Working Capital of BSNL

A Summer Training Project Report On

“Calculation Calculation of Working Capital ” Of

Bharat Sanchar Nigam Limited GMTD Gwalior (M. P.) IN THE PARTIAL FULFILLMENT OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION 2009-2010

Affiliated to Jiwaji University, Gwalior

Submitted to : Mrs. Ritu Singh (HOD) MBA

Submitted by Praveen Mishra MBA (Finance) III sem

CONTENTS Acknowledgement Executive Summary

Chapter-1 Introduction 1.1. 1.2. 1.3.

1.4. 1.5.

Overview of the BSNL Objectives of the study Profile of the Organisation o Overview of BSNL Gwalior Circle o Vision, Mission & objectives o Products o Management Profile o Fact Sheet o Revenues Strategies o Policy of Accounting and finance Comparative Study SWOT Analysis

1 2 3 6 7 8 9 10 11 12 18 20

Chapter-2 Research Methodology 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. 2.7. 2.8.

Statement of the Problem Research Design Methodology Sampling Techniques used Selection of Sample Size Data Collection Statistical Tools Used Limitations of the Study

22 22 23 23 23 23 24 24

Chapter-3 Data Analysis and Findings 3.1. 3.2. 3.3.

Introduction Calculation of Working Capital Comparative Graph of Working Capital

25 35 40

Chapter-4 Conclusion and Suggestions 4.1. 4.2. 4.3. 4.4.

Finding Analysis Conclusion Suggestions

Appendix Bibliography

41 41 41 42 43 45

ACKNOWLEDGEMENT I

had

sincerely

expressed

my

ineptness

&

gratitude

towards

Mr. Ram Sadal (AO-SBP) of B.S.N.L. GWALIOR, for giving me an opportunity to join this esteem organization for 45 days of summer training. My summer training in B.S.N.L. GWALIOR, of duration 45 days has been quite successful. During my stay for 45 days, I had received full co-operation from employees and officers of the Bharat Sanchar Nigam Limited Gwalior. The practical visualization of the summer training has helped me to understand a lot of practical things. In order to acquire myself to the task of the organization and to analyze them, I met staff who helped by their kind co-operation and guidance. During the training they have been giving the practical knowledge. I would be pleased to thank Mr. Chandrshekhar (SS-SBP) of B.S.N.L This Acknowledgement would be incomplete if I fail to express my deep gratitude towards all the staff of BSNL who gave me a lot of support. I would be special thank to our college faculty Mrs. Ritu Singh (HOD), Mr. Rakesh Rajput, Mr. Sudeep Shrivastava and Ms. Jyoti Jain

under

supervision this topic. This Acknowledgement would be incomplete if I fail to express my deep gratitude towards all the facility of NRI College of Management who gave me a lot of support and guidance. Last but not least I would be special gratitude to Mr. Mahendra Sikarwar and our all friends who heartening me to complete this project.

EXECUTIVE SUMMARY This project is based on the annual reports of the Bharat Sanchar Nigam Limited. It is done to find out whether the BSNL are improving our capital structure or not.

Further, in this Project

Chapter 1 includes the introduction of the company wherein I told about the Objectives of the study and profile of the Bharat Sanchar Nigam Limited.

Chapter 2 includes the Research Methodology wherein I have discussed the Research Design and Various sources of the Data Collection.

Chapter 3 includes the Data analysis and Findings wherein I have analyze the data collected from the departmental records, annual reports and web site records.

Chapter 4 represents the conclusion and the suggestions based on the departmental records and annual report.

Chapter 1 Introduction of BSNL

Type

Communication Service Provider

Availability

Countrywide except Delhi & Mumbai

Owner

The Government of India

Key people

S.D. Saxena (CFO); A.K. Sinha (CEO)

Founded

19th century, incorporated 2000

Website

www.bsnl.in

1.1 Overview of the BSNL: BSNL is India's oldest and largest Communication Service Provider (CSP). Currently BSNL has a customer base of 64.8 million (Basic & Mobile telephony). It has footprints throughout India except for the metropolitan cities of Mumbai and New Delhi which are managed by MTNL. As on March 31, 2007 BSNL commanded a customer base of 33.7 million Wireline, 3.6 million CDMA-WLL and 27.5 million GSM Mobile subscribers. BSNL's earnings for the Financial Year ending March 31, 2006 stood at INR 401.8b (US$ 9.09 b) with net profit of INR 89.4b (US$ 2.02 billion). Today, BSNL is India's largest Telco and one of the largest Public Sector Undertaking of the country with authorized share capital of US$ 3.95 billion (INR 17,500 Crores) and networth of US$ 14.32 billion.

