A study of the balance sheets of private telecom operators, namely Bharti Airtel, Vodafone and Idea, show that they did not declare the disputed amounts under the levy of annual gross revenues (AGR) as provisions in their books.
The Supreme Court recently ruled that telcos have to pay approximately Rs 92,000 crore to Department of Telecommunications (DoT) as revenue share on AGR computation.
According to telecom regulator Trai sources, 15 per cent AGR was fixed as licence fee under “revenue sharing” which was reduced to 13 per cent, and lastly to 8 per cent in 2013. It appears that the revenue sharing package turned out to be very beneficial to the telecom service providers, which is evident from the continuing rise in gross revenues, sources said.
In 2004, telecom service providers (TSP) earned gross revenues of Rs 4,855 crore which, by 2015, has undergone a quantum jump to Rs 2.37 lakh crore.
Analysts have also looked at the Accounting Standard 37 in view of reported assertions by the telecom operators on not providing sufficiently for revenue share liability. This is important because the accounting standard is binding on them under the Companies (Accounting Standard) Rules, 2015, read with Section 469 of the Companies Act, 2013.
Accordingly, the companies were expected to declare the disputed amounts as ‘provisions’ since they were well aware of such amounts all through the proceedings before Telecom Disputes Settlement and Appellate Tribunal (TDSAT) and till the matter was disposed off by the Supreme Court.
Instead, a mere mention by them of the disputed in unquantified terms as a ‘contingent’ or ‘deferred’ liability is insufficient compliance of the said AS 37 read with the 2015 Rules and section 469 of the Companies Act 2013, analysts contend.
Analysts have also examined the informal averments by Bharti Group of their inability to meet the revenue share liabilities. In fact, the market cap of the equity shares held by the Bharti Group alone in Bharti Airtel is approximately Rs 48,000 crore – which is more than double the purported revenue share liability of about Rs 23,000 crore. This argument may not be relevant for Vodafone Idea given the present state of its stock price.
The telecom operators did not disclose the revenue payments to DoT in financial filings. For Bharti Airtel, the revenue share payable to DoT in 2010-11 was Rs 5,352 crore, in 2011-12 it was Rs 5,358 crore, in 2012-13 it was Rs 7,228 crore, in 2013-14 it was Rs 77,17 crore, in 2014-15 it was Rs 7,363 crore, in 2015-16 it was Rs 7,723 crore, in 2016-17 it was Rs 7,637 crore, in 2017-18 it was Rs 6,695 crore and in 2018-19 it was Rs 6,462 crore.
Similarly, for Vodafone’s standalone computation before its merger with Idea, the revenue payable to DoT was not disclosed in financial filings.
In 2010-11, the revenue payable to DoT was Rs 268 crore, in the subsequent year it was the same, in 2012-13, it jumped substantially with increase in revenues to Rs 3,292 crore, it was Rs 3,654 crore at 9 per cent levy and Rs 3,248 crore at 8 per cent levy in 2013-14, in the next year it was Rs 3,644 crore, in 2015-16 it was Rs 3,827 crore while the figures for 2016-17 are not available.
In the case of Idea Cellular, in 2010-11, the revenue payable to DoT was Rs 1,550 crore, it was Rs 1,758 crore the next year, in 2012-13 it was Rs 2,021 crore, it was Rs 2,386 crore at 9 per cent and Rs 2,121 crore at 8 per cent levy in the subsequent year, in 2014-15 it was Rs 2,563 crore, while it was Rs 2,896 crore in 2015-16 and Rs 2,870 crore in 2016-17.
For the merged entity Vodafone Idea, the revenue payable to DoT in 2017-18, was Rs 2,290 crore and Rs 3,026 crore in 2018-19.
No increase in fuel prices for 2nd consecutive day on Tuesday
Petrol and diesel prices remained unchanged for the second consecutive on Tuesday providing relief to consumers who have been facing a regular increase in fuel prices in the past few months taking the retail rates to historic high levels.
With no revision, the price of petrol in Delhi remained Rs 105.84 a litre and Rs 111.77 per litre in Mumbai, according to a price notification of state-owned fuel retailers. In Mumbai, diesel rates also remained static at Rs 102.52 a litre; while in Delhi it costs Rs 94.57, the same as on Sunday.
The price pause comes after the rates rose for four straight days when the rates of both petrol and diesel rose by Rs 1.40 paise per litre. There was no change in the rates also on October 12 and 13.
Diesel prices have increased on 19 out of the last 25 days taking up its retail price by Rs 5.95 per litre in Delhi.
With diesel prices rising sharply, the fuel is now available at over Rs 100 a litre in several parts of the country. This dubious distinction was earlier available to petrol that had crossed Rs 100 a litre-mark across the country a few months earlier.
Petrol prices had maintained stability since September 5, but oil companies finally raised the pump prices last week. Petrol prices have also risen on 16 of the previous 21 days taking up the pump price by Rs 4.65 per litre.
Crude prices have been on a surge rising over a three-year high level of over $ 85.7 a barrel now. It has softened a bit, falling below $ 85 a barrel now. Since September 5, when both petrol and diesel prices were revised, the price of petrol and diesel in the international market is higher by around $9-10 per barrel as compared to the average prices during August.
Markets open on a positive note
The 30-scrip Sensitive Index (Sensex) on Tuesday opened on a positive note during the morning trade.
The Sensex of the BSE opened at 62,156.48 points and touched a high of 62,159.29 points. The Sensex touched a low of 61,964.41 points.
On Monday, the Sensex closed at 61,765.59 points.
The Sensex is trading at 62,061.59 points, up by 296.00 points or 0.48 per cent.
On the other hand, the broader 50-scrip Nifty at National Stock Exchange (NSE) opened at lower note at 18,602.35 points after closing at 18,477.05 points.
The Nifty is trading at 18,549.55 points in the morning.
Petrol, diesel prices rise again, burn bigger holes in consumers’ pockets
Petrol and diesel price rose again on Friday taking its retail rates to record high levels across the country affecting consumers this festive season.
Accordingly, in the national capital, petrol and diesel prices increased by 35 paisa per litre to Rs 105.14 per litre and Rs 93.87 per litre, respectively.
In India’s financial capital of Mumbai, petrol became costlier by 34 paisa per litre to Rs 111.09 a litre on Friday, the highest across all the four metro cities. Diesel also costs Rs 101.77 for one litre in Mumbai.
The price hike on Friday is for a second consecutive day after the rates remained static on Tuesday and Wednesday.
Diesel prices now have increased on 17 out of the last 21 days taking up its retail price by Rs 5.25 per litre in Delhi.
With diesel price rising sharply, the fuel is now available at over Rs 100 a litre in several parts of the country. This dubious distinction was earlier available to petrol that had crossed Rs 100 a litre mark across the country a few months earlier.
Petrol prices had maintained stability since September 5 but oil companies finally raised its pump prices last week and this week given a spurt in the product prices lately. Petrol prices have also risen on 14 of the previous 17 days taking up its pump price by Rs 3.95 per litre.
OMCs had preferred to maintain their watch prices on global oil situation before making any revision in prices. This is the reason why petrol prices were not revised for last three weeks. But extreme volatility in global oil price movement has now pushed OMCs to effect the increase.
Crude price has been on a surge rising over three year high level of over $84.5 a barrel now. Since September 5 when both petrol and diesel prices were revised, the price of petrol and diesel in the international market is higher by around $9-10 per barrel as compared to average prices during August.
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