MIRA
INFORM REPORT
|
Report Date : |
16.01.2008 |
IDENTIFICATION
DETAILS
|
Name : |
IDEA MOBILE COMMUNICATIONS LIMITED |
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Formerly Known As : |
ESCOTEL MOBILE
COMMUNICATIONS LIMITED |
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Registered Office : |
A-30, Mohan Co-operative
Industrial Estate, Mathura Road, New Delhi 110 044 |
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Country : |
India |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
25.05.1995 |
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Com. Reg. No.: |
55 – 68988 |
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CIN No.: [Company
Identification No.] |
U74899DL1995PTC068988 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
DEL104979C |
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|
Legal Form : |
A Closely Held Public Limited Liability Company |
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Line of Business : |
The company is engaged in providing Cellular Services, Cellular
Telephone, SIM Card. |
RATING &
COMMENTS
|
MIRA’s Rating : |
B |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
Usually correct |
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Litigation : |
Clear |
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Comments : |
Subject is an
established company having moderate track. Profit margin is under severe
pressure. Payments are usually correct and as per commitments. The company can
be considered for normal business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered Office : |
A-30, Mohan
Co-operative Industrial Estate, Mathura Road, New Delhi 110 044, India |
|
Tel. No.: |
91-11-5560 7700 / 66615555 |
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Fax No.: |
91-11-5560 7714 / 66615499 |
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E-Mail : |
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Website : |
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Area : |
Large |
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Location : |
Owned- Commercial |
DIRECTORS
|
Name : |
Mr Rajan Nanda |
|
Designation : |
Chairman |
|
Address: |
2 Friends Colony,
New Delhi – 110 065, India. |
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Date of
Birth/Age : |
15/10/1942 |
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Qualification: |
Graduate |
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Date of
Appointment : |
28/11/1995 |
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|
Name : |
Mr Wallace F
Paul, Foreigner |
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Designation : |
Director |
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Address: |
24 F Two Exchange
Square, 8 Connaught Palace, Hong Kong. |
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Date of
Birth/Age : |
27/06/1950 |
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Date of
Appointment : |
30/04/2003 |
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|
Name : |
Mr Thacker Premji
Vijay |
|
Designation : |
Director |
|
Address: |
7-34 Shyam Vilas,
B Desai Marg, Mumbai, Maharashtra, India |
|
Date of
Birth/Age : |
21/06/1960 |
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Date of
Appointment : |
28/11/1995 |
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|
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|
Name : |
Mr Pangilinan V
Manuel |
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Designation : |
Director |
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Address: |
24 F Two Exchange
Square, 8 Connaught Palace, Hong Kong. |
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Date of
Birth/Age : |
14/07/1946 |
|
Date of
Appointment : |
28/11/1995 |
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|
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|
Name : |
Mr Pasricha Uday |
|
Designation : |
Director |
|
Address: |
E 4 Palmsprings,
104 Cuffe Parade, Colaba, Mumbai – 400 005, Maharashtra, India. |
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Date of
Birth/Age : |
05/04/1957 |
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Date of
Appointment : |
19/01/1996 |
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|
Name : |
Mr Edwards L
Christopher Foreigner |
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Designation : |
Director |
|
Address: |
Mill Batch,
Blackford Road, Mark High Bridge, Somerset, Ta 9 4 NR, Uk. |
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Date of
Birth/Age : |
24/01/1948 |
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Date of
Appointment : |
14/01/2000 |
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|
