Acknowledgement Executive Summary

Chapter-1 Introduction
1.1. 1.". 1.&. Overview of the BS ! O#$ective% of the %tudy 'rofile of the Organi%ation o Overview of BS ! (walior Circle o *i%ion+ ,i%%ion - o#$ective% o /act Sheet o 1evenue% Strategie% o ,anagement 'rofile o 'roduct% o 'olicy of Accounting and finance Comparative Study S6O7 Analy%i% 1 " & ) . 0 2 13 11 1& 12 "1

1.4. 1.5.

Chapter-" Research Methodology

".1. ".". ".&. ".4. ".5. ".). "... ".0. &.1. &.". &.&. &.4. &.5. 4.1. 4.". 4.&. 4.4. Statement of the 'ro#lem 1e%earch 8e%ign ,ethodology Sampling 7echni9ue% u%ed Selection of Sample Si:e 8ata Collection Stati%tical 7ool% ;%ed !imitation% of the Study <ntroduction Comparative %tatement of BS ! 7rend Analy%i% of 'rofit Common Si:e Balance Sheet Ca%h flow Statement /inding Analy%i% Conclu%ion Sugge%tion% "& "& "4 "5 "5 "5 "5 ") ". &" &5 &)

Chapter-& Data Analysis and Findings

Chapter-4 Conclusion and Suggestions

44 44 45 4) 4.-53

Appendix

 Bi#liography

51

"

Type Availability Owner Key people Founded ebsite

Communication Service 'rovider Countrywide except 8elhi - ,um#ai 7he (overnment of <ndia S.8. Saxena =C/O>? A.@. Sinha =CEO> 12th century+ incorporated "333 www.#%nl.in

!"!

Overview o# the $S%&'

BS ! i% <ndiaA% olde%t and large%t Communication Service 'rovider =CS'>. Currently BS ! ha% a cu%tomer #a%e of )4.0 million =Ba%ic - ,o#ile telephony>. <t ha% footprint% throughout <ndia except for the metropolitan citie% of ,um#ai and ew 8elhi which are managed #y ,7 !. A% on ,arch &1 + "33. BS ! commanded a cu%tomer #a%e of &&.. million 6ireline+ &.) million C8,A6!! and "..5 million (S, ,o#ile %u#%cri#er%. BS !A% earning% for the /inancial Bear ending ,arch &1 + "33) %tood at < 1 431.0# =;SC 2.32 #> with net profit of < 1 02.4# =;SC ".3" #illion>. 7oday+ BS ! i% <ndiaA% large%t 7elco and one of the large%t 'u#lic Sector ;ndertaking of the country with authori:ed %hare capital of ;SC &.25 #illion =< 1 1.+533 Crore%> and networth of ;SC 14.&" #illion.

&

!"( Ob)ective o# Study'

7he main o#$ective of thi% %tudy i% to carry on #rief %tudy on D Analysis o# Financial State*entE through thi% < am a#le to get the difference of variou% a%%et% and lia#ilitie% of the BS !. Other ob)ectives o# this pro)ect are as #ollows' 7o identify the variou% a%%et% amount of the BS ! with re%pect to Annual 1epot% of the BS !. Comparative %tudy of 7wo year Annual report%. 7o %tudy the variou% department% for the need% of a%%et% and u%e-le%% a%%et% amount of BS ! (walior city center.

!"+ ,ro#ile o# Organisation' Over views o# Organisation -istory

7he foundation of 7elecom etwork in <ndia wa% laid #y the Briti%h %ometime in 12th century. 7he hi%tory of BS ! i% linked with the #eginning of 7elecom in <ndia. <n 12th century and for almo%t entire "3th century+ the 7elecom in <ndia wa% operated a% a (overnment of <ndia wing. Earlier it wa% part of er%twhile 'o%t - 7elegraph 8epartment ='-7>. <n 12.5 the 8epartment of 7elecom =8o7> wa% %eparated from '-7. 8o7 wa% re%pon%i#le for running of 7elecom %ervice% in entire country until 1205 when ,ahanagar 7elephone igam !imited =,7 !> wa% carved out of 8o7 to run the telecom %ervice% of 8elhi and ,um#ai. <t i% a well known fact that BS ! wa% carved out of 8epartment of 7elecom to provide level playing field to private telecom%.Su#%e9uently in 1223% the telecom %ector wa% opened up #y the (overnment for 'rivate inve%tment+ therefore it #ecame nece%%ary to %eparate the (overnmentA% policy wing from Operation% wing. 7he (overnment of <ndia corporati%ed the operation% wing of 8o7 on Octo#er 31 + "333 and named it a% Bharat Sanchar a pu#lic %ector. igam !imited =BS !>.BS ! operate% a%

Main Services being provided by $S%&

BS ! provide% almo%t every telecom %ervice+ however following are the main 7elecom Service% #eing provided #y BS ! in <ndiaF!" .niversal Teleco* Sevices ' /ixed wireline %ervice% - 6irele%% in !ocal loop =6!!> u%ing C8,A 7echnology called b#one and Tarang re%pectively. BS ! i% dominant operator in fixed line. A% on ,arch &1+ "33. =end of financial year> BS ! had .)G %hare of fixed and 6!! phone%.

BS ! ,o#ile

're-paid ,o#ile

(" Cellular Mobile Telephone Services F BS ! i% ma$or provider of Cellular ,o#ile 7elephone %ervice% u%ing (S, platform under #randname Cellone . 're-paid Cellular %ervice% of BS ! are know a% /0cel . A% on ,arch &1+ "33. BS ! had 1.G %hare of mo#ile telephony in the country.

BS ! Broad#and +" Internet F BS ! i% providing internet a% dial-up connection =Sancharnet > and A8S!-Broad#and Dataone . BS ! ha% around 53G market%hare in #road#and in <ndia. BS ! ha% planned aggre%%ive rollout in #road#and for current financial year. 1" Intelligent %etwor2 3I%4 F BS ! i% providing < voting+ toll free calling+ premium calling etc. %ervice% like tele-

$S%& ,resent 5 Future

Since it% corporati%ation in Octo#er "333+ BS ! ha% #een actively providing connection% in #oth ;r#an and 1ural area% and the efficiency of the company ha% dra%tically improved from the day% when one had to wait for year% to get a phone connection to now when one can get a connection in even hour%. 're-activated ,o#ile connection% are availa#le at many place% acro%% <ndia. BS ! ha% al%o unveiled very co%t-effective Broad#and internet acce%% plan% =8ataOne> targeted at home% and %mall #u%ine%%e%. At pre%ent BS ! en$oyA% 4.G of market %hare of <S' %ervice%.

Bear of Broad#and "33.

/ormer <ndian Communication% ,ini%ter 7hiru 8ayanidhi ,aran had declared year "33. a% HBear of Broad#andH in <ndia and BS ! i% gearing up to provide 5

million Broad#and connectivity #y the end of "33.. BS ! ha% upgraded exi%ting 8ataone =Broad#and> connection% for a %peed of up to " ,#itI% without any extra co%t. 7hi% " ,#itI% #road#and %ervice i% #eing provided #y BS ! at a co%t of $u%t ;SC 5.5 per month. /urther+ BS ! i% planning to upgrade it% #road#and %ervice% to 7riple play =telecommunication%> in "33.. BS ! ha% #een a%ked to add 130 million cu%tomer% #y "313 #y /ormer <ndian Communication% ,ini%ter 7hiru 8ayanidhi ,aran. 6ith the frantic activity in the communication %ector in <ndia+ the target appear% achieva#le+ however due to inten%e competition in <ndian 7elecom %ector in recent pa%t BS !A% growth ha% %lowed down. BS ! i% pioneer of 1ural 7elephony in <ndia. BS ! ha% recently #agged 03G of ;SC 503 m =< 1 "+533 crore%> 1ural 7elephony pro$ect of (overnment of <ndia.

