Professional Documents
Culture Documents
CONTENTS
DETAILS
PAGE NO
04 06
07 08
09 10
Directors Report
11 25
26 27
28 51
52 96
Auditors Report
97 126
127 137
138 140
141 143
BOARD OF DIRECTORS
Director (CFA)
Director [Finance]
[Upto 30.11.2013]
Government Director
Government Director
[Upto 26.08.2014]
Director
Director
Chairman, Remuneration
Chairman, Audit
Committee of the Board Committee of the Board
Smt. Darshana
Momaya Dabral
Government Director
[W.e.f. 29.9.2014]
Statutory Auditors
Walker Chandiok & Co., L-41 Connaught Circus, New Delhi-110 001.
Cost Auditors
M/s Balwinder & Associates, Cost Accountants
Bankers
State Bank of India, Punjab National Bank, ICICI Bank, Indian Bank, HDFC Bank,
Canara Bank, Union Bank of India, Corporation Bank, IDBI Bank, Oriental Bank of Commerce,
Indus Ind Bank, Yes Bank
OUR BUSINESS
Mobile Services
Broadband Services
Landline Broadband
Enterprise Business
Landline Services
Enterprise Voice and Mobility:- EPABX, Voice Telephone Lines, FLPP B-fone, Phone plus
VPN, ISDN/PRI/BRI, Centrex, 2G/3G Mobile, services
Blackberry services
Intelligent Network Services:- Universal ITC,
Internet Data Centre Services:- IDC Overview, UAN service, Toll free numbers/services, VPN
Managed Colocation services, Managed/ service, Televoting services
Hosting Services, Managed IT Services, Cloud
BSNL PCO:- FLPP-PCO
Services (PCaas)
Enterprise Data Services:- Leased Circuit(DLC), PRI/BRI/Dial-up Internet:- Dial up internet,
MPLS VPN, Internet Leased Line, VSAT, VPN ISDN PRI, ISDN BRI
Services (Over BB, CDMA/3G)
MISSION:
a)
b)
c)
d)
e)
OBJECTIVES
To provide quality and reliable fixed telecom service to our customer and thereby increase
customers confidence
To provide customer friendly mobile telephone service, with focus on Value added service
and data services, of high quality and play a leading role as GSM operator in its area of
operation.
Strategy for:
I.
Rightsizing the manpower
II. Providing greater customer satisfaction
Contribute towards:
I.
Broadband customers base in India as envisaged in draft National Telecom Policy
2011.
II. Providing broadband connectivity to 2.5 lakhs Village Panchayats as per Government
policy
To leverage the existing infrastructure of BSNL for facilitating implementation of other
government programmes and initiatives particularly in the rural areas.
To look for the opportunity of possible expansion of BSNL footprint globally by exploring
international telecom in developing markets such as Africa.
Shri Ravi Shankar Prasad, Honble Minister for Communications and IT addressing the delegates in the Heads of
Circle Conference 22nd August 2014.
Business Outlook
Acknowledgements
On behalf of the Board of Directors of your
Company, I wish to convey sincere regards
and deep gratitude to our valued subscribers. I
acknowledge the unstinted support and valuable
guidance from various Ministries, particularly
from the Department of Telecommunications,
other Ministries and Departments, Authorities
and Agencies of the Union Government and the
State Governments.
Thank you,
Corporate Governance
Your Company believes in conducting
business in a manner that complies with the
A.N. Rai
Chairman and Managing Director
Jai Hind !
10
DIRECTORS REPORT
Dear Members,
Your Directors have great pleasure in presenting the 14th Annual Report of your company,
alongwith the Audited Statement of Accounts, Auditors Report and Comments and Review of the
Comptroller and Auditor General of India, on the Accounts for the financial year ended March 31,
2014.
FINANCIAL PERFORMANCE
The financial performance for fiscal 2013-14 is summarized as below:
S.
No
1
2
3
4
5
6
7
8
9
10
Particulars
1
2
3
4 = 1+2-3
5
6
7=4-(5+6)
8
9=7+8
10
11=9+10
2013-14
[Rs. in Lacs]
2,615,326
184,309
2,868,679
(69,044)
602,317
21,964
(693,325)
(19,094)
(712,419)
10,443
Note 1
(701,976)
Note 1: Wealth tax expenditure booked for the current year is Rs. 84 lacs which is included in the expenditure
(excluding interest and depreciation) shown at serial no 3.
11
OUTLOOK
During the year under review, your Directors continued to work on the vision of creating a customer
focused organization. Your Directors on their part have taken various strategic initiatives to improve
companys operating efficiency and revenue earning potentials to spear overall growth and
productivity in the organization. Focus is on service, differentiation and operational agility to cater
to subscribers on Pan India basis. Initiatives such as capacity expansion, technology upgradation
coupled with revenue assurance are likely to enhance revenue and restrain the losses.
PHYSICAL PERFORMANCE
Your Company, despite operating in a very highly competitive and consumer driven market with
pressure on earnings was able to restrain the negative trend to some extent.
The status of MoU Targets and Net Achievements in respect of physical performance during the
year 2013-14 is as follows:S.
No
1(a)
1(b)
1(c)
2
2(a)
2(b)
2(C)
3
Item
Unit
MoU
Status
Status
Net
%age of
Target for
as on
as on
achievement
achievement
13-14 31.3.2013 31.3.2014 during 2013-14 against annual
target
Lakh
80.00 1,216.53 1,131.38
-85.15
-106.44
Conn
Total
Telephone
connection
Wireline
WLL
Mobile
WLL
Mobile
VPT
Nos
0.00
0.00
80.00
90
90
-
204.46
27.02
985.05
1,248.97
184.88
22.49
924.00
1,275.31
-19.58
-4.53
-61.05
26.34
398.58
85.19
765.20
577,882
383.99
84.54
806.78
578,267
-14.59
-0.65
41.58
385
12
-76.31
29.26
46.20
Item
4(a)
Broadband
Wireline
FTTH
EVDO
connection
Wimax
connection
Broadband
capacity
OF Cable
4(b)
4(c)
4(d)
5
6
Unit
MoU
Status
Status
Net
%age of
Target for
as on
as on
achievement
achievement
13-14 31.3.2013 31.3.2014 during 2013-14 against annual
target
Lakh
99.28
99.65
0.37
1.38
cons
Nos
11,445
25,146
13,701
60.42
30
Nos
101,538
93,671
-7,867
-15.73
Nos
Lakh
16.1
Ports
Route 20,000
Kms
85,329
124,963
39,634
17.83
100.18
100.18
0.00
0.00
719,935
734,323
14,388
71.94
Villages
Total
Covered
% Coverage
632
632
100.00
6,210
6,110
98.39
5,93,601
3,91,776
66.00
67,493
59,861
88.69
1,42,083
98,511
69.33
55,414
46,299
83.55
Area (Sq.Km)
32,89,212
18,82,837
57.24
12,389
7,858
63.43
To augment the capacity, during 2014-15, your company plans to add 10 Million net GSM
connections and 12.5 million GSM capacity.
tariff plans and improved marketing strategies are being envisaged for improvement in the services.
The CDMA WLL connections are being given on demand in most of the areas in all the circles.
At present, the latest Mobile Switching Centre (MSC) based 2,000 IX/EVDO system is being used
extensively in the companys network. Your company is optimizing its network continuously for
its performance. In order to reduce the interruptions occurring due to media failure, more Ring
connectivity of Optical Fiber Cable (OFC) media are being provided to WLL BTSs.
However, your company does not have future expansion plan in CDMA WLL.
WiMAX Services
During the year under review, your company provided 39,634 WiMAX connections. Your company
is making all out efforts to popularize WiMAX services by introduction of various attractive tariff
plans and improved marketing strategies. Prepaid services on WiMAX have been tested for launching
of these services. Procurement of CPEs is planned to provide connections and utilize the available
capacity of WiMAX.
However, your company does not have future expansion plan in WiMAX.
BROADBAND SERVICES
Your Companys broadband services are one among the best in the country. To accelerate further
growth of business in this segment, your Company constantly monitors the service and offers
innovative tariff plans, new technologies etc.
14
Total
Covered
% Coverage
632
628
99.37
6,210
6,005
96.70
Cities
4,645
4,443
95.65
Villages
593,601
169,532
28.56
ENTERPRISE BUSINESS
Special focus is being paid to cater to the business needs of the Enterprise customers of your company
segmented in Platinum, Gold and Silver categories. Platinum customers are being served on panIndia basis through single window concept through nine platinum offices located at Ahemedabad,
Bangalore Chennai, Hyderabad, Kolkata, Mumbai, NCR I, NCR II Delhi and Pune, covering around
1,033 Platinum Accounts.
Apart from the ISDN-PRI and Bulk broadband connections, these customers are also offered MPLS
based leased line, MPLS based managed network service, Point to Point leased line, VPNoBB
services, VSAT services and Internet Data Centre Services.
MPLS based Next Generation Transport Project(MNGT)
This has been implemented for expansion of the Core Network alongwith International Gateways
to enhance the capacity of carrying Internet traffic of wire line and wireless network. In this project
42 Core Routers and 30 LAN switches were installed and commissioned alongwith redeployment
of 30 Nos of existing core routers which are now being used as Edge Routers in the field.
Managed Leased Line Network(MLLN)
Equipment was purchased for expansion of existing MLLN network which is meant to provide
Leased Lines of n*64 upto 2 Mbps to the enterprise customers. In this 1,500 V-MUXs and 40 DXC
were installed, enhancing the existing capacity by 21,000 ports/modem.
Leased Circuits
18,996 leased circuits had been commissioned in the year under review.
Procurement of additional cards for upgradation of Edge Routers in the existing MPLS Network
was done to augment the port capacity for the customer connectivity and BSNL services which
provided additional 10,000 number of E1 ports, 600 number of GE ports and 60 number of 10 GE
ports.
Following projects have been planned for the financial year 2014-15 :
15
To increase the reach of MPLS network 232 No. of MPLS Edge Routers at 186
locations
To facilitate IPv4-IPv6 interoperability at International gateways Carrier Grade Network
Address translator is planned to be deployed.
Parameter
Village Public Telephones
GSM
CDMA
Broadband
Total villages
5,93,601
5,93,601
5,93,601
5,93,601
Covered
5,78,267
3,91,776
4,69,389
1,69,522
% Coverage
97.42
66.00
79.07
28.56
COMPUTERISATION AND IT
Implementation of CDR Project
The CDR project implementation was completed in April, 2012. This takes care of customer care,
billing and post billing operations for landline and broadband customers across the country. This
has resulted in advantages like faster implementation of telecom tariff across the country, corporate
monitoring of billing, revenue and customer care including faults. From the customers point of
view, this gives an advantage of uniform customer experience across SSAs, Internet based portal
payments, combined bill of landline and broadband services, uniform standard bill format across
the country, customer friendly tariff packages like fair usage policy etc.
Implementation of ERP
On successful completion of the proof of concept phase of the ERP Project till October 2013
ERP was implemented in the telecom factory (Mumbai), Training Centre (ALTTC, Ghaziabad),
a project circle (Western Telecom Project), a Maintenance Region (Southern Telecom Region),
two Territorial Circles (Karnataka and Maharashtra) and the Corporate Office having resolved the
post implementation issues your Directors have decided to complete the roll out phase in all the
remaining units during this financial year. Implementation of ERP across the Organization will
enable profit centre accounting (lines of business wise), cost control of inventory across units,
efficient asset management, centralized data base of all the employees, centralized (circle wise)
pay roll processing, centralized operations leading to standard optimal procedures and having
centralized IT systems leading to transparency, visibility of information and data accuracy.
TELECOM FACTORIES
Telecom Factories of your Company located at Kolkatta, Gopalpur, Kharagpur, Jabalpur, Richhai,
Bhilai and Mumbai are in-house manufacturing units engaged in production of various telecom
products. These factories with a staff strength of 2,287 as on 1st April 2014 touched the output of
Rs.153.25 crore in the year under review. For 2014-15, a target of Rs.500 crores has been set for
them.
Your Directors have initiated several initiatives for setting up manufacturing facilities for various
telecom/electronic equipments and other related products for revenue generation by gainful
utilization of the huge infrastructure of these telecom factories, by selection of suitable partners.
Advance work order has been issued to M/s Fujikura Ltd., Japan for utilization of spareable
infrastructure of TF Mumbai for setting up manufacturing facilities for OF Cable, Accessories /
Network components and other related products.
Floating / finalization of EoI/RFP is underway for the following:
Selection of partner for setting up manufacturing facilities for solar power supply system
for telecom and non telecom applications at TF Bhilai;
Selection of a consultant to advise and assist your Company in selection of suitable
partners for manufacturing various telecom/electronic equipment and other related
products in Telecom Factories.
In addition, the production of PLB HDPE Telecom Duct is being augmented in Telecom Factories
to meet the increased demand for NOFN Project being implemented by your Company. To meet
the internal demand of the Company, 2 Nos. of manufacturing lines have also been purchased.
TRAINING OF EMPLOYEES
Your Companys state of the art training centres located at various places design and conduct
number of training programmes, for the skill development and quality training of the employees of
various levels. By opting for the on-line/computer based programmes for completing the mandatory
EPP upgradation trainings, considerable cost saving has been effected by the training centres.
BSNL AICTE Employability Enhancement Training Programme
Pursuant to the MoU entered into with the All India Council for Technical Education(AICTE) for
utilizing the training facilities and faculty of the Company for benefit of students covered under
this programme, a total of 7,555 engineering students got benefitted. The initiative was centrally
implemented and monitored through BRBRAITT, Jabalpur and supported by other Training centres
of the Company. A total of Rs.8.4 Cr was earned by the Company under this segment.
Training Revenues
During the year under review about 1,10,000 students got associated with the Company for
vocational/summer training programmes and a total revenue of of Rs.27 Crores was earned under
this segment.
Foreign Deputations
During the period under review, 40 officers of the Company were deputed abroad for various
training programmes, exhibitions, meetings, conferences and business meetings etc., to have first
hand information on the latest developments taking place in the telecommunication sector and for
upgrading the knowledge and skills
18
Total No. of
Employees
47,768
1,90,509
2,38,277
Scheduled
Caste
7,668
35,363
43,031
Category
Blindness of low vision
Hearing Impairment
Locomotor Disability or Cerebral Palsy
Scheduled
Tribe
2,341
9,960
12,301
Executive
0
9
166
OBC
5,655
14,933
20,588
Non-Executive
29
22
347
ExServicemen
113
490
603
Total
29
31
513
19
satellite based services (DSPT) etc. A task force team is working in close coordination with the
Army and the local administration to restore the services.
With a view to provide immediate relief to the victims, your Company has allowed free calls
(local as well as STD) and free SMS service to all those BSNL customers who will be using BSNLs
mobile network in the Srinagar area for ten days starting from 12.9.2014. Further, there shall be no
incoming/outgoing barring for postpaid customers for one month from 12.9.2014.
Constitution of the Corporate Social Responsibility (CSR) Committee of the Board
Pursuant to the provisions contained in the Section 135 of the Companies Act 2013 and Rules
thereunder, Your Board, in its 154th meeting held on 7.3.2014 constituted the Corporate
Social Responsibility Committee (CSR Committee) of the Board comprising Shri Ajai Vikram
Singh Independent Director, Shri A.N.Rai CMD/Director(Enterprise) & (HR) and Shri N.K.Gupta
Director(CFA) as Members and the Secretary of the Company as the Secretary of the Committee.
The Terms of Reference of the CSR Committee are as per the provisions of the Section 135 of
the Companies Act 2013 and Rules made thereunder. Owing to losses, no specific budget was
earmarked for the CSR activities during the year under review.
-
-
32.89 Crore
96.45 Crore
COMPLIANCES
All the Senior Management Personnel including key managerial personnel handling different
verticals/units have been delegated with administrative and financial powers thereto, are responsible
to ensure adherence to all the applicable laws, rules, guidelines etc., and ensures the compliance
of the enterprise risk management policy of the company as a routine, while taking or processing
the detail for decision or approval by the competent authority(ies). The Company Secretary ensures
the compliance of all the applicable provisions of the Companies Act and other applicable laws.
Being the successor and assigns of the erstwhile Departments of Telecom Services and Telecom
Operations with vast geographical spread, the BSNL follows the existing system. Accordingly, all
the litigations before the honble courts are handled by the respective verticals and units under
their control with the help of Advocates.
20
CORPORATE GOVERNANCE
The term Corporate Governance connotes putting in a system of best practices in the sphere of
governance, which in turn, lead to value maximization for all the stakeholders. Existing governance
practices have been strengthened further over the years with sustained focus on excellence in all
spheres.
The Guidelines on Corporate Governance for the Unlisted CPSEs laid down by the Department of
Public Enterprises are being implemented by the Company with effect from the year 2008-09.
All the Members of the Board; and the Senior Management Personnel of the Company have affirmed
compliance with the Companys Codes of Conduct for the Members of the Board and the Senior
Management Personnel, respectively.
Your Company has obtained certificate from M/s Hemant Singh & Associates, Company Secretaries,
regarding compliance of conditions of corporate governance as stipulated in the Guidelines
on Corporate Governance for Central Public Sector Enterprises 2007, and revised further vide
No.18(8)/2005-GM, dated 14.5.2010, issued by the Department of Public Enterprises.
Management Discussion and Analysis Report, Report on Corporate Governance, together with the
Certificate on compliance of conditions of corporate governance as stipulated in the Guidelines
on Corporate Governance for Central Public Sector Enterprises forms part of this Report. Quarterly
progress reports on the implementation of CG Norms for the unlisted CPSEs issued by the DPE are
being sent regularly to the Administrative Ministry.
that in the preparation of the annual accounts, the applicable accounting standards had been
followed along with proper explanation relating to material departures;
(ii)
that the Directors had selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the financial year and of the profit or
loss of the Company for that period;
(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the assets
of the Company and for preventing and detecting fraud and other irregularities;
(iv) that the Directors had prepared the annual accounts on a going concern basis.
STATUTORY DISCLOSURES
None of the Directors of your Company is disqualified as per provision of Section 274(1)(g) of the
Companies Act, 1956.
21
Further, Your Directors have made necessary disclosures, as required under various provisions of
the Act, which were taken note by the Board of Directors and requisite forms were filed with the
appropriate authorities.
None of the employees of your Company is drawing remuneration exceeding the limits laid down
under provisions of section 217(2A) of the Companies Act 1956 read with Companies (Particulars
of Employees) Rules, 1975.
DIRECTORS
Government of India, Ministry of Communications and IT, Department of Telecommunications
vide their order No. 1-1/2014-PSA dated 6.5.2014 and 11.06.2014 communicated the approval
of the competent authority for extension of the tenure of Shri R.K.Upadhyay CMD upto 30.4.2014
and thereafter upto 30.6.2014 i.e., the date of his superannuation.
Pursuant to Government of India, Ministry of Communications and IT, Department of
Telecommunications order No.1-10/2011-PSA dated 30.6.2014, consequent upon attaining the
age of superannuation Shri Upadhyay retired from service w.e.f., afternoon of 30.6.2014.
Pursuant to GoI, MoC & IT, DoT Order No.1-1/2014-PSA dated 30.6.2014 in terms of the instructions
contained in the DoP & T (Office of Establishment officer) OM No.26(3)EO/2004(ACC) dated
17.8.2005, the competent authority approved the entrustment of the additional charge of the post
of CMD to Shri A.N. Rai Director(E) for a period of three months w.e.f., 1.07.2014 or until further
orders, whichever is the earliest. During the period of holding additional charge as aforesaid, Shri
A.N. Rai will not be entitled to any additional remuneration. Shri Rai assumed the charge of office
of CMD on Forenoon of 1.7.2014.
Government of India, Ministry of Communications and IT, Department of Telecommunications
vide their Notification No.1-4/2012-PSA dated 13.2.2013 conveyed the ex-post-facto approval of
the ACC for entrustment of the Additional charge of Director(HR) to Shri A.N.Rai Director(E) for
a further period of six months beyond 4.12.2012 or till a regular incumbent is appointed or until
further orders, whichever is earliest.
Thereafter, wef 4.6.2013, till the receipt of further orders from Department of Telecom, CMD
was looking after the additional charge of the Director (HR). Government of India, Ministry of
Communications and IT, Department of Telecommunications vide Notification No1-4/2012-PSA
dated 8.8.2013 conveyed the approval of ACC for extension of additional charge of the post of
Director(HR) in favour of Shri A.N.Rai Director(Enterprise) for a period of six months beyond
4.6.2013 or till a regular incumbent is appointed or until further orders, whichever is earliest.
Thereafter, wef 4.12.2013, till the receipt of further orders from Department of Telecom, CMD
was looking after the additional charge of the Director (HR). Government of India, Ministry of
Communications and IT, Department of Telecommunications vide Order No.1-4/2012-PSA, dated
7.2.2014 conveyed the approval of the Appointments Committee of the Cabinet conveyed by the
DoP & T (ACC) vide their communication No.24(6)EO/2012(ACC), dated 30.1.2014, the extension
of entrustment of the additional charge of Director(HRD) in favour of Shri A.N.Rai Director(Enterprise)
for a period of six months wef 4.12.2013 or till a regular incumbent is appointed or until further
orders, whichever is the earliest. Consequent upon the completion of the period on 3.6.2014, since
4.6.2014, additional charge of the office of Director(HR) vest in the CMD.
22
23
AUDIT COMMITTEE
The Committee has Prof.N.Balakrishnan, Non official Part Time (Independent) Director as Chairman;
and, Shri Ajai Vikram Singh Non official Part Time (Independent) Director, Shri Shahbaz Ali
Government Director [upto 26.8.2014] and Shri Anupam Shrivastava Director(CM) as Members.
Director(Finance) is the Regular Invitee and Shri H.C.Pant, the Company Secretary & Sr.GM(L) is
the Secretary of the Committee.
