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DIVIDEND POLICY OF RCOMM.

PRESENTED BY.Ravi Upadhyay BM-122

Shudhakar Kumar BM-153

Tarun Badhuria BM- 157

Vijay Sharma- BM- 164

Vineet Kumar Dubey- BM- 165

Vivek Pratap Singh- BM- 170


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INTRODUCTION

Reliance Communications Limited, is the flagshipcompany of the Reliance Anil Dhirubhai Ambani Group.

The Reliance Anil Dhirubhai Ambani Group currently has

Net worth in excess of 64,000 Crore (US$13.6 billion)

Cash flows of 13,000 Crore ($2.8 billion)

A net profit of 8,400 Crore ($1.8 billion).

The Equity Shares of RCOM are listed on Bombay Stock

Exchange Limited and National Stock Exchange Limited. The Global Depository Receipts and Foreign Currency

Convertible Bonds are listed on Luxembourg Stock

Exchange and Singapore Stock Exchange


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OVERVIEW Type - public.

Industry Telecommunications.

Founded- 2004 .

Founder - Dhirubhai Ambani.

Headquarters Navi Mumbai, Maharashtra, INDIA

Anil Ambani (Chairman), Satish Seth - (M.D.)

Revenue - 22,948 crore (US$5.09 billion) (2009)

Operating income - 9,305 crore (US$2.07 billion) (2009)

Net income - 6,045 crore (US$1.34 billion) (2009) Total assets- 102,207 crore (US$22.69 billion) (2009)

Total equity- 1,032 crore (US$229.1 million) (2009)

Employees- 31,884 (2009).


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DIVIDEND

A dividend is a payment made by acompany to its shareholders on its profit

after paying the interest and taxes.

A company has two options either to

retain its profits for investments or to pay

the profits in form of dividends.


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HOW MUCH TO PAY ?

Dividend payout decisions are basically made

on the following three models.

Walters model.

Gordons model.

The Miller Modigliani model.


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The different types of dividends

include:

Special dividend

Cash Dividends

Stock dividend

Regular Dividend

Interim Dividend

Scrip Dividend Bond Dividends

Property Dividend


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Payment of Dividend

The Dividend is paid under two modes :

(a) National Electronic Clearing Services (NECS)

(b) Physical dispatch of Dividend Warrant

Benefits of NECS (payment through electronic facilities)

Shareholder need not make frequent visits to his

bank

Prompt credit to the bank account of the investorthrough electronic clearing.


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Dividend through DirectCredit

The Company will be appointing one

bank as its Dividend banker for

distribution of dividend. The banker will carry out direct credit to

those investors who are maintaining

accounts


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Factors Affecting Dividend

Policy Stability of earnings. Age of corporation.

Liquidity of funds.

Extent of share distributions. Needs for additional capital.

Trade cycle.

Government policies.

Taxation policies.

Legal requirements.

Past dividend rates.

Ability to borrow. Policy of control.

Repayments of loans.

Time of payment of dividend.

Inflation.


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GRAPHICAL REPRESENTATION OF

DIVIDEND


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Dividend declared by RCOM

Announcement

Date.

Effective

Date.

Dividend Type. Dividend (%)

Remarks.

17-05-2010 13-09-2010 Final 17.00

24-07-2009 04-08-2009 Interim 16.00

30-04-2008 19-09-2008 Final 15.00 AGM

30-04-2007 05-07-2007 Final 10.00 AGM


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Equity Dividend (Rs Crore)

0

102.23

154.8165.12

175.44

0

20

40

60

80

100

120

140

160

180

200

Dec ' 2005 Mar ' 2007 Mar ' 2008 Mar ' 2009 Mar ' 2010


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Retained Earnings(Rs Crore)

5.65

2294.9

4700.24

8909.73

777.1

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

Dec ' 2005 Mar ' 2007 Mar ' 2008 Mar ' 2009 Mar ' 2010


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DIVIDEND TREND Financial year 2010.

The Board of Directors have recommended a dividendof Re. 0.85 per equity share of Rs. 5 each i.e. 17% forthe financial year 2009 - 10, subject to approvals of theshareholders at the ensuing Annual General Meeting.

The Board of Directors have declared Interim

dividend of Re. 0.80 per equity share of Rs. 5 each i.e.16% for the financial year 2008 - 09. The interimdividend will be paid on or after 6th August 2009.

Financial year 2008.

The Board has recommended a dividend of 15%i.e. Re. 0.75 per equity share of Rs. 5 each for thefinancial year 2007-08, subject to the approval ofthe shareholders at the ensuing Annual GeneralMeeting.


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DIVIDEND TREND (Cont.)

Financial year 2007.

The Board of Directors have recommended

dividend @10%, i.e. Rs. 0.50 per equity share

each of Rs.5, aggregating to Rs.119.60 croreinclusive of tax on dividend for the financial

year ended 31st March, 2007.


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2010 2009 2008 2007 2006

Sales 12290.61 13610.58 13416.19 11725.26 8584.97

Gross Profit 2149.06 4335.67 4447.75 4280.87 3149.84

Net Profit 478.93 2352.93 2586.45 2408.85 1722.10

EPS 2.32 11.40 12.53 11.78 8.42

Dividend% 17 16 15 10


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VALUE OF A SHARE PRICE FROM 2006

to 2011 If Mr. X had purchased 100 share in 2006,at that

time price of the share was Rs.98.25 ,i.e. Rs.9825 Total no. of share he have today is 10o only, as

company has not given any bonus share till now

from its inception. Suppose Mr. X sells on todays market price as on

15/03/2011 which is Rs. 104.15 ,then he would get areturn of Rs. 10415 and earn a profit of Rs. 590.

At the time when the RCOMM share as ever gone uphikes on 16/1/2008 with Rs. 844 , if the particularinvestor sold out its 100 shares ,he would have fetchamount of Rs. 84400 and profit of 74575.


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HISTORIC GRAPHS

R F M k t P i Hik Of


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Reasons For Market Price Hike Of

RCOMM In 2008 and then the

Decreasing trend

January 21, 2008 Reliance Communication will invest Rs.20,000 Crore (Rs. 200 billion) in an attempt to extend its

urban and rural coverage to 98 per cent and 67 per cent. Reliance also plans to cover 95 per cent of highways, 93 per

cent of railways, 6,000 towns and five lakh villages in 2008.Currently, the company has 22,000 towers.

It is likely to spend around $2.5 billion on the electronics

for GSM services, and build 43,000 new towers. Relianceofficials also claim that they will have 40,000 towers up andrunning by the end of this fiscal.


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Contd

Mon Aug 25 2008 by IANS Chennai Mobile

telephony major Reliance Communications

(RCom) plans to expand in rural areas in Tamil

Nadu in a major way. The company will start appointing around 100

distributors to reach at least 4,000 rural outlets.

The company hopes to increase this with its newscheme for small and medium enterprise(SME)

segment.


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Cont..

Not so good marketing strategies and policies

adopted by the company .

Unable to compete with its competitors .

Regular distrust by customers after 2008 .


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THANK YOU

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