Challenges
8uring /inancial Bear "33.-"330 =/rom April 31 + "33) to ,arch &1 + "33.> BS ! ha% added 2.) million new cu%tomer% in variou% telephone %ervice% taking it% cu%tomer #a%e to )4.0 million. BS !A% neare%t competitor Bharti Airtel i% %tanding at a cu%tomer #a%e of &2 million. Jowever+ de%pite impre%%ive growth %hown #y BS ! in recent time%+ the /ixed line cu%tomer #a%e of BS ! i% declining. <n order to woo #ack it% fixed-line cu%tomer% BS ! ha% #rought down long di%tance calling rate under One<ndia plan+ however+ the %ucce%% of the %cheme i% not known. Jowever+ BS ! face% #leak fi%cal "33)-"33. a% u%er% flee+ which ha% #een accepted #y the C,8 BS !. 're%ently there i% an inten%e competition in <ndian 7elecom %ector and variou% 7elco% are rolling out attractive %cheme% and are providing good cu%tomer %ervice%. Jowever+ BS ! #eing legacy operator and it% conver%ion from a (overnment 8epartment+ earn% lot of critici%m for it% poor cu%tomer %ervice. Although in recent pa%t there have #een tremendou% improvement in working of BS ! #ut %till it i% much #elow the <ndu%tryA% Expectation%. A large aging =average age 42 year%=appx>> workforce =&33+333 %trong>+ which i% mo%tly %emiilletrate or illeterate i% the main rea%on for the poor cu%tomer %ervice. /urther+ the 7op management of BS ! i% %till working in BS ! on deputation #a%i%

holding (overnment employee %tatu% thu% having little commitment to the organi%ation. Although in coming year% the retirement profile of the workforce i% very fa%t and around "5G of exi%ting workforce will retire #y "313+ however+ %till the workforce will #e 9uite large #y the indu%try %tandard%. Kuality of the workforce will al%o remain an i%%ue. Acce%% 8eficit Charge% =A8C+ a levy #eing paid #y the private operator% to BS ! for provide %ervice in non-lucarative area% e%pecially rural area%> ha% #een %la%hed #y &.G #y 71A<+ w.e.f. April 31 + "33.. 7he reduction in A8C may hit the #ottomline% of BS !.

$S%& at 6walior Circle

BS ! (walior Circle office i% %ituated in City Center area. 7hi% office i% undertaking of Bhopal office. 7hi% office are work% variou% area% like ,arketing+ 'lanning+ Admini%trative+ Operation - ,anagement and /inance. Each department work% under (, telecom di%trict. (, delegate% our %ome dutie% to 8(,. 8(, i% the head of the department. 7he%e po%t% are highly re%pon%i#le #ecau%e 8(, i% the main per%on of the department and 8(, give% variou% approval% of work%. 7hi% approval leave% variou% effect of the department like financial+ working efficiency+ function% of department% and field officer work%. Ba%ically BS ! city center work% in departmental approache% or function%. 7hi% office provide% a %upport to other department% or employee% of BS !. <n thi% office calculated variou% function of employee% like %alary of employee%+ departmental information+ variou% tender%+ payment of vendor%+ departmental expenditure of general provident fund% etc. But thi% office run a collection center thi% collection center collect variou% telephone%Imo#ile%I#road#and #ill%.

7ision
7o #ecome the large%t telecom Service 'rovider.

Mission
7o provide world cla%% State-of-art technology telecom %ervice% to it% cu%tomer% on demand at competitive price%. 7o 'rovide world cla%% telecom infra%tructure in it% area of operation and to contri#ute to the growth.

Ob)ective
,' 7elecom look% over the management+ control and operation of the telecom network with the following aim% and o#$ective 7o #uild a high degree of cu%tomer confidence #y %u%taining 9uality and relia#ility in %ervice. 7o upgrade the 9uality of telecom %ervice to international level. 'rovi%ion of telephone connection% on demand in all the village% of ,.'. Expan%ion of new %ervice% like <nternet+ <ntelligent 7elephony+ *ideo Conferencing+ Broad#and etc. 'opulari:e Broad#and Service% and to #e on-demand in the whole State. Expan%ion of Cellular ,o#ile 7elephone to all town%. 7o open <nternet @io%k% =CafeA%> at all Block Jead Kuarter%. 7o improve the 9uality of pre%ent %ervice% #eing given to the %u#%cri#er%. 7o open more Cu%tomer Service Center% and upgrade the exi%ting Cu%tomer Service Center% for #etter and friendly Cu%tomer care. ,oderni:e 'S7 network #y making 1S;% - A -1AL. 'lantation of 7ree% to make environment Clean - (reen. 7o rai%e nece%%ary financial re%ource% for it% developmental need%. 7o increa%e acce%%i#ility of %ervice%+ #y providing a large num#er of !ocal and S8I<S8 'u#lic Call Office% ='CO%> %o a% to reach out to the ma%%e%. etwork+ <S8 + <nternet

Fact sheets The Co*pany

$harat Sanchar %iga* &i*ited =known a% $S%&> i% a pu#lic %ector communication% company in <ndia. <t i% the large%t telecommunication company in <ndia and the %ixth large%t in the world. <t% head9uarter% are at State%man Jou%e+ Barakham#a 1oad+ ew 8elhi. <t ha% the %tatu% of ,ini-ratana - a %tatu% a%%igned to reputed 'u#lic Sector companie% in <ndia. 8uring the current financial year+ the management #a%ed on phy%ical verification of fixed a%%et% and inventory and reconciliation of variou% head% of a%%et% and lia#ilitie% in the %u#%idiary and general ledger% which ha% re%ulted into increa%eIdecrea%e in the following a%%et% and lia#ilitie% taken over a% on 31%t Octo#er "333 amounting to net reduction in the a%%et% of 1%. 5+213 lakh ='.B. - 1%. "5+45" lakh>F <n pur%uance of the ,emorandum of ;nder%tanding dated &3th Septem#er "333 executed #etween (overnment of <ndia and BS !+ all a%%et% and lia#ilitie% in re%pect of #u%ine%% carried on #y 87S and 87O were tran%ferred to the Company with effect from 31%t Octo#er "333 at a provi%ional value of 1%. )+&33+333 lakh and up to previou% financial year BS ! ha% identified net a%%et% of 1%. )+&5"+3"0 lakh again%t it. 6eneral In#or*ation
No. of Revenue District Population No. of Tehsil Block H. . Total "illa#es No. of "illa#es$%nha&ite'( 2 1,629,881 6 ! 1221 11)8

13

Revenues Strategies
7he telecom %ector i% the mo%t competitive %ector po%t li#erali:ation. 7hi% ha% re%ulted in a movement from growth #a%ed #u%ine%% model that empha%i:ed growth in num#er% to profit-#a%ed model where the %ucce%% i% mea%ured #y margin%. BS ! a% part of the tran%ition ha% to adopt #oth co%t reduction and revenue enhancement mea%ure%+ which would directly impact profita#ility. <t i% evident that there i% a declining trend in #a%ic %ervice% and there i% %tagnation in cellular revenue%. 1evenue maximi:ation %trategie% will have two component%+ one internal to the organi:ation and the other external. 7he internal a%pect would involve an initiative for change of proce%%+ technology+ organi:ational %tructure etc. <n thi% context+ revenue a%%urance i% the key to improving the #ottom line for BS !. 7hi% i% proactive %trategy to capture all revenue% due for the %ervice% provided. 're%ently+ BS ! generate% #ill% through different %oftware% acro%% the :one% of operation+ which are di%integrated and provide only #a%ic %olution%. 7he indu%try %tandard for revenue leakage i% a#out & to .G percent of revenue+ which in money term% tran%late% to a#out 1%."133 crore% for BS !. 7herefore plugging revenue leakage% i% $u%t the fir%t and mo%t o#viou% part of a 1evenue A%%urance initiative. 7he key concern% for BS ! for effective revenue reali:ation are M 7he delay in cu%tomer #illing after activation 7ime lag #etween call% generated and #illed Scope of fraud on-availa#ility of uniform data#a%e.

7herefore the focu% %hould #e on immediate implementation of C81 #a%ed #illing. 7hi% would re9uire huge inve%tment #ut the return would more than commen%urate. 7he %oftware %hould #e %cala#le and #e a#le to incorporate all the next generation value added %ervice%. 7he implementation of C81 #a%ed %y%tem will al%o generate the following #enefit%F ,lugging o# lea2age o# revenue" For*ulation o# appropriate *ar2eting strategies 8

11

Manage*ent ,ro#ile
Chief (eneral ,anager =C(,> ,r. Jindu$a

(, 7elecom 8i%trict ,r. 'ra%hant 7rivedi

8eputy (eneral ,anager =8(,>

=,arketing+ 'lanning - Admin>

8(,
=Operation - ,anagement>

8(,
=/inance>

,r. 'ra%hant 7rivedi

,r. *i$ay 8ixit

,r. S. 8. 7yagi

Chief Accounting Officer 71 =CO71> Account officer 71 1%t ,r. S.S. Bahdoriya AO ,o#. ,r. ,ano$ Badav AO 7elecom 1evenue "nd ,r. SC Nain

CO Strategic Bu%ine%% 'lan% =COSB'>

AO SB' ,r. 1am Sadal

AO 'ay ,r. aagar

AO Ca%h ,r. 1am Avatar

Nr. Account Officer ,r. 1.S. Bogik

Section Supervi%or ,r. Chandr%hekhar

Sr. 7runk Supervi%or ,r. @. . 8uwedi

'eon ,r. (ya%i 1am

Organisation Functional Structure o# $S%& 6walior Circle S$, Depart*ent

1"

