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CASH MANAGEMENT IN BHARAT SANCHAR NIGAM LIMITED

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CASH MANAGEMENT IN BHARAT SANCHAR NIGAM LIMITED Powered By Docstoc
					                A REPORT
                  ON
“CASH MANAGEMENT IN BHARAT SANCHAR NIGAM
               LIMITED”




                   1
                       TABLE OF CONTENTS

 1.   Introduction of Indian telecom industry……………………………………………………10
          1.1 major players of telecom industry………………………………………………..14

2. Overview of Bharat Sanchar Nigam
Limited…………………………………………………21
        2.1 Objective………………………………………………………………………….24
        2.2 Mission & Vision…………………………………………………………………24
        2.3 Organization Structure……………………………………………………………25
        2.4 Challenges Ahead………………………………………………………………...31

3.    Cash management system in BSNL……………………………………………………….32
         3.1 Cash Flow Analysis………………………………………………………………42
         3.2 Funds Flow Analysis……………………………………………………………..44
         3.3 Budgeting………………………………………………………………………...46
         3.4 Bank Reconciliation………………………………………………………………50

4.    Advantage of Cash Management System………………………………………………….51

5.    Financial Analysis of BSNL………………………………………………………………53
6.    Competitor Analysis………………………………………………………………………..55

7.    SWOT Analysis…………………………………………………………………………….67

8.    Experience gained in BSNL………………………………………………………………..69

10. Limitations ………………………………………………………………………………....74

11. Conclusions/Recommendations…………………………………………………………….75

12. Appendix……………………………………………………………………………………76
       12.1 Balance sheet
       12.2 Cash flow statements from Jan to March 08
       12.3 Funds flow statement from Jan to March 08
       12.4 Budget Performa for the year 07-08
       12.5 Bank reconciliation statement from 07-08

13. References……………………………………………………………………………..........77

14. Glossary…………………………………………………………………………………….79




                                   2
                            TABLE OF ILLUSTRATIONS


1.   Chart 1- Major player of Telecom Industry

2.   Table 1- market share of major telecom company

3.   Chart 2- subscribers

4.   Chart3 -market share

5.   Table 3- organizational structure

6.   Table 4- Cash flow statement of the month of January 08

7.   Table 5-Company’S budget statement

8.   Table 6- bank reconciliation

9.   Table 7- comparative balance sheet




                                         3
The Indian Telecom Industry
The telecom network in India is the fifth largest network in the world meeting up with global
standards. Presently, the Indian telecom industry is currently slated to an estimated contribution
of nearly 1% to India’s GDP.

Introduction:-
The Indian Telecommunications network with 110.01 million connections is the fifth largest in
the world and the second largest among the emerging economies of Asia. Today, it is the fastest
growing market in the world and represents unique opportunities for. Global in the stagnant
global scenario. The total subscriber base, which has grown by 40% in 2005, is expected to reach
250 million in 2008. According to Broadband Policy 2004, Government of India aims at 9
million broadband connections and 18 million internet connections by 2008. The wireless
subscriber base has jumped from 33.69 million in 2004 to 62.57 million in Fiscal year 2004-
2005. In the last 3 years, two out of every three new telephone subscribers were wireless
subscribers. Consequently, wireless now accounts for 54.6% of the total telephone subscriber
base, as compared to only 40% in 2003. Wireless subscriber growth is expected to bypass 2.5
million new subscribers per month by 2008. The wireless technologies currently in use are
Global System for Mobile Communications (GSM) and Code Division Multiple Access
(CDMA). There are primarily 9 GSM and 5CDMA operators providing mobile services in 19
telecom circles and 4 metro cities, covering 2000 towns across the country.

Evolution of the industry-Important Milestones

1851 First operational land lines were laid by the government near Calcutta
1881 Telephone service introduced in India
1883 Merger with the postal system
1923 Formation of Indian Radio Telegraph Company (IRT)
1932 Merger of ETC and IRT into the Indian Radio and Cable Communication Company
1947 Nationalization of all foreign telecommunication companies to form the Posts, Telephone
and Telegraph (PTT), a monopoly run by the government’s Ministry of Communications
1985      Department of Telecommunications (DOT) established, an exclusive provider of
domestic and long-distance service that would be its own regulator (separate from the postal
system)
1986 Conversion of DOT into two wholly government-owned companies: the Vides Sanchar
Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam
Limited (MTNL) for service in metropolitan areas.
1997 Telecom Regulatory Authority of India created.
1999 Cellular Services are launched in India. New National Telecom Policy is adopted.

                                                4
2000    DoT becomes a corporation, BSNL
INDIAN TELECOM ENVIORNMENT- a step towards development

Indian telecommunications today benefits from among the most enlightened regulation in the
region, and arguably in the world. The sector, sometimes considered the “poster-boy for
economic reforms,” has been among the chief beneficiaries of the post-1991 liberalization.
Telecommunications has generally been seen as removed from “mass concerns,” and thus less
subject to electoral calculations.
    Market oriented reforms have also been facilitated by lobbying from India’s booming
technology sector, whose continued success of course depends on the quality of communications
infrastructure. Despite several hiccups along the way, the Telecom Regulatory Authority of India
TRAI), the independent regulator, has earned a reputation for transparency and competence.
With the recent resolution of a major dispute between cellular and fixed operators (see below),
Indian telecommunications, already among the most competitive markets in the world, appears
set to continue growing rapidly. At that time, Rajiv Gandhi proclaimed his intention of “leading
India into the 21st century,” and carved the Department of Telecommunications (DOT) out of the
Department of Posts and Telegraph. For a time he also even considered corporatizing the DOT,
before succumbing to union pressure. In a compromise, Gandhi created two DOT-owned
corporations: Mahanagar Telephone Nigam Limited (MTNL), to serve Delhi and Bombay, and
Videsh Sanchar Nigam Limited (VSNL), to operate international telecom services. He also
introduced private capital into the manufacturing of telecommunications equipment, which had
previously been a DOT monopoly.

INTRODUCTION OF PRIVATE PLAYERS;-
                                                     It was not until the early 1990s, when the
political situation stabilized, and with the general momentum for economic reforms, that
telecommunications liberalization really took off. In 1994, the government released its National
Telecommunications Policy (NTP-94), which allowed private fixed operators to take part in the
Indian market for the first time (cellular operators had been allowed into the four largest
metropolitan centers in 1992). Under the government’s new policy, India was divided into 20
circles roughly corresponding to state boundaries, each of which would contain two fixed
operators (including the incumbent), and two mobile operators .As ground-breaking as NTP-94
was, its implementation was unfortunately marred by regulatory uncertainty and over-bidding.
      A number of operators were unable to live up to their profligate bids and, confronted with
far less lucrative networks than they had supposed, pulled out of the country. As a result,
competition in India’s telecom sector did not really become a reality until 1999. At that time the
government’s New Telecommunications Policy (NTP-99) switched from a fixed fee license to a
revenue sharing regime of approximately 15%. This figure has subsequently been lowered
(to10%-12%), and is expected to be reduced even further over the coming years. Still, India
continues to derive substantial revenue from license fees ($800 million in2001-2002); leading
some critics to suggest that the government has abrogated its responsibilities as a regulator to
those as a seller. Another, perhaps even more significant, problem with India’s initial attempts to
introduce competition was the lack of regulatory clarity. Private operators complained that the
licensor – the DOT – was also the incumbent operator. Them any stringent conditions attached to
licenses were thus seen by many as the DOT’s attempt to limit competition. It was in response to


                                                5
such concerns that the9government in 1997 set up the Telecom Regulatory Authority of India
(TRAI), the nation’s first independent telecom regulator.
POLICIES ADOPTED BY TRAI

Over the years, TRAI has earned a growing reputation for independence, transparency and an
increasing level of competence. Early on, however, the regulator was beleaguered on all fronts. It
had to contend with political interference, the incumbent’s many challenges to its authority, and
accusations of ineptitude by private players. It was not until 2000, with the passing of the TRAI
Amendment Act, that the regulatory body really came into its own. Coming just a year after
NTP-99, the act marks something of a watershed moment in the history of India telecom
liberalization. It set the stage for several key events that have enabled the vigorous competition
witnessed today. Some of these events include:

• The corporatization of the DOT and the creation of a new state-owned telecom company,
Bharat Sanchar Nigam Ltd (BSNL), in 2000;

• The opening up of India’s internal long-distance market in 2000, and the subsequent drop in
long-distance rates as part of TRAI’s tariff rebalancing exercise;

• The termination of VSNL’s monopoly over international traffic in 2002, and the partial
privatization of the company that same year, with the Tata group assuming a 25% stake and
management control;

• The gradual easing of the original duopoly licensing policy, allowing a greater number of
operators in each circle;

• The legalization, in 2002, of IP telephony (a move that many believe was held up due to
lobbying by VSNL, which feared the consequences on its international monopoly) .The
introduction in 2003 of a Calling Party Pays (CPP) system for cell phones, despite considerable
opposition by fixed operators.

• And, more generally, the commencement of more stringent interconnection regulation by
TRAI, which has moved from an inter operator negotiations-based” approach (often used by the
stronger operator to negotiate ad infinitum) to a more rules-based approach. All of these events
have created an impressive forward-momentum in Indian telecommunications, resulting in a
vigorously competitive and fast-growing sector.
. In late 2002, for example, thousands of mobile users in New Delhi were for a time cut off from
the fixed-line network when MTNL shut down interconnection for cellular companies. (MTNL
later attributed the incident to a “technical snag.”) It was not until late 2003 that the issue was
finally resolved, under considerable government pressure, when cellular operators agreed to
withdraw their many cases against the fixed-line operators. Fixed operators would in effect be
allowed to enter the mobile business; in return, the government granted cellular players several
concessions, including lower revenue-share arrangements estimated to total over $210 million.
Perhaps most notably, the government announced its intention to adopt a “unified access
licensing” regime, which would in the future provide a single, technology-neutral license for



                                                6
fixed and cellular operators, and allow new technologies to enter the Indian market without
requiring a wholesale rewrite of licensing laws.

MAJOR MARKET TRENDS

The telecoms trends in India will have a great impact on everything from the humble PC,
internet, broadband (both wireless and fixed), and cable, handset features, talking SMS, IPTV,
soft switches, and managed services to the local manufacturing and supply chain. This report
discusses key trends in the Indian telecom industry, their drivers and the major impacts of such
trends affecting mobile operators, infrastructure and handset vendors.

HIGHER ACCEPTANCE FOR WIRELESS SERVICES

   Indian customers are embracing mobile technology in a big way (an average of four million
subscribers added every month for the past six months itself). They prefer wireless services
compared to wire-line services, which is evident from the fact that while the wireless subscriber
base has increased at 75 percent from 2001 to2006, the wire-line subscriber base growth rate is
negligible during the same period .In fact, many customers are returning their wire-line phones to
their service providers as mobile provides a more attractive and competitive solution. The main
drivers for this trend are quick service delivery for mobile connections, affordable pricing plans
in the form of pre-paid cards and increased purchasing power among the 18 to 40 years age
group as well as sizeable middle class – a prime market for this service .Some of the positive
impacts of this trend are as follows.
   According to a study, 18 percent of mobile users are willing to change their handsets every
year to newer models with more features, which is good news for the handset vendors. The other
impact is that while the operators have only limited options to generate additional revenues
through value-added services from wire-line services, the mobile operators have numerous
options to generate non-voice revenues from their customers .Some examples of value-added
services are ring tones download, colored ring back tones, talking SMS, etc. Moreover, there
exists great opportunity for content developers to develop applications suitable for mobile users
like mobile gaming, location based services etc. On the negative side, there is an increased threat
of virus – spread through mobile data connections and Bluetooth technology – in mobile phones,
making them unusable at times. This is good news for anti-virus solution providers, who will
gain from this trend.


MERGERS

Demand for new spectrum as the industry grows and the fact the spectrum allocation done on the
basis of number of subscribers will force companies to merge so as to claim large number of
subscribers to gain more spectrum as a precursor to the launch of larger and expanded services.
However it must also be noted that this may very well never happen on account of low telecom
penetration.




                                                7
                   Major Players of Telecom Industry in India
There are three types of players in telecom services:

•     State owned companies (BSNL and MTNL)

•     Private Indian owned companies (Reliance Infocomm, Tata Teleservices,)

    • Foreign invested companies (Vodafone-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular,
      BPL Mobile, Spice Communications)

BHARAT SANCHAR NIGAM LIMITED

On October 1, 2000 the Department of Telecom Operations, Government of India became a
corporation and was renamed Bharat Sanchar Nigam Limited (BSNL).BSNL is now India’s
leading Telecommunications Company and the largest public sector undertaking. It has a
network of over 45 million lines covering 5000 towns with over 35 million telephone
connections. The state-controlled BSNL operates basic, cellular (GSM and CDMA) mobile,
Internet and long distance services throughout India (except Delhi and Mumbai). BSNL will be
expanding the network in line with the Tenth Five-Year Plan (1992-97). The aim is to provide a
telephone density of 9.9 per hundred by March 2007. BSNL, which became the third operator of
GSM mobile services in most circles, is now planning to overtake Bharti to become the largest
GSM operator in the country. BSNL is also the largest operator in the Internet market, with a
share of 21 per cent of the entire subscriber base

BHARTI AIRTEL

It was Established in 1985, Bharti has been a pioneering force in the telecom sector with many
firsts and innovations to its credit, ranging from being the first mobile service in Delhi, first
private basic telephone service provider in the country, first Indian company to provide
comprehensive telecom services outside India in Seychelles and first private sector service
provider to launch National Long Distance Services in India. Bharti Tele-Ventures Limited was
incorporated on July 7, 1995 for promoting investments in telecommunications services. Its
subsidiaries operate telecom services across India. Bharti’s operations are broadly handled by
two companies:
The Mobility group :- which handles the mobile services in 16 circles out of a total 23circles
                        across the country
Infotel group :- which handles the fixed line, broadband, data, and satellite-based services.
Together they have so far deployed around 23,000 km of optical fiber cables across the country,
coupled with approximately 1,500 nodes, and presence in around 200 locations. The group has a
total customer base of 6.45 million, of which 5.86 million are mobile and 588,000fixed line
customers, as of January 31, 2004. In mobile, Bharti’s footprint extends across 15 circles .Bharti

                                                 8
Tele-Ventures' strategic objective is “to capitalize on the growth opportunities the company
believes are available in the Indian telecommunications market and consolidate its position to be
the leading integrated telecommunications services provider in key markets in India, with a focus
on providing mobile services”.