Name : |
Mr N G Hong Pong
Joseph Foreigner |
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Designation : |
Director |
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Address: |
Flat 4 – B, Tower
– 2, Robinson Heights, No 8, Robinson Road, Hong Kong. |
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Date of
Birth/Age : |
18/09/1962 |
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Date of
Appointment : |
14/01/2000 |
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|
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|
Name : |
Mr Swaroop Rajan |
|
Designation : |
Whole Time
Director |
|
Address : |
No. 9, 2nd
Floor, Panchsheela Park, New Delhi – 110 017. |
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Date of
Birth/Age : |
23/01/1957 |
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Date of
Appointment : |
30/04/2003 |
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|
Name : |
Mr Virmani Anil |
|
Designation : |
Director |
|
Address : |
J 173, 2nd
Floor, Saket, New Delhi – 110 017. |
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Date of
Birth/Age : |
10/09/1951 |
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Date of
Appointment : |
30/04/2003 |
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Name : |
Mr Tortoric A
Edward Foreigner |
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Designation : |
Director |
|
Address : |
24 F Two Exchange
Square, 8 Connaught Palace, Hong Kong. |
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Date of
Birth/Age : |
24/11/1939 |
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Date of
Appointment : |
30/04/2003 |
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|
Name : |
Mr Rae James
Donald Foreigner |
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Designation : |
Director |
|
|
C/o, Smart Communications,
INC Smart Towers, 6799 Ayala Avenue, Makati City, Phillipines. |
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Date of
Birth/Age : |
21/04/1961 |
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Date of
Appointment : |
30/04/2003 |
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|
Name : |
Ms Mandal Vidya |
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Designation : |
Company Secretary |
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Address : |
1612, Sectro 28,
Faridabad – 110 003, Haryana. |
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Date of
Birth/Age : |
26/03/1962 |
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Date of
Appointment : |
08/12/1997 |
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|
Name : |
Mr. Nadkarni
Girish |
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Designation : |
Director |
|
Address : |
Sushila Niwas, Saraswati
Baug Society Road, Andheri, Mumbai – 400 060, India. |
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Date of
Birth/Age : |
21.10.1968 |
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Date of
Appointment : |
10.06.2004 |
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|
Name : |
Mr. Mysore R
Prasanna |
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Designation : |
Director |
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Address : |
901 Citadel, 9th
Floor, 188 LD Ruparel Marg, Malbar Hills, Mumbai – 400 006, India. |
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Date of
Birth/Age : |
07.04.1947 |
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Date of
Appointment : |
10.06.2004 |
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|
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|
Name : |
Mr. Ty. Graham |
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Designation : |
Director |
|
Address : |
7277, 164 Avenue
NE, Redmond, WA 98052 |
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Date of
Birth/Age : |
27.04.1962 |
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Date of
Appointment : |
10.06.2004 |
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|
|
|
Name : |
Mr. Jain Kapish |
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Designation : |
Director |
|
Address : |
101, Sector 21 B,
Faridabad – 121 001, Haryana. |
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Date of
Birth/Age : |
09.10.1954 |
|
Date of Appointment
: |
10.06.2004 |
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|
|
|
Name : |
Mr. Mehmi Vikram |
|
Designation : |
Director |
|
Address : |
Flat No. 5,
Building 9, Atur Park Naylor Road, Pune – 411 001, Maharashtra, India. |
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Date of
Birth/Age : |
13.11.1953 |
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Date of
Appointment : |
