Infrastructure Private Limited

Towercom has subscribed 95 per cent share capital, which is 9,500 shares of Rs 10 each, the
filing said. RCom has announced the sale of 51 per cent stake in its telecom tower business to
Canada-based Brookfield Infrastructure Group for an upfront cash payment of Rs 11,000 crore.
8. Reliance Communications International Inc.

Reliance Communications International Inc. provides telecommunication services. The company

distributes Reliance India Call which is a prepaid or pay-after-use calling card. The company
was incorporated in 2003 and is based in New York, New York. Reliance Communications
International Inc. operates as a subsidiary of Reliance Communications Ltd.
9. Anupam Global Soft (U) Ltd.

Anupam Global Soft (U) Ltd. provides eBusiness solutions. The company holds telecom licenses
for Uganda: a public infrastructure provider license (PIPL) and public service provider license
(PSPL), which allows it to offer mobile, fixed line, Internet, National and International Long
Distance services, as well as WiMax and Wifi services. The company is based in Kampala,
Uganda. As of February 21, 2008, Anupam Global Soft (U) Ltd. operates as a subsidiary of
Reliance Communications Ltd.
10. Reliance Wimax Limited
Reliance Wimax Limited provides broadband wireless Internet access to the corporate market in
India. It offers its services to software/IT, media/entertainment, finance/banking, manufacturing,
transportation, and education sectors. The company was formerly known as Gateway Systems
(India) Ltd. and changed its name to Reliance Wimax Limited in January, 2009. The company
was founded in 1991 and is based in Mumbai, India with additional operations in Mumbai, New
Delhi, Bangalore, and Pune, India. Reliance Wimax Limited operates as a subsidiary of Reliance
Communications, Ltd.
11. Netizen Rajasthan Ltd

Netizen Rajasthan Ltd. was formerly a subsidiary of Reliance Infocomm Limited. As of

September 12, 2006, Netizen Rajasthan Ltd operates as a subsidiary of Reliance
Communications Ltd.
12. Mumbai Metro Transport Private Limited

Mumbai Metro is a rapid transit system serving the city of Mumbai, Maharashtra. The system is
designed to reduce traffic congestion in the city, and supplement the overcrowded Mumbai
Suburban Railway network. It is being built in three phases over a 15-year period, with overall
completion expected in 2021. When completed, the core system will comprise seven high-
capacity metro railway lines, spanning a total of 174 kilometres (108 mi).
Non controlling Interest

Non controlling interest (NCI) is the portion of equity ownership in a subsidiary not attributable
to the parent company, who has a controlling interest (greater than 50% but less than 100%) and
consolidates the subsidiary's financial results with its own. NCI is recorded in the shareholders'
equity section of the parent's balance sheet, separate from the parent's equity, rather than in the
mezzanine between liabilities and equity. The amounts of consolidated net income attributable to
the parent and to the non controlling interest must be clearly identified and presented on the
consolidated income statement.
RATIO ANALYSIS
Ratio analysis is a form of financial statement analysis that is used to obtain a quick
indication of a firm’s financial performance in several key areas.
NET PROFIT MARGIN:

Net profit margin looks at how much of a company’s revenues are kept as net income.
Net profit margin = Net income / sales revenue
COMPANY NET INCOME SALES NET PROFIT

(Rs) REVENUE (Rs.) MARGIN (%)
PARENT COMPANY 10295 9974 103
GROUP 22113 21500 102
RETURN ON ASSETS:
This ratio indicates how profitable a company is relative to its total assets. The return on
assets ratio illustrates how well management is employing the company’s total assets to
make a profit.
Return on assets = net income/ average total assets
COMPANY NET INCOME AVERAGE RETURN ON

TOTAL ASSETS ASSETS(%)
PARENT COMPANY 10295 78951 13
GROUP 22113 1,02,066 21
RETURN ON EQUITY:
The return on equity or ROE is a profitability ratio that measures the ability of a firm to
generate profits from its shareholders investments in the company.
Return on equity = Net income/ shareholder’s equity
COMPANY NET INCOME SHAREHOLDER’S RETURN ON

EQUITY EQUITY(%)
PARENT COMPANY 10295 31,054 33.15
GROUP 22113 35,622 62.07
CURRENT RATIO:
The current ratio is a liquidity ratio that measures a company’s ability to pay short term
and long term obligations.
Current ratio = current assets / current liabilities
COMPANY CURRENT CURRENT CURRENT
ASSETS LIABILITIES RATIO(%)
PARENT COMPANY 9,116 17,734 51.4
GROUP 14,468 26,188 55.2

BAIBF 08007 Financial Accounting

Uploaded by

Copyright:

Available Formats

BAIBF 08007 Financial Accounting

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

BAIBF 08007 Financial Accounting

Uploaded by

Copyright:

Available Formats

BAIBF 08007

Established in 2002, it is a subsidiary of Reliance Anil Dhirubhai Ambani Group. Reliance

Subsidiaries of Reliance Communication

2. Reliance Infratel Ltd.

3. Global Cloud Xchange

4. Reliance Global Call

Percentage Holding: 100%

7. Towercom Infrastructure Private Limited

8. Reliance Communications International Inc.

Reliance Communications International Inc. provides telecommunication services. The company

9. Anupam Global Soft (U) Ltd.

11. Netizen Rajasthan Ltd

Netizen Rajasthan Ltd. was formerly a subsidiary of Reliance Infocomm Limited. As of

12. Mumbai Metro Transport Private Limited

Non controlling Interest

NET PROFIT MARGIN:

COMPANY NET INCOME SALES NET PROFIT

COMPANY NET INCOME AVERAGE RETURN ON

COMPANY NET INCOME SHAREHOLDER’S RETURN ON

You might also like