MAHANAGAR TELECOM NIGAM LIMITED

MTNL was set up on 1st April 1986 by the Government of India to upgrade the quality of
telecom services, expand the telecom network, and introduce new services and to raise revenue
for telecom development needs of India’s key metros – Delhi, the political capital, and Mumbai,
the business capital. In the past 17 years, the company has taken rapid strides to emerge as
India’s leading and one of Asia’s largest telecom operating companies. The company has also
been in the forefront of technology induction by converting 100% of its telephone exchange
network into the state-of-the-art digital mode. The Govt. of India currently holds 56.25% stake in
the company. In the year 2003-04, the company's focus would be not only consolidating the
gains but also to focus on new areas of enterprise such as joint ventures for projects outside
India, entering into national long distance operation, widening the cellular and CDMA-based
WLL customer base, setting up internet and allied services on an all India basis.
MTNL has over 5 million subscribers and 329,374 mobile subscribers. While the market for
fixed wire line phones is stagnating, MTNL faces intense competition from the private players—
Bharti, Vodafone and Idea Cellular, Reliance Infocomm—in mobile services. MTNL recorded
sales of Rs. 60.2 billion ($1.38 billion) in the year2005-06, a decline of 5.8 per cent over the
previous year’s annual turnover of Rs.63.92 billion.

RELIANCE COMMUNICATION

Reliance is a $16 billion integrated oil exploration to refinery to power and textiles
conglomerate. It is also an integrated telecom service provider with licenses for mobile, fixed,
domestic long distance and international services. Reliance Infocomm offers a complete range of
telecom services, covering mobile and fixed line telephony including broadband, national and
international long distance services, data services and a wide range of value added services and
applications. Reliance India Mobile, the first of Infocomm initiatives was launched on December
28, 2002. This marked the beginning of Reliance's vision.
 Reliance Infocomm plans to extend its efforts beyond the traditional value chain to develop and
deploy telecom solutions for India's farmers, businesses, hospitals, government and public sector
organizations. Until recently, Reliance was permitted to provide only “limited mobility” services
through its basic services license. However, it has now acquired a unified access license for 18
circles that permits it to provide the full range of mobile services. It has rolled out its CDMA
mobile network and enrolled more than 6 million subscribers in one year to become the
country’s largest mobile operator. It now wants to increase its market share and has recently
launched pre-paid services. Having captured the voice market, it intends to attack the broadband
market.

TATA TELESERVICES




                                                9
Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies, over 200,000
employees and more than 2.3 million shareholders. Tata Tele services provides basic (fixed line
services), using CDMA technology in six circles: Maharashtra (including Mumbai), New Delhi,
Andhra Pradesh, Tamil Nadu, Gujarat, and Karnataka. It has over 800,000 subscribers. It has
now migrated to unified access licenses, by paying a Rs. 5.45 billion ($120 million) fee, which
enables it to provide fully mobile services as well. The company is also expanding its footprint,
and has paid Rs. 4.17 billion ($90million) to DoT for 11 new licenses under the IUC
(interconnect usage charges)regime. The new licenses, coupled with the six circles in which it
already operates, virtually gives the CDMA mobile operator a national footprint that is almost on
par with BSNL and Reliance Infocomm. In August 2004 the company started off services in 11
new circles . These circles include Bihar, Haryana, Himachal Pradesh, Kerala, Kolkata, Orissa,
Punjab, Rajasthan, Uttar Pradesh and Uttarakhand.

VIDESH SANCHAR NIGAM LIMITED

On April 1, 1986, the Videsh Sanchar Nigam Limited (VSNL) - a wholly Government
corporation. The company operates a network of earth stations, switches, submarine cable
systems, and value added service nodes to provide a range of basic and value added services and
has a dedicated work force of about 2000 employees. VSNL's main gateway centers are located
at Mumbai, New Delhi, Kolkata and Chennai. The international telecommunication circuits are
derived via Intelsat and Inmar sat satellites and wide band submarine cable systems e.g. FLAG,
SEA-ME-WE-2 and SEA-ME-WE-3.The company's ADRs are listed on the New York Stock
Exchange and its shares are listed on major Stock Exchanges in India. The Indian Government
owns approximately 26 per cent equity, M/s Panatone Finvest Limited as investing vehicle of
Tata Group owns 45 per cent equity and the overseas holding (inclusive of FIIs,ADRs, Foreign
Banks) is approximately 13 per cent and the rest is owned by Indian institutions and the public.
The company provides international and Internet services as well as a host of value-added
services. Its revenues have declined from Rs. 70.89billion ($1.62 billion) in 2001-02 to Rs. 48.12
billion ($1.1 billion) in 2002-03, with voice revenues being the mainstay. To reverse the falling
revenue trend, VSNL has also started offering domestic long distance services and is launching
broadband services.

VODAFONE

Hutch’s presence in India dates back to late 1992, when they worked with local partners to
establish a company licensed to provide mobile telecommunications services in Mumbai.
Commercial operations began in November 1995. Between 2000 and March 2004, Hutch
acquired further operator equity interests or operating licenses. With the completion of the
acquisition of BPL Mobile Cellular Limited in January 2006, it now provides mobile services in
16 of the 23 defined license area s across the country. Hutch India has benefited from rapid and
profitable growth in recent years. It had over 17.5 million customers by the end of June 2006.on
19 February 2007 the was acquired by a foreign company Vodafone.

IDEA




                                               10
Indian regional operator IDEA Cellular Ltd. has a new ownership structure and grand designs to
become a national player, but in doing so is likely to become a thorn in the side of Reliance
Communications Ltd. IDEA operates in thirteen telecom “circles,” or regions, in India, and has
received additional GSM licenses to expand its network into three circles in Eastern India -- the
first phase of a major expansion plan that it intends to fund through an IPO, according to parent
company . Aditya Birla Group.
                MAJOR PLAYER OF TELECOM INDUSTRY


          BSNL
          BHARTI'S AIRTEL
          RELIANCE INFOCOMM
          MTNL
          TATA TELESERVICES
          IDEA
          VODAFONE
          OTHER




                                          CHART -1




                                               11
                    TABLE-I

     COMPANY MARKET SHARES


                                      %
                    Subscriber in   market
company name          million       share
   BSNL
                           40.3      49.8
    Reliance
                           6.1       12.9
     Bharti
                           10.7      18.2
     MTNL
                           4.9       7.2

   Vodafone                3.8       4.2

  Idea Cellular            2.1        3
Tata Teleservices
                           1.3       1.9
     Spice
                            1        1.3
     Aircel
                           0.9       1.2
   Hexacom
                           0.2       0.3
Shyam Telelink             0.1       0.2

                      12
CHART -2




   13
                    CHART-3
.INTRODUCTION

                          Introduction of
        Company
                          Objective
                          Mission and Vision
                          Organizational
        structure
                          Challenges ahead




                      14
INTRODUCTION OF COMPANY
Bharat Sanchar Nigam Limited is a public sector communications company in India. It is the
India's largest telecommunication company with 25.14% market share as on December 31, 2007.
Its headquarters are at Bharat Sanchar Bhawan, Harish Chandra Mathur Lane, Jan path, New
Delhi. It has the status of Mini-ratna - a status assigned to reputed Public Sector companies in
India.

Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest Telecommunications
Company providing comprehensive range of telecom services in India: Wire line, CDMA
mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services,
IN Services etc. Within a span of five years it has become one of the largest public sector units in
India.
BSNL has installed Quality Telecom Network in the country and now focusing on improving it,
expanding the network, introducing new telecom services with ICT applications in villages and
wining customer's confidence. Today, it has about 47.3 million line basic telephone capacity, 4
million WLL capacity, 20.1 Million GSM Capacity, more than 37382 fixed exchanges, 18000
BTS, 287 Satellite Stations, 480196 R km of OFC Cable, 63730 R km of Microwave Network
connecting 602 Districts, 7330 cities/towns and 5.5 Lakhs villages. BSNL is the only service
provider, making focused efforts and planned initiatives to bridge the Rural-Urban Digital
Divide ICT sector. In fact there is no telecom operator in the country to beat its reach with its
wide network giving services in every nook & corner of country and operates across India except
Delhi & Mumbai. Whether it is inaccessible areas of Siachen glacier and North-eastern region of
the country. BSNL serves its customers with its wide bouquet of telecom services.
BSNL is numero Uno operator of India in all services in its license area. The company offers
wide ranging & most transparent tariff schemes designed to suite every customer.


                                                15
BSNL cellular service, CellOne, has more than 17.8 million cellular customers, garnering 24
percent of all mobile users as its subscribers. That means that almost every fourth mobile user in
the country has a BSNL connection. In basic services, BSNL is miles ahead of its rivals, with
35.1 million Basic Phone subscribers i.e. 85 per cent share of the subscriber base and 92 percent
share in revenue terms BSNL has more than 2.5 million WLL subscribers and 2.5 million
Internet Customers who access Internet through various modes viz. Dial-up, Leased Line, DIAS,
Account Less Internet(CLI). BSNL has been adjudged as the NUMBER ONE ISP in the country.
       BSNL has set up a world class multi-gigabit, multi-protocol convergent IP infrastructure
that provides convergent services like voice, data and video through the same Backbone and
Broadband Access Network. At present there are 0.6 million DataOne broadband customers.
The company has vast experience in Planning, Installation, network integration and Maintenance
of Switching & Transmission Networks and also has a world class ISO 9000 certified Telecom
Training Institute. Scaling new heights of success, the present turnover of BSNL is more than
Rs.351,820 million (US $ 8 billion) with net profit to the tune of Rs.99,390 million (US $ 2.26
billion) for last financial year. The infrastructure asset on telephone alone is worth about
Rs.630,000 million (US $ 14.37 billion). BSNL plans to expand its customer base from present
47 million lines to 125 million lines by December 2008 and infrastructure investment plan to the
tune     of   Rs.   733    crores   (US$    16.67    million)   in   the    next   three    years.
The turnover, nationwide coverage, reach, comprehensive range of telecom services and the
desire to excel has made BSNL the No. 1 Telecom Company of India

       The foundation of Telecom Network in India was laid by the British sometime in 19th
century. The history of BSNL is linked with the beginning of Telecom in India. In 19th century
and for almost entire 20th century, the Telecom in India was operated as a Government of India
wing. Earlier it was part of Post & Telegraph Department (P&T). In 1975 the Department of
Telecom (DoT) was separated from P&T. DoT was responsible for running of Telecom services
in entire country until 1985 when Mahanagar Telephone Nigam Limited (MTNL) was carved out
of DoT to run the telecom services of Delhi and Mumbai. It is a well known fact that BSNL was
carved out of Department of Telecom to provide level playing field to private telecoms.
Subsequently in 1990s the telecom sector was opened up by the government for private
investment, therefore it became necessary to separate the government's policy wing from
operations wing. The government of India corporatized the operations wing of DoT on October

                                               16
01, 2000 and named it as Bharat Sanchar Nigam Limited (BSNL).BSNL operates as a public
sector. Since its corporatization in October 2000, BSNL has been actively providing connections
in both Urban and Rural areas and the efficiency of the company has drastically improved from
the days when one had to wait for years to get a phone connection to now when one can get a
connection in even hours. Pre-activated Mobile connections are available at many places across
India. BSNL has also unveiled very cost-effective Broadband internet access plans (Data One)
targeted at homes and small businesses. At present BSNL enjoys around 45% of market share of
ISP services

.




BSNL is committed to provide quality Telecom Services at affordable price to the citizens of the
remotest part of the Country. BSNL is making all effort to ensure that the main objectives of the
new Telecom Policy 1999 (salient points indicated below) are achieved: Access to
telecommunications is of utmost importance for achievement of the country's social and
economic goals. Availability of affordable and effective communications for the citizens is at the
core of the vision and goal of the new Telecom policy 1999.

Strive to provide a balance between the provision of universal service to all uncovered areas,
including the rural areas, and the provision of high-level services capable of meeting the needs of
the country's economy; Encourage development of telecommunication facilities in remote, hilly
and tribal areas of the country

Transform in a time bound manner, the telecommunications sector to a greater competitive
environment in both urban and rural areas providing equal opportunities and level playing field
for all players.



                                                17
VISION:      To become the largest telecom Service Provider in Asia

MISSION:       To Provide world class telecom infrastructure in its area of operation and to
contribute to the growth of the country's economy.

To provide world class State-of-art technology telecom services to its customers on demand
at competitive prices.

OBJECTIVE:
•      To be the Lead Telecom Services Provider.

 •     To provide quality and reliable fixed telecom service to our customer and thereby
increase customer's confidence.

  •      To provide mobile telephone service of high quality and become no. 1 GSM operator in
its area of operation.

•     To provide point of interconnection to other service provider as per their requirement
promptly.

•      To facilitate R & D activity in the country.

•      Contribute towards:

       I.      National Plan Target of 500 million subscriber base for India by 2010.

       ii.     Broadband customers base of 20 million in India by 2010 as per Broadband
               Policy 2004.

      iii.     Providing telephone connection in villages as per government policy.

      iv.      Implementation of Triple play as a regular commercial proposition




                                                18
              ORGANISATION STRUCTURE

                               TABLE - 2


Name of Unit: - GMTD, Dehradun.
Month: - Feb – 2008                            Annexure
No. of employees to whom this return
relates & breakup                              Number
of expenditure under Salary as in part-A
Group-A                                           5
Group-B                                           97
Group-C                                          557
Group-D                                           67
TOTAL                                            726

No. of casual labour to whom wages are
payable                                           0
No. of work charged establishment/industrial
Employees                                         0
whose wages are changeable to
Manufacture/Works                                 0




                                    19
Main Services Being Provided By BSNL

When it comes to connecting the four corners of the nation, and much beyond, one solitary name

Lies embedded at the pinnacle - BSNL. A company that has gone past the number games and
the

Quest to attain the position of a leader . It is working round the clock to take India into the future

By providing world class telecom services for people of India. BSNL is India's no. 1 Telecom

Service provider and most trusted Telecom brand of the Nation.

Driven by the very best of telecom technology from chosen global leaders, it connects each inch of
the nation to the infinite corners of the globe, to enable you to step into tomorrow.
Here is an overview of the World Class services offered by the BSNL: .

Universal Telecom Services: Fixed wire line services & Wireless in Local loop (WLL) using
CDMA Technology called bfone and Tarang respectively. BSNL is dominant operator in fixed line.
As on December 31, 2007, BSNL had 81% market share of fixed lines.

Cellular Mobile Telephone Services: BSNL is major provider of Cellular Mobile
Telephone services using GSM platform under brand name Cell one. Pre-paid Cellular services of
BSNL are known as Excel. As on March 31, 2007 BSNL had 17% share of mobile telephony in the
country.