10.06.2004 |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names of Shareholders |
|
No. of Shares |
|
|
|
40 |
|
Mr. Jain Kumar
Lalit |
|
14 |
|
Mr. Virmani Anil |
|
280 |
|
Mr. Mathur Behari
Girish |
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14 |
|
Mr. Wadhera Anil |
|
268,259,652 |
|
Escorts Limited |
|
52,600,000 |
|
First Pacific
Company Limited |
|
205,140,000 |
|
Personal
Communications (Mauritius) Limited |
|
54 |
|
Idea Cellular Limited
with Mr. Pravesh Aghi |
|
20 |
|
Idea Cellular
Limited with Mr. Bimal Khandewal |
|
61 |
|
Idea Cellular
Limited with Mr. Satish Rajgarha |
|
86 |
|
Idea Cellular
Limited with Mr. Sudhir Mathur |
|
91 |
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Idea Cellular
Limited with Mr. Vikram Nehmi |
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36 |
|
Idea Cellular
Limited with Mr. Rajat Mukarji |
|
52999652 |
|
Idea Cellular
Limited |
|
|
|
|
|
|
|
Total |
|
579,000,000 |
BUSINESS DETAILS
|
Line of Business : |
The company is engaged in providing Cellular Services, Cellular
Telephone, SIM Card. |
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Products : |
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GENERAL
INFORMATION
|
Bankers : |
Standard Chartered
Bank Industrial
Development Bank of India Limited IDBI Tower, WTC
Complex, Cuffe Parade, Colaba, Mumbai – 400005 Union Bank of
India Union Bank
Bhavan, 239, Vidhan Bhavan Marg, Nariman Point, Mumbai – 400021 Bank of Baroda Mumbai Main Branch,
10/12, Mumbai Samachar Marg, Fort, Mumbai – 400023 UTI Bank Limited Sterling Plaza,
1262/B, Jangi Maharaj Road, Deccan Gymkhana, Pune – 411004 Canara Bank Warden House, Sir
P. M. Road, Fort, Mumbai – 400001 Uco Bank Mafatlal Centre,
1st Floor, Nariman Point, Mumbai – 400021 United Bank of
India United Bank of
India Building, 25, Sir Pheroze Shah, Mehta Road, Fort, Mumbai – 400021 Dena Bank Ashok Chambers, J
M Road, Deccab Gymkhana, Pune – 411004 HDFC Bank Limited
Millennium
Towers, 885/1, Bhandarkar Road, Pune – 411004 Jammu and Kashmir
Bank 79A, Mehta
House4, Bombay Samachar Marg, Fort,
Mumbai – 400023 State Bank of
Saurashtra 17/18-A, Nariman
Bhavan, Nariman Point, Mumbai – 400021 Punjab National
Bank Maker Tower, E,
Ground Floor, Cuffe Parade, Mumbai – 400005 Life Insurance
Corporation of India Togaksheema,
Jeevan Bima Marg, Mumbai – 400021 Insurance
Development Finance Company Limited Ramon House, 169
Backbay Reclamation, Mumbai – 400020 Small Industries
Development Bank of India Mumbai Branch
office, SME Development Centre, C-11, Bandra Kurla Complex, Bandra [East]
Mumbai – 400051 Export Import
Bank of India Center One
Building, Floor No. 21, World Trade center Complex, Cuffe Parade, Mumbaqi -
400005 |
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Facilities : |
Notes: The above borrowing
other than the vehicle loans are secured by assets referred to in note 2,
below net book value aggregating Rs.5639.580 Millions (Previous Year
Rs.4753.320 Millions) The above borrowing
are secured by under mentioned securities: Rs.4500.000 Millions secured by
the fixed movable assets and current assets of the company both present and
future Rs.1000.000 Millions secured by ·
The fixed
movable assets and current assets of the company both present ·
All tangible
assets of the company both present and future (excluding Licenses) ·
All the
right, title benefit, claims and demands whatsoever of the company, in to
under or in respect of the project Documents (other than the license Agreement
and the Tripartite Agreement) ·
All the
right, title benefit, claims and demands whatsoever of the company, in to
under or in respect of a)
Any letter
of credit, guarantee or performance bond that may be provided by any party to
the company duly acknowledged and conented to, where required, by the
relevant parties b)
All the
right, title benefit, claims and demands whatsoever of the company, in the
clearances in relation to the project. c)
Insurance
Contracts / insurance proceeds in relations to the project. Vehicle loans are
secured by the hypothecation of vehicle against which the loans have been
taken. |
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Banking
Relations : |
- |
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Auditors : |
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|
Name : |
Price Water House Chartered Accountants |
|
Address : |
P-1, Aditya Vihar, Saidullajab, Opp. D Block, Saket, Mehrauli-Badarpur
Road, Delhi – 110030, India |
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|
|
|
Name : |
A. F. Ferguson and Company Chartered Accountants |
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Address: |
9, Scindia House,
Kasturba Gandhi Marg, Connaught Place, New Delhi – 110001, India |