1.2 Objective of Study: The main objective of this study is to carry on brief study on “Analysis of five year balance sheet of BSNL through comparative balance sheet in Comparative Statement” through this I am able to get the difference of various assets and liabilities of the BSNL.

Other objectives of this project are as follows: •

To identify the various assets amount of the BSNL with respect to Annual Repots of the BSNL.

•

Comparative study of five year Annual reports.

•

To study the various departments for come to know all condition of BSNL Gwalior city center.

1.3 Profile of Organisation: Over Views of Organisation History The foundation of Telecom Network in India was laid by the British sometime in 19th century. The history of BSNL is linked with the beginning of Telecom in India. In 19th century and for almost entire 20th century, the Telecom in India was operated as a Government of India wing. Earlier it was part of erstwhile Post & Telegraph Department (P&T). In 1975 the Department of Telecom (DoT) was separated from P&T. DoT was responsible for running of Telecom services in entire country until 1985 when Mahanagar Telephone Nigam Limited (MTNL) was carved out of DoT to run the telecom services of Delhi and Mumbai. It is a well known fact that BSNL was carved out of Department of Telecom to provide level playing field to private telecoms.Subsequently in 1990s the telecom sector was opened up by the Government for Private investment, therefore it became necessary to separate the Government's policy wing from Operations wing. The Government of India corporatised the operations wing of DoT on October 01, 2000 and named it as Bharat Sanchar Nigam Limited (BSNL).BSNL operates as a public sector.

Main Services being provided by BSNL BSNL provides almost every telecom service, however following are the main Telecom Services being provided by BSNL in India:1. Universal Telecom Sevices : Fixed wireline services & Wireless in Local loop (WLL) using CDMA Technology called bfone and Tarang respectively. BSNL is dominant operator in fixed line. As on March 31, 2007 (end of financial year) BSNL had 76% share of fixed and WLL phones.

BSNL Mobile

Pre-paid Mobile

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

BSNL Broadband 3. Internet: BSNL is providing internet as dial-up connection (Sancharnet) and ADSL-Broadband Dataone. BSNL has around 50% marketshare in broadband in India. BSNL has planned aggressive rollout in broadband for current financial year. 4. Intelligent Network (IN): BSNL is providing IN services like televoting, toll free calling, premium calling etc.

BSNL Present & Future Since its corporatisation in October 2000, BSNL has been actively providing connections in both Urban and Rural areas and the efficiency of the company has drastically improved from the days when one had to wait for years to get a phone connection to now when one can get a connection in even hours. Pre-activated Mobile connections are available at many places across India. BSNL has also unveiled very cost-effective Broadband internet access plans (DataOne) targeted at homes and small businesses. At present BSNL enjoy's 47% of market share of ISP services.

Year of Broadband 2007

Former Indian Communications Minister Thiru Dayanidhi Maran had declared year 2007 as "Year of Broadband" in India and BSNL is gearing up to provide 5 million Broadband connectivity by the end of 2007. BSNL has upgraded existing

Dataone (Broadband) connections for a speed of up to 2 Mbit/s without any extra cost. This 2 Mbit/s broadband service is being provided by BSNL at a cost of just US$ 5.5 per month. Further, BSNL is planning to upgrade its broadband services to Triple play (telecommunications) in 2007. BSNL has been asked to add 108 million customers by 2010 by Former Indian Communications Minister Thiru Dayanidhi Maran. With the frantic activity in the communication sector in India, the target appears achievable, however due to intense competition in Indian Telecom sector in recent past BSNL's growth has slowed down. BSNL is pioneer of Rural Telephony in India. BSNL has recently bagged 80% of US$ 580 m (INR 2,500 crores) Rural Telephony project of Government of India.