,roducts
BS ! !A 8!< E BS ! ,OB<!E BS ! 6!! < 7E1 E7 SE1*<CES BS ! B1OA8BA 8 1E(<S7E1 O !< E 7A1<// ;SO /; 8E8 1;1A! B1OA8BA 8 /AK CJEC@ ;SA(E E76O1@ B1OA8BA 8 7B'ES O/ ACCESS 6<-/< CO-!OCA7<O SE1*<CE BS ! 6EB JOS7< ( < 7E1 E7 7A1<// 8<A! ;' < 7E1 E7 S,S- B;!@ S,S 'OS7'A<8 '1E'A<8 ; </<E8 ,ESSA(< ( ('1SI6A'I,,S 8E,O% 7A1<// S,S - B;!@ S,S 'JO E '!;S SE1*<CE E6 7E!E'JO E CO EC7<O 'E1,A E 7 CO EC7<O CO CESS<O < 1E 7A!S SJ</7 O/ 7E!E'JO E 71A S/E1 O/ 7E!E'JO E 7E!E'JO E 7A1<//

BS ! ,A A(E8 E76O1@ SE1*<CES BS ! ,'!S-*' <S8 <S8 7A1<//

!EASE8 !< E !EASE8 !< E

1&

7A1<//

14

< 7E!!<(E 7 E76O1@ /1EE 'JO E SE1*<CE '1E,<;, 1A7E SE1*<CE < 8<A 7E!E'JO E CA18 *<17;A! '1<*A7E E76O1@ =*' > *O<CE *' ; <*E1SA! ;,BE1 ; <*E1SA! 'E1SO A! ;,BE1 7E!E *O7< (

*<8EO CO /E1E C< ( O*E1*<E6 7A1<// /AK

A;8<O CO /E1E C< ( O*E1*<E6 7A1<// /AK O*E1*<E6 SE1*<CES O < E7 ;S< ( O < E7 < E7 CO EC7<O S 7A1<//

< E7

7E!ELI 7E!E(1A'J 7E!ELI 7E!E(1A'J 7A1<// E'ABL /1EE E'ABL 7A1<// CE 71EL CE 71EL 7A1<//

E'ABL

J* E7 1AB, < ,A1SA7 @;-BA 8 71A S'O 8E1

15

Accounting ,olicies $asis o# ,reparation o# Financial State*ents

7he financial %tatement% of Bharat Sanchar igam !imited =the DCompanyE or DBS !E> are prepared under the hi%torical co%t convention adopting the accrual method of accounting in accordance with <ndian (enerally Accepted Accounting 'rinciple% Companie% Act+ 125) =the DActE>. and in accordance with the provi%ion% of the

Revenue Recognition
<ncome from %ervice% i% accounted for on accrual #a%i% and in conformity with Accounting Standard M 2 of <CA<. Accordingly+ a> 1evenue for all %ervice% i% recogni:ed when earned and are reali:a#le at the time of #illing. ;n#illed revenue% from the #illing date to the end of the year are recorded a% accrued revenue during the period in which the %ervice% are provided. 'rovi%ion i% made in re%pect of #ill% con%idered to #e di%puted =#y the management>+ de#t% out%tanding for more than two year% and for de#t% due for le%% than " year%+ to the extent con%idered nece%%ary #y the management. #> <n%tallation Charge% recovered from %u#%cri#er% at the time of new telephone connection% are recogni:ed a% income in the fir%t year of the #illing. c> <n term% of the arrangement #etween 8epartment of 7elecommunication% =D8o7E> and the Company+ the charge% for telecommunication %ervice% and other infra%tructural %ervice% provided #y BS ! to 8o7 are neither #eing #illed nor provided for. d> Sale proceed% of %crap ari%ing from maintenance and pro$ect work% are taken into mi%cellaneou% income in the year of %ale. e> <ncome from S<,%+ recharge coupon% of ,o#ile+ 'repaid Calling Card%+ and 'repaid internet connection card% are treated a% income of the year in which the payment i% received %ince the extent of u%e of the%e card% within the financial year could not #e a%certained. f> 6herever there i% uncertainty in reali:ation of income+ %uch a% li9uidated damage%+ claim% on (overnment 8epartment% - local authoritie% etc.+ the%e are recogni:ed on collection #a%i%.

1)

g> 7he claim% on account of reim#ur%ement for provi%ion of infra%tructure+ operation and maintenance of *illage 'u#lic 7elephone% =*'7%> and 1ural Jou%ehold Connection% =18E!%> receiva#le from ;.S.O. fund are accounted for a% revenue on account of the fact that the claim for infra%tructure cannot #e credited to the concerned a%%et account %ince the claim amount could not #e %egregated a%%et wi%e. h> Other income #y way of intere%t on loan% to employee%+ %ecurity depo%it with (overnment 8epartment% and local authoritie%+ #eing not material+ are accounted for on collection.

Fi0ed Assets
a> /ixed a%%et% are carried at co%t le%% depreciation. Co%t include% directly related e%ta#li%hment and other expen%e% including employee remuneration and #enefit%+ directly identifia#le to the con%truction or creation of the a%%et%. #> Expenditure on replacement of a%%et%+ e9uipment%+ in%trument% and reha#ilitation work% i% capitali:ed if+ in the opinion of the management+ it re%ult% in enhancement of revenue generating capacity. c> A%%et% are capitali:ed to the extent completion certificate% have #een o#tained+ wherever applica#le. d> 7he co%t of %tore% and material% at the time of i%%ue to a pro$ect+ i% de#ited to C6<'. e> Apparatu% and plant% principally con%i%ting of telephone exchange%+ tran%mi%%ion e9uipment% and air conditioning plant% etc. are capitali:ed a% and when an exchange i% commi%%ioned and put to u%e. f> Ca#le% are capitali:ed a% and when ready for connection to the main %y%tem. g> <ntangi#le a%%et% are %tated at co%t of ac9uiring the %ame le%% accumulated depreciation I amorti:ation.

Depreciation9A*orti:ation
8epreciation i% provided #a%ed on the 6ritten 8own *alue method at the rate% pre%cri#ed in Schedule L<* to the Companie% Act+ 125) except for Su#%cri#er <n%tallation. 7he Su#%cri#er <n%tallation i% depreciated over the u%eful life of 5 year% on 6ritten 8own *alue method.

1.

A%%et%

co%ting up to 1%. 5+333 are

depreciated fully in the year

of

purcha%e. Similarly+ partition work% co%ting up to 1%. "+33+333 are depreciated fully in the year of con%truction. 7he depreciation on machinery tool% u%ed #oth for pro$ect and maintenance work i% charged to profit and lo%% account in%tead of capitali:ation. All telephone exchange #uilding%+ admini%trative office% and captive con%umption a%%em#ling premi%e%Iwork%hop% are con%idered a% normal #uilding and not a% factory #uilding. Accordingly depreciation i% charged uniformly. <ntangi#le a%%et% %uch a% Entry !icen%e /ee for 7elecom Service operation% are amorti:ed over the licen%e period =i.e. "3 year%> and %tandalone computer %oftware application% are amorti:ed over the licen%e period %u#$ect to maximum of 13 year% a% per %traight line method.

I*pair*ent o# Assets
A%%et%+ which are impaired #y di%u%e or o#%ole%cence+ are %egregated from the concerned a%%et% category and %hown a% O8ecommi%%ioned A%%et%P and provi%ion made for the lo%%+ if any+ due to the difference #etween their net carrying co%t and the net reali:a#le value.

Invest*ents
!ong-term inve%tment% are carried at co%t+ after providing for any diminution in value+ if %uch diminution i% of a permanent nature.

Inventories
<nventorie% are valued at co%t or net reali:a#le value a% the ca%e may #e - co%t a%certained generally on weighted average method? o#%oleteInon moving inventorie% are valued at net reali:a#le value.

Foreign Currency Transactions

a> 7ran%action% in foreign currency are recorded at the exchange rate prevailing on the date of the tran%action i.e. on the date of payment or receipt a% the ca%e may #e. #> All /oreign Currency !ia#ilitie% and monetary a%%et% are %tated at the 10

exchange rate prevailing a% at the date of Balance Sheet and the difference taken to 'rofit and !o%% Account% a% Exchange /luctuation !o%% or (ain.

/0traordinary Ite*s
Extra-ordinary item% of income and expenditure+ a% covered #y AS M 5+ are di%clo%ed %eparately.

Manu#acturing /0penses
Expen%e% incurred at /actory unit% are allocated to the co%t of the manufactured product%.

,rior ,eriod Ite*s

<tem% of <ncomeIexpenditure exceeding 1%. 5 lakh are only con%idered for #eing treated a% Aprior period item%A.

Ta0es on Inco*e
7axe% on <ncome for the current period are determined on the #a%i% of taxa#le income and tax credit% computed in accordance with the provi%ion% of the <ncome 7ax Act+ 12)1. <n accordance with the AS-""+ 8eferred 7ax !ia#ility i% recogni:ed on the timing difference% #etween accounting income and the taxa#le income for the period taking into con%ideration the content% of Accounting Standard <nterpretation% & and 9uantified u%ing the tax rate% in force or %u#%tantively enacted a% on the Balance Sheet date. 8eferred 7ax A%%et% are recogni:ed and carried forward to the extent there i% a virtual certainty that %uch deferred tax a%%et% can #e reali:ed.