Internet: BSNL is providing internet as dial-up connection (Sancharnet) and ADSL-Broadband
Dataone. BSNL has around 50% market share in broadband in India. BSNL has planned aggressive
rollout in broadband for current financial year.

Intelligent Network (IN): BSNL is providing IN services like tele-voting, toll free calling,
premium calling etc.


                                                   20
BSNL provides almost every telecom service, however following are the main Telecom Services
being provided by BSNL in India:-




                                 Basic Telephone Services
The Plain old, Countrywide telephone Service through 32,000 electronic exchanges. Digitalized
Public Switched Telephone Network (PSTN) with a host of Phone Plus value additions.




                                    BROADBAND

BSNL launched DataOne broadband service in January 2005 which shall be extended to 198 cities
very shortly. The service is being provided on existing copper infrastructure on ADSL2 technology.
The minimum speed offered to the customer           is   256 Kbps at Rs. 250/- per month only.
Subsequently, other services such as VPN, Multicasting, Video Conferencing, Video-on-Demand,
Broadcast application etc will be added.




                                Internet
Keeping the global network of Networks networked, the countrywide Internet Services of BSNL
under the brand name includes Internet dial up/ Leased line access, CLI based access (no account is
required) and DIAS service, for web browsing and E-mail applications. You can use your dialup
sancharnet account from any place in India using the same access no '172233' , the facility which no
other ISP has. BSNL has customer base of more than 1.7 million for Sancharnet service. BSNL also
offers Web hosting and co-location services at very cheap rates.




                                               21
                   ISDN
Integrated Service Digital Network Service of BSNL utilizes a unique digital network providing

High speed and high quality voice, data and image transfer over the same line. It can also facilitate
both desktop video and high quality video conferencing




.                  Intelligent Network
Intelligent Network Service (In Service) offers value-added services, such as:

                                                     Free Phone Service (FPH)
                                                     India Telephone Card (Prepaid card)
                                                     Account Card Calling (ACC)
                                                     Virtual Private Network (VPN)
                                                     Tele-voting
                                                     Premium Rae Service (PRM)
                                                     Universal Access Number (UAN) and more




                   I-Net
India s x.25 based packet Switched Public Data Network is operational in 104 cities of the country.
It offers x.25 x.28 leased, x.28 Dial up (PSTN) Connection) and frame relay services.




                                               22
                                  Leased Lines & Datacom
BSNL provides leased lines for voice and data communication for various applications on point to
point basis. It offers a choice of high, medium and low speed leased data circuits as well as dial-up
lines. Bandwidth is available on demand in most cities. Managed Leased Line Network (MLLN)
offers flexibility of providing circuits with speeds of nx64 kbps up to 2mbps, useful for Internet
leased lines and International Principle Leased Circuits (IPLCs).




                                  Cellular Mobile Service Postpaid and Prepaid

BSNLs GSM cellular mobile service CellOne has a customer base of over 5.2 million. BSNL
Mobile provides all the services like MMS, GPRS, Voice Mail, E-mail, Short Message Service
(SMS) both national and international, unified messaging service (send and receive e-mails) etc.
You can use BSNL Mobile in over 160 countries worldwide and in 270 cellular networks and over
1000 cities/towns across India. It has got coverage in all National and State Highways and train
routes. BSNL Mobile offers all India Roaming facility to both pre-paid and post-paid customers
(including Mumbai & Delhi).




                                 Wireless in Local Loop
This is a communication system that connects customers to the Public Switched Telephone
Network (PSTN) using radio frequency signals as a substitute for conventional wires for all or part
of the connection between the subscribers and the telephone exchange. Countrywide WLL is being
offered in areas that are non-feasible for the normal network.

Helping relieve congestion of connections in the normal cable/wire based network in urban areas.



                                                23
Connecting the remote and scattered rural areas. Limited mobility without any air-time charge.




Popular Brands of the Company




                                                            BSNL fixed service




                                                             BSNL Mobile




                                                             Pre-paid Mobile




                                                             BSNL Broadband




                                                              BSNL Sanchar net




                                              24
CHALLENGES AHEAD
During Financial Year 2006-2007 (From April 1, 2006 to March 31, 2007) BSNL has added 9.6
million new customers in various telephone services taking its customer base to 64.8 million.
The following are the main challenges faced by BSNL

   Threats from competitor’s bsnl's - BSNL nearest competitor Bharti Airtel is standing at a
   customer base of 39 million.

   Declining in fixed line customer - Despite impressive growth shown by BSNL in recent
   times, the fixed line customer base of BSNL is declining. In order to retain its fixed-line
   customers BSNL has brought down long distance calling rate under One India plan, however,
   the success of the scheme is not known. However, BSNL faces bleak fiscal 2006-2007 as
   users flee, which has been accepted by the CMD BSNL.

   Poor customer service - Presently there is an intense competition in Indian Telecom sector
   and various Telcos are rolling out attractive schemes and are providing good customer
   services. However, BSNL being legacy operator and its conversion from a Government
   Department, earns lot of criticism for its poor customer service.

   Lack of skilled manpower -Although in recent past there have been tremendous
   improvement in working of BSNL, still it is below the Industry's expectations. A large aging
   (average age 49 years(appx)) workforce (300,000 strong), which is mostly semi-literate or
   illiterate is the main reason for the poor customer service.

   Lack of active management - Despite all the limitations of a legacy set-up, the management
   has been striving hard for the growth of the organization - and has been able to give a tough
   and sustained fight to the competition - rather unheard in the Indian PSUs.




                                              25
    Large workforce - Although in coming years the retirement profile of the workforce is very
   fast and around 25% of existing workforce will retire by 2010, still the workforce will be
   quite large by the industry standards. Quality of the workforce will also remain an issue.

Access Deficit Charges (ADC, a levy being paid by the private operators to BSNL for provide
service in non-lucrative areas especially rural areas) has been slashed by 37% by TRAI, i.e. April
1, 2007. The reduction in ADC may hit the bottom lines of BSNL




CASH MANAGEMENT IN BSNL
Cash management is a term for certain services offered primarily to larger business customers.
This is the procedures for Government agencies to follow to ensure prudent cash management
practices when developing and implementing regulations, systems, and instructions. These
procedures include billings, collections, deposits, disbursements, cash held outside the cash
account of the Department and financial data reporting. These procedures also require the use
of timely methods, principally Electronic Funds Transfer (EFT) for the collection, deposit, and
disbursement of funds. It may be used to describe all bank accounts such as checking,
collection, operation account etc. provided to businesses of a certain size, but it is more often
used to describe specific services such as cash concentration, zero balance accounting, and
automated clearing house facilities. Sometimes even a private bank can be hire to provide a cash
management service for a company even bharat sanchar nigam limited also planning to
outsource its cash management service.

The following is a list of services generally offered by banks and utilized by larger businesses
and corporations like BSNL.:

      Account Reconcilement Services: Balancing a checkbook can be a difficult
       process for a very large business, since it issues so many checks it can take a lot of
       human monitoring to understand which checks have not cleared and therefore what the
       company's true balance is. To get around this, banks have developed a system which
       allows companies to upload a list of all the checks that they issue on a daily basis, so that
       at the end of the month the bank statement will show not only which checks have cleared,
       but also which have not. More recently, banks have used this system to prevent checks


                                                26
    from being fraudulently cashed if they are not on the list, a process known as positive
    pay.

   Advanced Web Services: Most banks have an Internet-based system which is more
    advanced than the one available to consumers. This enables managers to create and
    authorize special internal logon credentials, allowing employees to send wires and access
    other cash management features normally not found on the consumer web site.

   Armored Car Services: Large retailers who collect a great deal of cash may have the
    bank pick this cash up via an armored car company, instead of employees depositing the
    cash.

   Automated Clearing House: services are usually offered by the cash management
    division of a bank. The Automated Clearing House is an electronic system used to
    transfer funds between banks. Companies use this to pay others, especially employees
    (this is how direct deposit works). Certain companies also use it to collect funds from
    customers (this is generally how automatic payment plans work). This system is the
    subject of the ire of some consumer groups, because under this system all banks assume
    that the company initiating the debit is correct until proven otherwise.

   Balance Reporting Services: Corporate clients who actively manage their cash
    balances usually subscribe to secure web-based reporting of their account and transaction
    information at their lead bank. These sophisticated compilations of banking activity may
    include balances in foreign currencies, as well as those at other banks. They include
    information on cash positions as well as 'float' (e.g., checks in the process of collection).
    Finally, they offer transaction-specific details on all forms of payment activity, including
    deposits, checks, wire transfers, ACH (automated clearinghouse debits and credits),
    investments, etc.

   Cash Concentration Services: Large or national chain retailers often are in areas
    where their primary bank does not have branches. Therefore, they open bank accounts at
    various local banks in the area. To prevent funds in these accounts from being idle and
    not earning sufficient interest, many of these companies have an agreement set with their
    primary bank, whereby their primary bank uses the Automated Clearing House to
    electronically "pull" the money from these banks into a single interest-bearing bank
    account.

   Lockbox services: Often companies (such as utilities) which receive a large number of
    payments via checks in the mail have the bank set up a post office box for them, open
    their mail, and deposit any checks found. This is referred to as a "lockbox" service.

   Positive Pay: Positive pay is a service whereby the company electronically shares its
    check register of all written checks with the bank. The bank therefore will only pay
    checks listed in that register, with exactly the same specifications as listed in the register
    (amount, payee, serial number, etc.). This system dramatically reduces check fraud.

                                             27
      Sweep Accounts: are typically offered by the cash management division of a bank.
       Under this system, excess funds from a company's bank accounts are automatically
       moved into a money market mutual fund overnight, and then moved back the next
       morning. This allows them to earn interest overnight. This is the primary use of money
       market mutual funds.

      Zero Balance Accounting: can be thought of as somewhat of a hack. Companies
       with large numbers of stores or locations can very often be confused if all those stores are
       depositing into a single bank account. Traditionally, it would be impossible to know
       which deposits were from which stores, without seeking to view images of those
       deposits. To help this problem, banks developed a system where each store is given their
       own bank account, but all the money deposited into the store account is automatically
       moved into the company's main bank account. This allows the company to look at
       individual statements for each store. US Banks at the present time, however, are almost
       all converting their systems so that companies can tell which store made a particular
       deposit, even if these deposits are all being done into one account. Therefore, zero
       balance accounting is being used less frequently.

      Wire Transfer: A wire transfer is an electronic transfer of funds. Wire transfers can be
       done by a simple bank account transfer, or by a transfer of cash at a cash office. Bank
       wire transfers are often the most expedient method for transferring funds between bank
       accounts. A bank wire transfer is a message to the receiving bank requesting them to
       effect payment in accordance with the instructions given. The message also includes
       settlement instructions. The actual wire transfer itself is virtually instantaneous, requiring
       no longer for transmission than a telephone call.

      Controlled Disbursement: This is another product offered by banks under Cash
       Management Services. The bank provides a daily report, typically early in the day, that
       provides the amount of disbursements that would be charged to the customer’s account.
       This early knowledge of daily funds requirement allows the customer to invest any
       surplus in intraday investment opportunities, typically money market. This is different
       from delayed disbursements, where payments are issued through a remote branch of a
       bank and customer is able to delay the payment due to increased float time.

Scope and Applicability
 These procedures apply to all Government agencies, unless specifically exempted by statute,
whose financial transactions directly or indirectly affect the cash account of Treasury. The
following regulations establish the policy for cash management practices within the Government.

 Cash Management - Practices and techniques designed to accelerate and control collections,
ensure prompt deposit of receipts, improve control over disbursement methods, and eliminate
idle cash balances.



                                                28
Cash Management Improvements Fund - A revolving fund financed by assessments against
an agency for noncompliance with collection or deposit improvements. Moneys from this fund
will be made available, without fiscal year limitation, for payment of expenses incurred in
developing and implementing selected projects that provide for improved methods of
collection and deposit.

Cash Management Review - A comprehensive and ongoing study of an agency's cash-flows
and     corresponding cash management processes or mechanisms, conducted to identify
opportunities for improvement in an agency's cash management practices. This review is a
major part of the Current Assets Management Review and Analysis (CAMRA

 Current Assets Management Review and Analysis (CAMRA) - A process to assess and
improve the   management of Federal agency finances through electronic data collection. The
Cash Management Review is a major part of CAMRA.

 Billings and Collections ; Agencies responsible for the preparation of invoices to individuals
and organizations will adhere to the following:

     Ensure that an invoice, for either an actual or estimated amount, is prepared and mailed
       within 5 business days after the day that goods have been shipped or released, services
       have been rendered, or payment is otherwise due. Agencies may prepare and mail an
       invoice later than the 5-day timeframe if they can demonstrate that it is cost effective to
       do so.
     Include a payment due date on the invoice that will not be more than 30 days from the
       date of the invoice, unless otherwise provided by law.
     If the value of the goods or services cannot be specifically determined, a bill equal to at
       least 75 percent of the estimated value will be prepared and mailed within 5 business
       days. Identify the estimated invoice as being a partial invoice and note that a final
       invoice will be completed when the value is determined
     Prepare and mail a final invoice within 30 days of the submission of an estimated
       partial invoice.
     Collections normally are required to be made by EFT and must be arranged with FMS.
       When indicated by FMS, agencies will include a statement on the invoice requiring
       payment by EFT and provide the necessary information for EFT payment by the
       remitter.

Charges for Late Payments. Payment terms as stated in a contract, debt instrument, or notice
of indebtedness (that is, demand letter) are expected to be adhered to by the debtor. If payment
is not received by the due date, then an agency is expected to pursue collection of the debt using
the appropriate available methods, and to assess interest, administrative charges, and penalties
on past due amounts.


                                               29
 Collection Mechanisms ;All funds are to be collected by EFT when cost-effective, practicable,
and consistent with current statutory authority. FMS acknowledges that agencies may find it
desirable to utilize a menu of mechanisms, if the base of remitters is diverse. The mechanisms
used for collecting funds for credit to the account of the U.S. Government will be jointly
determined by the responsible agency and FMS and must have as their objective the
minimization of total cost to the Government as a whole, including agency direct costs, the cost
of purchased services, and the float cost of the money involved in the collection system.
Agencies will evaluate new or modified collections flows using the following guidelines and
provide recommendations to FMS. When consistent with the above criteria, agencies should
generally consider mechanisms in the following order of preference:

 (1) Automated Clearing House (ACH)(the computerized facility for member depositary
institutions to process payment orders in machine readable form),

(2) Fed wire (for deposits requiring same-day settlement),

(3) Debit/Credit Card (when cost   effective),

(4) Lockbox, and

(5) Treasury's General Account (TGA).