AUDITORS
M/s Walker Chandiok & Co., Chartered Accountants, New Delhi were appointed as Statutory
Auditors of the Company by the Comptroller & Auditor General of India. In addition to the Statutory
Auditors 47 Branch Auditors were also appointed for the year 2013-14. The Report of the Statutory
Auditors and the comments of the Comptroller and Auditor General of India, alongwith replies of
the Management thereto are attached as Addendum forming part of this Report.
COST AUDITORS
Pursuant to the directions of the Government of India, Ministry of Corporate Affairs, Cost Audit
Branch for Cost Audit of the Telecommunication Companies by the Cost Accountants, Your
Company has appointed M/s Chandra Wadhwa & Co., Cost Accountants as Cost Auditors for
carrying out the Cost Audit of the Company for the year 2013-14. The Cost Audit Report for the
Financial Year 2012-13 was filed with the MCA, Registrar of Companies on 18.01.2014.
Your Board has appointed M/s Balwinder & Associates, Cost Accountants as Cost Auditor of the
Company for conducting the Cost Audit and Accounting Separation Report (ASR) Audit for the
Financial Year 2014-15. Further, pursuant to the provisions of Section 148 of the Companies Act
2013 and Rule 14(a) of the Companies (Audit and Auditors) Rules 2014, Your Board has approved
the remuneration of Rs.3,99,000/-[Rupees Three Lakh Ninety-Nine Thousand only] plus applicable
taxes as Audit Fee to M/s Balwinder & Associates Cost Auditor, subject to ratification of the same
by the Members in the ensuing Annual General Meeting.
Shri A.N. Rai, CMD inaugurating the Swachh Bharat Abhiyaan campaign in BSNL on
2nd October, 2014.
24
Sd/[A.N.RAI]
CHAIRMAN AND MANAGING DIRECTOR
Sd/[A.N.RAI]
CHAIRMAN AND MANAGING DIRECTOR
25
OUTLOOK
The telecom sector has witnessed considerable technological advancements and huge investments
in the core infra in the past decade. Governments thrust on e-delivery, ever increasing demand for
non-voice telecom services and the huge untapped rural market for data services present a strong
business case for the sector in the coming days.
CAUTIONERY STATEMENT
These discussions are forward looking within the meaning of the applicable laws and regulations.
Actual performance may deviate or vary from the explicit or implicit expectations.
27
With the introduction of Corporate Governance Norms for the Unlisted CPSEs by the Department
of Public Enterprises, for achieving complete compliance, required changes/modifications have
been put in place.
28
Additional charge of Director(HRD) vested with CMD between 5.3.2012 to 18.6.2012; and, thereafter
charge vested with the Director(E) till 3.6.2013. Thereafter, w.e.f. 4.6.2013 till the receipt of further
orders from the GoI, CMD looked after the charge of Director(HR). GoI DoT vide their letter dated
8.8.2013, conveyed the approval of ACC for extension of additional charge of Dir(HR) to Shri
A.N.Rai Director(E) wef 4.6.2013 for a period of six months or till a regular incumbent is appointed
or until further orders whichever is the earliest. Thereafter, w.e.f. 4.12.2013 till the receipt of further
orders from the GoI, CMD looked after the charge of Director(HR). GoI, MoC & IT, DoT vide order
No.1-4/2012-PSA dated 7.2.14 conveyed the approval of ACC for extension of additional charge of
Director(HR) to Shri A.N.Rai wef 4.12.2013 for a period of six months or till a regular incumbent is
appointed or until further orders, whichever is the earliest. Thereafter, again, wef 4.6.2014, till the
receipt of further orders from GoI, CMD looked after the charge of Director(HR).
Wef 1.12.2013, till the receipt of orders from GoI, CMD was looking after the additional charge of
Director(F). GoI, MoC & IT, DoT vide order No.1-4/2012-PSA dated 5.2.2014 entrusted the additional
charge of the office of Director(F) to Shri Shrivastava with immediate effect for a period upto 28.2.2014
until further orders whichever is the earliest. Thereafter, wef 1.3.2014 till the receipt of further orders
of GoI, CMD was looking after the additional charge of the office of Director(F). GoI, MoC & IT,
DoT vide order No.1-4/2012-PSA dated 9.5.2014 conveyed the extension of the entrustment of the
additional charge of the post of Director(Finance) to Shri Shrivastava for a period of six months wef
1.3.2014 or till the appointment of regular incumbent to the post or until further orders, whichever
is the earliest. On attaining the age of superannuation, pursuant to the GoI, MoC & IT, DoT Order
No.1-10/2011-PSA dated 30.6.2014, Shri Upadhyay retired from service wef A/N 30.6.2014.
2.
*Wef 1.7.2014 GoI, MoC & IT, DoT vide Order No.1-1/2014-PSA dated 30.6.2014 entrusted
the additional charge of the post of CMD to Shri A.N.Rai Director(Enterprise) for a period of three
months wef 1.07.2014 or until further orders, whichever is the earliest. Shri Rai assumed the
charge of office of CMD wef F/N of 01.07.2014.
29
**Additional charge of Director(HR) vested with Shri Rai wef 5.12.2011 to 4.3.2012. Wef
5.3.2012 to 18.6.2012 additional charge vested with the CMD. Thereafter, Government of India,
M/o Communications and IT vide order dated 19.6.2012 conveyed the approval of the competent
authority for entrustment/extension of the additional charge of Dir(HR) to Shri A.N.Rai for a period
upto 4.9.2012. Thereafter, GoI DoT vide order dated 27.2.2013 conveyed the ex-post-facto approval
of the ACC for extension of the Additional charge of Dir(HR) to Director(E) for a further period of
3 months beyond 4.9.2012; which was followed by another ex-post-facto approval for a further
period of six months beyond 4.12.2012. Thereafter, w.e.f. 4.6.2013, till the receipt of further
orders, from GoI, CMD looked after the additional charge of Dir(HR). GoI, MoC & IT, DoT, vide
their order dated 8.8.2013 conveyed the approval of ACC for extension of the additional charge
of Director(HR) to Shri A.N.Rai Dir(E) wef 4.6.2013 for a period of six months or till a regular
incumbent is appointed or further orders, whichever is the earliest. Thereafter, wef 4.12.2013, till
the receipt of further orders from GoI, CMD looked after the additional charge of Dir(HR). GoI,
MoC & IT, DoT, vide order No.1-4/2012-PSA, dated 7.2.2014 conveyed the approval of the ACC
for extension of entrustment of additional charge of Director(HR) to Shri Rai for a period of six
months wef 4.12.2013 or till a regular incumbent is appointed or until further orders, whichever
is the earliest. Thereafter, till the receipt of further orders from GoI, CMD is looking after the
additional charge of office of Director(HR).
***Consequent upon the conclusion of the period of entrustment of the additional charge of
Director(F) to Shri Anupam Shrivastava Director(CM) on 31.8.2014, thereafter, till the receipt of
orders from the GoI, CMD was looking after the additional charge of Director(F).
3. Shri K.C.G.K.Pillai Director[Finance] [Upto 30.11.2013] [Pursuant to GoI, MoC & IT, DoT
order No.1-2/2010-PSA (Vol.II) dated 29.11.2013, on attaining the age of superannuation Shri
Pillai retired from service wef A/N of 30.11.2013]
4.
5.
* Wef 1.12.2013, till the receipt of orders from GoI, CMD was looking after the additional charge
of Director(F). GoI, MoC & IT, DoT vide order No.1-4/2012-PSA dated 5.2.2014 entrusted the
additional charge of the office of Director(F) to Shri Shrivastava with immediate effect for a period
upto 28.2.2014 until further orders whichever is the earliest. Thereafter, wef 1.3.2014 till the receipt
of further orders of GoI, CMD was looking after the additional charge of the office of Director(F).
GoI, MoC & IT, DoT vide order No.1-4/2012-PSA dated 9.5.2014 conveyed the extension of the
entrustment of the additional charge of the post of Director(Finance) to Shri Shrivastava for a period
of six months wef 1.3.2014 or till the appointment of regular incumbent to the post or until further
orders, whichever is the earliest. Thereafter, wef 1.9.2014, till receipt of orders from GoI, CMD was
looking after the additional charge of Director(F).
Government Nominee Directors [02 ]
1.
2.
3.
Shri Shahbaz Ali, DDG [TPF & A/cs ] in DoT [ Upto 26.8.2014]
Ms.Rita A.Teoatia Additional Secretary(T) in DoT [Wef 04.09.2012]
Smt.Darshana Momaya Dabral, DDG[TPF] in DoT [ Wef 29.9.2014]
31
Shri N.K.Gupta Director(CFA) [DIN: 01140881] [ Wef 1.6.2012] :- Shri Naresh Kumar Gupta took
over as Director CFA in BSNL on 1st June 2012. Shri Gupta is B.E. from Delhi College of Engineering
(DCE), in Electronics and Communications. He joined the Department of Telecommunications,
Government of India through Indian Telecommunications Services (ITS) Group A 1978 batch.
Since then he has worked in various capacities in different units of DoT/TEC/BSNL/MTNL and has
versatile experience covering almost all the fields in telecommunications including installation,
operations, development and management of telecom networks, sales and marketing and financial
management etc. Before joining as Director (CFA) on the BSNL Board, N K Gupta was working
as Chief General Manager Punjab Telecom Circle in BSNL and prior to that he was heading the
Information Technology division for CFA business unit of BSNL. He in the capacity of DDG (I) TEC
was instrumental in framing specifications and Network architecture against which BSNL and MTNL
have implemented their broadband Networks. He has represented DoT in many committees of
TRAI, DIT, and also in various Inter-Ministerial Committees like committee on preparing encryption
policy, E-Commerce and Information Security working Group. He has widely travelled abroad
and represented India in number of UN & ITU meetings including World Summit on Information
Society in Geneva and other important assignments. He was an active member of Apex Committee
involved in the planning and execution of NIB-II of BSNL and also framing the specification for
ERP implementation in BSNL which is currently in progress. He was deeply involved in Pan-India
Roll out of zonal OSS and BSS for Wire-line and Broadband segment which helped BSNL to
changeover from decentralized 334 SSA level systems to 4 zonal data centres with implementation
of world class COTS applications. N K Gupta is also instrumental in conceptualizing BSNL entry
in to the Data Center (IDC) Services business for opening up a new revenue stream by leveraging
BSNLs existing infrastructure with an innovative revenue share model. Presently BSNL is in the
process of acquiring IDC business. As Director (CFA) BSNL, he is mainly responsible for improving
the Systems and Methods to achieve optimal performance and maximum utilization of BSNLs
extensive country-wide Infrastructure and network. He is also responsible for achieving business
interests of the Company by way of high customer satisfaction and timely provision of quality
services in BSNL CFA segment. He is also responsible for induction & adoption of new technologies
and committed to provide state-of-the-art modern and world class telecom services in the highly
competitive environment.
Shri Anupam Shrivastava Director(CM) & * (Fin) [DIN: 06590535] [ Wef 1.5.2013] :- Shri Anupam
Shrivastava is a 1981 batch of Indian Telecom Service (ITS) Officer who has around three decades
of experience in the field of telecommunications. He is BE (Electronics & Communications) and
is also MBA (Mktg.). He has taken telecommunication trainings in India & Japan. Shri Shrivastava
joined BSNL Corporate Office as Director (CM) on 1st May, 2013 and is responsible for the growth
of mobile business of GSM / CDMA / WIMAX in BSNL, including all activities related to Sales &
Marketing, VAS, Tariff finalization & revenue. As Zonal Director for North Zone he is responsible
for monitoring growth and maintenance of Telecom Network in 8 Circles. Prior to this assignment,
Shri Shrivastava had held the post of Sr. GM, Ajmer TD where he gave special attention to Sales
& Marketing of telecom products in the SSA which resulted in physical growth of connections in
all segments and increased revenue for the SSA. Ajmer SSA was chosen for the pilot project for
NOFN which was successfully completed ahead of target. His contributions in providing quality
service to BSNL customers have been widely acknowledged and he strived to achieve benchmarks
prescribed by TRAI / BSNL C.O. for various service parameters. Shri Shrivastava also worked as GM
Jodhpur SSA and during his stint there he gave record number of mobile and landline connections
with special emphasis on data and broadband business. He also has experience of working as GM
(BB) in Rajasthan Telecom Circle with additional charge of Marketing and Enterprise Business. Shri
32
Shri Ali has also rendered his services as Government Nominee Director on the Board of Directors
of Tata Communications Ltd.
Ms. Rita A. Teoatia Government Director [DIN: 02876666] [Wef 04.09.2012] :- Ms. Rita Teaotia
joined the Indian Administrative Service in the year 1981 and served in the districts of Panchmahal
and Gandhinagar in Gujarat. Subsequently, she worked in the energy sector as MD, Gujarat
Industries Power Company Ltd., and Secretary (Energy). She has worked extensively at policy
making and strategic levels in the fields of Education, Health, Womens Development and rural
Development. From 2003-2007, she worked in the Government of India as Joint Secretary in the
Ministry of Health and Family Welfare. Prior to the present assignment, she also served as Additional
Secretary, in the Department of Electronics and Information Technology (DeitY),from 19th March,
2012. In this capacity, she headed the National eGovernane Plan, which entailed working closely
with all State Governments and arms of DeitY, including National Informatics Centre(NIC),
Standardisation Testing and Quality Certification (STQC) Directorate, Centre for Development of
Advance Computing (C-DAC) and National Institute of Smart Governance(NISG).At present, she is
serving as Additional Secretary in the Department of Telecommunications and ex officio Secretary
of the Telecom Commission. Ms.Rita Teaotia has received four National eGovernance awards
for applications developed during her various assignments. She holds a Masters in Medieval and
Modern Indian History from the University of Lucknow.
Shri Ajai Vikram Singh, Director [DIN : 02184840] [ Wef 17.7.2012 ] :- Shri Ajai Vikram Singh was
born at Ajmer and had his education at Mayo College (Senior Cambridge) and Government College
(Graduation), Ajmer. After a short spell in the Private Sector, he joined the Indian Administrative
Service(IAS) in 1967 and, after the initial training, was allotted to the Uttar Pradesh Cadre. He
has served in various capacities in the State and Central Governments, both, in the field and
in the Secretariats. He was District Magistrate in Ghazipur, Sultanpur, Moradabad, and Aligarh
33
districts, as also Commissioner, Lucknow Division. He has served as Managing Director of two
State enterprises (Rajasthan State Warehousing Corp-on deputation, & UP Export Corp.) In the Uttar
Pradesh Secretariat, he has been Secretary, Small Industries; Secretary, Heavy Industries; Industrial
Development Commissioner & Principal Secretary.In the Government of India, the postings have
been with the Cabinet Secretariat, Ministry of Defence, Ministry of External Affairs, and the Ministry
of Industries. He did the National Defence College(NDC) Course in 1984 during the first of his four
tenures with the Ministry of Defence. He was posted as Minister (Supply) in the High Commission
of India at London for two years. In November 2000, the State of Uttar Pradesh was bifurcated into
Uttar Pradesh and Uttaranchal, and Shri Ajai Vikram Singh was appointed as the first Chief Secretary
of the new State of Uttaranchal (Now Uttarakhand). In 2001, consequent to the re-organisation of the
Ministry of Defence, he was appointed to the newly created post of Special Secretary (Acquisition).
This involved setting up a new organization and evolving procedures for all capital acquisitions for
the Armed Forces. Subsequently, he has been Revenue Secretary (Now the Ministry of Finance),
Secretary, Ministry of Non-Conventional Energy Sources (now the Ministry of New & Renewable
Energy), Secretary, Ministry of Road Transport & Highways, and Defence Secretary. During his
various postings in the Central and State Governments, he has been Chairman of the following
Companies:- Indo-Gulf Fertilisers Ltd., India Polyfibres Ltd., Pashupati Acrylon Ltd., U.P.Textile
Corporation and U.P.Finance Corporation. In addition, he has served as Director on the Boards of,
inter-alia, the following Companies:- IFCI Ltd., BHEL Ltd., Maruti Udyog Ltd., HMT Ltd., Heavy
Engineering Corp. Ltd., Andrew Yule Ltd., Bharat Bhari Udyog Nigam Ltd., Bharat Yantra Nigam
Ltd., Hindustan Aeronautics Ltd., Mazagon Docks Ltd., Goa Shipyard Ltd., and PICUP. Shri Ajai
Vikram Singh superannuated from service on 31st July 2005, and is now living in his home-town,
Ajmer, with his wife, son, daughter-in-law, and two grand-children. He is involved with issues
connected with ecology, the environment, and local development. He is currently Chairman of the
Pune based World Institute of Sustainable Energy(WISE), a society devoted to the spread of clean
and renewable energy. He is also on the Board of Directors of Pipavav Defence & Offshore Engg.
Co.Ltd., and Overseas Infrastructure Alliance Infrastructure Alliance(India) Pvt. Ltd. He has taken
up the cultivation of Jojoba ( a non-edible oil bearing plant) and Aloe Vera on a trial basis in his
village near Ajmer.
Prof. N. Balakrishnan, Director [DIN: 00181842] [Wef 17.7.2012] :- Prof. N. Balakrishnan
received his B.E. (Hons.) in Electronics and Communication from the University of Madras in
1972 and Ph.D. from the Indian Institute of Science in 1979. He then joined the Department of
Aerospace Engineering as an Assistant Professor. He is currently the Associate Director of the
Indian Institute of Science and a Professor at the Department of Aerospace Engineering and at the
Supercomputer Education and Research Centre. His areas of research where he has more than
200 publications in the international journals and international conferences include Numerical
Electromagnetics, High Performance Computing and Networks, Polarimetric Radars, Aerospace
Electronic Systems, Information Security, Complex Social Networks and Digital Library. He has
received many awards including the Padmashree by the President of India, 2002, Homi J. Bhabha
Award for Applied Sciences, 2004, JC Bose National Fellowship in 2007, the Alumni Award for
Excellence in Research for Science & Engineering by IISc, 2001, Millennium Medal of the Indian
National Science Congress in 2000, Ph D (Honoris Causa) from Punjab Technical University in
2003, the CDAC-ACS Foundation Lecture Award in 2008 and the Academy Excellence Award,
Defence Research and Development Organization in 2009. He was the NRC Senior Resident
Research Associate at the National Severe Storms Laboratory, Norman, Oklahoma, U.S.A. from
1987-1989. He was a visiting research scientist at the University of Oklahoma in 1990, Colorado
State University in 1991 and is a Visiting Professor at Carnegie Mellon University from 2000 till
34
Observance of the Secretarial Standards issued by the Institute of the Company Secretaries
of India
The Institute of Company Secretaries of India(ICSI) has, evolved and laid down the best practices
for corporate practice in the form of Secretarial Standards. The Company has been adhering to the
Standards relating to Board Meetings, General Meetings, Payment of Dividend, Maintenance of
36
Code of Conduct for the Members of the Board and the Senior Management Personnel
In addition to the Companys Conduct, Disciplinary and Appeal Rules, in line with the corporate
governance norms, the Board of Directors of the Company have laid down a Code of Conduct for
the Members of the Board. All the Members have affirmed compliance with the said code.
Similarly, In addition to the Companys Conduct, Disciplinary and Appeal Rules, in line with the
corporate governance norms, the Board of Directors of the Company have laid down a Code
of Conduct for the Senior Management Personnel of the Company. All the Senior Management
Personnel have affirmed compliance with the said code.
Scheduling of Board/Committee Meetings and Submission of Agenda Items for the Board/
Committee meetings.
The meetings of the Board/Committee thereof are convened, keeping in view the statutory provisions
and the convenience of the Members, with sufficient advance planning. The Agenda Notes are,
generally sent minimum seven days in advance to facilitate meaningful and informed discussions;
Wherever required, voluminous documents/documents of confidential nature are tabled at the
meeting, with the approval of the Chairman;
The Board also discusses sensitive and urgent business proposals, without formal agenda note,
depending on urgency and case to case basis;
Wherever required, the Senior Management Personnel of the Company are called to make
presentations before the Board/Committee on specific agenda notes.
The Meetings of the Board/Committee are generally held at the Registered office of the Company
at Delhi. Whenever required, meetings are also held outside the headquarters.
Compliances
While submitting the Agenda Notes, every Senior Management Personnel/Functional Director(s)
concerned, being the head of respective line function/business unit who have been delegated with
administrative and financial powers thereto, ensure adherence to all the applicable laws, rules,
guidelines etc. The Company Secretary ensures the compliance of all the applicable provisions of
the Companies Act and other corporate laws.
37
Accordingly, head of the business unit/line head handling the respective subject also ensures and
undertakes the compliance of the enterprise risk management policy of the company as a routine,
while submitting the Agenda papers. Being the successor and assigns of the erstwhile Departments
of Telecom Services and Telecom Operations, the BSNL has an inbuilt systems, accordingly, all the
court cases and litigation issues are handled by the respective heads of the Circles/Units.
All the returns/reports under Companies Act 1956 were filed in time with the designated
authorities.
Present
NIL
Present
NIL
Present
NIL
Present
Present
1 )))
3^
Present ^^
2&
3&&
NA
NA
NIL
Retired
on
30.4.2013.
Retired on A/N
of 30.11.2013
Assumed charge
on 1.6.2012.
Appointed in
place of Shri
S.R.Rao
wef
4.9.2012
Appointed in
place of Shri
Tangirala wef
14.2.2012
Tenure
of
appointment
ended
on
20.5.2013
Appointed wef
17.7.2012
Appointed wef
17.7.2012.
Appointed wef
29.9.14
Note :- The disclosure of the Directorships are based on the disclosures received from the Directors.
)))
Government Nominee Director in TCIL
^
CEO & MD Heidelberg Cement India Limited, Chairman-Cochin Cements Limited, Director-Ballarpur
Industries Limited.