,rovisions
'rovi%ion% are recogni:ed when the Company ha% a pre%ent o#ligation a% a re%ult of pa%t event%? it i% more likely than not that an outflow of re%ource% will #e re9uired to %ettle the o#ligation? and the amount ha% #een relia#ly e%timated.

12

Contingent &iabilities
!ia#ilitie%+ though contingent+ are provided for if there are rea%ona#le chance% of maturing %uch lia#ilitie% a% per management. Other contingent lia#ilitie%+ #arring frivolou% claim%+ not acknowledged a% de#t%+ are di%clo%ed #y way of note%.

/arning ,er Share

Earning 'er Share =HE'SH> compri%e% the et 'rofit after tax =excluding extraordinary income net of tax>. 7he num#er of %hare% u%ed in computing Ba%ic - 8iluted E'S i% the weighted average num#er of %hare% out%tanding during the year.

Seg*ent Reporting
7he primary %egment con%i%t% of O#a%icP and OcellularP %ervice% provided. 7he manufacturing activitie% have not #een treated a% a %eparate %egment %ince %uch activitie% are e%%entially carried on a% %upport %ervice to other %egment%. 7he following %pecific accounting policie% have #een followed for %egment reportingF Segment 1evenue include% %ervice income and other income directly identifia#le withIalloca#le to the %egment. <ncomeIexpen%e+ which relate% to the Company+ a% a whole and not alloca#le to individual #u%ine%% %egment i% included in D;n-alloca#le Corporate <ncomeIexpen%e re%pectivelyE. Expen%e% that are directly identifia#le withIalloca#le to %egment% are con%idered for determining Segment 1e%ult%. Segment A%%et% and !ia#ilitie% include tho%e directly identifia#le with the re%pective %egment%. ;n-alloca#le corporate a%%et% and lia#ilitie% repre%ent the a%%et% and lia#ilitie% that relate to the Company a% a whole and not alloca#le to any %egment

"3

,olicy o# Finance
Standard% of /inancial 'roprietie% Ever officer incurring or authori:ing expenditure from pu#lic fund% %hould #e guided #y high %tandard% of financial propriety. Every officer %hould al%o enforce financial order and %trict economy at every %tep and %ee that all relevant financial rule% and regulation% are o#%erved+ #y hi% own officer and #y %u#ordinate% di%#ur%ing officer%. Among the principle% on which empha%i% i% generally laid are the followingF 1. Every officer i% expected to exerci%e the %ame vigilance in re%pect of expenditure incurred from pu#lic money% a% a per%on of ordinary prudence would exerci%e in re%pect of expenditure of hi% own money. ". 7he expenditure %hould #e prima-facie more that the occa%ion demand%. &. o authority %hould exerci%e it% power% of %anctioning expenditure to pa%% an order which #e directly or indirectly to it% own advantage%. 4. Expenditure from pu#ic money% %hould not #e incurred for #enefit of a per%on or %ection of the people unle%%a. a claim for the amount could #e enforce in a Court of !aw+ or #. the expenditure i% in pur%uance of a recogni%ed policy or cu%tom. 5. 7he amount of allowance% granted to meet expenditure of a particular type %hould #e %o regulated that the allowance% are not on the whole a %ource of profit to the recipient%. ). 7he re%pon%i#ility and accounta#ility of every authority delegated with financial power% to procure any item or %ervice on (overnment account i% total and indivi%i#le. (overnment expect% that the authority a concerned will have the pu#lic intere%t uppermo%t in it% mind while making a procurement deci%ion. 7he re%pon%i#ility i% not di%charged merely #y the %election of the cheape%t offer. .. 6henever called for+ the concerned authority mu%t place on record in preci%e term%+ the con%ideration% which weighed with it while talking the procurement deci%ion.

"1

!"1 Co*parative study between years ;;<=(;;>'

8uring the current financial year+ the management #a%ed on phy%ical verification of fixed a%%et% and inventory and reconciliation of variou% head% of a%%et% and lia#ilitie% in the %u#%idiary and general ledger% which ha% re%ulted into increa%eIdecrea%e in the following a%%et% and lia#ilitie% taken over a% on 31%t Octo#er "333 amounting to net reduction in the a%%et% of 1%.5+213 lakh ='.B. - 1%. "5+45" lakh>F
Figures in &a2hs o# Rupees ,ercentage Change 3@4

,articulars Assets /ixed A%%et% Capital 6<' <nventory Sundry 8e#tor% Advance to contactor% 8epo%it with Electricity BoardIother Total A &iabilities Cu%tomer 8epo%it% Earne%t ,oney 8epo%it% Security 8epo%it from Contractor%I Supplier% 6orking Expen%e !ia#ility a% on 1%t Octo#er "333 Contractor% Bill% paya#le a% on 1%t Octo#er "333 et A%%et% taken over #y the Company Total $

up to *arch +!? (;;> 5+41.+ 2"1 53&+ 11" 100+ )4. )0"+ .43 &2+ 440 "+ 30) A?<++?B C1 &21+ )5) 1"+ 5"5 "2+ 454 &0+ "0& 13+ 330 )+&5"+ 3"0 A?<++?B C1

up to *arch +!? (;;< 5+41)+) 2. 53"+) &1 100+) 01 )04+4 &3 &2+4 40 "+1 &0 A?<+1?;( C &2&+. 34 1"+1 50 "2+3 22 4"+) )) 13+" 03 )+&4)+1 10 A?<+1?;( C

Absolute change Rs"

=1+""4> =401> &4 1+)23 5" .1

-3.3" -3.13 3.3" 3."5 3.33 ".42 3.331

"+340 =&).> =&55> 4+&0& "." =5+213> .1

3.5" -".2& -1."1 11.45 ".." -3.32 3.331

""

Interpretation o# Co*parative $alance Sheet

7he comparative #alance %heet of the company reveal% that during "330 there ha% #een on increa%e in final a%%et% of 1%. 1""4 lakh i.e. 3.3"G while long term lia#ilitie% to other %ide have relative increa%e #y 1%. 4&0& lakh and contractor #ill pay ha% increa%ed #y 1% "." lakh. 7hi% fact depict% the policy of the company i% to purcha%e fixed a%%et% from the long-term %ource% of finance there #y not affect the working capital. Current a%%et% have increa%ed #y 1%. 1")1 lakh and advance of contractor not increa%ed on the other hand there ha% #een an increa%e in inventorie% amount 1%. &4 lakh. 7he current lia#ilitie% have increa%ed #y 1%. 450" lakh i.e. 3.3)G. 7hi% further confirm% that the company ha% revi%ed long term finance%. 7he overall financial po%ition of the company i% %ati%factory.

"&

!"C S

OT Analysis'

Strengths'
'an-<ndia reach Experienced telecom %ervice provider 7otal telecom %ervice provider Juge 1e%ource% =financial - technical pool> Juge cu%tomer #a%e ,o%t tru%ted telecom #rand 7ran%parency in #illing Ea%y deployment of new %ervice% Copper in la%t mile can #e u%ed for ea%y #road#and deployment Juge Optical /i#re network and a%%ociated #andwidth

ea2nesses'

on-optimi:ation of network capa#ilitie% 'oor marketing %trategy Bureaucratic organi:ational %et up <nflexi#ility in mind%et =8O7 period legacie%> !imited num#er of value added %ervice% 'oor franchi%ee network !egacy of poor %ervice image Juge and aged manpower 'rocedural delay% !ack of %trategic alliance% 'ro#lem% a%%ociated with incum#ency like outdated technologie%+ unproductive rural a%%et%+ %ocial o#ligation%+ political interference+

'oor <7 penetration within organi:ation 'oor knowledge ,anagement

"4

Opportunities

7remendou% market growing at "3 lac cu%tomer% per month ;ntapped #road#and %ervice% ;ntouched international market Can capitali:e on pu#lic %ector image to gra# governmentP% <C7 initiative% <7EB %ervice market% 8iver%ification of #u%ine%% to turn-key pro$ect% !everaging the #rand image to %ource fund% Almo%t un-invaded *SA7 market /uller utili:ation of %lack re%ource% Can make a kill through deep penetration and low co%t advantage Broaden market expected from convergence of #roadca%ting+ telecom and entertainment indu%try

Threats

Competition from private operator% @eeping pace with fa%t technological change% ,arket maturity in #a%ic telephone %egment ,anpower churning ,ultinational eyeing <ndian telecom market 'rivate operator% demand for %haring la%t mile 8ecrea%ing per line revenue% due to competitive pricing 'rivate operator% demand to do away with A8C can %eriou%ly effect revenue% 'opuli%t policie% of government like DOne<ndiaE rate%

"5

State*ent o# ,roble*'
7he re%earch i% carried on in a proper planned and %y%tematic manner. 7he re%earch wa% particularly #a%ed departmental re%earch. 6e have to move to variou% department and meet people which include their name% and contact num#er% given #y BS ! training and 'lanning department. 8uring the department we have to know a#out to departmental work% #y explaining the working proce%% of a particular department. Our 7eam moved variou% department% like SB'+ 'ay and Ca%h and meet Accounting Officer of each department. 7hi% officer i% provide a huge working knowledge of our department. Each department pre%ence% a %ection %upervi%or thi% SS will provide variou% data of relative department and give opportunity to handling the working proce%% and re%olve our dou#t%.