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Associates : |
·
Escorts
Telecommunication Limited ·
Escosoft
Technologies Limited ·
Escorts
Heart Institute and Research Centre ·
Cellnext
Solutions Limited ·
Escorts
Finance Limited ·
Escorts
Hospital and Research Centre |
|
|
|
|
Subsidiaries : |
·
Vaspte
Investment Private Limited ·
Asian
Telephone Services Limited ·
Swinder
Singh Satara and company Limited ·
Escorts
Telecommunication Limited* ·
Escorts
Heart Institute and Research Center* ·
Escorts
Finance Limited* ·
Iserv India
Solutions Private Limited* ·
Bhagalakshmi
Investment Private Limited ·
BTA Cellcom
Limited ·
Sapte
Investments Private Limited ·
Escorts
Technologies Limited* ·
Cellnext
Solutions Limited* ·
Escorts
Hospital and Research Centre* (* for the period 01.04.2004 to 10.06.2004) |
|
|
|
|
Holding
Company: |
·
Escorts
Limited ·
Idea
Cellular Limited |
|
|
|
|
Affiliates: |
·
First
Pacific Company Limited ·
Personal
Communications (Mauritius) Limited |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
766000000 |
Equity shares |
Rs.10/- each |
Rs.7660.000 Millions |
|
|
|
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|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
526,000,000 |
Equity Shares |
Rs.10.- each |
Rs.5260.000 millions |
|
|
|
|
|
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
5260.000 |
5260.000 |
5260.000 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
0.000 |
0.000 |
0.000 |
|
|
4] (Accumulated Losses) |
(9815.690) |
(9980.810) |
(9642.889) |
|
|
NETWORTH |
(4555.690) |
(4720.810) |
(4382.889) |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
1001.050 |
7503.760 |
6565.593 |
|
|
2] Unsecured Loans |
8560.220 |
2507.360 |
1845.133 |
|
|
TOTAL BORROWING |
9561.270 |
10011.120 |
8410.726 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
5005.580 |
5290.310 |
4027.837 |
|
|
|
|
|
|
|
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
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|
FIXED ASSETS [Net Block] |
6083.000 |
5977.020 |
6213.387 |
|
|
Capital work-in-progress |
483.910 |
269.390 |
54.029 |
|
|
|
|
|
|
|
|
INVESTMENT |
0.000 |
0.000 |
0.000 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
17.590 |
27.160 |
25.825 |
|
|
Sundry Debtors |
283.180 |
285.140 |
170.268 |
|
|
Cash & Bank Balances |
143.210 |
207.680 |
100.313 |
|
|
Other Current Assets |
0.000 |
0.000 |
0.000 |
|
|
Loans & Advances |
1200.870 |
608.990 |
315.560 |
|
Total
Current Assets |
1644.850 |
1128.970 |
611.966 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
3067.860 |
1991.640 |
2837.419 |
|
|
Provisions |
138.320 |
93.430 |
14.126 |
|
Total
Current Liabilities |
3206.180 |
2085.07 |
2851.545 |
|
|
Net Current Assets |
(1561.330) |
(956.100) |
(2239.579) |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
5005.580 |
5290.310 |
4027.837 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Sales Turnover |
7134.333 |
5082.270 |
4393.411 |
|
Other Income |
0.000 |
0.000 |
0.000 |
|
Total Income |
7134.333 |
5082.270 |
4393.411 |
|
|
|
|
|
|
Profit/(Loss) Before Tax |
178.073 |
(337.920) |
(1051.099) |
|
Provision for Taxation |
12.950 |
0.000 |
0.000 |
|
Profit/(Loss) After Tax |
165.123 |
(337.920) |
(1051.099) |
|
|
|
|
|
|
Export Value |
133.430 |
N.A. |
N.A. |
|
|
|
|
|
|
Import Value |
N.A. |
N.A. |
N.A. |
|
|
|
|
|
|
Total Expenditure |
6956.260 |
3350.770 |
2811.993 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
PAT / Total Income |
(%) |
2.31 |
(6.65)
|
(23.92) |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
2.50 |
(6.65)
|
(25.61) |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
2.30 |
(4.58)
|
(6.36) |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
(0.04) |
(7.16)
|
(0.24) |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
(2.80) |
(2.56)
|
(2.57) |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.51 |
0.54
|
0.21 |
LOCAL AGENCY
FURTHER INFORMATION
Fixed Assets:
- Land
- Leasehold
Land
- Building
- Leasehold
Improvement
- Plant and
Machinery
- Furniture
and Fixture
- Vehicles
The subject was formerly known Escotel Mobile
Communications Private Limited and subsequently changed to Idea Mobile
Communications Limited w.e.f. July 1, 2004 as per the Registrar of Companies
letter No. ROC/21/55-68988/713 dated July 1, 2004
On January 15,2004 Escorts
Limited (Escorts), First Pacific Company Limited (FPC) and Personal
Communications (Mauritius) Limited (the Promoters), whole hold 51%, 10% and 39%
respectively in the Company have entered into a Share Sale and Purchase
Agreement (SSPA) agreement with Idea Cellular Limited (Idea) to divest their
stake in the company to Idea Cellular Limited.