&
Director in Pipavav Defence and Offshore Engineering Company Limited and Director in Overseas
Infrastructure Alliance(India) Private Limited.
&& Director in (i) Data Security Council of India(DSCI) not for profit company registered under Section 8 of
Companies Act 2013; (ii) Central Bank of India; and (iii) C-DOT Alcatel-Lucent Research Centre Pvt Ltd., under
Chapter 1 Section 2(68) of new Companies Act 2013.
^^ The Audit Committee of the Board, in its 50th meeting held at 10.30 AM on 30.9.2013 elected Shri Ajai
Vikram Singh as Chairman for the meeting. He attended the 13th AGM held at 5 PM on 30.9.2013 as Chairman
of the Audit Committee of the Board.
39
40
Details of Chairmanships of
Board Committee
Name of
Name of
Company
Committee
-
NIL
-
NIL
-
NIL
NIL
Name and
Designation
Smt.Darshana
Momaya Dabral,
Govt. Director
[Wef 29.9.2014] \\\\\
Details of Chairmanships of
Board Committee
Name of
Name of
Company
Committee
NIL
NIL
Note :The disclosure of the Memberships/Chairmanships are based on the disclosures received from the Directors.
~
Charge of the Director(F) vested with the CMD till joining of Dir(F) on 25.4.2012. Consequent upon the
retirement of Shri KCGK Pillai on A/N of 30.11.2013, till receipt of further orders of GoI, CMD was looking after
the additional charge of Dir(F). GoI, vide order No.1-4/2012-PSA dated 5.2.2014 entrusted the additional charge
with immediate effect upto 28.2.2014 to Shri Anupam Shrivastava Dir(CM). Again, wef 1.3.2014, till receipt of
further orders of GoI, CMD was looking after the additional charge of Dir(F). GoI vide order No.1-4/2012-PSA
dated 9.5.2014 conveyed the extension of additional charge of Director(Finance) to Shri Shrivastava for a period
of six months wef 1.3.2014. By virtue of having the charge of Dir(F) he was Member of the Finance Committee of
the Board during relevant periods.
@
Additional charge of Director(HRD) vested with CMD wef 5.3.2012 to 18.6.2012 and thereafter vested with
Director(E). Thereafter wef 4.6.2013, CMD looked after the charge of Director(HR) till the GoI vide order No.14/2012-PSA dated 8.8.13 conveyed the approval of ACC for extension of the additional charge of Director(HR)
to Shri A.N.Rai Director(E), for a further period of six months wef 4.6.2013. Again, pending receipt of GoI order,
wef 4.12.2013, CMD was looking after the additional charge of Director(HR). GoI vide order No.1-4/2012-PSA
dated 7.2.14 conveyed the ACC approval for extension of additional charge of Dir(HR) to Shri Rai Director(E)
for a period of six months wef 4.12.2013. By virtue of having the charge of Dir(HR), he was Member of the
Remuneration Committee of the Board and Committee on Appellate & Review matters under BSNL CDA Rules
2006 during relevant periods.
+
Shri A.N.Rai assumed the charge of Director(Enterprise) wef 19.9.2011. He is not a Member of any committee.
Additional charge of Director(HRD) vested with Shri Rai wef 5.12.2011 to 4.3.2012. Thereafter, wef 19.6.2012,
additional charge of Director(HRD) entrusted again to Shri A.N.Rai for a period upto 4.9.2012 till appointment of
regular incumbent or further orders, whichever is the earliest, followed by extension upto 3.12.2012. Thereafter,
the arrangement of entrustment of additional charge of Director(HR) to Shri Rai was extended for six months
beyond 4.12.2012 or till a regular incumbent is appointed or until further orders, whichever is earliest. With effect
from 4.6.13, till the receipt of further communication from the GoI, CMD looked after the charge of Director(HR).
Thereafter, GoI, MoC & IT, DoT, vide its order No.1-4/2012-PSA dated 8.8.13 conveyed the approval of the
ACC for extension of additional charge of the post of Director(HR) in favour of Shri Rai Director(E) for a period
of six months or till a regular incumbent is appointed or until further orders, whichever is earliest. Thereafter wef
4.12.2013 till the receipt of further orders of GoI, CMD was looking after the additional charge of Director(HR).
GoI, vide order No.1-4/2012-PSA dated 7.2.2014 conveyed the approval of ACC for extension of additional
charge arrangement of Dir(HR) to Shri Rai for a period of six months wef 4.12.2013. Thereafter, wef 4.6.2013,
pending receipt of further orders of the GoI, additional charge of Dir(HR) was vesting in the CMD. By virtue of
Dir(HR) being Member of the Remuneration Committee of the Board, Committee on Appellate & Review Matters
under BSNL CDA Rules 2006 and the Corporate Social Responsibility Committee, he was Member of these
Committees during the relevant periods. Further, consequent upon the retirement of Shri R.K.Upadhyay CMD on
30.6.2014, GoI vide order No.1-1/2014-PSA dated 30.6.2014 conveyed the approval of the competent authority
for entrusting the additional charge of the CMD to Shri Rai for a period of three months wef 1.7.2014. Shri Rai
assumed the charge of office of CMD wef F/N 1.7.2014.
++ Shri K.C.G.G.K.Pillai assumed the charge of Director(F) wef 25.4.2011. Director(F) is Member of the
Finance Committee and Remuneration Committee. He retired on superannuation from service on 30.11.2013.
+++ Shri Gupta assumed the charge of Director(CFA) on 1.6.2012.
++++ Consequent upon the retirement of Shri KCGK Pillai on 30.11.2013, wef 1.12.2013 CMD was holding
the additional charge of office of Director(F). GoI vide No.1-4/2012-PSA, dated 5.2.2014 entrusted the additional
42
BOARD COMMITTEES
The Company has the following Committees of the Board.
Remuneration Committee
To ensure complete compliance of the Corporate Governance Norms, the Board of Directors of
the Company has re-constituted the Remuneration Committee. The Committee comprised of Shri
Sanjiv Gupta Non official Part Time [Independent] Director as Chairman, Shri S.R.Rao Government
Director, Shri A.K.Garg Director(HR) and Shri Ashish Guha Non official Part Time [Independent]
Director as Members and the Company Secretary as Secretary.
43
The Board, in its 143rd meeting held on 28.8.2012, re-constituted the Remuneration Committee
with the following composition:- Shri Ajai Vikram Singh Director as Chairman; Shri Shahbaz Ali
Govt. Director, Shri Ashish Guha Director[upto 20.5.2013], Director(HR), and Director(Finance) as
Members and the Company Secretary as the Secretary of the Committee.
Committee on Appellate & Review matters under BSNL CDA Rules 2006
To consider and decide all the appeal / review cases for and on behalf of the Board of Directors,
wherever the Board is indicated as Appellate and Reviewing Authority in the CDA Rules 2006
of the Company, the Board of Directors, in their 135th meeting held on 26.8.2011, constituted a
Standing Committee of the Board known as Committee on Appellate & Review matters under BSNL
CDA Rules 2006, comprising of Director(HR) and One Government Director and the Company
Secretary as Secretary of the Committee. The minutes of each of the meetings of the Committee
shall be submitted to the Board in the immediately following meeting of the Board.
At present, the committee comprise Shri Shahbaz Ali Government Director(Upto 26.8.2014) and
Director(HR) [at present additional charge of Director(HR) vest with CMD / Director(Enterprise)].
Director (Finance) is a regular invitee to the Meetings of the Committee. Company Secretary acts
as the Secretary of the Committee.
The Chairman of the Audit Committee was present in the last Annual General Meeting of the
Company.
NUMBER OF MEETINGS HELD DURING 2013-14 AND
ATTENDANCE NO. OF MEETINGS HELD: 06
Name and Designation
No. of meetings
Remarks
attended
Shri Ashish Guha Director,
Elected Chairman in the 40th meeting held
Chairman
on 29.9.2011. Tenure of appointment ended
on 20.5.2013.
Shri Shahbaz Ali, Govt. Director
6
Member [Upto 26.8.14]
Shri R.K. Agarwal Director(CM)
1
On attaining the age of superannuation, Shri
Member.
Agarwal retired from service on 30.4.2013.
Prof. N. Balakrishnan Director
5
Board, in its 143rd meeting held on 28.8.12
Chairman
inducted him as Member. The Committee in
its 46th meeting held on 7.12.12 elected him
as Chairman.
Shri
Ajai
Vikram
Singh
4
Board, in its 148th meeting held on 14.6.2013
Director
inducted him as Member. The Committee,
elected him as Chairman for the 50th meeting
held on 30.9.2013.
Shri
Anupam
Shrivastva
Board, in its 148th meeting held on 14.6.2013
Director (CM)
inducted him as Member.
DISCLOSURES
DIRECTORS REMUNERATION
FUNCTIONAL DIRECTORS
BSNL being a Government Company, and in terms of Article No.111 of the Articles of Association
of the Company, the remuneration payable to the Directors is determined by the President of
India.
45
The salary and other perks paid to the Functional Directors during the year under review is as
follows:Name
Desgn.
Salary incl.
DA
CMD
Dir(Ent.)
Dir(CM)
2222648
2047675
341919
Other
Benefits &
Perks
267840
87000
18102
Contribution in
CPF & Other
Funds
251720
230950
18056
Total
2742208
2365625
378077
Dir(CM)
1860753
101000
200989
2162742
Dir(CFA)
1969558
203729
221676
2394963
Dir(Fin.)
2108759
92488
141636
2342883
10551312
770159
1065027
12386498
46
Subject
Status of Implementation
Year of
Issue
2011-12
2
3
2012-13
2013-14
I)No.61-01/2012-SU,dated 10.6.2013.
In partial modification of OM No.6101/2009 dated 27.2.2009, the benefit of
merger of 50% DA effectively amounting
to 78.2% as on 1.1.2007 for the purpose
of fitment in respect of the Board level
and below Board level executives and
Non-unionised supervisors and nonexecutives of BSNL was allowed from
the date of issue of the order. No arrears
will be paid and the revised fitment on
the basis of DPE OM dated 2.4.2009 will
be paid with prospective effect only.
Implemented.
BSNL
has
become a Member of the
Bharat Broadband Networks
Limited; and, as directed by the
Government, invested a sum
of Rs.10/- [Rupees Ten only] in
this financial year [Vide Cheque
No.502828, dated 19.4.2012],
towards One Equity Share of
Rs.10/- [Rupees Ten only] being
fully paid up for cash at par.
Implemented. Vide Order No.116/2010-PAT(BSNL)
dated
10.6.2013, orders issued for
allowing benefit of merger of
50% DA effectively amounting
to 78.2% as on 1.1.2007, with
prospective date i.e. date of issue
of Presidential Directive.
Time
12.30 P.M.
12.45 P.M.,
13th AGM,
30.09.2013
05.00 P.M.
Venue
Details of Special
Resolutions passed in
the AGMs
Regd & Corp. Office, Board
Room, 3rd Floor Bharat Sanchar
Bhawan, H.C. Mathur Lane,
Janpath, New Delhi-110 001.
Regd & Corp. Office, Board
Room, 3rd Floor Bharat Sanchar
Bhawan, H.C. Mathur Lane,
Janpath, New Delhi-110 001.
Regd & Corp. office, Board
Room, 3rd floor, Bharat Sanchar
Bhawan, H.C. Mathur Lane,
Janpath, New Delhi-110 001.
47
Time
05.00 P.M.,
Venue
Details of Special
Resolutions passed in
the AGMs
Regd & Corp. office, Board
Room, 3rd floor, Bharat Sanchar
Bhawan, H.C. Mathur Lane,
Janpath, New Delhi-110 001.
MEANS OF COMMUNICATIONS
Annual financial statements, New releases, etc., are put in the companys website as well as in the
intranet portal of the company.
Website :- The companys website www.bsnl.co.in is a user friendly site, containing all the latest
developments.
Annual Report
Annual Report of the Company containing inter-alia, Audited Accounts, Directors Report, Auditors
Report and replies of management thereto, Comments and Review of the C & AG of India are
circulated amongst all the Members and other entitled thereto. As enunciated in the Companies
Act and also laid before the Houses of the Parliament.
TRAINING OF DIRECTORS
The Company is managed by the Sectoral Experts/Specialists having domain knowledge and
expertise of the core sector, which is Telecom Services Management. Being a Telecom Service
Provider, BSNL is also Member of various National and International level Telecom / Technology
related forums.
In order to update the knowledge and skill of BSNL officers and to have first hand information on
latest developments taking place in telecommunications, 40 officers including Board level officers
were deputed abroad for various events.
Non-official Part-Time Directors, being men of public eminence and proven expertise, bring their
own value addition to the management of the company. Still, they are also nominated for various
national level seminars, workshops, training programmes as per their convenience.
A glimpse of the Targets set forth vis--vis the achievements under the Memorandum of
Understanding
Item
Target
48
Achievement
% age of
achievement
176
50
88
4993
16069
321
20071
26311
132
250
464
184
49
Code of Conduct laid down in accordance with the CG Norms. Accordingly, no separate Whistle
Blower Mechanism was in place.
However, consequent upon the mandate of the DPEs MoU Task Force for inclusion of Compliance
of CG Norms, inter-alia, the establisihing a whistle blower mechanism also as one of the Dynamic
Parameters, the Company has put in place in place a Board approved Whistle Blower Policy.
Shri A.N. Rai, CMD addressing the delegates in the Heads of Circle conference
22nd August, 2014
50
Place : New Delhi
Dated : 19.09.2014
Sd/[K. Raghavan]
Practising Company Secretary
FCP No. 3230
CP No. 13033
51
As at 31 March 2014
As at 31 March 2013
3
4
5
Non-current liabilities
Long term borrowings
Other long term liabilities
Long term provisions
1,250,000
4,470,295
33,037
5,753,332
1,250,000
5,076,240
37,633
6,363,873
6
7
8
Current liabilities
Short term borrowings
Trade payables
Other current liabilities
Short term provisions
72,000
330,074
783,606
1,185,680
170,318
353,884
687,008
1,211,210
9
10
11
12
373,853
870,657
682,363
67,459
1,994,332
8,933,344
256,114
950,092
721,054
53,184
1,980,444
9,555,527
4,144,428
917,677
386,917
923
5,449,945
718,074
23,773
532,684
6,724,476
4,555,753
1,528,885
369,600
1,462
6,455,700
657,511
13,330
683,370
7,809,911
354,728
276,258
93,195
76,344
1,321,806
2,122,331
86,537
8,933,344
377,209
295,339
116,125
93,975
760,510
1,643,158
102,458
9,555,527
TOTAL
ASSETS
Non-current assets
Fixed assets
- Tangible assets
- Intangible assets
- Capital work-in-progress
- Intangible assets under development
13
Non-current investments
Deferred tax assets (net)
Long-term loans and advances
14
15
16
Current assets
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
17
18
19
20
21
33
Sd/Anupam Shrivastava
Director (Finance)
Sd/Sujata Ray
ED Finance
Sd/Rajeev Singh
General Manager (Corporate Accounts)
Sd/H.C.Pant
Company Secretary and Sr. General Manager (Legal)
52
INCOME
Revenue from operations
22
2,615,326
2,565,481
Other income
23
184,309
147,308
2,799,635
2,712,789
Total
EXPENSES
Employee benefit expenses
24
1,543,584
1,375,782
Finance costs
25
21,964
35,147
13
602,317
833,643
26
1,100,765
1,040,235
29
224,330
205,236
Total
3,492,960
3,490,043
(693,325)
(777,254)
(19,094)
(18,282)
(712,419)
(795,536)
10,443
7,092
(701,976)
(788,444)
(14.04)
(15.77)
Other expenses
27
15
34
Sd/Anupam Shrivastava
Director (Finance)
Sd/Sujata Ray
ED Finance
Sd/Rajeev Singh
General Manager (Corporate Accounts)
Sd/H.C.Pant
Company Secretary and Sr. General Manager (Legal)
53
(712,419)
(795,536)
Adjustments for :
Current year depreciation and amortisation
602,317
833,643
9,063
14,642
21,799
34,916
84
85
Interest income
(6,888)
(13,824)
(3,817)
(4,859)
(43,421)
(46,939)
22,534
22,463
2,118
2,266
25,684
24,701
53,953
41,534
(91,985)
(66,792)
Finance costs
Wealth tax
Capitalisation of overheads
Write off and losses other than bad debts
Bad-debt provision other than services
(4,596)
586,845
(22,867)
(125,574)
818,969
23,433
Adjustment for :
Decrease/(increase) in inventories
18,951
(18,190)
(86,517)
19,205
127,296
(55,523)
(45,322)
46,834
Increase in provisions
110,874
65,988
Decrease in remittances
15,921
21,157
15,629
(85)
149,601
141,203
102,904
(92)
149,516
(39,269)
165,145
54
(39,361)
63,543
79,471
(479,357)
(269,642)
248,789
67,798
Interest received
7,058
13,910
(750)
21
(60,563)
(284,823)
(56,159)
(244,072)
117,739
Interest paid
(21,741)
124,067
95,998
(15,901)
108,166
(23,680)
(72,363)
115,753
188,116
92,073
115,753
85,256
110,234
Cheques in hand
4,473
3,962
Cash in hand
2,344
92,073
1,557
115,753
Notes :
a)
In the absence of adequate data regarding assets appearing in the deletions/adjustments column of note no. 13 of fixed
assets, all deletions (except amount transferred as decommissioned assets) have been assumed to be cash sales.
b)
In the absence of adequate details regarding unreconciled inter circle remittances with the subsidiary records, all the
inter circle remittance have been treated as part of working capital changes.
c)
The above cash flow statement has been prepared under the Indirect Method as set out in the Accounting Standard - 3
on Cash Flow Statement notified by Companies (Accounting Standard) Rules, 2006.
d)
This is the Cash Flow Statement referred to in our report of even date.
for Walker Chandiok & Co LLP
(formerly Walker, Chandiok & Co)
Chartered Accountants
Sd/per Atul Seksaria
Partner
Sd/Anupam Shrivastava
Director (Finance)
Sd/Sujata Ray
ED Finance
Sd/Rajeev Singh
General Manager (Corporate Accounts)
Sd/H.C.Pant
Company Secretary and Sr. General Manager (Legal)
55
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
1.
CORPORATE INFORMATION
Bharat Sanchar Nigam Limited (the Company or BSNL) is a Public Sector Company fully owned
by the Government of India and was formed on 15 September 2000 in pursuance of Telecom
Policy 1999, to take over the ongoing business of the Department of Telecom Services (DTS)
and Department of Telecom Operations (DTO) from 01 October 2000. The Company has been
incorporated under the Companies Act, 1956 with its registered corporate office in New Delhi.
2.
The financial statements have been prepared to comply with the Accounting Standards
referred to in the Companies (Accounting Standards) Rules, 2006 issued by the Central
Government in exercise of the power conferred under sub-section (1)(a) of section 642 and
relevant provisions of the Companies Act, 1956 (the Act) read with the general circular
15/ 2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section
133 of the Companies Act, 2013. The financial statements have been prepared on a going
concern basis under the historical cost convention on accrual basis. The accounting policies
have been consistently applied by the Company.
The preparation of financial statements in conformity with the principles generally accepted
in India requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent liabilities on the date of
financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. Any revision to accounting estimates
is recognised in the current and future periods.
a)
b)
c)
d)
Revenue for all services is recognised when earned and are realisable at the time of
billing. Un-billed revenues from the billing date to the end of the year are recorded
as accrued revenue during the period in which the services are provided. Provisions
are made for debts outstanding for more than two years and for debts less than two
years which are considered disputed (based on management decision), to the extent
considered necessary by the management.
Installation charges recovered from subscribers at the time of new telephone connections
are recognised as income in the first year of the billing.
In terms of the arrangement between Department of Telecommunications (DoT) and
the Company, the charges for telecommunication services and other infrastructural
services provided by BSNL to DoT are neither billed nor provided for.
Sale proceeds of scrap arising from maintenance and project works are taken into
miscellaneous income in the year of sale.
56
e)
f)
g)
h)
i)
Income from Subscriber Identity Modules (SIMs) recharge coupons of mobile, prepaid
calling cards, and prepaid internet connection cards are treated as income of the year in
which the payment is received since the extent of use of these cards within the financial
year cannot be ascertained.
Wherever there is uncertainty in realisation of income, such as liquidated damages,
claims on Government departments and local authorities etc., these are recognised on
realisation basis.
The claims receivable on account of provision of infrastructure, operation and
maintenance of Village Public Telephones (VPTs) and Rural Household Connections
(RDELs) etc. and operational sustainability of rural wire line network from Universal
Service Obligation (USO) fund are accounted for as other operating income.
The interest on surplus fund which are placed generally in fixed deposits with banks is
recognised on accrual basis.
Other income by way of interest on loans to employees, security deposit with
Government departments and local authorities, being not material, are accounted for
on collection basis.
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
b)
Assets costing up to Rs. 5,000 are depreciated fully in the year of purchase. Similarly,
partition works and paintings costing up to Rs. 2,00,000 are depreciated fully in the
year of construction/ acquisition.
c) The depreciation on machinery and tools used both for project and maintenance work
is charged to Statement of Profit and Loss instead of capitalization.
d) All telephone exchange buildings, administrative offices and captive consumption
assembling premises/workshops are considered as building (other than factory building).
Accordingly depreciation is charged uniformly.
2.5.2 INTANGIBLE ASSETS
a) Intangible assets such as entry license fee, one time Spectrum fee for telecom service
operations are amortised over the license period (i.e. 20 years) and standalone computer
software applications are amortised over the license period (subject to maximum of 10
years) on straight line method.
Assets, which are impaired by disuse, damage or obsolescence, are segregated from the
concerned assets category and shown as Decommissioned Assets and provision is made for the
loss, if any, due to the difference between their net carrying cost and the net realisable value.
2.7 INVESTMENTS
Long-term investments are carried at cost, after providing for any diminution in value, if such
diminution is other than temporary.
