Aircel Ltd 2005

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AIRCEL

TENTH ANNUAL REPORT

2004-05

AIRCEL LIMITED

w w w . r e p o r t j u n c t i o n . c o m

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AIRCEL LIMITED

TENTH ANNUAL REPORT

INFORMATION ON BOARD OF DIRECTORS & OTHER PARTICULARS

Board of Directors

Audit Committee - Members

Mr A Subramanian, DirectorMr V Se lvaraj, DirectorMr V Srinivasan,DirectorMr K V P easkaran, CEO & Whole-time DirectorMr MR R adhakrishnan, Nominee Director of IDBl

Mr v Selvaraj, C hairmanA SubramanianMr vSrinivasanMr KVP BaskaranMr MP R adhakrishnan

Company secretary Mr M Suresh

Auditors M/s Brahmayya & Co.

Chartered AccountantsAndhra insurance Buildings

156, Thambu Chetty streetChennai 600 001

Registered Office Aircel Limited"Sterling Tower"327, Anna SalaiTeynampet

Chennai 600 006Tel : (044) 2431 3001Fax : (044) 2431 3036











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AIRCEL

AIRCEL LIMITED

Registered Office: 'Sterling Tower', 327, Anna Salai

Teynampet, Chennai 600 006

NOTICE

Notice is he reby g iven tha t th e TENTH A n n u a l G e ne r a l M e e t i ng of the M e m b e r s ofAIRCEL LIMITED w i l l be he ld on Thursday, 2nd June 2005 at 9.00 AM, at the

Registered Office of the C om pa ny at 'Sterling Tower', 327, Anna Salai, Teynampet,

Chennai 600 006, to transact th e f o l l ow i ng bu s i n e ss :

Ordinary Business:

1. T o consider a nd adopt th e Audi t ed Ba lance Shee t as a t 31st March 2005, Profi t a nd

Loss Account for the year ended on that date and the Reports of the Board of

Directors a nd Audi tor s the r eon .

2 . To appoint a Director in place of Mr A S u b r a m a n i a n , w ho r e t i r e s by rota t ion a nd

be ing e l ig ib l e , o f f e r s h imse l f fo r re - appo in tment .

3. T o appoin t a Director in place of Mr V Sr in iva san , w ho r e t i r e s by rotation and

be ing e l ig ib l e , o f fe r s h imse l f fo r r e - appoin tment .

4 . To appoin t Mess r s . Brahmayya & Co. , Cha r t e r ed Accountan t s , Chenna i , there t i r ing Audi tors of the C om pa ny , as the A u d i t o r s of the C o m p a n y , w ho s ha l l ho ld

office f rom the conc lus ion of th i s A nnu a l Gene r a l M ee t ing un t i l the conc lu s ion of

the nex t An nua l Gene r a l Mee t ing and fi x t h e i r r e m u ne r a t i on .

Special Business:

5. T o consider , and i f thought f i t , to pa ss w i th or w i t h ou t modif icat ion(s) , th e

fo l low ing resolu t ion(s) as an Ordinary Resolution:

RESOLVED tha t pu r suan t to the provis ions of Sec t ion 269 , Schedu le X I I I and a l l

other appl icable provis ions , if a n y , of the Companie s Ac t , 1956 , consen t of theM e m be r s of the Company be and is hereby accorded for the r e - appoin tment of Mr

K V P Baskaran as the Chie f Execu t ive Of f ic e r & Whole - t ime Di r ec tor of the

Company for a fur ther per iod of f ive years from 1st J u l y 2005 to 30th June 2010 on

th e te rms a nd conditions set-forth he r e u nde r :

CERTIFIED TRUE COPYAGM NOTICE - 2005

A i r c e l L im i t e d

5th Floor, Spencer P laza , 769, Anna S a ia i , Che nna i - 600 002 Ph: 91-44-28490849 Fax: 91-44-28496769

R egd. Of f i ce : "Ster ling Tower" , 327, Anna-Salai, Tey namp et, Che nnai - 600 006 Ph: 91 -44 -24313001 F a x : 91 -44 -24313036
















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AIRCEL

R e m u ne r a t i on : N ot exceeding Rs .36 lacs pe r a n n u m inc l ud ing pe rqu i s i t e s

(Cost to the C om pa ny) .

Perquis i tes notinc luded in CTC: i) Fac i l i ty of Car a t C he nna i fo r official purpose s .

ii ) Fac i l i ty of Car a t Coimbatore fo r tou r ing va r ious p l a c e s

wi th in T a m i ln a du a nd Pondicherry fo r off ic ia l purposes .