Incorporated on May
21,1995 the subject is engaged in the business of Providing Cellular Services
Subject reportedly imports cellular phones and other communication
equipments
|
Particulars |
31-Mar-2004 |
31-Mar-2003 |
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|
Value (Rs. In Lac) |
% of Consumption |
Qty (Nos) |
% of Consumption |
|
|
Imported |
- |
- |
4.22 |
90.17 |
Subject provides communication
services and generate income from overseas
Operations/Business:
40% in Uttar Pradesh (West)
26% in Haryana
33% in Kerala
·
Financial
Results:
The company’s
accumulated losses exceed the shareholder funds however, the company’s operating
to improve during the year. The income of the company recorded a growth of
22.20% from the previous year whereas net loss for the year reduced by 68% as
compare to the previous year. The company has also received confirmation from
its holding company fro the necessary financial and business support. In view
of the share, the accounts for the year have been prepared on a going concern
basis.
·
Share
Capital:
The issued and paid
up capital Share capital of the company is Rs.5260.000 Millions as at 31.03.205,
which is unchanged from last year the company’s ownership changed by way of a
100% equity buy about of the company’s share Capital by Idea Cellular Limited.
From Escorts Limited. First pacific Company Limited. and Personal Communication
(Mauritius) Limited., its erstwhile shareholders.
·
Dividend:
Since the company
has incurred losses during the year, no dividend has been recommended by the
Board of Directors.
·
Operations:
Over the financial
year of the company has maintained a steady growth and has grown from 989
customers to 1385 customers i.e. growth of 40%. The company achieved a turnover
of Rs.5368.620 Millions and an EBITDA of Rs.2017.850 Millions representing an
increase of 22.20% and 27.40% respectively over the last year. The growth trends
have been maintained in spite of intense competition from 5 Cellular /CDMA
operators in each circle and an enormous drop in tariffs across the country.
The company
maintained its strong position in each of its circles despite the intense
competition and closed the year with a market share of 38%, 20% and 27% in UP
(West), Haryana and Kerala respectively.
·
Marketing
Update:
During the year
under review, the company has continued its extensive efforts on the marketing
front by introducing various marketing initiatives across all its circles of
operations. Some of the major marketing initiatives are:
·
VAS Services
During the year,
the company has launched various new VAS services. Among SMS services major launches
were cricket alerts, SMS services of CNBC TV 18, Contests, picture messages,
logos ringtone services etc. Among voice services major launches were
indiatimes voice service.
·
Dialer
Tones:
The company has
launched an existing and entertaining service called Dialer Tones under which
IDEA’S customers can set their Ringing tone for caller from a choice of tunes,
ranging from Bellwood film songs o International hits, wacky sounds to
instrumental music and even their own voice, among other tunes. The best
feature of the product is that Tones can be customized caller wise- Friends can
get a special tone and family can get an altogether different tone World wide
this service is extremely popular and one of most accessed value added
services.
·
Launch of LIFETIME
IDEA:
The company has
launched a unique special programme ‘LIFETIME IDEA’ for the prepaid subscriber.
This special programme allows Bonus Talk time to its customers depending upon
hoe long the customer stayed on IDEA network. It is the first and only loyalty
program, for prepaid customers, introduced by a Cellular brand.
Significant
Industry Developments:
·
Industrial
Growth :
The Indian mobility
industry has continued to maintain its fast pace growth during the financial
year 2004-05 growing at around 55% with total mobility subscribers touching
Rs.51.700 Millions subscribers by March 2005, mainly driven by intense
competition, aggressive pricing and increased network coverage. Further, the
industry has achieved a milestone by exceeding the number of fixed subscribers.
·
Increase in
FDI Limit :
The government had
cleared the long discussed proposal to hike Foreign Direct Investment limit in
telecom sector to 74% form the current 49%. The increase in the FDI limit is expected
to user in a 20% jump in foreign investments in the telecom sector within next
2 years. However few restrictions have been imposed such as:
·
Majority of
Board members have to be Indians
·
10% of the
equity will have to be held by the Indian promoters etc.
TRAI’s
recommendation on Unified Licensing regime:
TRAI had issue dits
final recommendations to the DOT on the unified licensing regime.
The recommendation
were as under:
·
Registration
charges equivalent to entry fee comprising NLD+ILD+ a proportion of entry fee
paid by new BSOs.