On-Line Payment and Collection System (OPAC) or other mechanism for which the agency
has Voucher and Schedule of Withdrawals and Credits, will be used for the transfer of funds
between agencies.

Disbursement Mechanisms; All funds are to be disbursed by EFT when cost-effective,
practicable, and consistent with current statutory authority. Agencies will evaluate new or
modified cash flows using the following guidelines and provide recommendations to company

Salary Payments. ACH will be adopted as the presumed method for paying employees.
Direct Deposit enrollment forms for establishing regular payments will be designed to use this
approach. If required by law, the forms must afford recipients the opportunity to reject EFT
without justification.

Vendor and Miscellaneous Payments. Each department and agency will exercise its
authority to require that all contractors are paid by EFT in accordance with 31 CFR 206, unless
a determination is made that it is not in the best interest of the Federal Government to do so.
EFT will be adopted as the standard method of payment for all Federal program payments
originated by agencies or their agents. To the maximum extent possible, agencies are required
to use Vendor Express, which is the mechanism supporting the movement of Federal agencies'
vendor and miscellaneous payments from checks and Fedwire to ACH processing. Agencies
proposing to use any non-EFT mechanism for vendor and miscellaneous payments must
successfully demonstrate to FMS why EFT is not feasible or cost-effective. FMS will work

                                                 30
with each agency to develop and execute individual conversion plans and coordinate
agency conversion plans with the Regional Financial Centers and the Federal Reserve
System.

 Agency Payments; Agencies will ensure that payment terms, which specify when payment will
be due and how payment will be made, are contained in all contracts with any organization.
Invoices that are authorized for payment by an agency, including progress and final payments,
will be paid in accordance with company rule and regulations or when otherwise due.
Accounting systems will be designed to ensure that invoices are paid timely and discounts are
taken when appropriate when agencies take discounts after the expiration of the discount period
or fail to make timely payments, interest penalties will be paid according to the company’s Act

 Cash Discounts :- Agency payment systems will incorporate procedures that take advantage of
cash discounts as a matter of routine and eliminate any need for special handling. Such
discounts will be taken when the discount terms applied in the conversion formula result in an
effective annual interest rate equal to, or greater than, the Current Value of Funds Rate .The
discount period is calculated from the date placed on the proper invoice by the contractor to the
discount date. If the invoice is undated, the discount period will begin on the date a proper
invoice is received by the designated billing office and the date annotated. All discount
payments must be scheduled for issuance as close as possible to, but no later than, the last day of
the discount period the formula, with example, to convert discount terms to an effective annual
discount rate to be compared against the Current Value of Funds Rate are in the figure on this
page.

Conversion Formula

Discount      Annual Calendar

   Percent      Days

   _____      X _______________________

100 Percent    Number of (-) Number of = Effective

   Minus        Days in     Days Left        Annual



   Discount      Payment      in Discount    Discount



   Percent      Period     Period*            Rate




                                                31
  *Discount period begins with date of an invoice, whereas payment period begins with receipt
of an invoice in the designated billing office unless otherwise noted; in effect, the discount
period will be reduced by the number of days' difference between the invoice date and date of
receipt.




Example for Application of Conversion Formula

 Current Value of Funds Rate: 5 per

Discount Terms: 2 percent / 10: net 30

Invoice Date: April 15

Receipt Date: April 21 (6 days elapsed time)

       .02        360

       _____    x _____        = .28 or 28 percent

   1.00 - .02    30 - (10-6)

 Based on this example, the effective annual    discount rate exceeds the Current Value of Funds
Rate, and the discount should be taken.

Cash Advances

       Cash Held Outside Treasury
       Cash Held at Personal Risk, Including Imprest Funds, by Disbursing Officers and
        Cashiers         Agencies will make unannounced verifications of the cash balances in
        imprest funds at least once each quarter. At least every 6 months, accountable officers
        shall ensure that such funds are commensurate with actual needs and meet the
        requirements specified in Manual of Procedures and Instructions for Cashiers. Cash on
        hand shall be maintained at the minimum needed to meet normal requirements. In lieu

                                                32
        of cash, agencies must use ACH for small purchases, travel advances, and
        reimbursements to the maximum extent possible. If using    ACH is not cost-effective,
        practicable, or consistent with current statutory authority, agencies will use the
        Government Small Purchase Card or third-party draft.

All Other Cash Held Outside Treasury ; All public moneys must be deposited to the
Treasury's General Account Such funds include those held in escrow, seized in connection with
law enforcement activities, deposited in court, obtained as a result of an agency's regulatory
enforcement authority, and the like.

Cash Management Performance ; To ensure effective cash management, the job elements of
agency personnel responsible for receipts and disbursements should include cash management as
critical performance measurement

Cash Management Reviews :an agency is responsible for monitoring efficiency, effectiveness,
and profitability in its cash management practices. The monitoring includes a methodology to
ensure that an agency review is completed for receipts and disbursements. The review will--

       Determine if an agency is collecting and disbursing funds by EFT.
       Determine if an agency is billing, collecting, and depositing in a timely manner.
       Determine if an agency is making disbursements according to the Prompt Payment
       Document agency cash-flows to include all collections and disbursements.
       Determine whether an opportunity exists to implement a better mechanism or process, or
        upgrade an e0xisting mechanism or process. Agencies may be required to perform a
        comprehensive cash management review every 5 years, the first of such reviews having
        been performed in 1986. FMS will notify agencies when reviews are scheduled and
        provide detailed information to the agencies on the process.


The standard formula for measuring interest savings based on benefit days is as

Follows:

    Cash Flow Amount x Benefit x Current Value =          Interest 250 (Business Days) Days of
Funds Rate Savings

Warning Letter: When FMS has determined that an agency is at fault and may not implement
an initiative by the scheduled implementation date, a warning letter will be sent to the
designated cash management official. The warning letter will indicate an FMS contact with
whom to discuss possible solutions or alternative courses of action. For collections initiatives,
the warning letter will also contain—

     Identification of the initiative and scheduled implementation date.

                                               33
        A statement that the implementation schedule of the initiative is in jeopardy and the
          basis for this determination.
        The amount that will be charged based on proposed savings associated with the
          initiative, if final implementation date is missed, and method of calculating charges.
        FMS's authority to impose charges.
        Agency's appropriation to be charged.

Approval of Requests for Funds :The Project Selection and Approval Committee will
evaluate all requests and select appropriate projects for funding. The disbursement of moneys
from the CMIF to an agency will be made under the authority of the Economy Act (31 U.S.C.
1535). Upon approval, the committee will authorize the transfer of the total amount of approved
funds to the project agency or will arrange funding on a reimbursable basis. Money will be
transferred to, and reported by, the agency as appropriate, based on current accounting
procedures.




CASH FLOW STATEMENT ANALYSIS OF BSNL
Cash flow is a term that refers to the amount of cash being received and spent by a business
during a defined period of time, sometimes tied to a specific project. Measurement of cash flow
can be used:

        To evaluate the state or performance of a business or project.
        To determine problems with liquidity. Being profitable does not necessarily mean being
         liquid. A company can fail because of a shortage of cash, even while profitable.
        To generate project rate of returns. The time of cash flows into and out of projects are
         used as inputs to financial models such as internal rate of return, and net present value.
        To examine income or growth of a business when it is believed that accrual accounting
         concepts do not represent economic realities. Alternately, cash flow can be used to
         'validate' the net income generated by accrual accounting.

Cash flows in BSNL can be classified into:

   1. Operational cash flows: Cash received or expended as a result of the company's core
      business activities.
   2. Investment cash flows: Cash received or expended through capital expenditure,
      investments or acquisitions.
   3. Financing cash flows: Cash received or expended as a result of financial activities, such
      as interests and dividends.




                                                 34
All three together - the net cash flow - are necessary to reconcile the beginning cash balance to
the ending cash balance. Cash flow after expenditures affecting payments. Loan draw downs or
equity injections, that are just shifting of capital but no expenditure as such, are not considered in
the net cash flow.

Benefits reap by BSNL by using Cash flow

The cash flow statement is one of the four main financial statements of a company. The cash
flow statement can be examined to determine the short-term sustainability of a company. If cash
is increasing (and operational cash flow is positive), then a company will often be deemed to be
healthy in the short-term. Increasing or stable cash balances suggest that a company is able to
meet its cash needs, and remain solvent. This information cannot always be seen in the income
statement or the balance sheet of a company. For instance, a company may be generating profit,
but still have difficulty in remaining solvent.

The cash flow statement breaks the sources of cash generation into three sections: operational
cash flows, investing, and financing. This breakdown allows the user of financial statements to
determine where the company is deriving its cash for operations. For example, a company may
be notionally profitable but generating little operational cash (as may be the case for a company
that barters its products rather than selling for cash). In such a case, the company may be
deriving additional operating cash by issuing shares, or raising additional debt finance.

Companies that have announced significant write downs of assets, particularly goodwill, may
have substantially higher cash flows than the announced earnings would indicate."Strong cash
flow is one of the most attractive aspects of the cell phone business, allowing operators like
BSNL to return money to shareholders even as they rack up huge paper losses.

In certain cases, cash flow statements may allow careful analysts to detect problems that would
not be evident from the other financial statements alone. For example, WorldCom committed an
accounting fraud that was discovered in 2002; the fraud consisted primarily of treating ongoing
expenses as capital investments, thereby fraudulently boosting net income. Use of one measure
of cash flow would potentially have detected that there was no change in overall cash flow .

Cash flow statements facilitate decision making by providing a basis for judgments concerning
the profitability, financial condition, and financial management of a company

The cash cycle (also known as the operating cycle or the earnings cycle) in BSNL is the series
of transactions or economic events in a given company given by:

   1. Cash is converted into goods and services.
   2. Goods and services are sold to customers like recharge coupons , sim card,ITC card,etc.
   3. Cash is collected from customers by means of telephone, mobile, internet bills etc.




                                                 35
CASH FLOW ANALYSIS OF BSNL

The cash flow statement is useful to managers, lenders, and investors because it translates the
earnings reported on the income statement—which are subject to reporting regulations and
accounting decisions—into a simple summary of how much cash the company has generated
during the period in question.

Under the circle office of BSNL Dehradun the main sub units are

BSNL Dehradun

BSNL Rishikesh

BSNL Haridwar

BSNL Mussorie

The circle office made budget as well as cash flow statement for the whole Uttaranchal circle.
All the transaction as well as collection is done by Punjab National Bank main branch




                                                    TABLE-3

       CASH FLOW STATEMENT FOR THE MONTH OF JANUARY 2008

PNB                             ANNEXURE-A to the Cash flow SSA statement for the month of: Jan 2008
                                Name of the SSA/PAU    O/o GMTD Dehradun
                                                       ANALYSIS OF CASH TRANSACTIONS IN BSNL SSA/PAU
                                                       ON:


                                                                                                          last working
 Srl    Name and Station of Bank where collection account
                                                             4/1/2008   11/1/2008   18/01/08   25/01/08   day     date:
 No.                     is maintained.
                                                                                                            31/01/08


   1                        2                            3          4          5          6           7              8
         DDN                    OB cash (at the
   1    '3713002100315541       beginning of day)               99119      60671     148430      221478        725713
                                Collections of the day        1075304    2745299    3820620     6561233       3396058
                                Total:                        1174423    2805970    3969050     6782711       4121771
                                cash remitted to Bank         1113752    2657540    3747572     6056998       4064925
                                closing cash balance            60671     148430     221478      725713         56846




                                                             36
       RS                        OB cash (at the
   2   '3714002100118468         beginning of day)                     0           0         0           0                0
                                 Collections of the day           297389      556200    315336     1001969           388350
                                 Total                            297389      556200    315336     1001969           388350
                                 cash remitted to Bank            297389      556200    315336     1001969           388350
                                 closing cash balance                  0           0         0           0                0


       VKS                       OB cash (at the
   3   0886002100000023          beginning of day)                     0           0         0        1141              946
                                 Collections of the day           142356      279518    138216      268176           130551
                                 Total                            142356      279518    138216      269317           131497
                                 cash remitted to Bank            142356      279518    137075      268371           130868
                                 closing cash balance                  0           0      1141         946              629


       ME                        OB cash at the beginning
   4   0331002100059796          of day                               0            0         0           0                0
                                 Collections of the day           94293       126247     43129      219233           159574
                                 Total:                           94293       126247     43129      219233           159574
                                 cash remitted to Bank            94293       126247     43129      219233           159574
                                 closing cash balance                 0            0         0           0                0




Uttaranchal Circle Dehradun
                                                ANALYSIS OF TRANSACTIONS IN COLLECTION BANK



                                                                                                  last working day
                                                4/1/2008    11/1/2008      18/01/08    25/01/08
                                                                                                  date: 31/01/08



1-A                                             2-A         3-A            4-A         5-A        6-A

Cr. Bal available at beginning of day in Bank   1327054     0              14545       592241     662757
Cash Remittance/amount credited by clearing     3855846     7721841        6424200     9820786    17182833
TT sent by Bank to Circle Focal point branch    5182375     7707106        5846009     9749925    14183172
Bank charges if any debited in collection a/c   525         190            495         345.00     1540
Excess credit(+)/Excess Debit by bank(-)        0           0              0           0          0
Credit closing balance at the end of the day    0           14545          592241      662757     3660878

Cr. Bal available at beginning of day in Bank   272299      57666          74792       101744     2400
Cash Remittance/amount credited by clearing     298367      567126         361952      1130656    828762
TT sent by Bank to Circle Focal point branch    513000      550000         335000      1230000    830000


                                                            37
Bank charges if any debited in collection a/c   0        0        0        0        0
Excess credit(+)/Excess Debit by bank(-)        0        0        0        0        0
Credit closing balance at the end of the day    57666    74792    101744   2400     1162

Cr. Bal available at beginning of day in Bank   0        0        0        0        0
Cash Remittance/amount credited by clearing     142356   291691   157809   270348   130868
TT sent by Bank to Circle Focal point branch    142356   291691   157674   270348   130868
Bank charges if any debited in collection a/c   0        390      135      0        0
Excess credit(+)/Excess Debit by bank(-)        0        0        0        0        0
Credit closing balance at the end of the day    0        0        0        0        0

Cr. Bal available at beginning of day in Bank   0        0        0        0        0
Cash Remittance/amount credited by clearing     94631    125909   43129    219233   159574
TT sent by Bank to Circle Focal point branch    94631    125909   43129    219233   159574
Bank charges if any debited in collection a/c   0        0        0        0        0
Excess credit(+)/Excess Debit by bank(-)        0        0        0        0        0
Credit closing balance at the end of the day    0        0        0        0        0




FUND FLOW ANALYSIS
Fund Flow Statement depicts the sources where from additional funds during the current year as
compare to the previous year have been received and to what uses these funds have been applied.
The term funds as referred in the Fund Flow Statements means working capital which is the
access of current assets over the current liabilities. It also shows the Inflow and Outflow funds in
BSNL.
It reveals the Inflow of additional funds during the current year or month as compare to the
previous year of month and also the utilization of fund.
Since BSNL deals with basic phone, mobile, internet etc. therefore the main source of funds for a
company is collection of Cash from various sources like Billing, Internet charges etc. which act
as Cash Inflow for the Company. On the other hand the company also deals with operations we
shows that payment of current liabilities, managing of working capital, Loan or mortgages,
purchases of Fixed Assets, payments of interest, Taxes etc.