RESOLVED FURTHER tha t Mr KVP Baskaran sha l l be a Direc tor re t i r ing by

rotation and on his appoin tment imm edia t e ly a f te r such r e t i remen t by ro t a t ion , he

shall continue to hold his office of Whole- t ime Direc tor and such re -appointment

sha l l not be deemed to constitute a break in his appoin tment a s Whole - t ime

Director.

By Order of the Board of Direc tors

Chenna i M SURESH30th M a y 2005 Comp any Secre ta ry

AGM NOTICE - 2005

A i r c e l L i m i t e d

5th Floor, Spe nce r Plaza, 769, Anna Salai, C henna i - 600 002 Ph: 91-44-28490849 Fax: 91-44-28496769

Regd. Off ice : "Ster l ing Tower", 32 7, Anna/Salai, Teynampet , Chennai - 600 006 Ph: 91 -44 -24313001 Fax : 91-44-24313036




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AIRCEL

NOTES:

1. A n Exp l ana to ry S ta temen t pursuan t to Section 173(2) of th e Co mp a n i e s A c t, 1956 inrespect of the special business is at tached .

2. A member entitled to attend and vote is entitled to appoint a proxy to attend and

vote instead of himself and the proxy need not be a member of the Company.

The instrument appointing proxy should, however, be deposited at the

Registered Office of the Company not less than forty-eight hours before th e

commencement of the Meeting.

3. Shareholders are requested to br ing t he i r copy of A n n u a l Repor t to the M ee t ing .

4. M e mb e r s / Proxies a re r eques ted to f i l l up the A t t e n d a n c e Sl ip fo r a t t e n d in g th e

Meeting .

5. M e mb e r s w ho hold shares in demater ia l ised form a re r eques ted to wr i t e t h e i r Cl ien t

ID and DP ID numbers and those who hold shares in physica l form are requested to

w r i te the i r Fo l io Num ber in the a t t endance s l ip for a t t end ing th e Meet ing .

6 . A l l documents referred to in the accom pany ing Not ice a re open fo r in spec t ion at the

Registered Office of the Co mp a n y d u r in g office hours on a l l w o rk in g d a ys , excep t

Saturdays and hol idays, between 11.00 AM . and 1 .00 PM u pto the date of the A n n u a l

Genera l Meeting .

7. Corporate Members a re r eques ted to send a du l y cert if ied copy of the BoardResolut ion authoris ing their representa t ive to attend a nd vote at the A n n u a l G e n e r a l

Meeting .

By Order of the B oard of Directors

C he nna i M SURESH

30th M a y 2005 Com pan y Secretary

AGM NOTICE - 2005


5th Floor, S p e n c e r Plaza, 769, Anna Salai , Che nnai - 600 002 Ph: 91-44-28490849 Fax: 91-44-28496769

Regd . Off ice : "Ster l ing Tower", 3 27, Anna/Salai, Te ynamp e t , Chennai - 6 0 0 0 0 6 P h : 91 -44 -24313001 Fax :91 -44 -24313036



























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AIRCEL

Explanatory Statement pursuant to Section 173(2) of the Companies A ct, 1956

Item No.5

Mr KVP Baskaran w a s re -appointed as the C hi e f E x e c u t iv e Office r a nd W hol e - t i m e

Direc tor of the Com pan y a t the seventh A n n u a l G e ne r a l M e e t i ng of th e C o m pa ny he ld on

Septembe r 30, 2002. Mr KVP Baskaran w a s re -appointed fo r th r e e ye a r s t i l l J u n e 30,

2005 . The r emu ne ra t ion payab le to Mr Baska ran w as approved on the f o l l o w i n g sca le :

Rem une ra t ion : Not exceed ing Rs.24 lacs per a n n u m i n c l u d i n g

perqu i s i t e s (Cost to the C o m p a n y )

Pe rqu i s i t e s not i n c l u d e d in CTC: i) Fac i l i ty of Car at C h e n n a i fo r offic ia l purpose si i ) Fac i l i ty of Car a t Coimba tor e for tou r ing va r i ou s

places wi th in T a m i l n a d u and Pondi che r ry fo r

officia l purposes .

This remunera t ion was revised to Rs.36 l a c s wi th o the r t e rms and condi t ions r ema in ing

the s ame , by the Me mbers of the Company a t the Ex t r a -ord ina ry Gen e r a l Mee t ing

(EGM) of the Company he ld on 25th October 2004.

T he term of office of Mr KVP Baska r an is due to exp i r e on 30th J u n e 2005 . I t is now

proposed to re -appoint Mr KVP Baskaran as the Chief Execut ive Office r & W h o l e - t i m e

Dire ctor fo r another per iod of five yea r s wi th effect from 1st J u l y 2005 to 30th J u n e

2 0 1 0 .