2.8 INVENTORIES
Inventories are valued at cost or net realisable value, where ever available, as the case may
be the cost is ascertained generally on weighted average method, obsolete/non moving
inventories are valued at net realisable value.
a)
b)
Expenses incurred at factory units are allocated to the cost of the manufactured products
and manufactured items are transferred to other units on standard rates determined by the
Company.
Items of income/expenditure exceeding Rs. 5 lacs are only considered for being treated as
prior period items.
59
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
Taxes on income for the current period are determined on the basis of taxable income and
tax credits computed in accordance with the provisions of the Income Tax Act, 1961.
In accordance with the notified AS-22, Deferred Tax Liability is recognised on the timing
differences between accounting income and the taxable income for the period taking into
consideration the contents of Accounting Standard Interpretations (ASI) - 3 and quantified
using the tax rates in force or substantively enacted as on the reporting date.
Deferred Tax Assets are recognised and carried forward to the extent there is a virtual certainty
that such deferred tax assets can be realised.
2.14 PROVISIONS
Provisions are recognised when the Company has a present obligation as a result of past
events; it is more likely than not that an outflow of resources will be required to settle the
obligation, and the amount has been reliably estimated.
Liabilities, though contingent, are provided for if there are reasonable chances of maturing
such liabilities as per management. Other contingent liabilities, barring frivolous claims, not
acknowledged as debts, are disclosed by way of notes.
Earnings Per Share (EPS) comprises the net profit after tax (excluding extraordinary income
net of tax). The number of shares used in computing Basic and Diluted EPS is the weighted
average number of shares outstanding during the year.
The primary segment consists of Basic, Cellular and Broad Band services provided. The
manufacturing activities have not been treated as a separate segment since such activities are
essentially carried on as support service to other segments mainly for captive consumption.
The following specific accounting policies have been followed for segment reporting:
a) Segment revenue includes service income and other income directly identifiable with/
allocable to the segment.
b) Income/expense, which relates to the Company, as a whole and not allocable to individual
business segment is included in Un-allocable income/expense respectively.
c) Expenses that are directly identifiable with/allocable to segments are considered for
determining segment results.
d) Segment assets and liabilities include those directly identifiable with the respective
segments. Un-allocable corporate assets and liabilities represent the assets and liabilities
that relate to the Company as a whole and not allocable to any segment.
3.
SHARE CAPITAL
As at 31 March 2014
As at 31 March 2013
1,000,000
1,000,000
750,000
750,000
1,750,000
1,750,000
500,000
500,000
750,000
750,000
1,250,000
1,250,000
As at 31 March 2014
As at 31 March 2013
Authorised
Amount
Number of
shares
Amount
5,000,000,000
500,000
5,000,000,000
500,000
7,500,000,000
750,000
7,500,000,000
750,000
Equity shares
Balance at the beginning/end of the year
Preference shares
Balance at the beginning/end of the year
b) Details of shares held by shareholders having more than 5% shares in the Company
As at 31 March 2014
As at 31 March 2013
4,999,998,400
4,999,998,400
99.99
99.99
7,500,000,000
7,500,000,000
100
100
Equity shares
The Central Government of India (No.)
Holding (%)
Preference shares
The Central Government of India (No.)
Holding (%)
Notes :
a)
Out of the shares issued by the Company, 49,99,998,400 (previous year 49,99,998,400) equity shares of Rs. 10/each and 7,500,000,000 (previous year 7,50,00,00,000) preference share of Rs. 10/- each were allotted as fully
paid up for consideration other than cash in the financial year 2000-01 and 2001-02 respectively. The President
of India through its nominees is holding 1,600 shares of Rs. 10/- each as subscribers to the Memorandum and
Articles of association.
b)
The Company for the period of five years immediately preceding the date of Balance Sheet has not :
i)
Allotted fully paid up shares by way of bonus shares.
c)
ii)
Brought back any class of shares.
Vote of members : Every member present on person and being a holder of equity share shall have one vote and
every person either as a general proxy on behalf of a holder of equity share, shall have one vote or upon a poll,
61
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
every member shall have one vote for every share held by him. On poll, the voting rights of holder of equity
share shall be as specified in Section 87 of the Companies Act, 1956. The holder of preference share have a right
to vote on resolution placed before the Company which directly affects the rights attached to their preference
shares and subject to aforesaid, the holders of preference shares shall in respect of such capital be entitled to vote
on every resolution placed before the Company at a meeting if the dividend due on such capital or any part of
such dividend remains unpaid in respect of an aggregate period of not less than two years preceding the date of
commencement of the meeting and where the holders of any preference shares have a right to vote as aforesaid
on any resolution every such member personally present shall have one vote and on a poll his voting right in
respect of such preference share bears to the total paid up equity capital of the Company.
d)
Division of profit : The profit of the Company, subject to any special rights relating thereto created or authorised
to be created by the articles subject to the provisions of the articles and also subject to the provisions of section
205(2A) of the Companies Act, 1956 and, regarding transfer of the amount to reserve of the Company, shall be
divisible among the members with the approval of the President of India, in the proportion of the amount of
capital paid or credited as paid-up on the shares held by them respectively.
4.
As at 31 March
2013
4,023,839
4,026,257
98,318
(2,340)
(2,388)
53
(30)
4,119,870
4,023,839
General reserves
430,084
430,084
200,000
200,000
422,317
1,210,761
(701,976)
(788,444)
(279,659)
422,317
4,470,295
5,076,240
Notes :
a)
During the current year, the loan from the Government of India amounting to Rs. 98,318 lacs has been waived
vide letter no.1-43/2008-B, dated 11 April 2014 and the same has been taken to the capital reserve created at the
time of formation of the Company.
b)
The contingency reserve was created in the financial year 2003-04 by appropriation of profits to meet various
contingencies that may arise in future, based on the decision made by the board of directors.
5.
Grant in aid
62
As at 31 March
2013
33,037
37,633
33,037
37,633
Since 2005-06, an amount of Rs. 61,332 lacs (Rs. 17,000 lacs for wireline and Rs 44,332 lacs for wireless
services) has been received from Department of Information Technology (DIT) for providing wireline and wireless
connectivity to 41,500 common service centers. Since this grant cannot be linked to creation of any particular
asset; as telecom network is a seemless entity, the same is being disclosed under Grant in aid as a Deferred
Grant in accordance with the notified Accounting Standard-12 on Accounting for Government Grants and is
being written back in the Statement of Profit and Loss by applying the depreciation rate on Base Transceiver
Station (i.e. 13.91%).
6.
LONG-TERM BORROWINGS
As at 31 March As at 31 March
2014
2013
Unsecured loans
- Loan from the Government of India [note a]
- Government of India (non refundable and non interest bearing ) [note b]
98,318
72,000
72,000
72,000
170,318
Notes :
a)
The notional loan of Rs. 7,50,000 lacs, which is a part of the capital structure of the Company, had a
moratorium on repayment of the principal and interest thereon up to 31 March 2005. The Company has
been representing since long to the Government of India for reduction in the rate of interest and withdrawal
of terms and conditions towards penal interest and prepayment charges. However, since the Ministry of
Finance, Government of India has not agreed to extend any relief in the form of reduction of interest rate
on the loan, as informed by the DoT through letter No. I-432008-B, dated 21 June 2011, the difference
of Rs. 18,868 lacs between the books of the Company and DoT in respect of outstanding principal
amount of the loan has been accounted in the books of the Company in the financial year 2010-11.
However, during the current year, this outstanding loan from the Government of India and the interest thereon
has been waived-off by the Government (Department of Telecommunication) vide its letter no. 1-43/2008-B,
dated 11 April 2014, consequently the principal amount of loan has been credited to capital reserves and the
outstanding interest provision has been written back.
b)
The Government of India has sanctioned a non-refundable and non-interest bearing advance of Rs 72,000 lacs
as budgetary support for the ongoing Village Panchayat Telephones (VPT) program of the Company vide letter
no.25-1/2001-SAT/pp(pt), dated 13 January 2003. The amount has already been expensed off for the purpose
for which it was sanctioned. The Company has sought approval from DoT for writing back this loan, being nonrefundable in nature.
7.
63
38,289
38,430
291,785
315,454
330,074
353,884
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
8.
LONG-TERM PROVISIONS
As at 31 March As at 31 March
2014
2013
9.
783,606
687,008
783,606
687,008
373,853
256,114
373,853
256,114
Note :
a)
744,748
802,057
99,602
97,747
24,715
49,120
1,115
759
477
380
29
870,657
950,092
Thirty one circles (previous year twenty seven) of the Company has identified Micro, Small and Medium
Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). The required
information in terms of section 22 of MSMED Act to the extent available in respect of thirty one circles (previous
year twenty seven circles) are given below :
64
As at 31 March As at 31 March
2014
2013
131
NIL
NIL
NIL
The amount of interest due and payable for the period of delay in making
payment
NIL
NIL
The amount of interest accrued and remaining unpaid at the end of each
accounting year
NIL
NIL
The amount of further interest remaining due and payable even in the
succeeding years as per Section 23 of MSMED Act, 2006
NIL
NIL
b)
An IUC agreement is being finalised between the Company and MTNL in the current year. Till the finalisation
of the agreement interconnect charges are based on the rates prescribed by Telecom Regulatory Authority of
India (TRAI) in IUC regulation. The net claim receivable/payable as on 31 March 2014 from MTNL is subject to
confirmation and reconciliation.
353
204
50,570
32,659
36,730
12,394
13,962
22,568
13,146
101,395
107,159
204,827
214,818
39,109
47,207
9,553
9,286
16,010
13,727
44,044
47,835
2,275
1,757
33,614
24,213
30
246
22,642
22,028
19,222
16,395
34,780
25,164
86,888
76,608
682,363
721,054
Interest accrued and due on the Government loan [refer note 6(a)]
65
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
389
390
2,742
2,525
6,435
7,187
57,893
43,082
67,459
53,184
66
Particulars
Current year
Opening
balance as at
01 April 2013
93,679
17,669
772,687
6,200,933
13,662
5,906,505
519,289
458,328
50,783
566,736
19,942
478,767
23,370
183,407
93,327
15,399,084
Less : Diminution in the value of decommissioned assets
Total
INTANGIBLES
Entry license fees
1,852,538
Computer softwares
35,259
Total
1,887,797
CAPITAL WORK IN PROGRESS
Capital work in progress
373,857
Less :Impairment in pending projects etc.
Total
INTANGIBLE ASSET UNDER DEVELOPMENT
Intangible assets under development
1,462
17,662,200
TANGIBLES
Lands ( Free hold )
Lands ( Lease hold )
Buildings
Apparatus and plants
Motor vehicle and launches
Cables
Lines and wires
Subscriber installations
Installation test equipments
Masts and aerials
Office machinery and equipments
Electrical fittings
Furniture and fixtures
Computers
Decommissioned assets
A.
2,602
297
14,310
255,266
667
13,041
11,927
9,132
691
21,172
690
19,144
461
5,208
19,469
374,077
672,451
588
673,039
468,137
1,047
1,516,300
1,515
1,515
485,784
508
1,024,200
573
237
27,766
333,189
79
72,362
2,162
9,393
2,323
32,783
454
33,407
391
4,672
16,602
536,393
Gross Block
Additions
Deletions
During the year
67
923
17,170,100
391,504
1,180,087
36,186
1,216,273
91,650
17,609
786,143
6,278,856
13,074
5,965,826
509,524
458,589
52,415
578,347
19,706
493,030
23,300
182,871
90,460
15,561,400
11,125,831
338,333
20,579
358,912
3,787
315,693
4,167,973
12,098
4,616,498
417,550
419,697
32,252
302,455
14,068
290,375
18,257
156,216
10,766,919
612,153
(63,511)
3,042
(60,469)
263
23,202
331,922
347
206,498
14,037
13,459
2,738
38,320
823
28,765
1,022
11,226
672,622
95,890
(153)
(153)
(4)
412
63,256
565
8,304
9,367
7,217
233
(420)
400
2,810
242
3,661
96,043
11,642,094
274,822
23,774
298,596
4,054
338,483
4,436,639
11,880
4,814,692
422,220
425,939
34,757
341,195
14,491
316,330
19,037
163,781
11,343,498
923
5,449,945
391,504
4,587
386,917
905,265
12,412
917,677
91,650
13,555
447,660
1,842,217
1,194
1,151,134
87,304
32,650
17,658
237,152
5,215
176,700
4,263
19,090
90,460
4,217,902
73,474
4,144,428
Summary of significant accounting policies and other explanatory information for the year ended 31 March 2014
68
Opening
balance as at
01 April 2012
2,494
294
7,188
85,496
782
5,685
7,594
4,386
906
17,432
272
12,473
254
2,072
7,590
154,918
146
146
191,094
663
346,821
5,857
5,857
136,903
82
526,185
559
496
10,241
185,020
73
94,079
2,487
11,334
3,297
28,023
427
28,498
383
9,167
9,259
383,343
Gross Block
Additions
Deletions
During the year
1,462
17,662,200
373,857
1,852,538
35,259
1,887,797
93,679
17,669
772,687
6,200,933
13,662
5,906,505
519,289
458,328
50,783
566,736
19,942
478,767
23,370
183,407
93,327
15,399,084
10,349,571
245,706
16,327
262,033
3,527
291,600
3,858,939
12,309
4,383,332
407,549
404,944
29,074
265,281
13,253
258,073
17,132
142,525
10,087,538
849,152
92,627
3,738
96,365
261
24,338
366,573
476
235,865
16,119
18,670
3,445
38,526
975
30,987
1,196
15,356
752,787
72,892
(514)
(514)
1
245
57,539
687
2,699
6,118
3,917
267
1,352
160
(1,315)
71
1,665
73,406
11,125,831
338,333
20,579
358,912
3,787
315,693
4,167,973
12,098
4,616,498
417,550
419,697
32,252
302,455
14,068
290,375
18,257
156,216
10,766,919
1,462
6,455,700
373,857
4,257
369,600
1,514,205
14,680
1,528,885
93,679
13,882
456,994
2,032,960
1,564
1,290,007
101,739
38,631
18,531
264,281
5,874
188,392
5,113
27,191
93,327
4,632,165
76,412
4,555,753
Notes :
a)
In some cases, the title deeds of land purchased/acquired on leasehold/freehold from various authorities, are in the process of being executed.
b)
Land includes leasehold land to the extent identified by thirty one circles (previous year thirty two circles).
c)
Addition to fixed assets include assets identified and taken over by the Company in the current year, pertaining to the assets being taken over from DoT as on 01 October 2000
Rs. (2,232) lacs (previous year Rs (2,252) lacs)
d)
Additions in gross block include Rs.43,421 lacs (previous year Rs.46,939 lacs) of Employee remuneration and Administrative expenses capitalised during the year.
e)
The depreciation during the year includes Rs. 9,063 lacs (previous year Rs.14,642 lacs) relating to prior period.
f)
The current year depreciation includes Rs.772 lacs (previous year Rs.867 lacs) which has been capitalised.
95,614
17,467
769,634
6,101,409
14,371
5,818,111
524,396
451,380
48,392
556,145
19,787
462,742
23,241
176,312
91,658
15,170,659
Less : Diminution in the value of decommissioned assets
Total
INTANGIBLES
Entry license fees
1,852,538
Computer softwares
29,548
Total
1,882,086
CAPITAL WORK IN PROGRESS
Capital work in progress
428,048
Less :Impairment in pending projects etc.
Total
INTANGIBLE ASSET UNDER DEVELOPMENT
Intangible assets under development
2,043
17,482,836
TANGIBLES
Lands ( Free hold )
Lands ( Lease hold )
Buildings
Apparatus and plants
Motor vehicle and launches
Cables
Lines and wires
Subscriber installations
Installation test equipments
Masts and aerials
Office machinery and equipments
Electrical fittings
Furniture and fixtures
Computers
Decommissioned assets
B. Previous year
Particulars
20,000
20,000
698,074
637,511
718,074
657,511
Note :
a)
All the five installments of Rs. 4,000 lacs each are overdue for redemption of 7% redeemable cumulative
preference shares in respect of investment in M/s ITI Limited at the end of the year and no dividend has been
received till date. ITI Limited will redeem preference shares to the Company immediately on release of Financial
Assistance by the Government of India to ITI as a part of revival package. Hence, no provision for the aforesaid
investment is made in the books of accounts of the Company.
123,698
259,055
98,412
6,606
15,076
502,847
132,336
259,055
99,525
14,485
15,126
520,527
B
A-B
461,706
17,368
479,074
23,773
489,829
17,368
507,197
13,330
Notes :
a)
The deferred tax has been dealt with in accordance with the contention of the Company before the tax authorities.
The depreciation has been calculated on the book value of assets taken over from DoT, contrary to the Income Tax
Departments contention of treating capital reserve as relief/ grant/ subsidy deductable from book value of assets.
The Company contends that the capital reserve arising out of the capital structure at the time of incorporation of
the Company is not in the nature of financial relief and hence not to be reduced from the value of fixed assets.
According to the Companys contention, the depreciation provided in the books on the value of assets without
deducting the amount involved in capital reserve is admissible in income tax. The stand of Company was upheld
by the Honble High Court of Delhi and the income tax department has not contested against this yet in the
higher court. The Company is recognising deferred tax assets/liabilities accordingly.
69
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
b)
The Company, being a Company providing telecommunication services is eligible to claim deduction under
Section 80 IA of the Income Tax Act, 1961 with respect to 100 % of the profits and gains derived from this
business for the first five years and thereafter at 30% of the profits for the second five years (referred to as the Tax
Holiday Period). The Company has opted for tax holiday period from financial year 2003-04 and the period ends
in the previous financial year 2012-13.
c)
In accordance with Accounting Standard Interpretation (ASI)-3 issued by the Institute of Chartered Accountants
of India, the deferred tax provision in respect of timing differences which originates and gets reversed during the
tax holiday period have not been recognised. Deferred tax in respect of timing differences which originate during
the tax holiday period but gets reversed after the tax holiday period, have been recognized in the year in which
the timing differences have originated. For this purpose, as a conservative measure, deferred tax provision has
been made in respect of the period when only 30% of the profits would be tax free assuming that only 70% of
the timing differences would reverse.
d)
The Company has not recognised any deferred tax asset during the year following the notified Accounting
Standard 22 Accounting for taxes on income, only reversal relating to deferred tax assets and deferred tax
liability created during the earlier years have been made
10,077
10,232
4,581
6,612
19,290
16,450
1,372
3,130
24,116
24,097
467,350
616,951
5,898
5,898
532,684
683,370
17. INVENTORIES
As at 31 March As at 31 March
2014
2013
Building materials
Lines and wires
Cables
Apparatus and plants
Telephone instruments
70
183
373
8,332
9,433
90,889
89,422
200,559
209,494
17,801
14,777
81
88
27,498
26,821
8,376
16,928
7,536
675
3,233
8,427
18,275
25,716
493
48
383,256
402,207
28,528
24,998
354,728
377,209
Other stores
Physical verification of stock has been conducted by the management during the year and is reconciled with the
detailed inventory records. Where ever the difference is found the same is provided for. In seven circles (previous
year six circles) difference between the store ledger and the general ledger is identified and provided for in the
current financial year.
b)
The Company is in the process of identification of non-moving, slow moving and obsolete inventories in eleven
circles (previous year five circles). Pending finalisation of the process, no provision if any, that may be required,
has been made.
c)
In certain cases, the Company has placed orders for procuring inventory at provisional prices around 80-90% of
the previous purchase price. Final purchase price in such cases is determined at a later date. Price difference in
such cases is adjusted on the total material available in stock at the time of finalization of purchase price. The
proportionate price differential on the already consumed material is adjusted on the existing stock. These cases
were arising mainly due to price variation in Copper cable. However, with the introduction of Optical Fiber
Cables (OFC) these cases have reduced to very minuscule level.
752,958
725,748
20,330
732,628
725,748
456,370
430,409
276,258
295,339
Notes :
a)
In twenty four circles (previous year twenty six circles), there is difference in the closing balance of trade
receivables between the subsidiary ledger and the general ledger. To the extent identified, the net difference
between general ledger and subsidiary ledger balances is Rs. 22,590 lacs (previous year Rs. 22,917 lacs). The
management is in the process of reconciling these differences, however an amount of Rs. 23,561 lacs is provided
for the circles where general ledger is more than subsidiary ledger. The provision for doubtful receivables is
made on the basis of information available in the subsidiary ledger.
b)
The age-wise analysis of the trade receivables as per subsidiary ledger is given below:
71
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
As at 31 March As at 31 March
2014
2013
Particulars
Trade receivable exceeding six months
551,767
551,861
178,601
150,970
730,368
702,831
c)
The classification of the trade receivables as secured (to the extent of the security deposits held by the Company),
unsecured/considered good and considered doubtful, to the extent available as per sub ledger is as follows:
As at 31 March As at 31 March
2014
2013
Particulars
Considered good secured
140,460
133,244
158,075
149,203
Doubtful receivable
431,833
420,384
730,368
702,831
83,315
110,234
1,941
4,473
3,962
2,344
1,557
92,073
115,753
1,122
372
93,195
116,125
In eight circles (previous year ten circles), it has been noticed that cheques deposited with the bank and telegraphic
transfer (TT) sent, have not been credited in the relevant bank accounts of the Company amounting to Rs. 2,704
lacs (previous year Rs. 3,442 lacs) as on 31 March 2014. The management has already taken up the case with
the concerned banks for timely crediting the amount in the respective account.
b)
In nine circles (previous year ten circles), unlinked credit items amounting to Rs. 470 lacs (previous year Rs. 482
lacs) and in ten circles (previous year eight circles) unlinked debit items amounting to Rs. 223 lacs (previous year
Rs. 428 lacs) are appearing in the bank reconciliation statement as at 31 March 2014. The management is in the
process of reconciling all such items in due course.
c)
Bank balances in one circle (previous year three circles) includes cheques in hand pending to be deposited in
bank on 31 March 2014.