·
Revenue share
licence fees reduced to 6% of Adjusted Gross Revenue from currently 15%
·
Migration is
optional at this stage, but will be mandatory after 5 Years.
·
Reselling is
not permitted at this stage.
The department
of Telecommunication is yet to finalize its policy on the same.
·
New ADC
Regime
TRAI had announced
a new Access Deficit Charge (ADC) regime effective from 01.02.2005 which will
result in lower pries for domestic consumers. Key changes are as follows:
·
ADC on National Long Distance calls reduced to
30 paise against 30, 50 and 80 paise for the 0-50, 50-200 and 200 km paid
earlier
·
ADC on
International outgoing calls reduced to Rs.2.50/ minute as against Rs.4.25*
minute earlier.
·
ADC on
International incoming calls reduced to Rs.3.25 / minute as against Rs.4.25/
minute earlier.
·
TRAI
Regulation on Access to Information:
A regulation has
been issued to protect the confidentiality of the document filed by the service
providers with the authority. A service provider claiming confidentially of
document filed shall give reason for keeping the information confidential.
·
Interconnection Usage Charge (IUC) Regime
Pursuant to TRAI
Regulation 2003, IUC regime was implemented from 1st May 2003. As a result Airtime on incoming calls is not
leviable and cost based interconnection charges have been specified for
organisation, carriage and termination of calls. Additionally, access deficit charges are payable to basic service
providers in respect of calls made from cellular to cellular and cellular to
fixed subscribers. The regulations were
further amended /modified due to certain anomalies in the charges and revised
regulations were implemented from 1st February 2004.
·
Transfer of
Licence
In respect of
transfer/assignment of licenses, DOT issued an amendment on 2nd June 2003,
permitting transfer of licenses whenever amalgamation or restructuring i.e.
merger or demerged is approved by the High Court in accordance with the
provisions of the Companies Act 1956, provided the transferee is fully eligible
in accordance with eligibility criteria contained in Tender conditions for
grant of fresh license in that area.
This is to enable consolidation of business and to manage operations
efficiently. Earlier a licensee company
was barred from creating any third party right in any manner whatsoever.
·
Unified Access
Service License (UASL) (Basic and Cellular)
Purusant to TRAI
recommendation, DOT issued guidelines for Unified Access Services License on
11th November 2003, unifying Basic and Cellular Mobile Services within the
service area. This provides an option
for existing Basic Service Operator (BSO) to migrate to UASL for a service
area, the entry fee for which will be equal to entry fee paid by the 4th CMTS
provider.
·
Reduction in
License Fee
The Government of
India announced a package of financial relief to help alleviate financial
strain on cellular operators and issued amendment to the license agreement on
27th January 2004 reducing the license fee by 2% for all Telecom Service
Providers. Further in view of high
entry fee paid by the 1st and 2nd CMTS Circle operators compared to 4th CMTS
licensees, license fee for 1st and 2nd circle operators has been further
reduced by another 2% with effect from 1st April 2004 for a period of 4 years.
·
Wireless in
Local Loop (WLL)
On October 28, 2003
the Cellular Operators Association of India (COAI) filed an appeal in the
Supreme Court against the Telecom Dispute Settlement and Appellate Tribunal's
(TDSAT) majority judgment, which had allowed liability mobility (WLL) services
to basic Operators.
Idea to invest
Rs 2000 Millions in Escotel areas
Mid Day — January 20, 2004
Idea Cellular the
three way joint venture between Tatas, Birla and US based AT and T is to invest
Rs.2000 Millions in expanding the network and facilities, in the three circles
of UP West, Haryana and Kerala of
Escotel Mobile Communications which it took over.
“We expect the
integration process of the six circles we have purchased from the
Escorts-First Pacific combine to be
complete within the next three months. All these circles are now cash positive
and generate enough to cover their debt servicing. However we will have to
infuse the funds necessary for expansion and up gradation of the network,” says
Idea Cellular chief executive officer
Vikram Mehmi.
The company plans
to roll out the Idea brand in all these circles in a passed manner once a brand
transition plan is developed.
“We have started
integration of the acquisitions in different functional areas like call centers
and will do a best practices based integration on a national level,” Mehmi
says. To fund the Rs 2750 Millions cash
price paid for the takeover of the six cellular circles, Idea has arranged bridge
financing from lenders.