Research Design'
7he re%earch de%ign of thi% pro$ect i% exploratory. 7hough each re%earch %tudy ha% it% own %pecific purpo%e #ut the re%earch de%ign of thi% pro$ect on BS ! i% exploratory in nature a% the o#$ective i% the development of the hypothe%i% rather than their te%ting.

")

Methodology
Every pro$ect work i% #a%ed on certain methodology+ which i% a way to %y%tematically %olve the pro#lem or attain it% o#$ective%. <t i% a very important guideline and lead to completion of any pro$ect work through o#%ervation+ data collection and data analy%i%.

According to Cli##ord

oody?

D1e%earch ,ethodology compri%e% of defining redefining pro#lem%+ collecting+ organi:ing - evaluating data+ making deduction% - re%earching to conclu%ion%.E Accordingly+ the methodology u%ed in the pro$ect i% a% follow%F 8efining the o#$ective% of the %tudy /raming of 9ue%tionnaire keeping o#$ective% in mind =con%idering the o#$ective%> /eed#ack from the employee% Analy%i% of feed#ack Conclu%ion+ finding% and %ugge%tion%.

".

Sa*pling TechniDue .sed'

7hi% re%earch ha% u%ed convenience %ampling techni9ue.

Convenience sa*pling techniDueF Convenience %ampling i% u%ed in

exploratory re%earch where the re%earcher i% intere%ted in getting an inexpen%ive approximation of the truth. A% the name implie%+ the %ample i% %elected #ecau%e they are convenient

Selection o# Sa*ple Si:e'

/or the %urvey of department%.

Sources o# Data Collection'

1e%earch will #e #a%ed on two %ource%F 1. 'rimary data ". Secondary data

!4 ,ri*ary Data'
Survey' 'rimary data wa% collected #y departmental %urvey for BS !.

(4 Secondary Data'
Secondary data will con%i%t of different literature% like #ook% which are pu#li%hed+ article%+ internet+ the company manual% and we#%ite% of company- www.#%nl.com. <n order to reach relevant conclu%ion+ re%earch work needed to #e de%igned in a proper way. 7hi% re%earch methodology al%o include%F /amiliari:ation with the concept of finance and it% variou% merit%+ demerit%. 7horough %tudy of the information collected. Conclu%ion% #a%ed on finding%.

Statistical Tools .sed

7he main %tati%tical tool% u%ed for the collection and analy%e% of data in thi% pro$ect areF 'ie Chart% Bar 8iagram% !ine Chart% "0

&i*itations o# Study
/inancial analy%i% i% a powerful mechani%m of determining financial %trength% and weakne%%e% of a firm #ut+ the analy%i% i% #a%ed on the information availa#le in the financial %tatement%. 6e ha% al%o careful a#out the impact of price level chance%+ window%-dre%%ing of financial %tatement%+ change% in accounting policie% of BS !+ accounting concept% and convention%+ and per%onal $udgment% etc. 8ue to the following unavoida#le and uncontrolla#le factor% the factor%+ the re%ult might not #e accurate. Some of the pro#lem% faced while conducting the %urvey are a% follow%F 7ime and co%t con%traint% were al%o there. Chance% of %ome #ia%ne%% could not #e eliminated. A ma$ority of re%pondent% %how lack of cooperation and are #ia%ed toward% their own opinion%. Some of the important !imitation% of financial analy%i% are however+ %ummed up a% #elowF <t i% only a %tudy of interim report%. /inancial analy%i% i% #a%ed upon only monetary information and non-monetary factor% are ignored. <t doe% not con%ider change% in price level. A% the financial %tatement% are prepared on the #a%i% of a going concern+ it doe% not give exact po%ition. 7hu% accounting concept% and convention% cau%e a %eriou% limitation to financial% analy%i%. Change% in accounting procedure #y a firm may often make financial analy%i% mi%leading. Analy%i% i% only a mean% and not an end in it%elf. 6e interpretation and draw own conclu%ion 8ifferent people may interpret the %ame analy%i% in different way%. ha% to make

"2

+"!

Introduction
/inancial %tatement% are prepared primarily for deci%ion making. 7hey play a

dominant role in %etting the framework of managerial deci%ion%. But the information provided in the financial %tatement i% not an end in it%elf a% no managerial can #e drawn from the%e %tatement alone. Jowever+ the information provided in the financial %tatement i% of immen%e u%e in making deci%ion through analy%i% and interpretation of financial %tatement%. /inancial analy%i% i% Othe proce%% of identifying the financial %trength% and weakne%%e% of the firm #y properly e%ta#li%hing relation%hip #etween the item of the #alance %heet and the profit and lo%% accountP. 7here are variou% method% u%ed in analy:ing financial %tatement%+ %uch a% comparative %tatement%+ trend analy%i%+ common-%i:e %tatement+ %chedule of change in working capital+ fund% flow and ca%h flow analy%i%+ co%t-volume-profit analy%i% and ratio analy%i%. 7he term financial analy%i%P+ al%o know a% analy%i% and interpretation of financial %tatement+ refer% to the proce%% of determining financial %trength% and weakne%%e% of the firm of the firm #y e%ta#li%hing %trategic relation%hip #etween the item the #alance %heet+ profit and lo%% account and other operative data. D/inancial analy%i% i% a proce%% of evaluating the relation%hip #etween component part% of a financial %tatement to o#tain a #etter under%tanding of a firmP% po%ition and performance%E According to Matclf and Titard D/inancial %tatement analy%i% i% largely a %tudy of relation%hip among the variou% financial factor% in a #u%ine%% a% di%clo%ed #y %ingle %et-of %tatement% and a %tudy of the trend of the%e factor% a% %hown in a %erie% of %tatementE. According to Myers 7he term Ofinancial %tatement analy%i%P include #oth Oanaly%i%P and OinterpretationP. 7he analy%i% and interpretation of financial analy%i% %tatement% i% e%%ential to #ring out the my%tery #ehind the figure in financial %tatement%. /inancial %tatement i% an attempt to determine the %ignificance and meaning of the financial %tatement data %o the foreca%t may #e made of the future earning+ a#ility to pay intere%t and maturitie% and profita#ility of a %ound dividend policy.

&3

Types o# Financial Analysis

< can cla%%ify variou% type% of financial analy%i% into different categorie% depending upon =i> the material u%ed+ and =ii> the method of operation followed in the analy%i% or the modu% operandi of analy%i%.

3i4

On the basis o# *aterial used' According to material u%ed+ financial

analy%i% can #e of two type% =a> external analy%i% and =#> internal analy%i%. a" /0ternal Analysis' 7hi% analy%i% i% done #y out%ider% who do not have acce%% to the detailed internal accounting record% of the #u%ine%% firm. 7he%e out%ider% include inve%tor%+ potential inve%tor%+ creditor%+ potential creditor%+ government agencie%+ credit agencie% and the general pu#lic. /or financial analy%i%+ thi% external party to the firm depend% almo%t entirely on the pu#li%hed financial %tatement. External analy%i%+ thu% %erve% only a limited purpo%e. Jowever+ the change% in the government regulation% re9uiring #u%ine%% firm make% availa#le more detailed information to the pu#lic through audited account% have con%idera#ly improved the po%ition of the external analy%i%. b" Internal Analysis' 7he analy%i% conducted #y per%on% who have acce%% to the internal accounting record% of a #u%ine%% firm i% known a% internal analy%i%. Such an analy%i% can+ therefore+ #e performed #y executive and employee% of the organi:ation a% well a% government agencie% which have %tatutory power% ve%ted in them. /inancial

&1

analy%i% for managerial purpo%e i% the internal type of analy%i% that can #e effected depending upon the purpo%e to #e achieved.

3ii4

On the basis o# *odus operandi' According to the method of

operation followed in the analy%i% financial can al%o #e of two type%F =a> hori:ontal analy%i% =#> vertical analy%i%.

a" -ori:ontal Analysis' Jori:ontal analy%i% refer% to the compari%on of financial data of a company for %everal year%. 7hu% figure for thi% type of analy%i% are pre%ented hori:ontally over a num#er of column%. 7he figure% of the variou% year% are compared with %tandard or #a%e year%. A #a%e year cho%en a% #eginning point. 7hi% type of analy%i% i% al%o called O8ynamic Analy%i%P a% it i% #a%ed on the data from year to year rather than on data of any one year. 7he hori:ontal analy%i% make% it po%%i#le to focu% attention on item% that have changed %ignificantly during the period under review. Compari%on of an item over %everal period% with a #a%e year may %how a trend developing. Comparative %tatement and trend percentage% are two tool% employed in hori:ontal analy%i%.

b" 7ertical Analysis' *ertical analy%i% refer% to the %tudy of relation%hip of the variou% item% in the financial %tatement% of one accounting period. <n thi% type% of analy%i% the figure from financial %tatement of a year are compared with a #a%e %elected from the %ame yearP% %tatement. <t i% al%o know% a% OStatic Analy%i%P. Common-%i:e financial analy%i% %tatement and financial ratio are the tool% employed in vertical analy%i%. Since vertical analy%i% con%ider% data for one time period only+ it i% not conducive to a proper analy%i% of financial %tatement%. Jowever+ it may #e u%ed along with hori:ontal analy%i% to make it more effective and meaningful.