72
1,224
1,304
63,916
84,948
Purchase advances
6,467
3,164
4,234
4,450
Security deposits
367
54
Other advances
136
55
76,344
93,975
Note :
a)
In one circle (previous year fifteen circles), it has been noticed that there are differences in the subsidiary ledger
of loans and advances with those appearing in general ledger. The management is in the process of reconciling
the differences of current assets as well as other current liabilities.
23,461
19,541
130,568
275,704
846,120
170,985
1,745
1,581
3,979
4,895
356,466
338,830
21,576
21,922
1,189
1,298
24
25
82,294
77,213
54,257
54,119
158
149
27
207
12,337
4,033
Accrued revenue
Amount recoverable from DoT
- On current account [refer note 32 and note c below]
- For employees on deputation
Amount recoverable from
- Government departments
- Government companies
Claims recoverable from others
Interest accrued
- on bank deposits
- on loans advances and investments
Call Detail Record based claims recoverable
73
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
As at 31 March As at 31 March
2014
2013
Less: Provision for doubtful items
1,534,201
970,502
212,395
209,992
1,321,806
760,510
Notes :
a)
No circles (previous year four circles) has reported that there is a difference between the subsidiary ledger and
the general ledger, under claims recoverable from MTNL to the extent identified, the general ledger balance
which are considered for preparation of financial statement,was more by Rs. 141 lacs in the previous year than
the subsidiary ledger.
b)
Cenvat on account of service tax, excise duty and custom duty on capital goods and inputs is under reconciliation
in some circles.
c)
Amount recoverable from DOT on current account includes an amount of Rs. 6,72,451 lacs recoverable on
account of refund of BWA Spectrum confirmed by DOT vide letter no.10-20/2012-SU.I (vol. II) dated 15 January
2014.
501,326
494,717
1,066,237
1,012,051
18,150
22,105
465,969
397,478
- Leased lines
208,239
179,674
2,604
1,553
399
1,088
11,574
7,512
302,809
318,157
2,577,307
2,434,335
20,942
113,907
- Other
17,077
17,239
38,019
131,146
2,615,326
2,565,481
- Other services
- Telegraphs and telex
- Income from passive infrastructure
- Receipts from other operators
Other operating revenue
Notes :
a)
Other operating income represents subsidy from Universal Service Obligation Fund and DoT.
74
Telephones disconnected due to non-payment are considered to be working for a period of 30 days from the
date of disconnection of outgoing facility. During this period, the incoming facility is provided and fixed monthly
charges are billed for this period.
c)
i) Revenue receivable for Rs. 267 lacs (previous year Rs. 289 lacs) and payable Rs. 494 lacs (previous year Rs.
760 lacs) in respect of Indo-Nepal traffic account has been considered on accrual basis in the accounts for the
financial year 2013-14.
ii) Nepal Telecom has disputed outstanding dues of Rs. 43 lacs pertaining to period from May 2003 to December
2004. A provision of Rs. 43 lacs which has been made by the corporate office on behalf of the circle in the year
2009-10 in this regard. The disputed amount of dues payable to Nepal telecom from January 2010 to March
2011 is Rs. 45 lacs.
d)
Revenue receivable for Rs. 10 lacs (previous year Rs. 7 lacs) and payable Rs. 7 lacs (previous year Rs. 8 lacs) in
respect of Indo-Bangladesh traffic account has been considered on accrual basis in the accounts for the financial
year 2013-14.
e)
No receivable and payable amount has been booked during the financial year 2013-14 as there is no traffic
between the countries during the current financial year (previous year NIL).
f)
Rs. 28 lacs outstanding on account of transit charges as disputed by M/s Tata Teleservices Limited is pending and
Rs. 285 lacs is outstanding against other IUC operator against which necessary provisions has been made upto
financial year 2011-12.
- On deposits in banks
3,679
6,762
- On advances
3,209
7,062
17,928
24,816
13,824
3,817
4,859
31,965
31,178
91,985
66,792
2,438
2,657
- Sale of scrap
3,038
4,204
3,988
5,379
3,324
2,186
18,938
16,229
159,493
133,484
184,309
147,308
Interest income
75
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
1,321,286
1,208,068
110,367
64,550
Pension contribution
88,914
91,641
18,735
15,933
6,440
4,142
818
808
32,634
30,585
1,714
1,913
1,580,908
1,417,640
37,324
41,858
1,543,584
1,375,782
Leave encashment of Rs. 59,418 lacs (previous year Rs. 55,359 lacs) has been paid by the Company considering
the unfunded position of the related fund.
b)
During the year, the Company has paid Rs. 400 lacs (previous year Rs. 500 lacs) to staff welfare board and Rs.
100 lacs (previous year Rs. 100 lacs) to sports and cultural board for promoting welfare activities at various
circles.
19,599
28
21,639
15,099
- Interest on others
153
190
Bank charges
165
231
21,964
35,147
Interest expense
Rent
Lease charges
Rates and taxes
76
32,141
32,322
489
456
4,962
6,184
262,451
253,256
281
195
- Buildings
31,170
27,077
92,418
85,119
- Cables
42,905
42,993
- Others
10,869
7,219
2,412
2,119
301
298
6,660
6,886
52,366
51,201
992
900
5,385
3,170
Travel expenses
7,907
8,376
6,959
7,115
Security services
28,612
27,805
21,839
20,691
238,835
225,858
64,719
55,040
77,906
81,409
1,885
1,992
84
85
22,534
22,463
832
2,096
25,684
24,701
53,953
41,534
1,286
170
1,069
1,074
8,321
6,111
(1,365)
(599)
1,106,862
1,045,316
6,097
5,081
1,100,765
1,040,235
77
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
Notes :
a)
8,379
11,833
Purchases
10,878
8,106
Direct expenses
13,123
12,207
2,079
(1,093)
(8,376)
(8,379)
Total (A)
26,083
22,674
17,762
16,563
8,321
6,111
Change in inventory
Production of goods by the Company is for captive consumption. Prices for the transfer of stock from Telecom
Factories to circles for self-consumption are predetermined. The predetermined rates include direct cost including
overhead allocation at a fixed rate. This practice has resulted in internal loss of Rs. 8,321 lacs (previous year
Rs. 6,111 lacs) for the year ended 31 March 2014 arising out of such transfer. The said amount has been netted
off against the administrative expenses in the Statement of Profit and Loss for the year since it is not possible to
identify the individual items of stores, which have been capitalised or expensed off.
c)
Consumption of stores and spare parts for the year ended 31 March 2014 is Rs. 2,367 lacs included in expenditure
on services and other expenses.
- Telephones (WLL)
48
1,018
- Broadband services
77
775
1,212
300
- Subsidy from DIT for Rural Broad Band (wireline) [refer note
5]
90
16,786
98
1,533
18,889
47
457
78
281
1,003
4,132
4,460
1,460
5,993
20,349
356
282
2,213
130
908
449
8,317
149
303
- USO subsidy
558
1,345
22
1,664
13,368
141
18
- Repairs
864
1,138
9,063
14,642
263
545
3,954
1,164
46
9,092
7,756
23,423
25,263
25,087
38,631
(19,094)
(18,282)
- License fee
- Interest
Total A
Income booked earlier now reversed
- Cellular mobile service
- IUC
- Telephones (WLL)
Expenditure
During the current financial year, based on physical verification of fixed assets and inventory
and reconciliation of various heads of assets and liabilities in the subsidiary and general
ledgers, the management has found some facts which has resulted in increase/ decrease
79
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
in the following assets and liabilities taken over as on 01 October 2000 amounting to net
reduction in the assets of Rs. 2,287 lacs [previous year 2,418 lacs]:
Particulars
Up to
31 March 2013
Assets
Fixed assets
Capital work-in-progress
Inventory
Trade receivables
Advance to contractors
Deposit with electricity boards /others
Total-A
Liabilities
Customer deposits
Earnest money deposits
Security deposits from contractors /suppliers
Working expense liability as on 01 October 2000
Contractors bills payable as on 01 October 2000
Total-B
Net assets taken over by the Company (A-B)
Previous year
Note 1:
Note 2:
5,409,071
502,627
187,850
683,196
39,448
2,184
6,824,376
393,704
12,122
29,005
43,513
16,593
494,937
6,329,439
6,331,857
Additions/
Up to
(Deletions) 31 March 2014
during the year
(2,232)
(108)
(2,340)
(6)
(6)
(41)
(53)
(2,287)
(2,418)
5,406,839
502,519
187,850
683,196
39,448
2,184
6,822,036
393,704
12,116
28,999
43,472
16,593
494,884
6,327,152
6,329,439
The net assets and the contingent liabilities transferred to the Company as on 01 October 2000 are
subject to confirmation by DoT as regard to their ownership and the value.
Trade receivables as on 31 March 2014 includes an amount of Rs. 36,458 lacs pertaining to period
prior to 01 October 2000, which have been fully provided for and included in net current assets
referred above.
28.2 The capital structure for the Company concurred by the Ministry of Finance and conveyed
by the Department of Telecommunications vide their U.O. No. 1-2/2000-B (Pt.) dated 13
December 2001 has been treated as consideration for transferring the above stated assets and
liabilities is as follows:
Particulars
As at 01
October 2000
(as on 31
March, 2013)
Equity
9% Non-cumulative preference shares
15 year Government loan (Interest at prevalent
Government lending rate) [note 1]
Loan from MTNL [note 2]
Capital reserves DoT [note 3]
Total
80
500,000
750,000
750,000
305,600
4,023,839
6,329,439
Additions/
Total structure
(Deletions) as at 01 October
during the
2000 (as on 31
year ended 31
March, 2014)
March, 2014
500,000
750,000
(2,287)
(2,287)
750,000
305,600
4,021,552
6,327,152
Notes:
1.
During the current year, the loan from the Government of India amounting to Rs. 98,318 lacs has been
waived vide letter no. 1-43/2008-B dated 11 April 2014 and the same has been taken to the capital
reserve created at the time of formation of the Company.
2.
The entire amount has been repaid in the previous years.
3.
Represents the difference between the total value of the assets taken over and the long term identified
liabilities and the capital structure, as on 01 October 2000 as communicated by DoT.
Service
Basic
CMTS
NLD
ILD
Leased circuits
30%
70%
Basic services
70.72%
17.58%
11.7%
CMTS services
75.50%
21.26%
3.24%
The NLD/ILD portion of Point of Interconnection (POI) revenue has been taken on actual
basis.
29.3 With effect from 01 April 2013, uniform rate of 8% is applicable for all the services i.e. Basic,
CMTS, ISP, VSAT, NLD and ILD and for all the circles irrespective of the category, vide DoT
letter no. 20-281/2010-AS-I (Vol. II) (Pt.) dated 25 June 2012.
However, in the year 2006-07 DoT vide their letter No. 1-45/2003-B dated 15 June 2006
has intimated that annual pension liability of the Government in respect of employees of
DoT / DTS / DTO who retired prior to 01 October 2000, those who have worked / are
working in the Company on deemed deputation and for those who are absorbed in the
Company shall not exceed 60% of the annual receipts to the Government from the item (a)
Dividend income from MTNL/BSNL, (b) License fee from MTNL/BSNL, (c) Corporate Tax/
81
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
Excise Duty/Service Tax paid by BSNL. Any amount exceeding the receipts on account of
3 items mentioned above shall be borne by MTNL/BSNL. The Company has taken up the
matter with the Government stating that its liability is restricted to pension contribution as per
the rates prescribed in financial rules.
30.2 During the year, the Company has recognised following amounts in the Statement of Profit
and Loss :
a) Defined contribution plans
Contribution to defined contribution plan i.e. employers contribution to provident
fund and pension contribution to the Government of India for the year is charged to
Statement Profit and Loss. These amounts are shown as under:
Particulars
Year ended
31 March 2014
Year ended
31 March 2013
18,735
15,932
88,914
91,641
b)
i)
3,601
3,388
2,811
2,289
( 2,443)
2,913
908
6,435
4,142
Net cost
ii)
Year ended 31
March 2013
( 2,890)
Year ended
31 March 2014
Particulars
Year ended
31 March 2014
Year ended
31 March 2013
Discount rate
8%
8%
7%
7%
82
iii)
24.94
LIC (1994-96)
Ultimate
LIC (1994-96)
Ultimate
Year ended
31 March 2013
35,128
28,617
Interest cost
2,811
2,289
3,601
3,388
Benefits paid
( 503)
(74)
iv)
2,913
908
43,950
35,128
Reconciliation of opening and closing balances of fair value of plan assets for
gratuity
Particulars
Year ended
31 March 2014
Year ended
31 March 2013
27,941
19,543
7,187
6,029
2,890
2,443
Benefits paid
( 503)
( 74)
37,515
27,941
v)
Particulars
Year ended
31 March 2014
Year ended
31 March 2013
37,515
27,941
43,950
35,128
6,435
7,187
23.17
Year ended
31 March 2014
Year ended
31 March 2013
Particulars
Year ended
31 March 2014
vi)
Gratuity fund investment details (Fund manager wise, to the extent funded)
Particulars
Life Insurance Corporation of India
SBI Life Insurance
Total
83
Year ended
31 March 2014
Year ended
31 March 2013
37,496
24,676
19
3,265
37,515
27,941
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
Leave encashment:
Leave encashment is also a defined benefit plan. The liability towards leave encashment
has been determined through actuarial valuation as per the notified Accounting Standard
15 (Revised 2005) Employee Benefits using projected unit credit method.
i)
Defined benefits / expenses for leave encashment recognised for the year
Particulars
Year ended
31 March 2014
Year ended
31 March 2013
10,184
10,019
Interest cost
58,407
53,179
(60,563)
(56,159)
42,818
2,151
50,846
9,190
Net cost
ii)
Particulars
Year ended 31
March 2014
Year ended 31
March 2013
Discount rate
8%
8%
7%
7%
10
11
1% to 3%
depending on age
1% to 3%
depending on age
LIC (1994-96)
Ultimate
LIC (1994-96)
Ultimate
iii)
Particulars
Year ended
31 March 2014
Year ended
31 March 2013
730,090
664,741
Interest cost
58,407
53,179
10,184
10,019
42,818
2,151
841,499
730,090
Benefits paid
Actuarial (gain)/loss on obligations (balancing figure)
Present value of obligations as at end of year
84
iv)
Reconciliation of opening and closing balances of fair value of plan assets for
leave encashment.
Particulars
Year ended
31 March 2014
Year ended
31 March 2013
637,511
581,352
60,563
56,159
Benefits paid
698,074
637,511
v)
Particulars
Year ended
31 March 2014
Year ended
31 March 2013
698,074
637,511
841,499
730,090
143,425
92,579
vi)
Leave encashment fund investment details (fund manager wise, to the extent
funded)
Particulars
Life Insurance Corporation of India (100%)
Year ended
31 March 2014
Year ended
31 March 2013
698,074
637,511
The transfer values, as indicated above, in respect of assets transferred from DoT on 01
October 2000 have been treated as its original cost and depreciation has been provided on
written down value method at the rates prescribed in Schedule XIV of the Companies Act,
1956 without reassessing the remaining useful life of such assets as on that date. Depreciation
has been provided at the rates as stated above for all the assets acquired after 01 October
2000 except in the case of Subscribers Installations which are depreciated over the useful life
of 5 years on written down value method. Depreciation has been calculated by the circles,
as per the policies of the Company.
85
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
31.2 Land at several locations has been taken over at a nominal value say Re. 1, wherever
original cost is not available. As at 31 March 2014, thirty one circles (previous year thirty
two circles) have identified the leasehold land. In the absence of the information relating to
such acquisition in other cases, no adjustment has been made for amortising the cost of such
unidentified lease hold land over the lease period.
The lease period of a few leasehold lands on which buildings are constructed, have not been
renewed / or the renewals are under dispute. Since expected terms, conditions and rentals
for renewal/ surrender are not ascertainable, no provision has been made for the surrender
value / written down value of the buildings.
31.3 Pending transfer of the immovable property in the name of the Company, documents in
respect of some land and buildings acquired during the period are under legal process/
execution. Further in respect of assets taken over from DoT, formalities for vesting the assets
in favour of the Company wherever necessary/applicable are under process.
31.4 The Company, as per instructions issued by the Ministry of Communications and Information
Technology through letters having number P-11014/13/2008-PP dated nil and number
P-11014/13/2008-PP dated 12 June 2010, has provided Rs. 10,18,658 lacs and Rs. 8,31,380
lacs as one time charge for 3G spectrum and BWA spectrum respectively in the financial
year 2009-10, which was earmarked for the Company on 08 August 2008. Above-mentioned
amount has been paid to the Government of India during the financial year 2010-11. As per
terms and conditions of NIA the right to use above-mentioned spectrum is for 20 years from
the date of awards of right to commercially use the allocated spectrum block. Accordingly,
the Company is amortising the one time spectrum fee over the period of twenty years as per
straight-line method.
During the current year, the Company received approval of the cabinet vide Department of
Telecommunication letter no. 10-20/2012-SU.I(vol. II) dated 15 January 2014, for surrender
of BWA Spectrum by the Company and refund of upfront charges paid by the Company
for six (6) LSAs amounting to Rs. 6,72,451 lacs. Accordingly, the Intangible assets of BWA
spectrum amounting to Rs. 6,72,451 lacs has been decapitalised and claims recoverable from
DoT for BWA spectrum refund has been debited by the corresponding amount. Further, the
to-date accumulated amortisation amounting to Rs. 1,49,228 lacs has been netted off with
the current year amortisation charge of the gross block.
31.5 Certain assets that have been completed and put to use, have not been capitalised in
fourteen circles (previous year thirteen circles) pursuant to the policy of capitalising only after
completion certificates have been obtained and till then these are still shown as capital workin-progress. The amount ascertained in respect of ten circles (previous year nine circles) is Rs.
45,808 lacs (previous year Rs 33,292 lacs). Consequently depreciation is also not charged on
the same.
31.6 Establishment and administration expenses incurred in units where project work is also
undertaken are allocated to capital and revenue mainly on actual man-month basis and only
where such actual allocation is not possible then on proportionate basis.
31.7 In two circles (previous year one circle), there is difference between the CWIP subsidiary
ledger and general control ledger.
86
Net amount of Rs. 8,07,011 lacs (Previous year Rs. 1,23,778 lacs) recoverable on current
account from DoT, out of which an amount of Rs. 6,72,451 lacs has been confirmed to
be refunded by DoT vide letter no. 10-20/2012-SU.I (vol. II) dated 15 January 2014, is
subject to confirmation, reconciliation and consequential adjustment. There is no practice of
getting confirmation of such balances with Government department due to huge number of
transactions.
There is no agreement between the Company and DoT for interest recoverable/payable on
outstanding amounts of DoT on current account. Hence, no accrual for interest has been
made on the amount payable to/recoverable from DoT.
The management is in the process of reconciling the various differences between the subsidiary
records and the corresponding control accounts and balance of Rs. 86,537 lacs (previous
year Rs. 1,02,458 lacs) in Inter/Intra-Circle Remittances account. This amount pertains mainly
to reconciliation of assets and liabilities, and marginally to expenditure and revenue amongst
various circles of the Company. The reconciliation of the remittances is done on continuous
basis throughout the year and proper effect is taken in the books of accounts for reconciled
amount.
Unit
F.Y. 2013-14
F.Y. 2012-13
(Rs. in lacs)
(701,976)
(788,444)
(in number)
5,000,000,000
5,000,000,000
(in Rs.)
10
10
(in Rs.)
(14.04)
(15.77)
A. Current year
Particulars
Revenue
Total
Basic
Cellular
848,713
1,292,179
472,237
2,197
2,615,326
116,492
43,664
160,156
Other income
121,477
33,447
2,375
2,194
159,493
1,086,682
1,369,290
474,612
4,391
2,934,975
400,829
429,937
(17,202)
(696,177)
Broadband
Unallocable
Segment results
87
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
Particulars
Revenue
Basic
Cellular
Broadband
Unallocable
Total
Interest income
5,735
243
18,838
24,816
Interest expenses
(234)
(85)
(21,645)
(21,964)
400,987
429,937
(20,011)
(693,325)
(20,825)
(2,520)
248
4,003
(19,094)
(1,497,888)
398,467
430,185
(16,008)
(712,419)
10,443
10,443
(1,497,888)
398,467
430,185
(9,952)
(701,976)
Segment assets
3,977,317
3,314,703
274,017
1,367,307
8,933,344
Segment liabilities
1,153,219
530,102
47,025
7,202,998
8,933,344
(18,740)
(482,200)
12,056
(330)
(489,214)
418,926
157,684
25,423
284
602,317
88,586
15,566
129
104,289
B. Previous year
Particulars
Revenue
Total
Basic
Cellular
921,442
1,234,184
408,100
1,755
2,565,481
134,480
45,804
180,284
90,133
38,612
1,162
3,577
133,484
1,146,055
1,318,600
409,262
5,332
2,879,249
213,137
367,932
(18,027)
(755,931)
8,545
433
4,846
13,824
(46)
(35,101)
(35,147)
213,524
367,932
(48,282)
(777,254)
(34,123)
(1,855)
17,588
108
(18,282)
(1,344,551)
211,669
385,520
(48,174)
(795,536)
Other income
Net segment revenue
Broadband
Unallocable
Segment results
Interest income
Interest expenses
88
Revenue
Basic
Deferred tax
Profit/(Loss) after tax
Cellular
Broadband
Unallocable
Total
7,092
7,092
(1,344,551)
211,669
385,520
(41,082)
(788,444)
4,476,926
3,352,443
251,586
1,385,518
9,466,473
548,949
593,089
35,504
2,027,515
3,205,058
39,618
112,301
24,844
13
176,776
476,767
330,944
25,626
306
833,643
66,830
24,868
254
91,955
Other information
Segment assets
Segment liabilities
Increase/(decrease) in gross block of fixed
assets
Depreciation and amortisation
Non cash expense other than depreciation
Note :
a)
Primary Segment: Basic, Cellular and Broad Band services have been considered as primary business
segments for reporting under the notified AS-17 Segment Reporting issued by CA Rules 2006.
b)
Secondary Segment: The Company caters only to the Indian market representing a singular economic
environment with similar risks and returns and further there are no reportable geographical segments.