“We plan to fund
the takeover cost and expansion outlay in the Escorts circles via a mix of
debt and equity. We have already
achieved financial closure for the existing Idea circles which includes funding of Rs 6000 Millions towards
additional capacity building, upgradation of network and IT infrastructure,” Mehmi says.
For the existing
Idea circles the company has already received the promoters equity
contribution and is drawing down on the
debt component in a phased manner.
The company is
expected to come out with an IPO in the next six months as it’s also seeing
an healthy growth in its subscriber
base that would entail additional investments at the back end to support
growth.
This will be
crucial to the company maintaining a healthy debt to equity ratio considering
that it already has a debt load running
into thousands of crores of rupees and will take on another Rs 8000 Millions of debt in the Escorts
acquisition.
Upside for
Escorts
Beleaguered Escorts
which had seen repeated downgrades of its long term credit rating since
2002 from investment grade category to
junk grade in November/December 2003 may now see its credit worthiness climb back into investment grade
category after the infusion of cash from the sale of Escotel Mobile Communications and three circles of Escorts
Telecommunications.
The company is also
expected to benefit from the debt of Escotel being taken over by Idea.
Since Escorts will also not have to
make any further funds infusion into the business it will act as a ratings positive for the company.
The following
clause be added as clause 183 of the Articles of Association of the company :
To comply with the
licence agreements for Cellular, Basic, Unified Access Services, International
Long Distance, National Long Distance or any business related to telephone and
communication entered by the company with the department of telecommunications
and any violation of the licence agreement shall automatically lead to the
company being unable to carry on its business in this regard.
|
Name of the
company |
ESCOTEL MOBILE COMMUNICATION LIMITED |
|
Presented By |
Mr. Satish Rajgarhia, Authorised Signtory |
|
1) Date and
description of instrument creating the change |
28.06.2004, Deed of
Hypothecation executed by the company in favour of Infrastructure Development
Finance Company Limited. (Hereafter referred to as ‘the Lender’) A certified
copy of the said Deed of Hypothecation is. |
|
2) Amount secured
by the charge/amount owing on the securities of charge |
The rupee loan of
Rs.1000.000 Million agreed to be lent and advance by the lender of the
company together with interest, additional interest, liquidated damages,
cost, charges, expenses and other monies payable by the company to the Lender
on the terms, conditions and covenants of the short Term Rupee Loan Agreement
dated 28.06.2004 entered in to between the company and the Lender (Hereafter
referred to as ‘the Loan Agreement’) |
|
3) Short particular
of the property charged. If the property acquired is subject to charge, date
of the acquired of the property should be given |
The whole of the
movable properties of the company including all office equipment and furniture,
vehicles, telephone and other movable assets of whatsoever nature belonging
to the company, both present & future, whether now lying loose or incase
or which are now lying or stored in or about or shall hereafter from time to
time during the continuance of the security of these presents be brought in
to or upon or be stored or be in the or about all the company factories,
premises and godowns or wherever else the same may be or be hold by any party
to the order or disposition of the company or in course or transit or on high
seas or on order or delivery, howsoever and whatsoever in the possession or
addition and the company and either by way of substitution or addition and
the company book debts, operating cash flows, bank accounts, receivable, commissions
any other revenues of whatsoever nature and where arising. All intangible
assets of the company, including but not limited to goodwill, trade mark,
uncalled capital, patent, present and future. All the right
title, interest, benefits, claims and demands whatsoever of the company in,
to or in respect of the project document including but not limited to the
right to recover payments and the benefit of all receivables or other claims
of the company under or in respect of there project document, the right to