The following data shows the Fund Flow of BSNL circle office for the month of January, 2008.

Revenue generated -                    Telecom                             Rs. 61433303.00
                                       Telegraph                           Rs. 25924.00
                                       Internet & ITC card                 Rs. 2115283.0 0
                                       Misc.                               Rs. 819157.00

                                                         38
                                   TOTAL                       Rs.64393667.00

Working Expenses -          Electric & water charges           Rs. 385206.00
                            Building Rents                     Rs. 475677.00
                            Wages                              Rs. 1002358.00
                            Marketing Exp.                     Rs. 1038462.00
                            Incl. Advertisement &              Rs. 860158.00
                            Conferences
                            Vehicle running charges            Rs. 1160803.00
                            Police Escort charges              Rs, 4519434.00
                            Security Guards
                            Bank & legal charges               Rs 209294.00
                            Travelling Exp.                    Rs. 4463913.00
                            Adman. Charges                     Rs. 652464.00
                            Incl. Stationery & Printing        ------------------------

                                   TOTAL                       Rs. 14767769.00

Maintenance Expenses        Repair of Machinery                Rs. 49962.00
                            Expenditure on Service             Rs. 164497.00
                            Construction of Tower              Rs. 5970458.00
                            Repairing of Building              Rs. 1657894.00
                            Maintenance of Cables              Rs. 1512144.00
                            Interconnection charge             Rs. 885853.00
                            General expenses                   Rs. 42685.00
                            Repairing & Maintenance of         Rs. 2746413.00
                            Sub Units
                                                               ---------------------------
                                   Total                       Rs.13030086..00


Therefore total working expenses and maintenance is   = 1767769 +13030086
                                                      = 27797855.00

Therefore fund flow percentage ratio =     Total of Working expenses and maintenance
                                                  Total Revenue

                                     =     27797855.00
                                           64393667.00

                                    =      43.16%

Standard Ratio given by the BSNL head office is 30% but for Uttaranchal Circle the ration is
coming out 43.16% we shows that the cost incurred in working expenses and maintenance a hire
then the revenue received.

                                             39
BUDGETING IN BSNL

Budgeting in a business sense is the planned allocation of available funds to each department
within a company. Budgeting allows executives to control overspending in less productive areas
and put more company assets into areas which generate significant income or good public
relations. Budgeting is usually handled during meetings with accountants, financial experts and
representatives from each department affected by the budgeting.

In a personal financing sense, budgeting can mean estimating monthly living expenses based on
previous bills and wages. For example, you can subtract all of your known monthly bills from
that figure even before they arrive.

The key to successful budgeting is both flexibility and inflexibility. Certain expenses are fixed,
so payment of those bills should be an inflexible element. Nothing is more important than paying
those particular bills in full. In business, departments need to know the absolute ceiling on
spending. Budgeting works best when very few exceptions are made to the upper limits. The idea
of fiscal responsibility is to form a workable budget and stick to it as best as possible

Budgeting also requires an element of flexibility. It isn't always possible to assign a fixed rupees
amount on a project in January and expect the budget to remain stable in July. There are always

                                                40
unexpected events which can drastically change the priorities of a company or an individual.
Without flexible budgeting, money allocated for one purpose could not be reallocated during a
fiscal emergency. An unexpected drop in sales revenue in March can affect the budgeting plans
in November, so accountants and financial officers need to adjust their figures regularly.

When economic times are good, many people become relax about personal budgeting. As long as
there is more money coming in than going out, all is well. But those who learn to establish a
workable budget and keep within it during the lean times often survive major financial crises
better than those who don't. Financial discipline can spell the difference between weathering the
storm and declaring bankruptcy. In BSNL the budget are always made in the month of august by
taking an idea about the money spends from April to august then the project budget is formed
upto march. For making budget we basically take the last two or three year data




                                             TABLE-4

                                    BUDGET STATEMENT

                                                         Page No.1

        Name of the           (Rs.In
SL.N   circle/unit: - GMTD,   Thousan
O      Dehradun.              ds)
                                                                For both
                                                         other than CMTS
                                                         & CMTS
        Monthly integrated
        W.E Statement for
          the month of
            March-08
       Details of
       expenditure on         Budget
       payment &              Allotmen   Proportio                          Expendit   Progressi   Variation
       provision              t            nate                              ure for      ve         with
             for
       employment                        Allotment                            the      Expendit    reference
       (Remuneration)         2007 -08   upto the        Expenditure upto   current      ure           to
                                          current         Previous month     month                 proportio

                                                    41
                                        month                                                    nate
                                                                                              allotment
       Part-A
   1   Salary                  127627     127627                   122518    11478   133996       6369
   2   Medical allowances        7869       7869                    7133      694     7827          -42
   3   Wages                       29            29                    53       0        53          24
   4   Overtime Allowances       3176       3176                    2621        28    2649         -527
   5   Incentive/Bonus           7425       7425                       30       3        33      -7392
       Leave travel
   6   concession                 545           545                  589        78     667         122
       Leave salary
   7   encashment                2956       2956                    3338      400     3738         782
   8   Uniform                    193           193                  191        -1     190           -3
       House leasing
   9   charge(Rent)                35            35                      0      0        0          -35
       Staff welfare and
  10   Amenities                  450           450                      0      0        0         -450
       Subsidy to
       Departmental
       Canteen/Food
  11   Allowance                 2096       2096                    1833      165     1998          -98
  12   Pension contribution     12663      12663                    11427    1055     12482        -181
       Leave salary
  13   contribution               747           747                  137        12     149         -598
       Payment under
  14   Workmen compensate         262           262                      0      0        0         -262
       Employer's
       contribution towards
  15   EPF                        481           481                  253        32     285         -196
       Administrative
  16   charges on EPF a/c          89            89                    56       0        56         -33
  17   Gratuity                     0            0                       0      0        0            0
       Group insurance
       (LIC) employer's
  18   contribution                 0            0                       0      0        0            0
  19   Honorarium                   0            0                       5      0        5            5
       TOTAL (A)               166643     166643                   150184    13944   164128      -2515




                                                       Page No.2

        Name of the unit:     (Rs.In
SL.N   GMTD                   Thousan
O      DEHRADUN               ds)
                                                        For both other
                                                       than CMTS &

                                                  42
                                                       CMTS
      Monthly integrated
      W.E Statement for
     the month March-08
           Details of       Budget
        expenditure on      Allotmen   Proportion                         Expendit     Progressi    Variation
            Office          t              ate                            ure for         ve           with
                                        Allotment                            the       Expendit     reference
       Administration       2007 -08   upto the        Expenditure upto    current        ure           to
                                                                                                   proportion
                                        current                                                    ate
                                       month           Previous month      month                   allotment
     Part-A
20    Rent of Building          6965        6965                  2680         310         2990        -3975
21   Rates & Taxes               505         505                   307           3          310         -195
     (I) Water charges           304         304                   396           4          400           96
     (ii) Electricity
22   charges                   18494       18494                 17035        2056        19091          597
     (III) Fuel charges         4545        4545                  3127         868         3995         -550
23   Computer stationery        1515        1515                  1256         173         1429          -86
     Computer Hire
24   charges                      11          11                     1           1            2           -9
25   Insurance                   225         225                    54          54          108         -117
     Vehicle running
26   expenses                   3904        3904                  3029         800         3829           -75
     Repairs &
27   Maintenance               21983       21983                 33667        3840        37507        15524
28   Travel Expenses            5370        5370                  3977         900         4877         -493
29   Conveyance charges          549         549                   438          39          477          -72
30   Printing                    288         288                   134          12          146         -142
31   Stationery                 1489        1489                  1232          58         1290         -199
32   Postal expenses            2179        2179                  1814         151         1965         -214
33   Bank charges                179         179                   178           2          180            1
34   Book & Periodicals           47          47                    25           3           28          -19
     Horticulture
35   Expenses                    216         216                    88             0         88         -128
     Police Escort
     charges/ security
36   Guards                     7877        7877                  9823        1181        11004         3127
37   General Expenses           4239        4239                  5365         550         5915         1676
     Professional / Legal
38   charges                     447         447                   375          96          471            24
39   Meetings                     94          94                    37           5           42           -52
40   Entertainment                16          16                     0           0            0           -16
     Membership fee /
     Other Discount
41   (1742603)                     0              0                490         138          628             0
42   Bond Expenses                 0              0                 31           0           31             0
43   Lease charges                 0              0                  0           0            0             0
     Business promotion
44   & mktg. Expenses              0              0               2137         909         3046         3046
45   Payment made to               0              0                  0           0            0            0

                                                  43
        Ministry of Health
        (for CGHS)
        Advertisement (other
   46   than marketing)         3359       3359             1536         0      1536       -1823
        Settlement account
   47   with drop                893        893              125         0       125          0
        Interest on Deferred
   48   payment                    0          0                0         0         0          0
        Waiting/Adman.
   49   Expen. Bills            1025       1025              303       100       403        -622
        Inter Connection
   50   Charges                 1371       1371              358       500       858        -513
        Expenditure on
        service (sim card
   51   charges)                    0         0                0         0         0          0
        TOTAL(B)                88089     88089            90018     12753    102771      14682
        TOTAL(A)+(B)           254732    254732           240202     26697    266899      12167




                               BANK RECONCILITION


Account Reconcilement Services: Since balancing a checkbook can be a difficult process for a
very large business like BSNL, since it issues so many cheques it can take a lot of human
monitoring to understand which cheques have not cleared and what the company's true balance
is. To get around this, banks have developed a system which allows BSNL to upload a list of all
the cheques that they issue on a daily basis, so that at the end of the month the bank statement
will show not only which cheques have cleared, but also which have not. And recently, banks
have used this system to prevent cheques from being fraudulently cashed if they are not on the
list; this process is also known as positive pay.



                                          Table - 5

           Review of Bank Reconciliation for the Month of JANUARY 2008


                                              44
                                                     COLLECTION ACCOUNT
                                                                                        Name of Circle SSA GMTD DEHRADUN.
                                                 PUNJAB NATIONAL BANK
                                        Add -
                                         Bank
                     Total Balance                 Add-                            Deduct-Cheques                Balance as per all
Sl.   Name of the                      charges                                                         Deduct-
                    as per all Bank               Others     Total Col. (3+4+5)   deposited, but not             Bank Statements
No.    SSA/PAU                            not                                                          Others
                        Books                    (specify)                         cleared by bank                 Col. 6-(7+8)
                                      included
                                       in CBBs
1           2             3                4        5                6                    7              8               9
 1    DEHRADUN         31072845             0           0         31072845          29441088.77              0     1500607.00
 2    RISHIKESH               0             0           0                0             30205.00              0      100945.00
      VIKAS
 3    NAGAR                  0              0           0                0               0.00             0              0.00
 4    MUSSOORIE              0              0           0                0               0.00             0              0.00
            TOTAL      3.1E+07              0           0         31072845        29471293.77             0        1601552.00




                                                        ADVANTAGES

            Cash Management Service is a flexible, low risk cash product that will ensure your peace of
            mind and ease of settlement. With real time account balances and transaction history, you will
            know what your cash positions are at all times.

            Benefits

                   Settlement of securities transactions.
                   Direct crediting of salary, dividends and other income
                   ATM and EFTPOS access
                   Telephone access
                   Electronic bill payments
                   Funds transfers to other financial institutions
                   Online access




                                                                    45
As the demand to move from a thick-client to a thin-client system increased among corporate
clients, and the advantages of doing so were somewhat obvious2, no corporate or small business
wanted to lose functionality in the bargain. Therefore, it was natural to expect that customers
would want to have and retain every bit of functionality around the traditional services of
collection payment and reporting the main features typically offered through web-based cash
management can be classified into:

 Payment management, liquidity management, electronic collections and information reporting,
other features such as single sign-on and billing engine complete the offering. Interfaces with
various payment systems, different services associated with fund transfers (stop payments,
cheques imaging, positive and reverse positive pay, retail and corporate lockbox facility, etc.) are
all considered passé today by corporate clients. Increasingly, customers are demanding cross-
border     settlements     and     integration     with       mainline     treasury      functions.

Large multinational corporate need multi-location collaborative environments, given the global
nature of their operations. This is especially true for companies with regional treasury centers or
the ones operating out of shared service centers, where transactions are initiated in one location
and exception approvals are done elsewhere. By web-enabling their cash management service,
banks are able to offer them operational flexibility. An obvious advantage that corporate
customers want to derive in their adoption of Internet-based systems is the efficient management
of funds and risk management. Corporate treasurers are highly conscious of carrying idle cash
and want to do everything possible to make judicious use of the funds available. This
necessitates the integration between the cash management system deployed within the
organization, and the general ledger, accounts receivables and accounts payables systems within
the company. The more seamless the integration between these systems, the more timely and
accurate will be the reporting function.



Benefits From a Bank’s Point of View

Just as in the case of corporate clients, banks also want to move to web-based solutions but not at
the expense of functionality. Large corporate usually concentrate their business with two banks
and use a third alternate bank for specialty products. Creating customer “stickiness” through
“one-stop-shop” features, such as providing consolidated information, can be very rewarding for
banks.
As banks become more familiar with technological advances, they too have become more
demanding of their vendors. The crux lies in leveraging technology without compromising on the
functionality available. The requirement is to make available tools and services that make the
task of the user much easier. There are several new technology features that are demanded by the
banks from a web-based cash management systems vendor:

      Single sign-on – integrated information reporting from various back-end systems such as
       treasury, cash management, commercial loans, trade finance, etc;




                                                46
      Segmentation of customers – traditionally in the retail area, but now increasingly being
       used to understand and cater to the needs of the corporate and business banking
       segments;
      Integration with multiple channels of delivery, as we move into an era of possibly making
       all functions available to customers across all touch-points; and
      Real-time reporting and others.

Banks, to a certain extent, achieved the above benefits by moving their systems from PC banking
thick-client solutions to web-based business e-banking solutions. Banks everywhere have been
criticized for only seeing a part of the large client relationship picture.