Name of Incumbent
Remarks
CMD
Shri. R K Upadhyay
Director (Finance)
Shri. R K Upadhyay
Director (Consumer
Mobility)
Shri. R. K. Agarwal
Director (HRD)
Director (Consumer
Fixed Access)
Shri. N. K Gupta
Director (Enterprise)
Shri. A.N.Rai
Government director
Non-official part-time
director
Prof. N. Balakrishnan
89
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
36.2 Disclosure of transactions between the Company and related parties and the status of
outstanding balances.
Name of the
party
Description of transactions
Year ended
31 March 2014
Year ended
31 March 2013
120
101
126
108
15
13
Total
16
13
Repayment of advance
12
12
Outstanding advance
Remuneration paid :
Payment of salary and allowances
Key Management
Perquisites
Personnel
Sitting fees
Total
Advance given [note below] :
Opening balance
36.3 The Company being a wholly State owned enterprise, disclosure as regards related party
relationship with other State controlled enterprises and transactions with such enterprises
has not been made in accordance with the notified Accounting Standard-18 Related party
disclosures.
Year ended
31 March 2014
Statutory
auditor
Branch
auditor
Statutory
auditor
Branch
auditor
13
227
13
227
Certification charges
36
36
Reimbursement of expenses
21
19
17
284
16
282
Other services
24
22
Total
Year ended
31 March 2013
38 AS 29 DISCLOSURE REQUIREMENT
The disclosure relating to provisions in terms of AS 29, to the extent available, are as under:
90
Opening
balance as at
01 April 2013
Wealth tax
Contingencies
Total
390
(397)
1,256
(1,192)
1,646
(1,589)
Fresh
provision
made during
the year
84
(85)
435
(120)
519
(205)
Provision
utilized during
the year
85
(92)
1
(56)
86
(148)
Provision
written back
during the
year
146
146
-
Closing
balance as
at 31 March
2014
389
(390)
1,544
(1,256)
1,933
(1,646)
Information required as per Note 5(viii) of General Instructions for preparation of Statement
of Profit and Loss, Part II of Revised Schedule VI of Companies Act, 1956, to the extent
available, is as under:
Year ended
31 March 2014
957
15,721
16,678
Raw material
Components and spares parts
Capital goods
Total
Year ended
31 March 2013
2,401
57,861
60,262
Note: One circle (previous year one circle) has not ascertained the value of import on CIF basis.
Year ended
31 March 2014
937
23
8,685
9,645
Expenses on services
Travelling
Others
Total
Year ended
31 March 2013
7,307
19
9,086
16,412
Note: One circle (previous year one circle) has not ascertained the value of expenditure in foreign currency.
39.3 Consumption of imported and indigenous stores and spares parts (to the extent identified) :
Particulars
Imported
Indigenous
Total
Year ended
31 March 2014
(Rs. in lacs)
%
21,908
56
17,325
44
39,233
100
(Rs. in lacs)
12,176
22,894
35,070
Year ended
31 March 2013
%
29
71
100
Note: One circle (previous year one circle) has not ascertained the consumption of imported and indigenous
stores and spares parts.
91
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
39.4 Earnings in foreign currency :
Particulars
Year ended
31 March 2014
56
2,548
685
3,289
Training fee
Income from services
Others
Total
Year ended
31 March 2013
51
8,423
569
9,043
Note: One circle (previous year one circle) has not ascertained the value of earnings in foreign currency.
40. LEASE
The Company has taken vehicles for senior executives under operating leases, which expire
between May 2013 to May 2018 (previous year April 2014 to July 2017). The gross rental
expenses, excluding service tax, for such vehicles are Rs. 92 lacs (previous year Rs. 92 lacs).
The committed lease rentals in the future are:
Particulars
Not later than one year (excluding service tax)
Later than one year and not later than five years (excluding service
tax)
Total
Year ended
Year ended
31 March, 2014 31 March, 2013
90
88
110
121
200
209
41. Vide a MoU entered during the year between the Company and MTNL, rentals will be
calculated at mutually agreed rates after review of space occupied by both the aforementioned
Public Sector Undertakings (PSUs) in each others buildings.
As at 31 March 2014
As at 31 March 2013
No. of
Amount
No. of
Amount
cases
cases
36
133
55
143
11
1,372
39
2,495
120
22,152
94
17,127
57
14,354
59
16,747
20
3,536
17
3,216
2
1,136,678
1
691,186
1
2,465
43,184
154,565
633
25,012
43,431
1,335,255
898
755,926
TR Billing
Enhanced sales tax in lieu of C/D Forms
On account of service tax disputed
Sales tax disputed
Central excise claims
License fee and spectrum charges [note 1]
Foreign exchange fluctuation loss [note 2]
Others [note 3]
Total
Note 1:
Demand raised by DoT amounting to:
(i)
Rs. 6,91,186 lacs on account of one time spectrum charges for Global System for Mobile
(GSM) spectrum held by the Company, the matter is subjudice by other operators and the
amount is not finally crystallized.
92
(ii)
Note 2:
Note 3:
Rs. 4,45,492 lacs on account of provisional assessment of license fee for the years 2006-07 to
2008-09, the matter has been taken up with DoT for revision.
The net amount payable to Pakistan Telecom Company Limited for settlement of telecom dues
amounting to Rs.17,671 lacs payable in Gold Franc currency have been accounted for in the book
of Maharashtra telecom circle in the year 2012-13 pertaining to the period upto June 2003. No claim
has been received from Pakistan Telecom Company Limited on account of telecom traffic. In the
absence of relevant details of traffic data, no recognition of income and provisioning for expenditure
related to it has been accounted for, for the above period. The Management has decided not to
recognise the foreign exchange fluctuation for the claims recoverable/payable from/to PTCL in the
books of accounts. Henceforth, the same will be shown as contingent liabilities.
The contingent liability in connection to 23 cases included under the head Others in the above
table is not ascertainable.
ii)
Claims pending in court related to Land acquisition, TR billing, Service tax, Central Excise and
Sales tax, Arbitration cases and others.
Particulars
As at 31 March 2014
As at 31 March 2013
14,438
16,520
848,092
273,354
No. of cases
Amount
iii)
Demands raised by the Income Tax Departments not acknowledged as debt are
as follows:
Assessment
year
Particulars
As at 31
March
2014
Particulars
As at 31
March
2013
Amount
Amount
2001-02
(refer note 1)
81,899
2002-03
(refer note 1)
Appeal pending at
ITAT
- against
penalty order u/s
271(1)(c)
27,307
2003-04
197,943
Appeal pending at
ITAT
against assessment u/s 143(3)
197,943
2004-05
36,110
Appeal pending at
ITAT
against assessment u/s 143(3)
36,110
Appeal pending
at ITAT
9,684 against assessment u/s 263 /
143(3)
9,684
2004-05
Appeal pending at ITAT against
(refer note 2) assessment u/s 263 / 143(3)
Appeal pending at ITAT against
assessment u/s 143(3)
31,667
Appeal pending at
ITAT
against assessment u/s 143(3)
31,667
2005-06
Appeal pending at ITAT against
(refer note 3) penalty order u/s 271(1)(c)
115,316
115,316
2006-07
Appeal pending at ITAT against
(refer note 4) assessment u/s 143(3)
92,606
92,606
2007-08
Appeal pending at ITAT against
(refer note 5) assessment u/s 143(3)
97,095
97,095
2005-06
93
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
2008-09
Appeal pending at ITAT against
(refer note 6) assessment u/s 143(3)
70,891
70,891
2009-10
Appeal pending at ITAT against
(refer note 7) assessment u/s 143(3)
29,749
59,429
3,071
3,071
2011-12
Appeal pending at CIT (A)
(refer note 8) against assessment u/s 143(3)
623,422
2010-11
Total
Notes :
1.
2.
3.
4.
5.
1,307,554
823,018
The cases have been decided in the favour of the Company hence not acknowledged as
contingent liability.
Assessment order under section(u/s) 263/143(3), dated 25 September, 2009 has been passed
for assessment year 2004-05, whereby deduction u/s 80-IA amounting to Rs. 4,52,830 lacs was
disallowed. An additional demand of Rs. 1,00,856 lacs has been raised against the Company.
The appeal filed against this assessment has been decided partly by CIT (A) in favour of the
Company vide their order dated 30 April 2010.As per appeal effect u/s 250/263/143(3) dated
30 June 2010 for effecting order of CIT (A) dated 30 April 2010, the additional demand of
Rs. 1,00,856 lacs has been reduced to Rs. 9,684 lacs. Further appeal has been filed with
Honble ITAT against the order of CIT (A).
The appeal filed against the penalty for A.Y. 2005-06 under section 271(1)(c) imposed to the
extent of Rs. 1,15,316 lacs has been disposed of by CIT(A) vide their order dated 14 March
2012. Substantial relief has been allowed to the Company as mentioned below.
S.
No.
Particulars
Penalty
(100%)
1
2
Depreciation
Normal
82,994
Normal
Normal
25,838
Section 115JB
5,630
Total
114,462
Further, second Appeal has been filed by both the Company and Income Tax Department
with Honble ITAT against order of CIT(A) vide Appeal No 2196/DEL-2012 and 2799/DEL2012 respectively.
For assessment year 2006-07, an additional demand of Rs. 51,890 lacs was raised against the
Company vide assessment order u/s 143(3) dated 27 December 2007. The additional demand
for assessment year 2005-06 has further been increased from Rs. 51,890 lacs to Rs. 92,606
lacs vide assessment order u/s 154/143(3) dated 24 September 2010. The appeal filed against
this assessment has been decided partly in favour of the Company by CIT (A) vide their order
dated 28 March 2008. The Company has filed appeal before ITAT against the order of CIT (A).
For assessment year 2007-08, an additional demand of Rs. 35,218 lacs was raised against
the Company vide assessment order u/s 143(3) dated 14 December 2009. The additional
demand for A.Y. 2007-08 has further been increased from Rs. 35,218 lacs to Rs. 97,095 lacs
vide assessment order u/s 154/143(3) dated 10 August 2010. The appeal filed against this
assessment has been decided partly in favour of the Company by CIT (A) vide their Order
dated 29 March 2011. The Company has filed appeal before ITAT against the order of CIT (A).
94
6.
7.
8.
9.
10.
11.
iv)
No. of cases
Amount
v)
For assessment year 2008-09, an additional demand of Rs. 1,00,202 lacs was raised vide
assessment order dated 23 December 2010. Vide rectification order u/s 154/143(3) dated
30 January 2012, the additional demand raised vide assessment order u/s 143(3) dated 23
December 2010 has been reduced from Rs. 1,00,202 lacs to Rs. 70,891 lacs. First appeal filed
before CIT (A) against Assessment u/s 143 has been disposed off by CIT (A) vide their order
dated 16 February 2012 and order u/s 154 dated 12 March 2012. Second appeal has been
filed with ITAT against above mentioned orders of CIT (A).
For assessment year 2009-10 an additional demand of Rs. 59,429 lacs had been raised vide
assessment order dated 02 November 2011. This amount has already been paid by the
Company/adjusted by way of refund of other assessment years. The Company filed appeal
before CIT(A) against the assessment order which was decided vide appellate order dated 24
September 2012.The additional demand was reduced from Rs. 59,429 lacs to Rs. 29,749 lacs.
Hence a relief of Rs. 29,679 lacs has been obtained by the Company by appeal effect of order
dated 24 September 2012 passed by CIT(A)-V, New Delhi.
A refund of Rs. 31,163 lacs has been granted to the Company (including interest u/s 244A
amounting to Rs. 1,484 lacs) which has been adjusted against the outstanding demand
of assessment year 2001-02. Income Tax Department has filed an appeal in ITAT against
appellate order. The Company also filed the appeal.
For assessment year 2011-12, an additional demand of Rs.6,23,422 lacs was raised against
the Company vide assessment order u/s 143(3) dated 31 March 2014. The Company has filed
appeal before CIT (A) against the assessment order u/s 143(3) on 29 April 2014.
Penalty proceedings u/s 271(1)(c) of the Income Tax Act 1961 which was initiated against
the Company for A.Y. 2001-02, A.Y. 2003-04, A.Y.2004-05, A.Y.2006-07, A.Y.2007-08,
A.Y.2008-2009 has been kept in abeyance. The additional demand, if any, has not been
quantified.
Additional interest u/s 234B and 220, if any, arising out of above-mentioned income tax
proceedings has not been quantified since demand has not been finally crystallised against
the Company.
As per records, an amount of Rs. 5,21,930 lacs (previous year Rs. 5,96,535 lacs) has been
adjusted by Income Tax Department against the additional demand of Rs. 13,07,554 lacs
(previous year Rs. 8,23,018 lacs) mentioned above which is contested by the Company at
appropriate forums.
As at 31 March 2014
As at 31 March 2013
With cash
margin
Without cash
margin
With cash
margin
Without cash
margin
33
395
38
366
1,169
6,250
427
5,331
As per Office Memorandum (OM) dated 19 November 2009, pension contribution was payable on the
actual pay drawn as on 01 January 2007 (being the date of implementation of second pay commission for
IDA). Whereas the Company was paying pension contribution on maximum of the scale as advised by
DoT. However, from 01 December 2011 the management has decided to pay the pension contribution as
per office memorandum dated 19 November 2009. For those who are retiring within six months, pension
contribution is paid on maximum of the pay scale as per letter no 7-45/2008-TA-I Dated 19 April 2013 of
Director(A/cs-I)IA, DoT. The actual difference between these two methods of pension contribution payment
upto 31 March 2014 is Rs. 70,703 lacs (previous year Rs. 30,844 lacs).
95
Summary of significant accounting policies and other explanatory information for the
year ended 31 March 2014
(All amounts in Rs. lacs, unless otherwise stated)
42.2 Commitments
a) Capital commitments
(i) The estimated amounts of contracts remaining to be executed on capital account
and not provided for in relation to execution of works and purchase of equipments
are Rs. 1,21,749 lacs (previous year 2,31,039 lacs).
(ii) In six circles (previous year thirteen circles) the estimated amount of contract
remaining to be executed on capital account has not been ascertained.
b) Other commitments
(i) The amount of other commitments amounting to Rs. 8,333 lacs is ascertained in
two circles (previous year NIL circle).
44.
45.
46.
47.
48.
49.
The provision for income tax for the current year has not been made since the Company is
not having any taxable income either under normal provision of Income Tax Act, 1961 or
special provision u/s 115JB (Minimum alternate tax) of the Income Tax Act, 1961.
The Company is executing various projects for various Government departments on
reimbursement basis.
An agreement dated 16 May 2013 has been entered into between the Company and Bharat
Broad band Nigam Limited (BBNL) with regard to contracting of laying OFC, installation of
equipment, operation and maintenance on agreed terms and conditions of the network so
built in pursuance of MOU dated 04 December 2012. The said agreement has come into
effect from 17 May 2013.
During the current year employees of the Company have contributed an amount of Rs. 1,488
lacs in the Prime Minister National Relief Fund for disaster relief measures and rehabilitation
of the victims of flood in Uttarakhand.
The Company has discontinued its Telegram business (including Telex and Long Distance
Telegraph and Telex system) with effect from 15 July 2013 and decommissioning of assets
(other than land, building, furniture & fixture and computers) is under process in the circles
having Telegram service assets. The net depreciated value of such assets is Rs. 1,044 lacs as
on 31 March 2014.
In Uttarakhand circle of the Company natural calamity due to cloud burst and heavy flood
occurred in the month of June 2013 and assets worth Rs. 91 lacs having net depreciated value
of Rs. 16 lacs were destroyed. The same have been written off in the books of accounts.
Figures of the previous year have been regrouped or reclassified wherever necessary to
conform to the current years grouping and classification.
Sd/Anupam Shrivastava
Director (Finance)
Sd/Sujata Ray
ED Finance
Sd/Rajeev Singh
General Manager (Corporate Accounts)
Sd/H.C.Pant
Company Secretary and Sr. General Manager (Legal)
96
We have audited the accompanying financial statements of Bharat Sanchar Nigam Limited,
(the Company), which comprise the Balance Sheet as at 31 March 2014 the Statement of
Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant
accounting policies and other explanatory information. These financial statements comprise
of 48 circles, out of which 1 circle is audited by us and remaining 47 circles are audited by
branch auditors appointed under Section 228 of the Companies Act, 1956 by the Comptroller
and Auditor General of India.
Management is responsible for the preparation of these financial statements, that give a
true and fair view of the financial position, financial performance and cash flows of the
Company in accordance with the accounting principles generally accepted in India,
including the Accounting Standards notified under the Companies Act, 1956 (the Act) read
with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate
Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes
the design, implementation and maintenance of internal control relevant to the preparation
and presentation of the financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors Responsibility
3.
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the Standards on Auditing issued by the Institute
of Chartered Accountants of India. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
4.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the Companys preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of Companys internal
control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
5.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our qualified audit opinion.
As detailed in note 28, 31.1 and 31.3 to the financial statements, assets and liabilities (including
contingent liabilities) taken over from DoT have been verified and valued by the management
97
based on internal calculations and are subject to reconciliations and confirmation from DoT
as regards to ownership, value and classification. The consequential impact on the financial
statements, if any, as a result of the same is presently not ascertainable. Further, subsequent
adjustments made on account of identification and recognition of net assets is adjusted to
capital reserve. This was also a subject matter of qualification in our previous years audit
report on the audited financial statements for the year ended 31 March 2013.
7.
As detailed in note 32 to the financial statements, amounts due from and to DoT included
in current assets and current liabilities aggregating to Rs. 173,669 lacs (previous year Rs.
170,985 lacs) and Rs. 39,109 lacs (previous year Rs. 47,207 lacs) respectively are subject
to confirmations and reconciliation. Consequently, the impact of the adjustments, if any,
on the financial statements is presently not ascertainable. This was also a subject matter of
qualification in our previous years audit report on the audited financial statements for the
year ended 31 March 2013.
Fixed Assets
8.
9.
10. As reported by auditors of 6 circles, the leasehold land as identified and valued by the
respective circles have been incorporated in the books of accounts and amortised with
effect from the date of formation of the Company. Hence, in respect of the lands still not
identified and/or duly incorporated in the books of accounts of the respective circles, the
consequential impact on value of fixed assets, amortisation and loss for the year is presently
not ascertainable. This was also a subject matter of qualification in our previous years audit
report on the audited financial statements for the year ended 31 March 2013.
11. As detailed in note 31.2 to the financial statements, auditors of 4 circles have reported on the
expired/non renewal of leases on lands on which the Company had constructed buildings.
The management has not made any provision for the surrender value/written down value
of the aforementioned buildings. The consequential impact of adjustment on fixed assets,
depreciation and amortisation and loss for the year, if any, is presently not ascertainable.
This was also a subject matter of qualification in our previous years audit report on the
audited financial statements for the year ended 31 March 2013.
12. As stated in note 13(a) and 31.3 to the financial statements, fixed assets, inter alia, includes
land pertaining to 25 circles, purchased/acquired on leasehold/ freehold basis through various
authorities, the title deeds of which are yet to be executed in the name of the Company. This
was also a subject matter of qualification in our previous years audit report on the audited
financial statements for the year ended 31 March 2013.
98
by auditors of certain circles, there are unquantifiable differences between the general
ledger / trial balance and accounting records pertaining to loans and advances, current
assets and current liabilities. The impact on the financial statements, if any, owing to
the aforementioned non-reconciliations is presently not ascertainable. This was also a
subject matter of qualification in our previous years audit report on the audited financial
statements for the year ended 31 March 2013.
18. As reported by auditor of 4 circles, there are differences in the inventory records between
stores ledger and General ledger/Trial balance, the impact of the same is currently not
ascertainable. This was also a subject matter of qualification in our previous years audit
report on the audited financial statements for the year ended 31 March 2013.
19. As reported by auditors of 2 circles, certain units have not applied the Company's policy
of valuation of inventory on weighted average method as stated in note 2.8 to the financial
statements. The impact of the adjustment, if any, on inventory, consumption and loss for
the year is presently not ascertainable. This was also a subject matter of qualification in our
previous years audit report on the audited financial statements for the year ended 31 March
2013.
Revenue
22. As reported by auditors of 6 circles, the income from recharge coupons, prepaid calling cards,
internet connection cards, sancharnet cards and stock of recharge coupons and prepaid
calling cards are subject to reconciliations. In the absence of specific details, the impact of
adjustment, if any, on financial statements is presently not ascertainable. This was also a
subject matter of qualification in our previous years audit report on the audited financial
statements for the year ended 31 March 2013.
23. As reported by auditors of 3 circles, the revenue for the current year, inter alia, includes
amounts pertaining to prior period(s). This has not been separately disclosed in the financial
statements in a manner that their impact on the current years loss can be perceived, which
is not in accordance with the notified Accounting Standard 5, Net Profit or Loss for the
Period, Prior Period Items and Changes in Accounting Policies. The consequential impact of
adjustments, if any, on the financial statements is presently not ascertainable.
100
Miscellaneous
26. The Company has not complied in respect of the following Accounting Standards notified
vide Companies (Accounting Standards) Rules, 2006:
i)
As reported by auditors of 11 circles, in absence of adequate information, details and
records of old, non-moving, damaged and unserviceable inventories could not be
identified The adjustment, if any, on inventories, consumption and loss for the year
is presently not ascertainable. This was also a subject matter of qualification in our
previous years audit report on the audited financial statements for the year ended 31
March 2013.
ii) As detailed in note 35 to the financial statements and as reported by auditors of 13
circles, the expenses, incomes, assets and liabilities are not properly disclosed under the
reportable segment as per the notified Accounting Standard 17 on Segment Reporting.