&"

,rocedure o# Financial State*ents

7here are three %tep% involved in the analy%i% of financial %tatement%. 7he%e areF =i> %election =ii> cla%%ification =iii> interpretation+ the fir%t %tep involve% %election of information =data> relevant to the purpo%e of analy%i% of financial %tatement%. 7he %econd %tep involved i% the methodical cla%%ification of the data and the third %tep include drawing and conclu%ion%. 7he following procedure i% adopted for the analy%i% and interpretation of financial %tatement%F 1. 7he analy%i% %hould ac9uaint him%elf with the principal and po%tulate% of accounting. Je %hould know the plan% and policie% of the management %o that he may #e a#le to find out whether the%e plan% properly executed or not. ". 7he extent of analy%i% %hould #e determined %o that the %phere of work may #e decided. <f the aim i% to find out the earning capacity of the enterpri%e than analy%i% of income %tatement will #e undertaken. On the other hand. <f financial po%ition i% to #e %tudied then #alance %heet analy%i% will #e nece%%ary. &. 7he financial data given in the %tatement %hould #e re-organi:ed and rearranged. <t will involve the grouping of %imilar data under %ame head%+ #reaking done of individual% component% of %tatement% according to nature. 7he data i% reduced to a %tandard form. 4. A relation%hip i% e%ta#li%hed among financial among financial %tatement% with the help tool% and techni9ue% of analy%i% %uch a% ratio+ trend%+ common %i:e+ fund% flow etc. 5. 7he information i% interpreted in a %imple and under%tanda#le way. 7he %ignificance and utility of financial data i% explained for helping deci%iontalking. ). 7he conclu%ion% drawn from interpretation are pre%ented to the management in the form if report%.

&&

Methods or Devices o# Financial Analysis

7he analy%i% and interpretation of financial %tatement% i% u%ed to determine the financial po%ition and re%ult of operation a% well. A num#er of method% or device% are u%ed to %tudy the relation%hip #etween different %tatement%. An effort i% made to u%e tho%e device% which clearly analy%i% po%ition of the enterpri%e. 7he following method% of analy%i% are generally u%edF Comparative Statement 7rend analy%i% Common Si:e Statement Ca%h /low Analy%i% 1atio analy%i%

Co*parative State*ent' Comparative #alance %heet analy%i% i% the %tudy of the

trend of the %ame item%+ group of item and computed item in two or more #alance %heet% of the %ame #u%ine%% enterpri%e on different data"

Trend analysis' 7hi% method determine% the direction upward% and involve% the
computation of the percentage relation%hip that each %tatement item #ear% to the %ame item in #a%e year.

Co**on si:e State*ent' 7he common %i:e %tatement% #alance %heet %tatement%
are %hown in analytical percentage%. 7he figure% are %hown a% percentage% of total a%%et%+ total lia#ilitie% and total %ale%. 7otal a%%et% are taken a% 133 and different a%%et% are expre%%ed a% a percentage of the total+ %imilarly variou% lia#ilitie% are taken a% a part of total lia#ilitie%.

Cash #low State*ent' Ca%h flow %tatement i% a %tatement which de%cri#e% the
inflow =%ource%> and outflow =u%e%> of ca%h and ca%h e9uivalent in an enterpri%e during a %pecified period of time.

&4

Ratio Analysis' 1atio i% a %imple arithmetical expre%%ion of the relation%hip of one

num#er to another. <t may #e defined a% the indicated 9uotient of two mathematical expre%%ion%.

&5

+"(

Co*parative State*ent o# $S%& year (;;> 5 (;;<

Table +"!
Comparative Balance Sheet for the year ended 2007 and 2008

,articulars
SO.RC/S OF F.%DS ShareholderA% /und% Capital 1e%erve% and Surplu% &oans Funds ;n%ecured !oan% 8eferred 7ax lia#ility TOTA& A,,&ICATIO% OF F.%DS Fi0ed Assets (ro%% #lock !e%%F 8epreciation et Block Capital 6orking-in-'rogre%% 8ecommi%%ioned A%%et%

as at +! March (;;> 3Rs" In &a2h4

as at +! March (;;< 3Rs" In &a2h4

Increase9 Decrease
3Rs" In &a2h4

Increase9 Decrease
3,ercentages4

1+"53+333 .+444+03"

1+"53+333 .+5)"+0"5

110+3"&

3 1.52

554+&)) 1"4+)35 B?+>+?>>+

&&0+00. 1&1+35& B?(<(?>AC

="15+4.2> )+440 3B!?;;<4

-&0.0. 5.1. =;"B>

11+0)4+231 )+3.1+511 5+.2&+&23 "5)+0)3 )+444 )+35)+)24 "3+333 "4"+04. 550+3)) &+.45+"2) 114+140 .14+4&1 5+&.4+.00 1+)).+212 514+050 "+10"+... &+12"+311 135+3)0 B?+>+?>>+

1"+45.+0"& )+20.+2.4 5+4)2+042 "))+5)" &02 5+.&)+033 "3+333 &""+33) 54)+551 4+355+150 1&.+)0. .44+441 5+035+04& 1+.&2+.00 )3)+&"1 "+&4)+132 &+452+.&4 ))+"&1 B?(<(?>AC

52"+2"" 21)+4)& =&"&+541> 2+.3" =)+355> =&12+024> .2+152 =11+515> &32+0)" "&+5&2 &3+313 4&1+355 .1+0)2 21+4)& 1)&+&&" ").+."& =&0+0&.> 3B!?;;<4

5.33 15.32 -5.50 &..0 -2&.2) -5."0 3.33 &".)3 -".3) 0.". "3.)" 4."3 0.3" 4.&1 1...) ..40 0.&2 -&).2) =;"B>

Invest*ents Current? Assets? &oans and Advances <nventorie% Sundry 8e#tor% Ca%h and Bank Balance% Other Current a%%et% -Accrued <ntere%t !oan% and Advance% &ess' Current &iabilities and ,rovisions Current !ia#ilitie% 'rovi%ion %et Current Assets Inter9Intra Circle Re*ittance TOTA&

&)

Figure +"!' Co*parative $alance Sheet chart

Figure +"( Co*parative $alance Sheet in @ Chart

&.

,rocedure o# Co*parative $alance Sheet

1. 7he Comparative #alance %heet ha% two column% for the data of original #alance %heet. ". 7hird column i% u%ed to %how increa%e% in figure%. &. 7he /ourth column may #e added for giving percentage% of increa%e or decrea%e.

Interpretation o# Co*parative $alance Sheet

7he comparative #alance %heet of the company reveal% that during "330 there ha% #een on decrea%e in fixed a%%et% of 1%. &12024 lakh i.e. -5."0G while long term lia#ilitie% to out%ider% have relatively decrea%e #y 1%. 21330 lakh i.e. -3.2.. 7hi% fact depict% the policy of the company i% to not purcha%e fixed a%%et% from the long-term %ource% of finance there #y not affect the working capital. Current a%%et% have increa%ed #y 1%. 1)&+&&" lakh and ca%h and #ank #alance% al%o increa%ed 1%. &32+0)" i.e. 0.".G+ inve%tment% not increa%ed on the other hand there ha% #een an increa%e in inventorie% amount 1%. .2+152 lakh i.e.&".)3G. 7he current lia#ilitie% have increa%ed #y 1%. 1)&+&&" lakh i.e. ..04 G. 7hi% further confirm% that the company ha% revi%ed long term finance%. 7he overall financial po%ition of the company i% %ati%factory.

&0

Trend Analysis 3,ro#it o# $S%&4

Table +"(
Bear% "335 "33) "33. "330 'rofit #efore 7ax Amount =1%.> in 'ercentage% !akh .2"+330.33 133.33 044+)20.33 015+&01.33 445+155.33 13).)5 13".25 5)."1

"335

"33)

"33.

Figure +"+' Trend ,ro#it chart

,rocedure o# Calculation Trends

4. One year i% taken a% a #a%eF year "335 taken a% a #a%e year 5. 7he figure of #a%e year are taken 133 ). 7rend percentage% are calculated in relation to #a%e year. /igure in other year i% le%% than the figure in #a%e year trend percentage will #e le%% than 133 and it will #e more than 133 if figure i% more than #a%e year figure. Each yearP% figure i% dived #y the #a%e yearP% figure.