Challenges During Financial Year 2007-2008 (From April 01, 2006 to March 31, 2007) BSNL has added 9.6 million new customers in various telephone services taking its customer base to 64.8 million. BSNL's nearest competitor Bharti Airtel is standing at a customer base of 39 million. However, despite impressive growth shown by BSNL in recent times, the Fixed line customer base of BSNL is declining. In order to woo back its fixed-line customers BSNL has brought down long distance calling rate under OneIndia plan, however, the success of the scheme is not known. However, BSNL faces bleak fiscal 2006-2007 as users flee, which has been accepted by the CMD BSNL. Presently there is an intense competition in Indian Telecom sector and various Telcos are rolling out attractive schemes and are providing good customer services. However, BSNL being legacy operator and its conversion from a Government Department, earns lot of criticism for its poor customer service. Although in recent past there have been tremendous improvement in working of BSNL but still it is much below the Industry's Expectations. A large aging (average age 49 years(appx)) workforce (300,000 strong), which is mostly semiilletrate or illeterate is the main reason for the poor customer service. Further, the Top management of BSNL is still working in BSNL on deputation basis holding Government employee status thus having little commitment to the

organisation. Although in coming years the retirement profile of the workforce is very fast and around 25% of existing workforce will retire by 2010, however, still the workforce will be quite large by the industry standards. Quality of the workforce will also remain an issue. Access Deficit Charges (ADC, a levy being paid by the private operators to BSNL for provide service in non-lucarative areas especially rural areas) has been slashed by 37% by TRAI, w.e.f. April 01, 2007. The reduction in ADC may hit the bottomlines of BSNL.

BSNL at Gwalior Circle BSNL Gwalior Circle office is situated in City Center area. This office is undertaking of Bhopal office. This office are works various areas like Marketing, Planning, Administrative, Operation & Management and Finance. Each department works under GM telecom district. GM delegates our some duties to DGM. DGM is the head of the department. These posts are highly responsible because DGM is the main person of the department and DGM gives various approvals of works. This approval leaves various effect of the department like financial, working efficiency, functions of departments and field officer works. Basically BSNL city center works in departmental approaches or functions. This office provides a support to other departments or employees of BSNL. In this office calculated various function of employees like salary of employees, departmental information, various tenders, payment of vendors, departmental expenditure of general provident funds etc. But this office run a collection center this collection center collect various telephones/mobiles/broadband bills.

Vision •

To become the largest telecom Service Provider.

Mission •

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

•

To Provide world class telecom infrastructure in its area of operation and to contribute to the growth.

Objective MP Telecom looks over the management, control and operation of the telecom network with the following aims and objective •

To build a high degree of customer confidence by sustaining quality and reliability in service.

•

To upgrade the quality of telecom service to international level.

•

Provision of telephone connections on demand in all the villages of M.P.

•

Expansion of new services like Internet, Intelligent Network, ISDN, Internet Telephony, Video Conferencing, Broadband etc.

•

Popularize Broadband Services and to be on-demand in the whole State.

•

Expansion of Cellular Mobile Telephone to all towns.

•

To open Internet Kiosks (Cafe's) at all Block Head Quarters.

•

To improve the quality of present services being given to the subscribers.

•

To open more Customer Service Centers and upgrade the existing Customer Service Centers for better and friendly Customer care.

•

Modernize PSTN network by making RSUs & AN-RAX.

•

Plantation of Trees to make environment Clean & Green.

•

To raise necessary financial resources for its developmental needs.

•

To increase accessibility of services, by providing a large number of Local and NSD/ISD Public Call Offices (PCOs) so as to reach out to the masses.