I t is proposed to re -appoint Mr KVP Baska r an on the s ame r e m u ne r a t i on a s w a s

approved by the Members of the Company a t the EGM he ld on 25th October 2004.

Mr KVP Baskaran, who i s M.Tech . and MBA had been in s t r umen ta l in se t t ing up the

state of the ar t t e l e com ne twork in the T a m i ln a du T e l e com c i r c l e and in succe s s fu l l y

runn ing the same du r ing the las t 8 years of se rvice w i th the Com pan y. D u r i ng his tenure

the Company had been consistent ly im prov ing i ts reve nue s and prof i ts .

T he Board of Directors of the C om pa ny , had a t the i r mee t ing h e l d on 30th M a y 2005

passed a resolu t ion for the sa id re -appointm ent of Mr KVP Ba skara n, s u b j e c t to the

approva l o f the Members a t the A nnu a l Gene r a l M ee t ing . A ccord ing ly , the ap prova l o f

the Me mbers i s sought for the r e - appoin tme nt of Mr K VP Baska r an a s the Ch ie fExecu t ive Officer & Whole- t ime Direc tor fo r anothe r pe r iod of five yea r s w i t h effect

from 1s t J u l y 2005.

Y o u r Direc tors recomm end th e R e s o l u t i on fo r you r a pp r ova l .

AGM NOTICE - 2005

A i r c e l L i m i te d

5th Floor, S p e n c e r Plaza, 769, Anna Salai, Chenn ai - 600 002 Ph: 91-44-28490849 Fax:91-44-28496769

Regd. Off ice : "Ster l ing Tower", 3 27, Anna-Salai, Teynamp et , Chennai - 600 006 Ph: 91 -44-24313001 F a x : 91-44-24313036































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AIRCEL

Interest of Directors

None of the Direc tors of the Company, except Mr K V P Baska r an may be de emed to be

concerned or inte res ted in the abov e resolu t ion.

Documents fo r Inspection

The Memorandum and Ar t i c l e s o f Assoc ia t ion of the Company w o u l d be a v a i l a b l e fo rinspection of the M e m be r s du r i ng th e course of the M e e t i ng .

The t e rms and condi t ions of appoin tment of the CEO & W hole - t ime Di r ec tor w i l l be

ava i lable for inspec t ion of Members dur ing the Mee t ing .

By Orde r of the Board of Direc tor s

C he nna i M S U R E S H

30th M a y 2005 Com pan y Secre ta ry

AGM NOTICE - 2005


5th Floor , Sp en cer Plaza, 769, Ann a Salai, Che nnai - 600 002 Ph: 91-44-28 490849 Fax :91-44-28496769

Regd. Off ice : "Ster l ing Tower", 327 , Anna-Salai, T eynampe t , Che nnai - 600 006 Ph: 91 -44-24313001 F a x : 91-44-24313036




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Aircel Limited

DIRECTORS' REPORT

To the Members of AIRCEL LIMITED

Your Directors are pleased to present the Tenth Annual Report of your Company forthe year ended 31st March 2005.

Financial Results

The f inancial results of the C omp any for the year ended 31st March 2005 and acomparison of the same with th e performance during th e previous year are givenbelow:

(Rs. in Millions)Particulars

Operating RevenuesOperating expensesEBIDTAFinance ChargesNon-cash expenditureNet income from operationsIncome from other operationsPBT

Provision for TaxProfit After TaxCash Profit

Year ended31st March 2005

3,556.61

1,780.82

1,775.79

360.74

587.20

827.85

32.54

860.39

67.54

792.85

1,380.05

Year ended31st March 2004

2,463.24

1,328.95

1,134.29

420.29

493.76

220.24

26.59

246.83

19.00

227.83

721.59

Your Directors are pleased to inform you that your Company has recorded Net Pro fitAfter Ta x (PAT) for the fourth year in succession. Profit After Tax for the year wasR s .792 . 85 million as compared to Rs . 227 . 8 3 million th e previous f inancial yearrepresenting a growth of 2 4 8 % .

Operating R evenues during the year grew by 44% compared to the prev ious ye ar .There was a significant increase in the net profit for the year, mainly due toincreased revenues that was attributable to substantial growth of subscribers. Theincrease in profit was also on account of significant reduction in finance charges dueto reduction of interest rates on major term loans an d Non-convert ible Debentures ofthe Company.

Depreciation for the year has increased due to the increased capital expenditure onaccount of network expansions carried ou t during th e year .

Dividend

Your Directors do not recomme nd any dividend on the eq uity sha res for the year .