A fully fledged offering in the form of web-based cash management also helps banks to increase
fee-based income through value-added offerings and segment customers, through adjustment of
the offering base. On the cost side, automatic entry and STP reduce cost. Centralized handling
and consolidations help the banks to scale up without significantly increasing headcount.

Web-based cash management, the direct channel for customers to request payments and
collection processing, forced the banks to decouple the back-end payment systems from their
operational systems and use web services to connect to the central payment hub. Quickly, banks
realized that these web services, designed initially for their cash management system, can be
used for multiple operational front-end systems such as customer relationship and branch
banking.




                       FINANCIAL ANALYSIS OF BSNL

 On October 1st, 2000, BSNL was formed by converting service providing functions of erstwhile
DOT to provide level playing field to private Telecoms. Since then BSNL has emerged as the 7th
largest Telecom Operating Company in the World. BSNL has played major role in spreading
telephones to rural areas of the country at affordable rates. As per TRAI report “5.3 lakh villages
have been provided access to telecom network through VPTs covering 87% of the villages. Most
of the VPTs have been provided by BSNL. BSNL has provided 13.59 million (July 2007) rural
DELs in the country”. By this statement we can judge the important role played by BSNL right
from its inception.

Income, Expenditure and Profit:



                                                47
Following Table shows Income, Expenditure and Profit figures of BSNL for the 5 year period
since its inception.

                                           Table - 6

S.    YEAR           INCOME             EXPENDITURE          PROFIT            PROFIT
No.                                                          BEFORE TAX        AFTER TAX
                     (Rs. in Crores)    (Rs. in Crores)
                                                             (Rs. In Crores)   (Rs. In Crores)

1     1.10.2000 to   11699              10669                1030              747

      31.3.2001

2     2002           24681              20461                4220              6312

3     2003           25892              25078                8136              1444

4     2004           33918              27163                6755              5976

5     2005           36090              29401                6689              10183

6     2006           41142              32521               6968               12902

7     2007           47683              34731               6851               16432

Government has set ambitious targets for Telecom PSUs (MTNL and BSNL) for providing a
total of 12.50 Crore telephones by December 2008 with a targeted market share of 50%.
However overall market share of both PSUs, which, was more than 85 % at the time of BSNL
formation, has declined to less than 37% as on date.


 BSNL has received 100% reimbursement of license fee from 2001-02 to 2003-04. From 2004-
05, the reimbursement of license fee is restricted to 2/3rd of license fee paid which will be
further restricted to 1/3rd in 2005-06. Thereafter, reimbursement will be nil. In the last 4 yrs
BSNL has received total license fee refund of Rs 8,665 Crore (BSNL paid Rs 15,498 Crore as
license fees) as a compensation for providing telecom services in rural areas.


 BSNL will have to pay income tax on 70% of its profits and only 30% would be exempted. In
the absence of such exemption from this year, BSNL will have to resort to borrowing resulting in
substantial interest burden.

BSNL’s expenses on staff have shot-up by 218.75% in the last four years from Rs 3,848 Crore in
2001-02 to Rs 8,418 Crore in 2006-07. For the financial year 2006-07, expenses on staff are
28.63% of the total expenses. Similarly, the Administration and Operational costs have also


                                                48
increased by 199% from Rs 3,995 Crore in 2001-02 to Rs 7,951 Crore. For the financial year
2006-07, expenses on Administration and Operation are 27.05% of the total expenses.

ANALYSIS OF FINANCIAL STATEMENT (Ratio Analysis)

Current Assets       =     Rs. 35.92 Million

Fixed Assets         =      Rs. 697388 Million

Net Current Assets =       Rs. 207629 Million

Profit   =     Rs. 55497     Liability =       Rs. 1463 Million

Net Fixed assets           = Rs. 57934 Crores In the form of land & Building and Cables.

Companies net worth        = Rs. 84948 crores

Authorized equity capital of Rs. 10000 crores

Paid up equity share capital Rs. 5000 crores

Revenue = Rs. 39715.00

Profit       = Rs. 39715

Net Profit to Fixed Assets Ratio= Net Profit before interest & tax

                                     Net Fixed Assets



                                      =          39715   =        0.69

                                                 57934

Since the ratio shows relationship of net profit to fixed assets that is whether the fixed assets are
being properly used or not. The above ratio for the company is coming out 0.69 which is not so
high therefore the company is not used its fixed assets properly.

Return on Investment           = Net Profit x 100

                                Capital Employed

                               = 39715000 x 100

                                      1055125

                                                  49
                              = 37.64%

This is one of the most important profitability ratio is indicate how effectively the capital
employed in the business is used. In case of BSNL the ratio is 37.64% the shows the earning
capacity of the net assets of the business.



Total debt ratio       =                  external equity

                                          Internal equity

                                      = 84948                       = 5.67:1

                                            15000

The shows the relation between the external and internal equity that is both long & short term
funds outsider funds. The ratio for BSNL is 5.67:1 It shows that the external equity of the
company is approx 5times of internal equity.

Fixed Assets Ratio            =            84948                =1.46%

                                           57934

The ratio shows the relation between long term funds that is share holder funds plus long term
loans and fixed assets. The ratio also indicated long term financial soundness of the business. As
the ideal ratio should be more than one for BSNL the fixed assets ratio is 1.46 the shows that the
company has more long term funds and financially sounds.



Current Assets ratio          = 207629              = 3.58%

                                  57934

This ratio shows short term financial soundness of the company. The ideal current ratio should
be around 2:1. In case of BSNL it is 3.15. We show that company is able to meet short term
obligation.




                                                   50
                  COMPETITOR ANALYSIS




IDEA CELLULAR


TYPE      Subsidiary

FOUNDED    1995

                          51
HEADQUARTERS           Pune, India

KEY PEOPLE              Chairman: Kumar Mangalam Birla

                        MD: Sanjeev Aga

                        VP Corporate Affairs: Rajat Mukharjee

INDUSTRY                Telecom

PRODUCTS                Mobile

WEBSITE                www.ideafresh.com

                       www.ideacellular.com



Idea Cellular is a wireless telephony company operating in various states in India. It initially
started in 1995 as a joint venture between the Tata’s, Aditya Birla Group and AT&T by merging
Tata Cellular and Birla AT&T Communications.

Initially having a very limited footprint in the GSM arena, the acquisition of Escotel in 2004
gave Idea a truly pan-India presence covering Maharashtra (excluding Mumbai), Goa, Gujarat,
Andhra Pradesh, Madhya Pradesh, Chhattisgarh, Uttar Pradesh (East and West), Haryana,
Kerala, Rajasthan and Delhi (inclusive of NCR).

The company has its retail outlets under the "Idea n' U" banner. The company has also been the
first to offer flexible tariff plans for prepaid customers. It also offers GPRS services in urban
areas Initially the Birla’s, the Tata’s and AT&T Wireless each held one-third equity in the
company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular
decided to sell its 32.9% stake in Idea. This stake was bought by both the Tata’s and Birla’s at
16.45% each.

On April 10, 2006, the Aditya Birla Group announced its acquisition of the 48.18% stake held by
the Tata’s at Rs. 40.51 a share amounting to Rs. 44.06 billion. While 15% of the 48.14% stake
was acquired by Aditya Birla Nuvo, a company in-charge of the Birla’s' new business initiatives,
the remaining stake was acquired by Birla TMT holdings Private Ltd., an AV Birla family
owned company. Currently, Birla Group holds 98.3% of the total shares of the company.

Idea has successfully launched 3 more new circles (states) in India viz. Rajasthan, Himachal
Pradesh and UP (East) to make itself a pan-India player. Recently, Idea got licenses to operate in
Mumbai & Bihar. They are awaiting the spectrum from DoT.



REPORT CARD

                                                52
PE ratio                                              28.20              21/05/08
EPS (Rs)                                              3.96               Mar, 08
Sales (Rs crore)                                      1,972.40           Mar, 08
Face Value (Rs)                                       10
Net profit margin (%)                                 11.44              Mar, 07
Return on average equity                              23.03              Mar, 07




RELIANCE COMMUICATION


TYPE PUBLIC                BSE: RCOM

FOUNDED                    2004

HEADQUARTERS               Navi Mumbai, India

KEY PEOPLE                 Anil Ambani, Chairman and Managing Director


                                          53
                             Satish Seth, Vice-Chairman Reliance-ADA Group

                             S. P. Shukla, CEO - Personal Business & Director

INDUSTRY                     Telecommunications

PRODUCTS                     CDMA service, GSM service, Broadband Internet Service

REVENUE                      US$ 4 Billion

EMPLOYEES                    33,000

WEBSITE                      www.reliancecommunications.com




Reliance Communications (formerly Reliance Infocomm), along with Reliance Telecom and
Flag Telecom, is part of Reliance Communications Ventures (RCoVL). According to National
Stock Exchange data.

 Anil Ambani controls 66.75 per cent of the company, which accounts for more than 1.36 billion
shares of the company. Reliance Infocomm is an Indian telecommunications company. It is the
flagship company of the Reliance-Anil Dhirubhai Ambani Group, comprising of power
(Reliance Energy), financial services (Reliance Capital) and telecom initiatives of the Reliance
ADA Group. Reliance Infocomm is currently managed by Anil Dhirubhai Ambani.

It uses CDMA2000 1x technology at present, Reliance Telecom's GSM cellular services are
available in 340 towns within its eight-circle footprint. Reliance's CDMA services are available
in 19 states and cover about 65% of the country, state wise. Reliance Infocomm also offered for
the first time in India, mobile data services through its R-World mobile portal. This portal
leverages the data capability of the CDMA 1X network.

  In July 2007, the company announced it is buying US-based managed Ethernet and application
delivery services company CEO Rohit Srivastava Yipes Enterprise Services for a cash amount of
Rs. 1200 crore rupees (equivalent of USD 300 million) In its first overseas acquisition, the
Reliance group has amalgamated the United States-based Flag Telecom for $ 211 million
[roughly Rs 950 crore (Rs 9.50 billion)].



REPORT CARD




                                              54
PE ratio                                           48.18      21/05/08
EPS (Rs)                                           12.53      Mar, 08
Sales (Rs crore)                                   3,455.35   Mar, 08
Face Value (Rs)                                    5
Net profit margin (%)                              18.63      Mar, 07
Last dividend (%)                                  15         30/04/08
Return on average equity                           11.73      Mar, 07




Bharti Enterprises (Airtel)

TYPE                       Public, Listed on BSE

FOUNDED                    1985

HEADQUARTERS               New Delhi, India

KEYPEOPLE                  Sunil Mittal

INDUSTRY                   Telecom
                                              55
REVENUE                      $5 billion

WEBSITE                     Bharti Group Airtel



Bharti Airtel, formerly known as Bharti Tele-Ventures Limited (BTVL) is India's largest GSM
mobile operator with more than 64.4 million mobile subscribers as of April 2008. It also offers
fixed line services and broadband services.
  The company also provides telephone services and Internet access over DSL in 14 circles. The
company complements its mobile, broadband & telephone services with national and
international long distance services. The company also has a submarine cable landing station at
Chennai, which connects the submarine cable connecting Chennai and Singapore. The company
provides end-to-end data and enterprise services to the corporate customers through its
nationwide fiber optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs,
ISP and international bandwidth access through the gateways and landing station.
It has presence in all 23 circles of the country and has the covers 71% of the current population
till FY07.
July 2007, Bharti Airtel signed a MoU with Nokia-Siemens for a 900 million dollar expansion of
its mobile and fixed network.
 In August 2007, the company announced it will be launching a customized version of Google
search engine that will provide an 'array of services' to its broadband customers.
In March 2008, Bharti Airtel will roll out third generation services in Sri Lanka in association
with SingTel. This is because Singapore-based Asian telecom major SingTel, which owns a little
over 30% in Bharti Airtel, is a major player in the 3G space as it has already third generation
networks in several markets across Asia

TOUCHTEL

Until September 18, 2004, Bharti provided fixed-line telephony and broadband services under
the Touchtel brand. Bharti now provides all telecom services including fixed-line services under
a common brand "Airtel"

BLACKBERRY

On 19th October 2004 Airtel announced the launch of a BlackBerry Wireless Solution in India.
The launch is a result of a tie-up between Bharti Tele-Ventures Limited and Research In Motion
(RIM).




REPORT CARD



                                               56
PE ratio                        25.00      21/05/08
EPS (Rs)                        32.90      Mar, 08
Sales (Rs crore)                7,413.73   Mar, 08
Face Value (Rs)                 10
Net profit margin (%)           22.42      Mar, 07
Return on average equity        35.35      Mar, 07




Tata Communications




                           57
The Tata Communications headquarters at Fort, Mumbai



TYPE PUBLIC                (NYSE;TCL)

FOUNDED                     1972

HEADQUARTERS                Mumbai, India

KEY PEOPLE                  Subodh Bhargava (Chairman), N. Srinath (Executive Director)

INDUSTRY                   Telecommunication

PRODUCTS                   Data communication, Internet, International Voice, data Carrier

REVENUE                    US$ 2.1 billion (2007)

NET INCOME                 US$ 35.4 million (2007)

EMPLOYEES                  5000

WEBSITE                    http://www.tatacommunications.com/



Tata communication is number one global international wholesale voice operator and number
one provider of international long distance, enterprise data and Internet services in India, the
company was named "Best Wholesale Carrier" at the World Communications Awards in 2006
and was named the "Best Pan-Asian Wholesale Provider" at the 2007 Capacity Magazine Global
Wholesale Telecommunications Awards for the second consecutive year.


                                              58
Now the leading integrated provider to drive and deliver a new world of communications, Tata
Communications became the unified global brand for VSNL, VSNL International, Teleglobe,
Tata Indicom Enterprise Business Unit, and CIPRIS on February 13, 2008.

Tata Communications Ltd. is a part of the $29 billion Tata Group; it is listed on the Bombay
Stock Exchange and the National Stock Exchange of India and its ADRs are listed on the New
York Stock Exchange


REPORT CARD


    PE ratio                                              -20.88             16/05/08
    EPS (Rs)                                              -1.72              Mar, 07
    Sales (Rs crore)                                      439.76             Dec, 07
    Face Value (Rs)                                       10
    Net profit margin (%)                                 -21.81             Mar, 07



.




Vodafone Essar Limited


Type                        Private


                                              59
Founded                  {{{foundation}}}

Headquarters             Mumbai, India

Key people               Asim Ghosh, MD

Industry                 Telecom

Products                 Mobile Telecommunication operator

Website                  www.vodafoneindia.com




Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers 16 telecom
circles in India. Despite the official name being Vodafone Essar, its products are simply branded
Vodafone. It offers both prepaid and postpaid GSM cellular phone coverage throughout India
and is especially strong in the major metros.