In our opinion, the same does not give true and fair disclosure of the segment-wise
operations of the Company as required by the aforementioned accounting standard.
This was also a subject matter of qualification in our previous years audit report on the
audited financial statements for the year ended 31 March 2013.
iii) As stated in note 15 to the financial statement, the Company as at 31 March 2014 has
deferred tax assets (net) amounting to Rs. 23,773 lacs. Since the Company has a recent
history of losses and owing to lack of virtual certainty and convincing evidence that
sufficient future taxable income will be available against such deferred tax asset and as
stipulated by the notified Accounting Standard-22, Accounting for taxes on income,
the amount of such deferred tax asset should be written off. Consequent to the above,
loss for the year in the statement of profit and loss is under-stated by
Rs. 23,773
lacs and the balance of deferred tax asset included under Non-Current Assets, has been
overstated by the corresponding amount.
iv) The Company has not carried out any Techno-economic assessment during the year
ended 31 March 2014 and hence identification of impairment loss and provision thereof,
if any, has not been made. The same is not in accordance with the notified Accounting
Standard 28 on Impairment of asset. The consequential impact of adjustment, if any,
101
on the financial statements is currently not ascertainable. This was also a subject matter
of qualification in our previous years audit report on the audited financial statements
for the year ended 31 March 2013.
v) The accounting for capital and revenue grant in accordance with the notified Accounting
Standard 12 on Accounting for grants is not followed consistently as reported by
auditors of 16 circles. In the absence of specific details, the consequential impact of
adjustment, if any, on the financial statements is presently not ascertainable.
vi) The accounting policy as referred to in note 2.10(b) to the financial statements with
respect to the liability on account of post-retirement medical benefits of employees
including retired employees, a defined benefit plan, is recognized on actual basis in
respect of bills received by the Company instead of recognizing the liability for the same
as the present value of the defined benefit obligation at the balance sheet date calculated
on the basis of actuarial valuation in accordance with the notified Accounting Standard
15 on Employee Benefits. The consequential impact of adjustment, if any, owing to
this non compliance on the financial statements is presently not ascertainable.
27. As stated in the note 2.12 of the financial statements, only individual transactions of income/
expenditure exceeding Rs. 5 lacs, are considered for evaluation as prior-period items. In
our opinion, the said accounting policy is not in accordance with the generally accepted
accounting principles in India and the same should be evaluated on aggregation of all prior
period transactions of similar nature irrespective of individual transaction values, for possible
adjustment/disclosure in the financial statements. The consequential impact of the adjustment,
if any, on the income, expense and loss for the year is presently not ascertainable. This was
also a subject matter of qualification in our previous years audit report on the audited
financial statements for the year ended 31 March 2013.
28. As reported by 14 circles and detailed in note 10(a) to the financial statements, these circles
have not identified units covered under Micro, Small and Medium Enterprises Development
Act, 2006 (MSMED Act, 2006) and hence disclosures as required under the MSMED Act,
2006 is presently not ascertainable. This was also a subject matter of qualification in our
previous years audit report on the audited financial statements for the year ended 31 March
2013.
29. The disclosure requirements of the Revised Schedule VI of the Companies Act, 1956 has
not been properly adhered to in the presentation and disclosure of financial statements of
the Company in respect of classification of assets/liabilities into current and non-current
and secured and unsecured, wherever applicable; categorisation of assets/liabilities into
appropriate accounting captions; changes in inventory; non-disclosure of consumption of
stores and spares; consumption of imported and indigenous stores and spares parts; capital
and other commitments and expenditure and earnings in foreign currency. This was also a
subject matter of qualification in our previous years audit report on the audited financial
statements for the year ended 31 March 2013.
30. As reported by auditors of 10 circles, compliances with regard to deposition, deduction,
reconciliation of service tax and tax deducted at source are pending to be made. In the
absence of specific details, we are unable to comment on its consequential impact, if any,
on the financial statements. This was also a subject matter of qualification in our previous
years audit report on the audited financial statements for the year ended 31 March 2013.
31. As detailed in notes (1) and (2) of the Cash Flow Statement, certain assumptions have been
made for the purpose of preparation of the Cash Flow Statement. In the absence of the
appropriate details, we are presently unable to ascertain the impact, if any, on the adjustments/
102
Qualified Opinion
32. In our opinion and to the best of our information and according to the explanations given to
us and based on the consideration of the reports of the other auditors, except for the effects/
possible effects of the matters described in the Basis for Qualified Opinion paragraph the
financial statements give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted in
India:
i)
in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March
2014;
ii) in the case of Statement of Profit and Loss, of loss for the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that
date.
Emphasis of Matter
33. We draw attention to note 14 to the financial statements of the Company regarding investments
in ITI Limited aggregating to Rs. 20,000 lacs as at 31 March 2014. The management, based on
the factors mentioned in the said note, believes that the diminution in the value of investments
is temporary in nature and hence no provision in respect of aforementioned amount has been
made in the accompanying financial statement. Our opinion is not qualified in respect of this
matter.
103
e.
f.
with the books of account and with the audited returns received from the Circles;
Except for the effects/ possible effects of the matters described in the Basis of Qualified
Opinion paragraph, in our opinion, the financial statements comply with the Accounting
Standards notified under the Companies Act, 1956 read with the General Circular
15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of
section 133 of the Companies Act, 2013; and
Since, the Company is a Government Company, clause (g) of sub-section (1) of section
274 of the Companies Act, 1956 regarding obtaining written representations from the
directors of the Company, is not applicable to the Company in terms of notification no.
GSR-829(E), issued by Ministry of Corporate Affairs, dated 21 October 2003.
Other Matter
36. We did not audit the financial statements of 47 circles and balances pertaining to the corporate
office, which reflect total assets (including intra/inter circle remittances) of Rs. 4,999,244 lacs
as at 31 March 2014; total revenues of Rs. 2,722,823 lacs and net cash inflows aggregating
to Rs. 5,173 lacs for the year then ended. The financial statements of the aforementioned
47 circles have been audited by other auditors whose reports have been furnished to us by
the management, and our opinion on the financial statements of the Company for the year
then ended to the extent they relate to the financial statements not audited by us as stated in
this paragraph is based solely on the audit reports of the other auditors. Our opinion is not
qualified in respect of this matter.
37. This report is effective as of 29 August 2014. Certain subsequent events or circumstances may
have occurred between the auditors' report date of the respective circles of the Company
and that of this audit report. Such events or circumstances could significantly affect the
accompanying financial statements or the related disclosures forming part of these financial
statements of the Company. In the absence of sufficient appropriate audit evidence in respect
of the other circles, the impact of adjustments, if any, or disclosures to be included in these
financial statements of the Company cannot be ascertained.
104
(a)
The Company has maintained proper records showing full particulars, including quantitative
details and situation of fixed assets except in case of 27 circles, where such records have
not been appropriately maintained.
Further, one of the circles of the Company does not have any fixed assets. Accordingly, the
provisions of clause 4(i) of the order, in respect of this circle, are not applicable.
In case of 12 circles, the fixed assets have been physically verified by the management
during the year and no material discrepancies were noticed on such verification. In our
opinion, the frequency of verification of the fixed assets is reasonable having regard to the
size of the Company and the nature of its assets in respect of these circles.
(b)
However in case of 2 circles, the physical verification has not been completed and in case
of 14 circles, the fixed assets have not been physically verified by the management during
the year. Further, in the case of 18 circles, the management has furnished the certificate of
physical verification of fixed assets but no documentary evidence was provided. Hence in
respect of all these circles, we are unable to comment on the discrepancies, if any, which
could have arisen on such verification. In our opinion, the frequency of verification of the
fixed assets is also not reasonable having regard to the size of the Company and nature of
its assets in respect of these circles.
(c)
In our opinion, a substantial part of fixed assets has not been disposed off during the year.
(ii)
(a)
In case of 7 circles, the inventory has not been verified by the management during the year
and owing to lack of adequate information at 12 circles, we are unable to comment on the
provisions of clause 4 (ii) of the order in respect of these circles.
(b)
However, the inventory of 7 circles, have not been verified by the management during
the year and owing to no documentation/inadequate documentation provided in case
of 26 circles, we are unable to comment on the procedures of physical verification and
reasonableness thereof.
In case of 13 circles, proper records of inventory are being maintained and no material
discrepancy between physical inventory and book records were noticed on physical
verification.
(c)
Further, 28 circles are not maintaining proper records of inventory. We are, therefore,
unable to comment on the discrepancies which could have arisen between physical
inventory and book records.
(iii) (a)
The Company has not granted any loan, secured or unsecured to companies, firms or other
parties covered in the register maintained under Section 301 of the Act. Accordingly, the
provisions of clauses 4(iii)(b) to 4(iii) (d) of the Order are not applicable.
105
(e)
The Company has not taken any loans, secured or unsecured from companies, firms or
other parties covered in the register maintained under Section 301 of the Act. Accordingly,
the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable.
(iv)
However, in case of 33 circles, the internal control system is not commensurate with the
size of the Company and the nature of its business for the purchase of inventory and fixed
assets and for the sale of goods and services. Out of these circles, 7 noticed continuing
failures to correct major weaknesses in the internal control system.
(v)
The Company has not entered into any contracts or arrangements referred to in Section
301 of the Act. Accordingly, the provisions of clause 4(v) of the Order are not applicable.
(vi)
The Company has not accepted any deposits from the public within the meaning of
Sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules,
1975. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.
(vii)
The Company has an internal audit system, the scope and coverage of which, in our
opinion, requires to be further enhanced to be commensurate with its size and the nature
of its business.
(viii)
The auditors of the 3 manufacturing circles have broadly reviewed the books of account
maintained by the Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act
in respect of Companys products and are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained. However, no detailed examination
of the cost records with a view to determine whether they are accurate or complete has
been done for the Company as a whole.
Further, in case of the remaining circles, the cost records are in the process of being
prepared at the corporate level and hence, we are unable to comment on the completeness
and accuracy of the same.
(ix) (a)
Subject to our comments in para 30 in the basis of qualified opinion paragraph of the audit
report, 40 circles are regular in depositing the undisputed statutory dues including provident
fund, investor education and protection fund, employees state insurance, income-tax, sales
tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory
dues, as applicable, with the appropriate authorities. Further 7 circles have generally been
regular in depositing such dues, though there has been a slight delay in few cases. One
circle has not been regular in depositing such dues and there have been significant delays
in a large number of cases.
Subject to our comments in para 30 in the Basis of Qualified Opinion paragraph of the
audit report, in respect of 12 circles, there are no dues in respect of income-tax, sales tax,
wealth tax, service tax, customs duty, excise duty and cess that have not been deposited
with the appropriate authorities on account of any dispute and incase of 36 circles, there
(b)
106
In our opinion, the company has no accumulated losses at the end of the financial year and
it has not incurred cash losses in the immediately preceding financial year; however, in the
current financial year, the Company has incurred cash losses.
(xi)
(xii)
The Company has not granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities. Accordingly, the provisions of clause
4(xii) of the Order are not applicable.
(xiii)
In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/ society.
Accordingly, provisions of clause 4(xiii) of the Order are not applicable.
(xiv)
In our opinion, the Company is not dealing or trading in shares, securities, debentures
and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not
applicable.
(xv)
The Company has not given any guarantees for loans taken by others from banks or financial
institutions. Accordingly, the provisions of clause 4(xv) of the Order are not applicable.
(xvi)
The Company did not have any term loans outstanding during the year. Accordingly, the
provisions of clause 4(xvi) of the Order are not applicable.
(xvii)
In our opinion and based upon examination of the books of account and utilization of
funds of the Company on an overall basis, funds raised on short-term basis, prima facie,
have been used for long-term purposes.
(xviii)
During the year, the Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of the Act. Accordingly,
the provisions of clause 4(xviii) of the Order are not applicable.
(xix)
The Company has neither issued nor had any outstanding debentures during the year.
Accordingly, the provisions of clause 4(xix) of the Order are not applicable.
(xx)
The Company has not raised any money by public issues during the year. Accordingly, the
provisions of clause 4(xx) of the Order are not applicable.
(xxi)
No fraud on or by the Company has been noticed or reported during the period covered by
our audit except in the case of 8 circles. Out of which 4 circle auditors have reported inventory
and cash embezzlements aggregating to Rs. 242.05 lacs, further 4 circles have reported
on frauds being done by the employees of the company aggregating to Rs. 314.83 lacs.
For Walker Chandiok & Co LLP
(formerly Walker, Chandiok & Co)
Chartered Accountants
Firm Registration No.: 001076N/N500013
Sd/-
per Atul Seksaria
Partner
Membership No.: 86370
Place: New Delhi
Date: 29 August 2014
107
108
Circle name
BRBAITT
UP West
TTC Jabalpur
Total
Name of statute
Service Tax Act
Work Contract Tax Act
Service Tax Act
Nature of dues
Service Tax
Work Contract Tax
Service Tax
Amount(Rs. in lacs)
686
188
8
882
The Haryana circle has not deposited service tax recovered from vendors and contractors on liquidated damages and the same has not been ascertained
by the circle auditors.
4)As per the report of the circle auditors of Task Force Guwahati, Uttaranchal, Telecom Stores Calcutta and West Bengal service tax payable by the Company
as service recipient under reverse charge mechanism has not been paid by the Company till the date of audit.
3)
2) The statutory dues outstanding for a period of more than 6 months have not been ascertained, in the absence of details, in case of NE-II, Himachal
Pradesh, Andaman & Nicobar and Chattisgarh circles as reported by the respective circle auditors.
1) As per the report of the auditors of the Madhya Pradesh circle, value added tax (VAT) collected by some units on sale of tender forms has not been
deposited with the Government and is payable for more than 6 months from the date they became payable.
Notes:
S. No
1
2
3
109
Total
CHENNAI
TELEPHONES
Total
BIHAR
TELEPHONES
S.
Circle name
No.
Provident fund
Employee provident
fund Act
Sales tax
Entry tax
Service tax
Nature of dues
Name of statute
164
263
126
43
257
1,010
1,286
504
67
378
122
733
237
464
1,241
245
244
830
788
698
2,348
103
148
1,883
212
139
253
28
490
27
8
77
3
15,418
218
38
438
694
Amount
(Rs. in
lacs)
Sep-10
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
2001 - 02 to 2005
2002 - 03 to 2005
2005 - 06 to 2006
2004 - 05 to 2005
2003 - 04 to 2006
2003 - 04 to 2006 - 07
2001 - 02 to 2006 - 07
2001 - 02 to 2005 - 06
2006 - 07 to 2007 - 08
2002 - 03 to 2006 - 07
2007 - 2008
2002 - 03 to 2005 - 06
2001 - 02 to 2005 - 06
2000 - 01 to 2004 - 05
2005 - 2006
2003 - 04 to 2005 - 06
2003 - 04 to 2006 - 07
2001 - 02 to 2006 - 07
2002 - 03 to 2005 - 06
2006 - 07 to 2007 - 08
2001 - 02 to 2005 - 06
2006 - 07
2007 - 08 to 2008 - 09
2005 - 06 to 2007 - 08
2005 - 06 to 2007 - 08
2004 - 2005
2008 - 2009
2009 - 10 to 2010 - 11
2005 - 2006
2008 - 09
July 2002 to February 2004
2005 - 2006
March 02 to January 05
Appendix II referred under CARO [Clause - 4 (ix) (b)] for the year ended 31 March 2014
Statutory dues not deposited on account of disputes as on 31 March 2014
High court
High court
110
UP-WEST
TELECOMS
Total
UTTARANCHAL
TELECOMS
S.
Circle name
No.
Nature of dues
Service tax
Entry tax
Service tax
Service tax
Sales tax
Employee provident
fund department
Arbitration act
Arbitration act
Sales tax Act
Name of statute
26
14
5
108
22
17
15
55
139
737
276
1
28
13
19
31
16
40
13
1
287
2
217
14
80
1,613
67
5
14
28
5
1,270
12
5
38
25
25
25
14
Amount
(Rs. in
lacs)
227
11
15
28
140
55
2004 - 05 to 2006 - 07
2007 - 2008
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
2004 - 2005
2006 - 07
2007 - 08
2004 - 05
2008 - 09
2000 - 01
2005 - 06
2006 - 07
2007 - 08
2008 - 09
2009 - 10
2010 - 11
Total
S.
Circle name
No.
111
Cenvat CreditTower Material
Finance act,1994
Sales tax
Trade tax
tax deducted at source
Civil Work
Sales tax
Civil Work
Arbitration act
Entry tax
Trade tax
UPTT
Tax deducted at sourceSales of
Recharge
UP act,2007
UPTT
Sales tax
Penalty
Service tax
Service tax
Tax deducted at sourcePublic
call office Commision
Nature of dues
Name of statute
- 2008 to 09 to 2011 to 12
1,353
15 2009 to 10
15
8
6,022
16 2004 to 05
132 1989 to 2005
16
132
2006 to 07
2008 to 2009
2005 to 06
2012 to 13
2008
2008
1999 to 2000
2000 to 01
2003 to 04
2004 to 05
6 2009 to 10
5 2007 to 08 to 2009 to 10
2008 to 09 to 2011 to 12
1
9
23
2
2
38
0*
0*
1
1
88
21
16
124
2006 to 07,2007 to 08
2003 to 04
20 2004 to 05
2006 to 07
2000 to 01,2001 to
02,2002 to 03
2007 to 08
2009 to 10
2000 to 2005
2000 to 2001, 2001 to
2002
August 02 to January 03
110 July 94 to March 98
2005 to 2006 to 2008 to
386
2009
2009 to 10,2011 to 12
1987 to 2003
2004 to 05
2003 to 2005
42 2002 to 2003
Commissioner (appeal)
Commissioner (appeal)
Member tribunal trade tax, Agra
Allahabad , High court
Amount
paid Period to which the
Forum where disputes are pending
(Rs. in amount relates
Lacs)
January 03 to November 03 Commissioner excise and service tax
153
48
50
2
11
267
76
1
162
1,543
125
803
25
35
60
60
Amount
(Rs. in
lacs)
112
Karnataka
Total
JHARKHAND
S.
Circle name
No.
Name of statute
Service tax
Nature of dues
57
58
58
143
10
22
22
12,277
259
238
1,180
263
86
412
403
263
913
13
64
1,674
2,552
653
39
326
2,928
Amount
(Rs. in
lacs)
Amount
paid Period to which the
Forum where disputes are pending
(Rs. in amount relates
Lacs)
October 2003 to December
Commissioner (appeal)
2003
Commissioner of central excise and service tax,
2005 to 06
Kolkata
2006 to 2007
April 2005 to November
Commissioner of central excise and service tax
2006
April 03 to September 03 Commissioner (appeal)
October 2003 to
Commissioner of central excise and service tax,
September 2008
Kolkata
October 2008 to March
Commissioner of Central excise and service tax
2010
1999 to 2000
Commissioner (appeal)
2007 to 08
Assistant Commissioner, Dhanbad
Commissioner of central excise and service tax
2005 to 06
Commissioner
2001 to 2006
Supreme court
Commissioner of central excise and service tax,
April 2004 to March 2006
Kolkata
April 2006 to March 2010 Range office, Jamshedpur
October 2008 to March
Commissioner of central excise and service tax,
2010
Kolkata
2000 to 2005
Commissioner (appeal)
December 2005 to
Commissioner of central excise and service tax
August2009
Commissioner
2004 to 05
Commissioner (appeal)
April 2002 to October
Commissioner (appeal)
2003
October 2003 to March
Commissioner of central excise and service tax
2008
Commissioner
S.
Circle name
No.
Name of statute
113
Service tax on Public call
office
InterestEXCESS refund
Service tax on Public call
office
Service tax on Public call
office
127
February 08 to March 10
50
April 10 to July 10
January 08 to June 09
February 09 to December
09
33
26
January 08 to June 09
26
April 01 to March 04
December 2008 to
September
2009
December 2007 to August
2010
February 08 to November
08
December 08 to March 09
April 09 to September
09
October 09 to March 10
April 09 to March 10
April 08 to March 11
January 08 to March 10
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
29
5
7
39
34
Service taxIUC
61
25
203
39
Service tax
Nature of dues
Amount
(Rs. in
lacs)
114
Total
S.
Circle name
No.
119
150
April 03 to March 07
173
April 04 to March 05
April 06 to March 11
April 01 to March 04
35
42
2,616
12
100
April 05 to March 08
101
33
April 03 to March 07
August 09 to August 10
2013 to 14
Amount
paid Period to which the
Forum where disputes are pending
(Rs. in amount relates
Lacs)
March 96 to December 97 Karnataka , High court
Commissioner of central excise and service tax,
December 94 to March 02
Chennai
May 05 to May 06
Commissioner of Central excise (appeal), Mangalore
April 09 to September
Additional commissioner of excise and customs,
09
Mysore
Custom excise and service tax appellate tribunal,
July 08 to March 09
Bangalore
Custom excise and service tax appellate tribunal,
November 07 to June 08
Bangalore
September
Custom excise and service tax appellate tribunal,
04 to September
Bangalore
06
Custom excise and service tax appellate tribunal,
August 07 to October 07
Bangalore
69
22
Cenvat Credit
440
0*
Cenvat credit
35
Serivce Tax
Nature of dues
Cenvat credit
rules,2004
Name of statute
Amount
(Rs. in
lacs)
RAJASTHAN
S.
Circle name
No.