Directors Report - 2005

CERT1FEO TRUE COPY

For Aircel Limited

Company Secretary














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Aircel Limited

OPERATIONS & NETWORK

During th e year under review, your Company undertook various network expansionactivities to cater to the growing needs of subscriber base. Your Company installedtwo new

Mobile Switching Centres (MSC),on e

eachat

Coimbatorean d

Madurai.The

total switch capacity of your Company was increased to 3 9,200 Erlangs from 3 4,2 00Erlangs last year.

During the year 125 new base stations were installed. Your Company extended i tscoverage in additional 130 new towns, taking the total number of towns covered to330. Your Company had also installed a new Short Messaging Service (SMS) serverthat can serve upto 700 messages per second.

Your Directors are pleased to report that Company's Phase III expansion programmewa s successfully completed during the year. Your Company embarked upon Phase IVexpansion, which would b e comple ted by June 2 005. This would increase the Switchcapacity apart from offering better quality of service an d providing coverage inhitherto uncovered towns in the Circle. This expansion will also help the Company inoffering Ge neral Pocket Ra dio Service (GPRS) to its subscribers.

Your Company currently has seven Mobile Switching Centres (MSC), Seventeen BaseStation Controllers (BSC) and 562 Base Transceiver Stations (BTS) across itsnetwork.

The year saw phenomenal growth in the subscriber base of your Company. YourDirectors are pleased to report that for the fourth year in succession, your Companyhas retained its market leadership with 35% share in the mobility market. The tota lnumber of subscribers as at 31st March 2005 was 1,214,010 as against 713,3 7 1during the last year, thus registering an increase of 70%.

Marketing

During the year, th e focus of your Company was on increasing its post-paid marketshare apart from consolidating its prepaid leadership position. Your Directors arepleased to report that various marketing initiatives of the Company during th e yearwere well received in the market as is reflected in the growth of subscribers.

Dealer Network

The number of Post-paid dealers as at 31st March 2005 was 146 and the Pre-paiddistributors were 54. The number of registered Pre-paid retailers as at the close ofthe financial year was 17,775. To increase the Company's reach in the Circle, yourCompany has been taking various measures to identify and appoint dealers whocould market th e Company's products aggressively to steer clear of competition.Your Company also appointed new agents in towns that have been newly covered byth e Company's network.


























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Aircel Limited

Accolades

Your Directors are please d to inform you that in a survey conducted by theInternational Data Corporation (IDC), your Company has been rated as No.l amongall mobile operators in India in terms of overall satisfaction. In the rating, yourCompany has scored 97 points on a 100-point user satisfaction scale, clearly crossingthe Telecom R egulatory Authority of India (TRAI) benchmark of 95 per cent.

In another survey viz. "Mobile Users Satisfact ion Survey 2004" conducted by Voice &Data, a leading publication in the communications sector, your Company ha s beenrated as the No.l operator in terms of overall satisfaction. The survey places "Aircel"at the top of the table comprising of 15 operators (including 9 GSM operators) acrossthe nation with 97 % satisfaction levels against th e industry average of 8 5 . 8 0%.

Your Directors would like to reassure you of the Comp any's commitment to providingto p quality service at affordable rates and setting new benchmarks and striving toachieve the same.

Directors

Mr A Subramanian and Mr V Srinivasan, Directors, retire by rotation at theforthcoming Annual General Meeting of the Company an d being eligible, offerthemselves fo r re-appointment.

Mr K VP Baskaran, Chief Executive Off icer & Whole- t ime Director of the Companyretires from his off ice on 30th June 2005. Your Directors have proposed re-appointment of Mr KVP Baskaran as the Chief Executive Off icer & Whole- t imeDirector of the Company for a further period of f ive years from 1st July 2005 to 3 0thJune 2010, subject to the approval of the Members at the ensuing Annual Ge neralMeeting.

Th e said appointment of Mr KVP Baskaran has been included as a Spe cial Business inthe Notice convening the Annual general Meeting of the Company .

Disclosure as per the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988

In terms of Section 217(l)(e) of the Companies Act, 1956read with the Companies(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, yourDirectors furnish the required details below:

(a ) Disclosure of Particulars pertaining to Conservat ion of Energy is not applicable toth e Company;

(b) R esearch and Dev elopment (R &D ): The C omp any has not incurred any

expenditure on Research & Deve lopment .(c) Technology Absorp t ion: The C omp any has not imported any techno logy duringthe year.

(d) Foreign Exchange Earnings an d Outgo: During th e per iod under rev iew, yourCompany e arned foreign exch ange amounting to R s .3 1 .3 3 mil l ions. The ForeignExchange outgo during the period was Rs .4 28 . 4 2 millions.




