Vodafone Essar provides 2G services based on 900Mhz and 1800Mhz digital GSM technology,
offering voice and data services in 16 of the country's 23 license areas

Vodafone Essar is owned by -

      Vodafone 52%
      Essar Group 33%,
      Other Indian nationals, 15%.

On 11 February 2007, Vodafone agreed to acquire the controlling interest of 67% held by Li Ka
Shing Holdings in Hutch-Essar for US$11.1 billion, piping Reliance Communications, Hinduja
Group, and Essar Group, which is the owner of the remaining 33%. The whole company was
valued at USD 18.8 billion. . The transaction closed on 8 May 2007




                                               60
In December 2006, Hutch Essar re-launched the "Hutch" brand nationwide, consolidating its
services under a single identity. The Company entered into agreement with NTT DoCoMo to
launch I-mode mobile Internet service in India during 2007.

In Mumbai, it was earlier known by the name Orange, a brand that used to be marketed by its
former owner, Hutchison. Still earlier it was known as Max Touch and AceTel even before that.
On September 20, 2007 Hutch becomes Vodafone in one of the biggest brand transition
exercises in recent times.

While there is no revealing the prices of the low-cost Vodafone handsets, the industry is abuzz
that prices might start at Rs 666, undercutting Reliance Communications' much-hyped 'Rang
Barse' with cheap handsets beginning at Rs 777.

.




Mahanagar Telephone Nigam Limited


TYPE                         Public (NSE, BSE, and NYSE: MTE)

FOUNDED                      1986

HEADQUARTERS                 New Delhi, India


                                                61
KEY PEOPLE                   Nishta Jhoree(CMD); Anita Soni (CFO); A.K.Sinha (ED- New
                             Delhi); J.Gopal (ED-Mumbai)

INDUSTRY                     Telecommunication

WEBSITE                       http://www.mtnl.net.in



Mahanagar Telephone Nigam Limited is an Indian Government-owned telephone service
provider in the cities of Mumbai, Thane, New Delhi, and Navi Mumbai in India. The company
was a monopoly until 2000, when the telecom sector was thrown open to other service providers

Products

MTNL provides fixed line telephones, cellular connection of both GSM —

Dolphin(Postpaid) and

Trump (prepaid) and

WLL (CDMA) —

Garuda-FW

Garuda-Mobile

      MTNL has set up its 100% subsidiary, Mahanagar Telephone Mauritius Limited. (MTML)
in Mauritius, for providing basic, mobile and international long distance services as second
operator in Mauritius. Necessary licenses were obtained in January 2004. MTML has already
started its CDMA based basic services in Mauritius.

    In Mauritius, 8000 telephone connections are actually operational from a total switching
capacity of 50,000. Moreover, through joint ventures with local telecommunications providers,
MTML plans to offer internet access through its wireless network to its users in February 2007.

Millennium Telecom Limited (MTL)

MTNL has restructured Millennium Telecom Ltd. (MTL) as a Joint Venture company of MTNL
and BSNL with 51% and 49% equity participation respectively. The company will now be
entering into new business stream of international long distance operations and will be executing
a project of submarine cable system, both east and west from India

Report card



                                               62
PE ratio                                             48.18             21/05/08
EPS (Rs)                                             12.53             Mar, 08
Sales (Rs crore)                                     3,455.35          Mar, 08
Face Value (Rs)                                      5
Net profit margin (%)                                18.63             Mar, 07
Last dividend (%)                                    15                30/04/08
Return on average equity                             11.73             Mar, 07




                           SWOT ANALYSIS OF BSNL
Strength
  1- The turnover nationwide coverage nearer comprehensive range of telecom services and
     the desire to excel has made BSNL the number one telecom company in India
  2- Wide coverage first mover advantage launches new and attractive schemes-
  3- Last markets share around 25.1% good service providers.


                                          63
  4- Customer friendly service excess around all over India (Billing transaction) provides all
      services under one roof.
  5- Largest revenue generating company. BSNL is miles ahead of its rivals with 35.1 in
      vision basic phone subscriber that is 85 % share of subscribes base and 92% share in
      revenue terms
  6- BSNL is numero Uno operator of India in all services in its license area.
  7- BSNL is an only services provider making focused efforts and planned initiative to
      bridge the rural and urban digital divide ICT Sector.
  8- BSNL serves its customer with its wide bouquet of telecom services.
  9- The company has vast experience in planning.
  10- The centralized structure.
  11- Net Profit – present turnover of BSNL is more than Rs. 351820-00 million with net profit
      to the line of Rs. 99390 million for the last financial year.


Weakness

  1- BSNL is not so customer friendly.
  2- Network problems like congestion server down problem mainly in the evening time.
  3- Because of the large coverage area and due to leased lines the company has incurred
     high maintenance cost.
  4- Lack of proper implementation of services.
  5- Inconsistent in working practice.
  6- Since the company launched so many brands so the company loosed it special position in
     consumer minds.
  7- Less coordination in working culture or working staff.
  8- Brand dilution – Its occurs when consumer is no longer associate with a specific product
     or even highly similar product as BSNL lose its luster.
  9- Slow pace of the reform process.




Opportunities

  1- BSNL planned to expand its customer base from present 47 millions line to 125 million
     lines by December 2008.
  2- Infrastructure investment planed to the line of Rs. 733 crores in the next three year.
  3- Moves toward international market



                                             64
   4- The company is not limited to basic phone services also capturing other market segment
      like mobile, internet i.e. broad band services.
   5- Planning to merger with top MNC’s


Threats

   1- Since the more telecom companies entered in and Indian market therefore the company
      faces some threats because of foreign players like Vodafone, etc.
   2- Competitors Strategies – Because of the high competitions with the other companies like
      Airtel, Reliance Communication, and Vodafone. The company adopts the low call rates
      schemes as a result of which the company may face some problems.
   3- International competition- the other company provide more feature as well as additional
      services.
   4- Financing these requirements require a little more liberal approach from the policy side.
      Problem of limited spectrum availability and the issue of interconnection charges
      between the private and state operators




                              EXPERIENCED GAINED
Bharat Sanchar Nigam Ltd was incorporated in October, 2000, it is World's 7th largest
Telecommunications Company providing comprehensive range of telecom services in India.
BSNL has installed Quality Telecom Network in the country and now focusing on improving it,
expanding the network, introducing new telecom services and wining customer's confidence.

                                              65
BSNL is the only service provider, making focused efforts and planned initiatives to bridge the
Rural-Urban Digital Divide ICT sector. In fact there is no telecom operator in the country to beat
its reach with its wide network giving services in every nook & corner of country and operates
across India except Delhi & Mumbai. BSNL serves its customers with its wide bouquet of
telecom services. BSNL is numero Uno operator of India in all services in its license area. The
company offers vide ranging & most transparent tariff schemes designed to suite every customer.
Scaling new heights of success, the present turnover of BSNL is more than Rs. 3, 51,820 million
with net profit to the tune of Rs.99, 390 million for last financial year.
     My work is related towards the cash department under the heading cash management in
BSNL. I, being a finance student, find is a nice place to start my work. I found the project is
worth enough to enter in this sector. As per I have learned that in today world it works in a very
impulsive way specially in the telecom industry is where you will find it everywhere. This is
what a finance student will dream to do. Every big or small firm is trying to its level best to get
as much it can get form the market. Competition is what brings the feel of work. The major
competitors of BSNL in the market are:


             BHARTI’S AIRTEL
             RELIANCE INFOCOMM
             VODAFONE
             ADITYA BIRLA’S IDEA
             TATA TELESERVICE (INDICOM)
             MTNL

      Some small players are also entering into the market. For continuous growth new financial
strategies are being formulated from time to time. I am trying my level best to get into all
activities that are possibly liked to the project to increase my knowledge and experience. My
project is basically deals with the various cash and banking operation in BSNL.

As BSNL is a very large firm so I was able to see and study the various financial techniques
adopted by the company especially in cash management field. The project deals with a
comparative analysis of various banking and cash related function (cash management) in Bharat
Sanchar Nigam Limited, the largest telecom company in India. The project also enlightens the
various day to day activities like operation and collection of cash in the company. And provide
budget for all branches and maintain their cash as well as fund flows.

                                                  66
     Cash management is a term for certain services offered primarily to large business
customer. It may be used to discuss all bank accounts provided to business of a certain size, but it
is more often used to describe specific service such as Cash Concentration, Zero balance
accounting and automated clearing house facilities. This project deals with the comprehensive
study of different department of BSNL basically focus on banking and cash. The principal
learning of the project is how the fund manager manage entire day to day task like operation,
collection and making budget for the company. The project also give me opportunity to closely
work with fund manager and handling some challenging responsibilities and various banking
operation, like reconciliation, analysis of bank statement, department cash book and rectification
of error, In this project, proper performance measurement will be taken which will involve
recognition of both , the banking and the cash section. After gathered information about BSNL
from various sources like internet and intranet my study will proceed towards the survey to
different departments like banking, cash, account, marketing and finance department.
It consists of three parts:

        (I)     Period of study

                  (a) For analysis of bank and company’s transaction I use last three financial year
                      data

                  (b) For comparison based — the report covers data for one financial year.

        (ii)    Data collection and sampling
                 To conduct this project, the data for the report like bank statement, cash book,
                 budgeting manual will be collected from secondary sources. The data relating
                 schemes are collected from company’s websites and other search engines such as
                 Google and also from concerned bank.


        (iii)     Data Analysis The analysis of the survey is based on primary and secondary
                 sources of information as mentioned above. The primary data is used to draw
                 some inferences regarding various sections in BSNL and their respective work.
                 The secondary data help to observe various functions under cash and banking in



                                                 67
         BSNL. Closely worked with fund manager and analyzing challenging task like
         budgeting, various banking operations, reconciliation etc

     The project is divided into various parts:

1)       In the first part the concept of banking and related terms will be deal   with.
2)       In the second part the comparative analysis of cash management policy of BSNL
         which consists of -:
            Preparation of cash book and bank book.
            Analysis of Trading account, Profit and loss account and balance sheet.
            Analysis of Telecom revenue
            How the collection and operation account manage
            Making budget for the company
            Account Reconcilement Services: Since balancing a checkbook can be a
             difficult process for a very large business like BSNL, since it issues so many
             cheques it can take a lot of human monitoring to understand which cheques
             have not cleared and what the company's true balance is. To get around this,
             banks have developed a system which allows BSNL to upload a list of all the
             cheques that they issue on a daily basis, so that at the end of the month the
             bank statement will show not only which cheques have cleared, but also which
             have not. And recently, banks have used this system to prevent cheques from
             being fraudulently cashed if they are not on the list; this process is also known
             as positive pay.

            .Balance Reporting Services: Company manages their cash balances usually
             subscribe to secure web-based reporting of their account and transaction
             information at their lead bank. They include information on cash positions as
             well as 'float' (e.g., cheques in the process of collection). Finally, they offer
             transaction-specific details on all forms of payment activity, including
             deposits, cheques.

            Controlled Disbursement: This is another activity perform by the company
             offered by banks under Cash Management Services. The bank provides a daily

                                           68
           report, typically early in the day, that provides the amount of disbursements
           that would be charged to the company’s account. This early knowledge of
           daily funds requirement allows the company to invest any surplus in intraday
           investment opportunities, typically money market. This is different from
           delayed disbursements, where payments are issued through a remote branch of
           a bank and customer is able to delay the payment due to increased float time.
           With a fast changing time, organization who contribute to the service industry
           need to be upgraded with the approach for providing the best of the service.
           The primary objective of the project is to study the banking and cash related
           studies in BSNL.To identify the cash needs for various department of BSNL
           study of the cash management policy of BSNL includes-
          Comparative study of cash management service of various banks especially
           Punjab National Bank and State Bank of India.
          Focusing of cash management to know how BSNL meet the payments
           schedule and to minimize funds committed to cash balance.
          To study present system of the company and its operations.

          To understand their requirement in terms of functional & Operation.
          To understand how decision are made during budgeting and what kind of
           decision problem can be face.
        To understand the proper role of manager for decision making. The specific
           objectives are as follow-
i)     To analyze whether past transaction and budget has any association or influence
       in future.
ii)    To identify differences in the company’s cash book and bank statement find out
       the error and rectifying it.
iii)   To compare the performance on yearly basis by introducing different changes in
       budget.
iv)    After gathered     information about BSNL from various sources like internet
       and intranet my study will proceed towards the survey to different departments
       like banking, cash, account, marketing and finance department.


                                       69
Limitation of the study
      While working on the project following limitations are experience

     Obstacle in data collection

     All the financial data pertaining to the organization can not be disclosed to a
      summer trainee.

     Limited information may be provided

     Lack of expertise being a trainee in analyzing data




                                      70
             Difficult to excess data of other Company and securities to conduct comparative
               study.

             Though every care is taken to collect data, information were found missing for
               one or two months.

             Since huge volume of data are to be analyzed, only a few selected schemes which
                ensured data availability for the period taken is used.




                                         Conclusion
There has been much progress made in India, but there is still much more ground to cover. The
cash management market in India is at an important threshold, juxtaposing both traditional
paper-based mechanisms as well as new electronic means. However, substantial co-operation is
needed at an industry level to set standards and processes for transacting information
electronically. This is important to make the electronic payments medium the preferred choice
for the bulk of the small and medium enterprises segment. Significant investment and effort will

                                              71
also be required by large agencies such as the DoT to improve connectivity and network
bandwidth, as well as from industry leaders like SBI to transform and revolutionize the paper
clearing.