115
17
Cenvat Disallowance
RECOVERY EXCESS Interest
creditED IN SUBSCRIBER
ACCOUNT
14
21
Entry tax
2
6
321
30
SALE tax
Service tax
Cenvat AVAILED LY
16
Employee provident
fund act
21
Service tax
17
20
2004 to 05
2012 to 13
2008 to 12
2011 to 12
2013
April 05 to March 09
2007 to 09
2008 to 13
2008 to 13
2009 to 2010
2009 to 2010
1
4
2005 to 2008
2005
2008
2008 to 2009
2005 to 2006
2009
2009 to 2010
2005 to 2006
2003 to 2004
17
14
36
Entry tax
Service tax
Cenvat credit
Service tax
Service tax
Service tax
71
4
Entry tax
Entry tax
DemandSerivce
TaxINFRASTRUCTURE
22
13
1
112
2006
2006
1
23
2011
2010
2001 to 2006
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
2008 to 2009
38,883
8
Excise duty
Cenvat credit
Serivce Tax and Interest and
penalty thereupon
Cenvat credit
Serivce Tax
Non-PAYMENT of Serivce Tax
on IUC
Cenvat credit TAKENATD
RAISED
Entry tax
Service tax
Nature of dues
Finance act,1994
Finance act,1994
Finance act,1994
Name of statute
Amount
(Rs. in
lacs)
116
PUNJAB
Total
S.
Circle name
No.
Service tax
Service tax
Service tax
Employee provident
fund act
Service tax
592
10
14
33
1,108
7
26
Cenvat credit
Rate Difference
Serivce Tax
31
149
Cenvat credittowers
VATboard band
14
42,460
Serivce Tax
193
46
Cenvat credit
13
32
Excise duty
2,166
Service tax
87
Cenvat credit
DisallowanceSerivce Tax
Cenvat credit
rules,2004
Sales tax act
Employee provident
fund act
Sales tax act
Service tax
13
202
38
28
Cenvat credit
Disallowance credit
Nature of dues
Name of statute
Amount
(Rs. in
lacs)
10-Sep-14
October 05 to January 08
April 06 to September 06
April 06 to September 06
October 02 to September
03
February 2002 to June
2004
2005 to 06 to 2007 to 08
2007 to 08
2002 to 2004
1991 to 96
2009
2005 to 2008
2006 to 12
2011
2010 to 11
2011 to 13
2004 to 05
2012 to 13
2005 to 08
2002 to 11
2012 to 13
2013 to 14
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
Tribunal
117
10
Total
Service tax
Service tax
1,919
3,835
17
68
16
1
14
67
625
30
46
65
14
962
129
265
387
2006 to 2007
2006 to 2007
2005 to 2006
2007 to 2009
2007 to 2009
2009 to 2010
1994 to 2000
2000 to 2004
2004 to 2005
2004 to 2008
2004 to 2007
2011 to 12
2011
September
04 to March 08
2002 to 2005
2010 to 2011
2008 to 2009
116
934
2009 to 2010
2007 to 08 & 08 to 09
2007 to 08
January 12 to September
13
1998 to 99 & 2003 to 04
tribunal
Central excise and service tax N .Delhi
Central excise and service tax N .Delhi
June2002 to February2005
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
October 06 to March07
2006 to 07 & 07 to 08
October08 to March09
79
1
21
2,236
15
Demand arrears
House tax
14
87
29
Amount
(Rs. in
lacs)
Non-PAYMENT
Service tax
Employee provident
fund and Misc
Provisions act
Indian electricity act
1910
Punjab minicipal act
1911
Service tax
Service tax
Nature of dues
Name of statute
Total
TAMIL NADU
Total
S.
Circle name
No.
118
13
12
11
TF MUMBAI
Total
TF KOLKATA
Total
WEST BENGAL
S.
Circle name
No.
Service tax
General provident fund and
others
General provident
fund and others
Department of sales
tax
Excise duty
Interest
Nature of dues
Name of statute
2007 to 2008
2008 to 2009
2009 to 2010
2009 to 2010
2010 to 2011
2013 to 14
31
38
49
112
2
167
1,334
188
3
156
178
412
6
0*
288
67
1,299
16
4
26
128
22
173
4
2
14
17
82
29
28
45
264
574
983
2,047
2007 to 08
1989 to 1990
1990 to 1991
1991 to 1992
1992 to 1993
1994 to 1995
1995 to 96
2000 to 01
2001 to 02
2002 to 2003
2003 to 04
2004 to 05
2006 to 07
2007 to 08
2002 to 03
2003 to 04
2004 to 05
2008 to 09
2009 to 10
2011 to 12
2012 to 13
2007 to 08
2009 to 10
2010 to 11
2012 to 13
2013 to 2014
2007 to 2008
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
2003 to 2004
2003 to 2004
2011 to 2012
26
867
14
27
Amount
(Rs. in
lacs)
Maharashtra tribunal
Appellate authority
DOT-CELL/CBI
119
16
15
GUJARAT
Total
J & K (ASK)
Total
S.
Circle name
No.
Finance act,1994
Finance Act
Central board of
excise and customs
Nature of dues
Name of statute
594
21
1,478
3,417
472
540
6,172
331
502
900
723
421
0*
135
131
150
133
47
43
86
601
39
50
63
63
98
75
Amount
(Rs. in
lacs)
October 2007 to
Novemberember 2011
August 2009 to March
2010
118 2007
2005 to 2009
2002 to 2003
2003 to 2004
2004 to 2005
2005 to 2006
2006 to 2007
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
February 2008 to July
2008
August 2008 to March
2009
Apr 2009 to December
2009
January 2010 to September
2010
October 2010 to July 2011
August 2011 to March
2012
Apr 2006 to September
2010
October 2010 to August
2011
September
2011 to March 2012
2010 to 2011
120
19
18
17
Total
NTP
Total
N.E.-I
Total
ANDHRA
PRADESH
Total
S.
Circle name
No.
Nature of dues
Employee provident
fund act
Service tax
Adjustment ST-NLR
Cenvat credit
Exempted services
Sales tax
Finance act,1994
Andhra Pradesh
Goods and services
tax act
Finance act,1994
Finance act,1994
Name of statute
50
26
232
23
93
123
16
4,959
4,279
803
4,269
15,144
4,265
4,167
1,076
20
95
304
283
566
531
270
69
1
1,127
37,270
40
1,814
129
24
15
372
Amount
(Rs. in
lacs)
118
2012 to 13
2001 to 2002
2012 to 13
February 2004 to
November 2006
April 2008 to October
2008
2002 to 2003
2003 to 04
2004 to 05
2005 to 08
2008 to 09
2009 to 10
2003 to 08
2006 to 08
2008 to 10
2010 to 11
2011 to 12
2005 to 06
2001 to 11
2005 to 12
2004 to 09
2006 to 07
2005 to 10
2006 to 07 to 2010 to 11
2008 to 09
2009 to 10
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
April 2010 to December
2010
Commissioner appeal
Commissioner of central excise and service tax,
Bangalore
21
20
121
Maharashtra
Total
UP-EAST
S.
Circle name
No.
Entry tax
House Tax
Trade Tax
Bank Guarantee
Purchase tax
Interest on Serivce tax
Service tax on public call
office
Interest on Serivce tax
Municipal taxes
UP VAT act 2008
Octroi tax
MVAT act,2005
Service tax
Trade tax
Nature of dues
Name of statute
38
269
359
7
1
6
7
231
6,591
290
49
9
44
662
11
200
115
22
7
2,447
1,067
80
1
97
1
2
3
5
731
307
16
41
62
53
Amount
(Rs. in
lacs)
2005
2002
1999 to 2006
2006 to 2008
2007 to 2008
2002
2006 to 07
2000 to 2001
1999 to 00
2004 to 05
2012 to 13,13 to 14
2002 to 03
2005 to 2009
2004 to 2007
June 07 to September
07
2005 to 2008
2004 to 2005
2006 to 2009
2003 to 06
2003 to 06
2009
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
1987 to 1988
1988 to 1989
1989 to 1990
2003 to 2004
April 08 to December 08
2008 to 09
2004 to 2005
2002 to 2005
2004 to 2005
2003 to 2005
2003 to 2004, 2004 to
2005
2000 to 2004
1995 to 1996, 2002 to
2005
AssistantT. Commissioner
1st appeal
Supreme court of India
trade tax tribunal
Deputy commissioner, Allahabad
Additional commissioner II, Jaunpur
122
22
Total
S.
Circle name
No.
Madhya Pradesh
commercial tax act
Madhya Pradesh
commercial tax act
Entry tax
Entry tax
142
109
48
93
480
5
1
0*
42
52
22
1,043
29
36
757
57
45
162
41
2,720
145
106
October 00 to June 02
2004 to 2005
2006 to 2007
2005 to 2006
2001 to 2002
2008 to 09
2007 to 08
2003 to 2004
October 2000 to June 2002
June 2002 to March 2003
2004 to 2005
2006 to 2007
2005 to 2006
2003 to 2004
2007 to 2008
2008 to 2009
2007 to 2008
2008 to 2009
June2002 to March2003
2009 to 2010
50
2005 to 2006
2009 to 2010
22
Interest
2009 to 2010
2009 to 2010
2008 to 2009
126
15
50
54
Cenvat
Service tax
Service tax claim
2004 to 2005
2002 to 2007
47
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
1998 to 1999 to 2001
2002 to 2003
1998 to 1999
2001 to 2002
394
219
1
8
824
Nature of dues
Name of statute
Amount
(Rs. in
lacs)
24
23
TF- JABALPUR
Total
CALCUTTA
Total
S.
Circle name
No.
Service tax
123
MADHYA PRADESH
commercial tax act
VAT
Entry tax
31
33
2
26
39
31
361
197
88
41
3,252
149
3,103
8,940
4,282
219
VAT
Misc Tax
VAT
Misc Tax
Employee provident
fund
Service tax
Madhya Pradesh
commercial tax act
120
83
257
75
0*
Service tax
Madhya Pradesh commercial
tax act
Entry tax
83
657
Madhya Pradesh
commercial tax act
Nature of dues
Name of statute
Amount
(Rs. in
lacs)
MPCT appellate board
Supreme court
1996 to 1997,1998 to
1999,1999 to 2000 and
2000 to 2001 (DOT
PERIOD)
1996 to 1997,1998 to
1999,1999 to 2000 and
2000 to 2001 (DOT
PERIOD)
2007 to 2008 to 2010 to
2011
2006 to 2007, 2007 to
2008, 2008 to 2009 &2009
to 2010
2012 to 13
2002 to 2003,2003 to
2004,2005 to 2006, 2006
to 2007 & 2008 to 2009
2007 to 2008
2008 to 2009
2005 to 2006
2006 to 2007
2000 to 01,2001 to 02,
2004 to 05 to 2008 to 09
Tribunal Bhopal
Tribunal, Bhopal
Assistant commissioner ,Jabalpur
Additional commissioner, Bhopal
Tribunal, Bhopal
Tribunal, Bhopal
Supreme court
Supreme court
2001 to 02
October 00 to June 02
January01 to March 02
Deputy Commissioner of Commerical tax(appeal)
April 2009 to March 2010
April 2009 to March 2010 Deputy Commissioner of Commerical tax(appeal)
2001 to 02 & 2011 to 12
Different courts in MP
Court attachment Employee provident fund authority
2005 to 12
in various units
2013 to 14
commissioner customs and excise , Bhopal
April03 to March04
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
124
27
26
25
KERALA
Total
CORPORATE
Total
ORISSA
Total
S.
Circle name
No.
Service tax
Sales tax
0*
2
0*
2002 to 03
70
2004 to 2005
2011-12
2009 to 10
High court
Commissioner ATE
Supreme court
Tribunal, Bhopal
Commissioner, Bhopal
2006 to 2007
2007 to 2008
2008 to 2009
2010 to 2011
2009 to 10
2005 to 2006
2004 to 2005
2004 to 2005
2005 to 2006
2003 to 2004
2008 to 09
2000 to 2004
2000 to 2004
1996 to 2003
2002 to 2004
1,472
684,132
115,316
92,606
97,095
70,891
3,071
29,749
623,422
197,943
36,110
9,684
31,667
1,227
33
105
85
227
777
2,177
310
767
252
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
2002 to 2003,2003 to 2004
& 2006 to 2007
2004 to 2005,2005 to
2006, 2009 to 10
2002 to 2003 to 2008 to
2009
Income Tax
Service tax
Sales tax
Service tax
Sales tax
Nature of dues
Name of statute
Amount
(Rs. in
lacs)
125
33
32
31
30
28
Total
Andaman &
Nicobar
Total
TS CALCUTTA
Total
STR
Total
ETR
Total
Finance act,1994
W.B.VAT act,2003
Service tax
Sales tax
Service tax
699
138
837
285
1,533
1,225
22
3,638
3,229
409
27
31
11
1
44
27
72
122
82
87
27
1
2
1
1
1,954
Service tax
Nature of dues
NTR
Finance act,1994
Name of statute
Amount
(Rs. in
lacs)
Total
S.
Circle name
No.
Commissioner of central excise and service taxE
Commissioner of Central excise, Customs and service
tax (appeal) CR Building IS Press Road Cochin
2003 to 2007
2007 to 2011
1989 to 90 to 1993 to 94
2006 to 2007
2007 to 08
2010 to 11
2004 to 2005
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
2006 to 07
2008 to 09
2009 to 10
2010 to 11
126
STP
35
Commissioner of central
excise & service tax
Penalty (Customs
duty)
Service tax
Assam
38
Grand Total
Total
Service tax
Total
WTR
Total
37
Himachal
Pradesh
Sevice tax
Service tax
Sevice tax
Nature of dues
Name of statute
36
Total
NE II
Total
34
S.
Circle name
No.
862,525
1,687
1,687
73
56
2
98
2
21
179
1,295
1,295
73
190
190
Amount
(Rs. in
lacs)
Custom Duty
2007 to 2008
2005 to 06 to 2007 to 08
2013 to 14
2005 to 06 & 2007 to 08
2013 to 14
2005 to 06 & 2007 to 08
Amount
paid Period to which the
(Rs. in amount relates
Lacs)
2005 to 2006
b)
19. As reported by auditors of 2 circles, certain Circles are being instructed to take appropriate
units have not applied the Companys policy action immediately.
of valuation of inventory on weighted average
method as stated in note 2.8 to the financial
statements. The impact of the adjustment, if
any, on inventory, consumption and loss for
the year is presently not ascertainable. This
was also a subject matter of qualification
in our previous years audit report on the
audited financial statements for the year
ended 31 March 2013.
Inter/ Intra Circle Remittance Account
20. As detailed in note 33 to the financial The circles are being instructed again for
statements, the Inter-Circle/Unit remittance prompt acceptance of remittance transfer
balances amounting to Rs. 86,537 lacs advices so that the outstanding is kept to the
(previous year Rs. 102,458 lacs) are yet to barest minimum possible. The reconciliation
be reconciled. Pending such reconciliations, of remittance items and accounting the same
the possible cumulative impact of the under final head are continuously being done
adjustments, if any, on assets and liabilities by the circles which resulted in continuous
and the current and prior year(s) income and decrease in the pending remittances for last
expenditure is presently not ascertainable. four financial years.
This was also a subject matter of qualification
in our previous years audit report on the
audited financial statements for the year
ended 31 March 2013.
License Fee, Spectrum Charges, Inter Connect Usage Charges
21. As detailed in note 29 to the financial The license fee is paid on revenue share basis.
statements, the Company segregates revenue The value of pulse is not constant and may
from NLD (National long distance)/ILD also be NIL for certain tariff plans. Special
(International long distance) on an estimated tariff/ validity vouchers introduce another
basis instead of actual usage of pulse which variable due to which pulse does not remain
consequently results in recognition of the right factor for measuring revenue for purpose
license fees on an estimated basis. The impact of calculating license fee. Further, license
of adjustment, if any, on the license fees fee is now uniform across various services;
expense, recoverable/ payable from DoT and hence the effect is not material. However,
loss for the year is presently not ascertainable the company is improving its technical
for the year. This was also a subject matter capabilities to measure as accurately as
of qualification in our previous years audit possible.
report on the audited financial statements for
the year ended 31 March 2013.
Revenue
22. As reported by auditors of 6 circles, the The concerned circles are being instructed to
income from recharge coupons, prepaid take necessary action in the matter.
calling cards, internet connection cards,
sanchar net cards and stock of recharge
coupons and prepaid calling cards are
subject to reconciliations. In the absence of
132
of qualification in our previous years audit liabilities have already been shown in note
report on the audited financial statements for to accounts. Moreover, the concerned circles
the year ended 31 March 2013.
are further advised to provide the adequate
details to auditors.
Miscellaneous
26. The Company has not complied in respect of
the following Accounting Standards notified
vide Companies (Accounting Standards)
Rules, 2006:
i.
As reported by auditors of 11 circles, The concerned circles are being instructed to
in absence of adequate information, take necessary action in this regard.
details and records of old, nonmoving, damaged and unserviceable
inventories could not be identified
The adjustment, if any, on inventories,
consumption and loss for the year is
presently not ascertainable. This was
also a subject matter of qualification
in our previous years audit report on
the audited financial statements for the
year ended 31 March 2013.
ii. As detailed in note 35 to the financial The disclosure of Segmental Reporting as
statements and as reported by auditors per AS-17 on Segment Reporting is required
of 13 circles, the expenses, incomes, at Company level only. The Segmental
assets and liabilities are not properly Reporting at Company level is disclosed on
disclosed under the reportable segment the basis of booking in respective account
as per the notified Accounting Standard heads under various segments which is not
17 on Segment Reporting. In our affected by the figures given by circles in
opinion, the same does not give true relevant annexure meant only for additional
and fair disclosure of the segment-wise confirmation in segment reporting of the
operations of the Company as required company.
by the aforementioned accounting
standard. This was also a subject matter of However, the concerned circles are being
qualification in our previous years audit instructed to give proper segregated details
report on the audited financial statements in the relevant annexure.
for the year ended 31 March 2013.
iii. As stated in note 15 to the financial As disclosed in the note no. 15(d), the
statement, the Company as at 31 company has not recognized any deferred
March 2014 has deferred tax assets tax assets following the notified accounting
(net) amounting to Rs. 23,773 lacs. standard accounting for taxes on income,
Since the Company has a recent history only reversal relating to deferred tax assets
of losses and owing to lack of virtual and deferred tax liabilities created during
certainty and convincing evidence that the earlier years have been made. Since
sufficient future taxable income will the reversal of deferred tax liabilities are
be available against such deferred tax more than the newly identified deferred tax
asset and as stipulated by the notified liabilities, it has resulted into increase in net
Accounting Standard-22, Accounting deferred tax assets.
134
iv.
v.
vi.
Noted.
Sd/(A.N.Rai)
Chairman & Managing Director
Date: 11-09-2014
Sd/-
138
A.
Balance Sheet
a)
1.
Current Liabilities (Note No. 11) - Other Current Liabilities - ` 6823.63 crore
Dot, after completing provisional assessment of License fee for the years from 2006-07 to
2008-09, raised an additional demand of ` 4076.62 crore apart from ` 378.30 crore towards
demand for short payment of license fee of for the year 2012-13. The Company did not
provide for the same but disclosed it is a contingent liability. As the demand was based
on assessment, the same should have been provided for. Non-provision has resulted in
understatement of other current liabilities as well as accumulated loss by ` 4454.92 crore.
B.
1.
The does not include ` 1428.62 crore being the penalties imposed by the TERM Cell of
DoT during the year 2013-14. Non-accounting of the above as expenditure for the year
has resulted in understatement of expenses, Loss for the year and also Current Liabilities by
` 1428.62 crore.
2.
Employee Benefit Expenses (Note No. 24) - Pension Contribution - ` 889.14 crore
The above head is understated by ` 707.03 crore due to charging of pension contribution of
absorbed employees on the bases of actually drawn pay instead of on maximum pay during
2011-12, 2012-13 and 2013-14. This has also resulted in understatement of provison as well
as accumulated loss by ` 707.03 crore.
139
C.
General Comments
1.
As per accounts of BSNL for the year 2013-14, the amount recoverable from and the amount
payable to Mahanagar Telephone Nigam Limited (MTNL) on current account have been
disclosed as ` 3517.95 crore and `996.02 crore respectively resulting in net recoverable
amount of `2521.93 crore from MTNL. However, as per approved annual accounts of MTNL for
the year 2013-14, the amount recoverable from and the amount payable to the Company was
` 4186.04 crore and ` 1828.25 crore respectively resulting in a net recoverable amount of
` 2357.79 crore from BSNL. Thus, there was net difference of `4879.72 crore in the receivable/
payable amounts between these two Government Companies under the same Ministry. This
comment was raised on accounts of the Company for the year 2012-13 also. However, there
is no change in the status of unreconciled balances between the Company and MTNL.
Place : Delhi
Date : September 2014
Sd/(R.B. Sinha)
Director General of Audit (P&T)
140
141
resulted in understatement of provision based on the existing basic pay of the post held
as well as accumulated loss by `707.03 by a Govt. Servant (BSNL employee are also
crore.
Govt. Servant for the purpose of pension under
Rule 37A) at the time of proceeding on foreign
service or the upgraded pay during financial
up-gradation.
As such the interpretation given by the
administrative ministry does not conform to
the statutory provisions and hence the case was
taken up once again with DOT. The Secretary
Telecom vide minutes dated 19/04/2012
permitted the BSNL Management to remit
pension contribution on the maximum of the
scale only for those employee who are due to
retire within six months and for all others on
actual basis. The Company has again taken up
the matter with DoT. In this context, it is also
mentioned that the stand of BSNL is conformed
by DOPT also in its letter no. 6/1/2014-Estt.
(Pay-II) dated 24th April 2014.
Hence, the difference amount is shown as
contingent liability.
C
1
GENERAL COMMENTS
Persistent
Non-Reconciliation
balances with MTNL
142
Sd/(R.B. Sinha)
Director General of Audit (P&T)
143
Sd/(A. N. Rai)
Chairman & Managing Director
Bharat Sanchar Nigam Limited
Date : 29-09-2014