Interpretation
'rofit #efore tax ha% %u#%tantially decrea%ed. <n four year period it ha% more than dou#led. 7he comparative decrea%e in profit i% much lower in "330 a% compared to "33) and "33.. 7he expan%ion of the firm i% not po%%i#le. 7he overall performance of the concern i% not good on the #a%i% of profit.

&2

Co**on Si:e $alance Sheet o# $S%& year (;;> and (;;<

Table +"+
Common Si:e Balance Sheet for the year ended 2007 and 2008 ,articulars
SO.RC/S OF F.%DS ShareholderA% /und% Capital 1e%erve% and Surplu% &oans Funds ;n%ecured !oan% 8eferred 7ax lia#ility TOTA& A,,&ICATIO% OF F.%DS Fi0ed Assets (ro%% #lock !e%%F 8epreciation et Block Capital 6orking-in-'rogre%% 8ecommi%%ioned A%%et% as at +! March (;;> 3Rs" In &a2h4 @ as at +! March (;;< 3Rs" In &a2h4 %

1+"53+333 .+444+03"

1&.&4 .2.4"

1+"53+333 .+5)"+0"5

1&.4. 01.4.

554+&)) 1"4+)35 B?+>+?>>+

5.21 1.&& !;;";;

&&0+00. 1&1+35& B?(<(?>AC

&.)5 1.41 !;;";;

11+0)4+231 )+3.1+511 5+.2&+&23 "5)+0)3 )+444 )+35)+)24 "3+333 "4"+04. 550+3)) &+.45+"2) 114+140 .14+4&1 5+&.4+.00 1+)).+212 514+050 "+10"+... &+12"+311 135+3)0 B?+>+?>>+

1").50 )4... )1.03 "..4 3.3. )4.)1 3."1 ".52 5.25 &2.2) 1."" ..)" 5..&4 1...2 5.42 "&."2 &4.35 1.1" !;;";;

1"+45.+0"& )+20.+2.4 5+4)2+042 "))+5)" &02 5+.&)+033 "3+333 &""+33) 54)+551 4+355+150 1&.+)0. .44+441 5+035+04& 1+.&2+.00 )3)+&"1 "+&4)+132 &+452+.&4 ))+"&1 B?(<(?>AC

1&4."3 .5."0 50.2" ".0. 3.33 )1.03 3."" &.4. 5.02 4&.)0 1.40 0.3" )".54 10..4 ).5& "5.". &..". 3..1 !;;";;

Invest*ents Current? Assets? &oans and Advances <nventorie% Sundry 8e#tor% Ca%h and Bank Balance% Other Current a%%et% -Accrued <ntere%t !oan% and Advance% &ess' Current &iabilities and ,rovisions Current !ia#ilitie% 'rovi%ion %et Current Assets Inter9Intra Circle Re*ittance TOTA&

43

Figure +"1 Co**on si:e $alance Sheet chart

,rocedure o# Co**on=Si:e $alance Sheet

1. 7he total a%%et% are taken a% 133 and different a%%et% are expre%%ed a% a percentage% of the total ". Similarly+ variou% lia#ilitie% are taken a% a part of total lia#ilitie%. &. 7hi% %tatement i% al%o known a% component percentage% or 133 percent %tatement #ecau%e every individual item i% %tated a% a percentage of the total 133. 7he %hort coming% in comparative %tatement and trend percentage where change% in item% could not #e compared with the total% have #een covered up.

41

Interpretation
An analy%i% of patter of financing of #oth the year% %how% that year "33. i% more traditionally financed a% compared to year "330. 7he BS ! ha% depended more on it% own re%erve% and %urplu% a% i% %hown #y #alance %heet. Out of total re%erve 01.4.G of the fund% are proprietorP% fund%. <n year "33. fund% are .2.4"G which %how% that thi% company ha% depend more upon out%ider fund%. <n the pre%ent day economic world generally+ companie% depend more on out%ider%P fund%. <n thi% context #oth year% have good finical planning #ut year "330 i% more financed on traditional line%. Both year% are %uffering from ade9uacy of working capital. 7he percentage of current a%%et% i% more than the percentage of current lia#ilitie% in #oth the year. <n the year "330 BS ! i% %uffering more form working capital po%ition than the %econd than the %econd year #ecau%e current a%%et% are more then current lia#ilitie% i.e. "5.".G and thi% percentage i% "&."2G in the "33.. A clo%e look at the #alance %heet %how% that inve%tment% in fixed a%%et have #een not financed from working capital in #oth year%. <n "33. fixed account for )4.)1G of the total a%%et% while long-term fund% account for 5.21G of total fund%. <n year "330 fixed account for )1.03 wherea% long term fund% account for &.)5G of total in%tead of u%ing long-term fund%. Both the year BS ! i% not facing working capital pro#lem.

4"

+"C

Cash Flow State*ent o# $S%&

Table +"1
CAS- F&O $-ARAT SA%C-AR %I6AM &IMIT/D STAT/M/%T FOR T-/ E/AR /%D/D +!ST MARC- (;;< Eear ended +!st March (;;< 3Rs" in &a2h4 Eear ended +!st March (;;> 3Rs" in &a2h4 Eear ended +!st March (;;A 3Rs" in &a2h4 Eear ended +!st March (;;C 3Rs" in &a2h4

,ARTIC.&ARS A" Cash #low #ro* operating activities' et =lo%%>Iprofit #efore tax #ut after 'rior period and Extraordinary item% Ad$u%tment% forF 8epreciation 'rior period depreciation <ntere%tI/inance charge% <ntere%t <ncome !o%%I='rofit> on /ixed A%%et% %old 8e#t% I Advance% 6ritten off 'rovi%ion for Bad and 8ou#tful 8e#t% Exce%% provi%ion written #ack 'rior 'eriod item other than depreciation Other 'rovi%ion Operating profit #efore working capital change% Ad$u%tment% for change% in working capital F - <nter Circle 1emittance - Sundry 8e#tor% - Other 1eceiva#le% - 7rade and Other 'aya#le% Cash generated #ro* operations -7axe% paid - 'rior 'eriod item other than depreciation %et cash #ro* operating activities $" Cash #low #ro* Investing activities' <nventorie% 'urcha%ed 'urcha%e of fixed a%%et% Capital 6ork in 'rogre%% 'roceed% from Sale of fixed a%%et% <ntere%t 1eceived %et cash used in investing activities

11C!CC 2)2)13 513) 0)"54 =43&&"4> ="33"> .32") 4.022 =030"2> =05)5> 14.525 2142&1 0"00 ..241 ="011"&> =033> &5&43 1".0.5 ="1).)> 1".) 13"510

<!C+<! 2&.))2 "1"&1 130203 =1.&&43> =051> 4.352 152510 =121&&> 12&"3 1"&)4)

<11AB< 2)"40) 54"2& "2"2 =0335"> =)10> =.&4&.> ")43& =&25&"> =055> ""2"".

>B(;;<

<+(A>; !(>><(C

BA1C>; !>>BBC!

!((1;BB (;A<>B>

!;<;<11 !<>(<C(

&00&. =)"0&0> =54&&5> )52"&

3!(1!+4 !(AC1!(

=1"""2> =1&14)5> =)...)> =)05>

3(!(!CC4 !CA>>BA

1))& =24)&.> =1.3&2.> 1454.4

3!!><B>4 !BC;B;;

=4"3"> =..51.> =520).> =441.4>

3!<C>A;4 !A<>;B(

=1.5.2&> 05)5 3!A>((<4 !;B<!<1

=15"5"4> =1".)> 3!C+<;;4 !1!+BBA

=1102.1> &02.) 3>BBBC4 !<>;B;C

=11.5.)> 1..444 CB<A< !>1ABA;

=.)342> =.1.&32> =2"&1> 53&12 &.2.05 3+>(1<C4

"4."& =015&1&> 1"5535 13..25 "&3)3" 3+(AA<<4

=545&2> =00"441> .03)) 04.53 1"4301 3AC;;<+4

=5."> =2.)&31> 1"5)02 1&&".& .3324 3A1><!>4

4&

C" Cash #low #ro* #inancing activities' 'roceed% from long term #orrowing% <ntere%t 'aid <nterim 8ividend 'aid 8ividend 'aid 8ividend 8i%tri#ution 7ax 'aid %et cash used in #inancing activities %et Increase93Decrease4 in Cash and Cash /Duivalents Opening Cash and cash eDuivalents Cash and cash eDuivalents as at +!";+"(;;< Cash and cash eDuivalents co*prise Cash? CheDues and Dra#ts 3in hand4 $alances with ban2s

=&33333> =1.).> =&3333> =).533> =1)5.3> 31!C<+>4

=1.43".> =...33> =53333> =03333> =10"&&> 3+BBBA;4

=2&)2)> =130&50> =4".52> =1111.4>

=&).2> =&3)0> ="")14> =&1033>

3+CCB<>4

3A!!A!4

+;B<A(

A<>+1<

<A1<+C

!;+>B<(

+>1C(B<

+;C>BC;