 The prospect of moving to substantially more electronic cash management services is clearly
possible and imminent. This will herald a new era of significantly more cost-effective and
streamlined cash management services - well integrated with the operational workflows of
corporate. Corporate are increasingly demanding more efficient and cost-effective services from
their banks and banks are responding to these demands more and more comprehensively, which
testifies of the considerable importance of cash management revenues to them

BSNL as a business entity has performed well so far even though there are some disturbing
trends also like big increase on staff cost and administrative expenditure. BSNL’s Staff cost is
highest among industry barring only to MTNL. While industry average of staff cost is about 4-6
% of AGR same figure for BSNL is more than 25 %. Despite all constrains of the legacy
network and large staff overall performance of BSNL is satisfactory. BSNL does not have
substantial debt so out go on the part of interest payment is small. BSNL’s performance in
Mobile business is average. BSNL started getting more than 10 % of its revenue from this
segment at the end of year 2005. More efforts are required on this front. Broadband is other
promising area where lot of efforts is required. Marketing of services is not up to the mark and
some serious steps needs to be taken in this area because customer acquisition and retention is of
prime importance in the highly volatile telecom market place where high churning and low
customer loyalty are the characteristics. Despite all this growth in the Telecom sector the digital
divide is continuously increasing. Gap between urban tele-density and rural tele-density is
widening. Private players are less interested in high investment oriented and low return paying
rural India but for BSNL there is a big opportunity here because BSNL already has a large
network of more than 36000 Digital Exchanges connected by OFC backbone. BSNL can harp on
its existing infrastructure to position itself as formidable player




                                      APPENDIX-A
                      T.T. TRANSACTION STATEMENT

                                                72
             Bharat Sanchar Nigam Limited
                O/o GMTD, Dehradun.
     T.T Statement of CMTS Month of April – 08
   Amount transferred to IFA Accounts by Bank during the Month of April - 08
   Date      Dehradun      Rishikesh   Vikasnagar    Mussoorie     Total Rs.
 2/4/2008       590937       94234        11400         69867        766438
 3/4/2008       785792      123955           0             0         909747
 4/4/2008       353934       76814        31572            0         462320
 5/4/2008      5582426      135389           0          33674       5751489
 7/4/2008      5015839      127663        32800            0        5176302
 8/4/2008       424019       73738        10250            0         508007
 9/4/2008      1335099       80896           0             0        1415995
10/4/2008       913924       79615           0             0         993539
11/4/2008      2268841       24173        22500            0        2315514
12/4/2008      3017946       37325           0          41086       3096357
 15/04/08      1375916       31029         6600            0        1413545
 16/04/08      1043723       53785           0             0        1097508
 17/04/08      2582356       40868        10820            0        2634044
 21/04/08      2052243       35719           0           6186       2094148
 22/04/08      2037364        6464           0             0        2043828
 23/04/08      1226870       54017         5620            0        1286507
 24/04/08       864809        6712           0             0         871521
 25/04/08       718096        2240           0             0         720336
 26/04/08       733337       39812           0           2128        775277
 28/04/08       476450        8406        14600            0         499456
 29/04/08       933423       59316        13400            0        1006139
 30/04/08       832852      130473         8720            0         972045
   Total      35166196     1322643       168282        152941      36810062




                                APPENDIX-B
                            BUDGET PERFORMA


                                        73
                                                                       Page No.1
SL.N    Name of the circle/unit: -        (Rs.In
O      GMTD, Dehradun.                 Thousands)
                                                                             For both other
                                                                       than CMTS & CMTS
           Monthly integrated W.E
          Statement for the month of

                  March-08
       Details of expenditure on       Budget          Proportiona                                 Expenditu    Progressiv    Variation
       payment & provision             Allotment            te                                       re for          e           with
           for employment                               Allotment                                     the       Expenditu     reference
       (Remuneration)                   2007 -08       up to the          Expenditure up to         current         re            to
                                                                                                                             proportiona
                                                        current                                                                   te
                                                       month               Previous month           month                     allotment
       Part-A
   1   Salary                            127627          127627                       122518         11478       133996           6369
   2   Medical allowances                   7869            7869                         7133           694         7827            -42
   3   Wages                                   29              29                             53            0          53            24
   4   Overtime Allowances                  3176            3176                         2621            28         2649          -527
   5   Incentive/Bonus                      7425            7425                              30            3          33        -7392
   6   Leave travel concession               545             545                            589          78          667           122
   7   Leave salary encashment              2956            2956                         3338           400         3738           782
   8   Uniform                               193             193                            191          -1          190             -3
   9   House leasing charge(Rent)              35              35                             0             0           0           -35
  10   Staff welfare and Amenities           450             450                              0             0           0         -450
       Subsidy to Departmental
  11   Canteen/Food Allowance               2096            2096                         1833           165         1998            -98
  12   Pension contribution                12663          12663                        11427          1055        12482           -181
  13   Leave salary contribution             747             747                            137          12          149          -598
       Payment under Workmen
  14   compensation                          262             262                              0             0           0         -262
       Employer's contribution
  15   towards EPF                           481             481                            253          32          285          -196
       Administrative charges on EPF
  16   a/c                                     89              89                             56            0          56           -33
  17   Gratuity                                    0              0                           0             0           0             0
       Group insurance (LIC)
  18   employer's contribution                     0              0                           0             0           0             0
  19   Honorarium                                  0              0                           5             0           5             5
       TOTAL (A)                         166643          166643                       150184         13944       164128          -2515




                                                                       Page No.2


                                                                  74
SL.N    Name of the unit: GMTD              (Rs.In
O      DEHRADUN                          Thousands)
                                                                        For both other than
                                                                        CMTS & CMTS
         Monthly integrated W.E
             Statement for
           the month March-08
          Details of expenditure on      Budget           Proportiona                               Expenditu     Progressiv    Variation
                   Office                Allotment             te                                   re for             e          with
                                                           Allotment                                              Expenditu
                Administration             2007 -08       up to the        Expenditure up to        the current       re       reference to
                                                            current                                                            proportiona
                                                          month             Previous month            month                    te allotment
       Part-A
  20   Rent of Building                         6965           6965                      2680             310         2990          -3975
  21   Rates & Taxes                             505            505                       307               3          310           -195
       (I) Water charges                         304            304                       396               4          400             96
  22   (ii) Electricity charges                18494          18494                     17035            2056        19091            597
       (III) Fuel charges                       4545           4545                      3127             868         3995           -550
  23   Computer stationery                      1515           1515                      1256             173         1429            -86
  24   Computer Hire charges                      11             11                         1               1            2             -9
  25   Insurance                                 225            225                        54              54          108           -117
  26   Vehicle running expenses                 3904           3904                      3029             800         3829            -75
  27   Repairs & Maintenance                   21983          21983                     33667            3840        37507          15524
  28   Travel Expenses                          5370           5370                      3977             900         4877           -493
  29   Conveyance charges                        549            549                       438              39          477            -72
  30   Printing                                  288            288                       134              12          146           -142
  31   Stationery                               1489           1489                      1232              58         1290           -199
  32   Postal expenses                          2179           2179                      1814             151         1965           -214
  33   Bank charges                              179            179                       178               2          180              1
  34   Book & Periodicals                         47             47                        25               3           28            -19
  35   Horticulture Expenses                     216            216                        88               0           88           -128
       Police Escort charges/ security
  36   Guards                                   7877            7877                      9823           1181        11004           3127
  37   General Expenses                         4239            4239                      5365            550         5915           1676
  38   Professional / Legal charges              447             447                       375             96          471             24
  39   Meetings                                   94              94                        37              5           42            -52
  40   Entertainment                              16              16                         0              0            0            -16
       Membership fee / Other
  41   Discount (1742603)                             0            0                         490          138           628              0
  42   Bond Expenses                                  0            0                           31             0          31              0
  43   Lease charges                                  0            0                            0             0           0              0
       Business promotion & mktg.
  44   Expenses                                       0            0                      2137            909         3046           3046
       Payment made to Ministry of
  45   Health (for CGHS)                              0            0                           0              0           0              0
       Advertisement (other than
  46   marketing)                               3359            3359                      1536              0         1536          -1823
  47   Settlement account with dop               893             893                       125              0          125              0
  48   Interest on Deferred payment                0               0                         0              0            0              0
  49   Waiting/Adman. Expen. Bills              1025            1025                       303            100          403           -622
  50   Inter Connection Charges                 1371            1371                       358            500          858           -513
       Expenditure on service (sim
  51   card charges)                                  0            0                           0              0           0              0
       TOTAL(B)                                88089           88089                     90018          12753        102771         14682

                                                                   75
      TOTAL(A)+(B)               254732     254732            240202       26697        266899       12167




                                        APPENDIX-C
                        RECONCILIATION OF PREPAID SIM

                               Bharat Sanchar Nigam Limited
                                  O/o GMTD, Dehradun.

                Reconciliation of Prepaid SIM & GSM Sim for the month of JAN 2008
                                                                                                       Cost of
                Sale                                                                        Total     items as
   Deno         Value   OB      Recd.     Total        Sold            Total       CB       Value      per TB
                                           SDCA DLRS
   Excel         100    2960    8976 11936    0    0                      0 11936                0
   Anant         949       0       0     0    0    0                      0     0                0
   Anant         441    3345    4988 8333     0    0                      0 8333                 0
Excel Plain
   Sim           100     104    1800      1904         0        0         0        1904          0
  St Power       100     329     998      1327         0        0         0        1327          0
 India One       100    2979       0      2979         0        0         0        2979          0
  Cell One
International              0                  0        0        0         0             0        0
  C-Top up
     Sim                   0        0        0         0        0         0          0         0
   V Sim                 413       29      442         0        0         0        442      2100
 GSM Sim         100      64                64         0        0         0         64         0
                                                                                            2100       327506

(1) Total cost of Sim sold during the month                                    =                             2100

Less: - Cost of 51 Excel Sim free issued by SDE RS, PNG,CTN,CRD.               =                              5100
Less: - Cost of 1 Student Sim issue for SDE CRD.                               =                               100
                            Net Cost                                           =                             -3100

(2) Amount credited in A/c as per TB                                           =                        327506
Less- Last month amount received during current month                          =                          6405
                                                  76
Add- Current month amount received in next month                            =      5665
Less- Amount wrongly credited during the month TB of other head of
A/c                                                                         =     75306
Add- Amount wrongly credited in other head of A/c of this head              =   1007798
Less: Excess amount deposited by CTO DN & VKS                               =       233
Add: - Cost of 77 Sim at Rishikesh, 9 at Mussorie sold at 440.55 in place
of Rs. 441/-                                                                =        37
                             Total                                          =   1259062

(3) Tallied with amount sold at 1                                           =   -1262162




                                              77
    Department Resources

    Quality procedure manual of payment department of BSNL Company

    Quality procedure manual of collection department of BSNL Company

    Manual of operation department of company

    Cash manual of BSNL

    Manual of Budgeting Fund Flow & Cash Flow

    Budgeting statement of previous financial year’




    Document use

           BSNL Annual Account

           Companies Cash Book as well as Bank Book




    Books

           Financial Management by Khan & Jain for Capital Budgeting.

           Financial Management by I.M. Pandey for Cash Management.

        Company’s Guideline book in which various rules & regulations are mention.




                                     78
Glossary


Definitions/Abbreviation                         Description/Full Form


ADC                         Access Deficit Charge


AGR       (Adjusted   Gross Total revenue less interconnect charges payable to
Revenues)                   other operators, roaming revenues actually passed
                            on to other service providers and service tax/sales
                            tax (if any is included in total revenue).This
                            revenue figure is used for computing license fees
                            paid to the DOT


Annualized EBITDA           Annualisation of last quarter EBITD


                                        79
ARPU (Average Revenue Per We calculate ARPU by dividing services revenue
User)                     (exclusive of activation charges and infrastructure
                          revenues) for the relevant period by the average
                          number of subscribers during the period. The
                          result obtained is divided by the number of month in that
                          period    to    arrive   at   the   ARPU     per   month
                          figure



AS                           Accounting Standards as issued by the Institute of
                             Chartered Accountants of India


AUSPI                        Association of Unified Telecom Service Providers of
                             India (formerly Association of Basic.
                             Tele communications Operators)


Census Towns                 A place satisfying the following three criteria
                             simultaneously:
                               (I) A minimum population of 5000.
                               (II)                                         at least
                                      75% of male working population engaged in non-
                                      agricultural pursuits;

                               (III)                                           A density
                                       population of at least 400 per square km (1,000 per
                                       square mile)


Churn                        An industry term used to refer to subscribers
                             leaving a network. We calculate Churn by dividing
                             the total deactivations in a period by the average
                             number of subscribers for that period and dividing
                             the result by the number of months in the relevant
                             period. The Churn calculation varies from operator
                             to operator as there are no set standards for
                             calculation of the same.


Circle/ Service Area         Unless     otherwise     specifically mentioned,   means
                             telecom circles in India (including metropolitan
                             circles) as defined by the DOT. Circles are classified as
                             metropolitan       circles        and    as      category

                                          80
         ‘A’, ‘B’ or ‘C’ Circles. The Circles are classified on the basis
         of the revenue generation capacity of each circle with
         category ‘A’ being considered the most revenue generating


COAI     Cellular Operators Association of India


EBIT     Earnings Before Interest and Tax


EBITDA   (Earnings    before    interest, tax,    depreciation     and
         amortization) This is the amount after deducting operating
         expenditure from total income. Total income is comprised of
         service revenue, sales of trading goods and other income.
         Operating expenditure is comprised of cost of trading goods,
         personnel expenditure, network operating expenditure, license
         and WPC charges, roaming and access charges, subscriber
         acquisition and servicing expenditure, advertisement and
         business promotion expenditure and administration and other
         expenses


EOP      End of period FY /Fiscal Financial year ending March31


NAV      Net Asset Value Net Adds Refers to net customer additions
         which is calculated as the difference between the closing
         and the opening total customers for the period Net Debt
         Total loan funds reduced by cash and cash equivalents


NLD      National Long Distance. An NLD license allows an
         operator    to     offer long-distance domestic calls
         across Circles in India



ROCE     The same has been calculated as under :-
         (PAT + Interest and Financing cost) / ( average
         capital employed)


RONW     Return on Net Worth


TDSAT    Telecommunications        Dispute     Settlement      Appellate
                     81
                            Tribunal Tele-density The number of telephone
                            connections in use for every 100 individuals in an area


TRAI                        Telecommunications Regulatory Authority of India,
                            constituted under the Telecommunications Regulatory
                            Authority of India Act, 1997


UAS License                 Unified Access Services License


USO                         Universal Service Obligation


VAS (Value Added Service)   All    services    other    than   standard     voice   calls,
                            including services, such as SMS, data transfer or
                            internet connectivity


3G (UMTS)                   A digital mobile communications technology which
                            uses a technology known as W-CDMA (or UMTS) to
                            deliver high-speed mobile communications




                                        82

				
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Description: The Indian Telecommunications network with 110.01 million connections is the fifth largest in the world and the second largest among the emerging economies of Asia. Today, it is the fastest growing market in the world and represents unique opportunities for. Global in the stagnant global scenario. The total subscriber base, which has grown by 40% in 2005, is expected to reach 250 million in 2008. According to Broadband Policy 2004, Government of India aims at 9 million broadband connections and 18 million internet connections by 2008. The wireless subscriber base has jumped from 33.69 million in 2004 to 62.57 million in Fiscal year 2004-2005. In the last 3 years, two out of every three new telephone subscribers were wireless subscribers. Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is expected to bypass 2.5 million new subscribers per month by 2008. The wireless technologies currently in use are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5CDMA operators providing mobile services in 19 telecom circles and 4 metro cities, covering 2000 towns across the country.