compel performance under the project document, the right to substitute or to
be substituted for the company there under. All the right,
title, interest, benefits, claims and demands whatsoever of the company in,
to under or in respect of that may be provided by any party to the company,
duly acknowledge and consented to, where required by the relevant parties: All the right,
title interest, benefits, claims and demands whatsoever of the company in the
clearances in relations to the project and Insurance
contracts/ insurance proceeds in relations to the project. |
|
4) Gist of the
terms and conditions and extent and operation of the charge. |
The first charge
operates as security, interalia, for the due payment by the company to the
lender of its Loan of Rs.1000 Millions, together with all with interest,
additional interest, liquidated damages, cost, charges, expenses and other
monies I terms of the loan Agreement. The company has
undertaken to keep the properties, goods maintained in 3 above in marketable
and good conditions at its own costs and to insure the same in the joint
names of the company and the lender. All the goods
hypothecation and all realization and insurance proceeds thereof and all
document in respects of the said security are to be kept distinguishable and
held as the exclusive property of the Lender. The security
created under the said Deed of Hypothecation is to be a continuing security. The security created
under the said Deed of Hypothecation shall rank pari passu with the security
created in flavor of other Lenders. |
|
5) Name and
Address and description of the person entitled to the charge. |
Infrastructure
Development Finance Company Limited, Ramon House, 2nd Floor, 169,
Backbay Reclamation, Mumbai – 400 020. |
|
6) Date and brief
description of instrument modifying the charge |
N.A. |
|
7) Particulars of
modifications specifying the terms and conditions or the extent of operations
of the charge in which modification is made and the details of the
modification. |
N.A. |
Particulars of Charge Holders
|
Name of Lender |
Rupee Commitment (Rs in Millions) |
|
Industrial
Development Bank of India Limited |
5500 |
|
IDBI Tower, WTC Complex,
Cuffe Parade, Colaba, Mumbai – 400005 |
|
|
|
|
|
Union Bank of
India |
4000 |
|
Union Bank
Bhavan, 239, Vidhan Bhavan Marg, Nariman Point, Mumbai – 400021 |
|
|
|
|
|
Bank of Baroda |
3750 |
|
Mumbai Main Branch,
10/12, Mumbai Samachar Marg, Fort, Mumbai – 400023 |
|
|
|
|
|
Bank of India |
3750 |
|
Bank of India
Building, 70/80, M G Road, Fort, Mumbai - 400023 |
|
|
|
|
|
UTI Bank Limited |
3400 |
|
Sterling Plaza, 1262/B,
Jangi Maharaj Road, Deccan Gymkhana, Pune – 411004 |
|
|
|
|
|
Canara Bank |
3000 |
|
Warden House, Sir
P. M. Road, Fort, Mumbai – 400001 |
|
|
|
|
|
UCO Bank |
3000 |
|
Mafatlal Centre,
1st Floor, Nariman Point, Mumbai – 400021 |
|
|
|
|
|
United Bank of
India |
2200 |
|
United Bank of
India Building, 25, Sir Pheroze Shah, Mehta Road, Fort, Mumbai – 400021 |
|
|
|
|
|
Dena Bank |
2200 |
|
Ashok Chambers, J
M Road, Deccab Gymkhana, Pune – 411004 |
|
|
|
|
|
HDFC Bank Limited
|
750 |
|
Millennium
Towers, 885/1, Bhandarkar Road, Pune – 411004 |
|
|
|
|
|
Jammu and Kashmir
Bank |
370 |
|
79A, Mehta
House4, Bombay Samachar Marg, Fort,
Mumbai – 400023 |
|
|
|
|
|
State Bank of
Saurashtra |
370 |
|
17/18-A, Nariman Bhavan,
Nariman Point, Mumbai – 400021 |
|
|
|
|
|
Punjab National
Bank |
270 |
|
Maker Tower, E,
Ground Floor, Cuffe Parade, Mumbai – 400005 |
|
|
|
|
|
Life Insurance
Corporation of India |
3000 |
|
Togaksheema,
Jeevan Bima Marg, Mumbai – 400021 |
|
|
|
|
|
Insurance
Development Finance Company Limited |
2500 |
|
Ramon House, 169
Backbay Reclamation, Mumbai – 400020 |
|
|
|
|
|
Small Industries
Development Bank of India |
1000 |
|
Mumbai Branch office,
SME Development Centre, C-11, Bandra Kurla Complex, Bandra [East] Mumbai –
400051 |
|
|
|
|
|
Export Import
Bank of India |
750 |
|
Center One
Building, Floor No. 21, World Trade center Complex, Cuffe Parade, Mumbaqi -
400005 |
|
|
|
|
|
Total |
4224 |
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.27 |
|
UK Pound |
1 |
Rs.76.88 |
|
Euro |
1 |
Rs.58.40 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
- |
|
--LIQUIDITY |
1~10 |
4 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
- |
|
--CREDIT LINES |
1~10 |
5 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
34 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|