(!B+!!C

!!CC!++

1;CC!A;

+>1C(B<

+;C>BC;

(!B+!!C

"5)2 435"502

1;CC!C<

".34 &.4"52"

+>1C(BA

&324 &354054

+;C>B1<

1.222& "31&1"3

(!B+!!+

Figure +"C %et Increase9Decrease in cash and cash eDuivalents

44

Figure +"A Cash #low #ro* various heads

,rocedure o# Cash Flow State*ent

Ca%h flow %tatement i% not a %u#%titute of income %tatement+ i.e. a profit and lo%% account+ and a #alance %heet. <t provide% additional information and explain the rea%on% for change% in ca%h and ca%h e9uivalent. 7he #a%ic information re9uired for the preparation of ca%h flow %tatement% i% o#tained from the following %ource%F i. ii. Comparative #alance %heet% a% two point% of time+ i.e. in the #eginning and at the end of accounting period. <ncome %tatement of the current accounting period or the profit and lo%% account. iii. Some %elected additional data to extract the hidden tran%action. Step <. Step <<. Step <<<. Step <*. Step *. Compute the net increa%e or decrea%e in ca%h and ca%h e9uivalent% #y making a compari%on of the%e accounting given in the comparative #alance %heet. Calculate the net ca%h flow provided operating activitie% #y analy%i% the profit and lo%% account #alance %heet and additional information. Calculate the net ca%h flow from inve%ting activitie%. Calculate the net ca%h floe from financing activitie%. 'repare a formal ca%h flow %tatement highlighting the net ca%h flow from operating.

45

Step *<.

,ake an aggregate of net ca%h flow the three activitie% and en%ure that the total net ca%h flow i% e9ual to the net increa%e or decrea%e in ca%h and ca%h e9uivalent a% calculated in %tep <.

Step *<<.

1epot %ignificant non-ca%h flow %tatement e.g.+ purcha%e of machinery again%t i%%ue of %hare capital or redemption of de#enture in exchange% fro %hare capital.

Interpretation
Cash Flow #ro* Operating Activities
Operating activitie% are the principal revenue-producing activitie% of the enterpri%e and other activitie% that are not inve%ting or financing activitie%. 7he operating activitie% are calculate% "335 to "330. 7hi% activity i% %hown that the ca%h flow of operating activitie%. 7he year of "335 net ca%h i% 1%. 1.4)2)3 in lakh+ year "33) ca%h 1%. 10.3235 lakh+ year "33. ca%h from operating 1%. 141&22) lakh and year "330 ca%h from operating activitie% 1%. 1320104 lak%. 7hi% operating %hown ca%h %hown i% reduction of ca%h flow of operating activity. <n "330 operating goe% down #ecau%e net profit i% goe% down in compari%on year "33) and tax paid i% goe% high %o net ca%h from operating activitie% goe% down in compari%on year "33).

Cash Flow #ro* Investing Activities

7hi% activity di%clo%e of ca%h flow% ari%ing from inve%ting activitie% i% important #ecau%e the ca%h flow% repre%ent the extent to which expenditure% have #een made for re%ource% intend to generate future income and ca%h flow. 7hi% activity i% %hown that the ca%h flow of inve%ting activitie%. 7he year of "335 net ca%h i% 1%. -)4.01. in lakh+ year "33) ca%h 1%. -)5330& lakh+ year "33. ca%h from inve%ting 1%. -&"))00 lakh and year "330 ca%h from inve%ting activitie% 1%. -&."405 lak%. 7hi% calculation %hown inve%ting payment%. <n "330 inve%ting activitie% goe% down #ecau%e purcha%e of fixed a%%et% i% 1%. .1.&32 lak%. <n thi% year inve%ting money i% goe% down in compari%on year "33) and intere%t receiving i% goe% high %o net ca%h u%ing in inve%ting activitie% goe% down in compari%on year "33).

Cash Flow #ro* Financing Activities

4)

7hi% activity di%clo%e of ca%h flow% ari%ing from financing activitie% i% important #ecau%e the claim on future ca%h flow% #y provider% of fund% =#oth capital and #orrowing%> to the enterpri%e%. 7hi% activity i% %hown that the ca%h flow of financing activitie%. 7he year of "335 net ca%h i% 1%. -)11)1 in lakh+ year "33) ca%h 1%. -&5520. lakh+ year "33. ca%h from financing 1%. -&222)3 lakh and year "330 ca%h from financing activitie% 1%. -4150&. lak%. 7hi% calculation %hown inve%ting payment%. <n "330 financing activitie% goe% upward #ecau%e taking long term #orrowing i% 1%. &33333 lak% compari%on year "33) #ecau%e in thi% year #orrowing i% 1%. &).) lakh. Overall ca%h flow net ca%h and ca%h e9uivalent i% decrea%ed in compari%on previou% year

4.

Findings
According to my %urvey and calculation the noteworthy point% areF ,o%tly year BS ! %uffer% in lo%%e%. BS ! #uild fixed a%%et%? the%e a%%et% will give effect in profit of BS !. Jighly due% of intraIinter circle tran%fer of fund% which i% leave our effect in lia#ilitie% %ide in #alance %heet. CoordinationP% of department% are not %ati%factory. Kualification of employee% i% not match hi% po%t%. 1evenue% policie% of BS ! are not properly implied. 8epartmental proce%% %o long. 'roper computeri:ing of department are not %ati%factory.

Analysis'
/rom the calculation it wa% found that among%t year "33) to "330. <n year "33) i% good for BS ! #ecau%e in thi% year profit goe% 13)G on #a%e of year "335. <n year "33. i% fine for BS ! #ecau%e in thi% year profit goe% approximately 13&G on #a%e of year "335. <n year "330 i% underprivileged for BS ! #ecau%e in thi% year profit will #e only 5)."1G on #a%e of year "335. <n thi% year BS ! %uffer payment% lia#ilitie%. 7he current lia#ilitie% will increa%e "5G. <n year "33) to "330 ca%h po%ition i% goe% decrea%e. 6e %aw the graph of ca%h < analy%i% the ca%h po%ition are not %ati%factory at thi% time. BS ! i% a ) th large%t telecom company in the world #ut at thi% time BS ! %uffer% ca%h+ capital pro#lem%.

40

Conclusion
After overhauling the all %ituation that #oo%ted a num#er of 'vt. Companie% a%%ociated with multinational in the 7elecom Sector to give #e relevant competition to the other e%ta#li%hed company in private %ector+ we come at the conclu%ion that 7here are very cut tough competition% among the private telecom companie% on the level of new trend of adverti%ing to %ilence a ma$or part of Cu%tomer%. BS ! i% not left #ehind in the pre%ent race of adverti%ement. 7he entry of more 'vt. player% in the telecom Sector have expanded the product %egment to meet the different level of the re9uirement like &(+ Broad#and+ phone line+ ca#le connection in on wire line to provide of the cu%tomer%. <t ha% #rought a#out greater choice to the cu%tomer%. Over all in BS ! facing %hort of employee% and pre%ent employee% are not working properly. Some employee% working faith full for BS ! #ut retirement of BS ! employee% i% too much. Each month large num#er of employee% will retired #y BS !. BS ! facing of over capitali:ation pro#lem. 7hi% pro#lem generated #y decommi%%ioned a%%et%. 7hi% organi:ation paid large amount of taxe%. 7hi% taxe% leave over effect earning per %hare% =E'S>.

42

Suggestions
7he %tudy ha% provided with the u%eful data from the re%pondent%. 7here ha% a lot to #e recommended. /ollowing are the recommendation%F 7here i% a need for #etter promotion for the inve%tment - %ervice%. ,ore return% %hould #e provided on revenue% policie%. A% the BS ! provide% the telecom facility to it% cu%tomer%. <t %hould provide thi% facility #y tie up with the other organi:ation% a% well. 1ecruit new 9ualified employee% technical or non technical. 6orking hour will increa%e to employee%. Create new accounting or finance policie%. 7hi% policie% will provide help generate revenue%. !aunch #etter plan% for according to cu%tomer%. 'lan% will #e flexi#le nature ,aintain Communication of each department. BS ! i% computeri:ed #ut today %ome department work with paper%. 7he%e employee% are not handle computer #ecau%e they canPt that. 8epartmental proce%%e% %o long < %ugge%t make a %hort proce%% of work to departmental.

53

51

5"

5&

54

55

5)

5.

$ibliography
,anagement Accounting Shashi K. Gupta & R.K. Sharma /inancial ,anagement I.M. andey. 1e%earch 'aperF /inancial Analy%i% Jampton !ohn !. /inancial 8eci%ion ,aking+ Second Ed p..5 6e# %ite% o www.#%nl.co.in o www.google.com o www.mp#%nl.com Annual 1eport% of BS ! "33)-"330. 8epartmental 1ecord%.

50