Products •

BSNL LANDLINE

•

BSNL MOBILE POSTPAID PREPAID UNIFIED MESSAGING SMS & BULK SMS

•

BSNL WLL

•

INTERNET SERVICES NETWORK BROADBAND TYPES OF ACCESS WI-FI CO-LOCATION SERVICE BSNL WEB HOSTING INTERNET TARIFF DIAL UP INTERNET

•

BSNL BROADBAND

•

BSNL MANAGED NETWORK SERVICES

•

BSNL MPLS-VPN

•

ISDN

•

LEASED LINE

•

INTELLIGENT NETWORK FREE PHONE SERVICE PREMIUM RATE SERVICE INDIA TELEPHONE CARD VIRTUAL PRIVATE NETWORK (VPN) VOICE VPN UNIVERSAL NUMBER UNIVERSAL PERSONAL NUMBER TELE VOTING

•

VIDEO CONFERENCING

•

AUDIO CONFERENCING

• •

I NET TELEX/ TELEGRAPH

•

EPABX EPABX CENTREX

•

HVNET

•

TRANSPONDER

Management Profile Chief General Manager (CGM) Mr. Hinduja

GM Telecom District Mr. Prashant Trivedi

Deputy General Manager (DGM)

DGM

DGM

(Marketing, Planning & Admin)

(Operation & Management)

(Finance)

Mr. Prashant Trivedi

Mr. Vijay Dixit

Mr. S. D. Tyagi

Chief Accounting Officer TR (COTR)

Account officer TR 1st Mr. S.S. Bahdoriya

AO Mob. Mr. Manoj yadav

CO Strategic Business Plans (COSBP)

AO Telecom Revenue 2nd Mr. SC Jain

AO SBP Mr. Ram Sadal

AO Pay Mr. Naagar

AO Cash Mr. Ram Avatar

Jr. Account Officer Mr. R.S. Yogik

Section Supervisor Mr. Chandrshekhar

Sr. Trunk Supervisor Mr. K.N. Duwedi

Peon Mr. Gyasi Ram

Organisation Functional Structure of BSNL Gwalior Circle SBP Department

Fact sheets The Company Bharat Sanchar Nigam Limited (known as BSNL) is a public sector communications company in India. It is the largest telecommunication company in India and the sixth largest in the world. Its headquarters are at Statesman House, Barakhamba Road, New Delhi. It has the status of Mini-ratana - a status assigned to reputed Public Sector companies in India. During the current financial year, the management based on physical verification of fixed assets and inventory and reconciliation of various heads of assets and liabilities in the subsidiary and general ledgers which has resulted into increase/decrease in the following assets and liabilities taken over as on 01st October 2000 amounting to net reduction in the assets of Rs. 5,910 lakh (P.Y. - Rs. 25,452 lakh): In pursuance of the Memorandum of Understanding dated 30th September 2000 executed between Government of India and BSNL, all assets and liabilities in respect of business carried on by DTS and DTO were transferred to the Company with effect from 01st October 2000 at a provisional value of Rs. 6,300,000 lakh and up to previous financial year BSNL has identified net assets of Rs. 6,352,028 lakh against it.

General Information

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)

Revenues Strategies The telecom sector is the most competitive sector post liberalization. This has resulted in a movement from growth based business model that emphasized growth in numbers to profit-based model where the success is measured by margins. BSNL as part of the transition has to adopt both cost reduction and revenue enhancement measures, which would directly impact profitability. It is evident that there is a declining trend in basic services and there is stagnation in cellular revenues. Revenue maximization strategies will have two components, one internal to the organization and the other external. The internal aspect would involve an initiative for change of process, technology, organizational structure etc. In this context, revenue assurance is the key to improving the bottom line for BSNL. This is proactive strategy to capture all revenues due for the services provided. Presently, BSNL generates bills through different softwares across the zones of operation, which are disintegrated and provide only basic solutions. The industry standard for revenue leakage is about 3 to 7% percent of revenue, which in money terms translates to about Rs.2100 crores for BSNL. Therefore plugging revenue leakages is just the first and most obvious part of a Revenue Assurance initiative. The key concerns for BSNL for effective revenue realization are – The delay in customer billing after activation Time lag between calls generated and billed Scope of fraud Non-availability of uniform database. Therefore the focus should be on immediate implementation of CDR based billing. This would require huge investment but the return would more than commensurate. The software should be scalable and be able to incorporate all the next generation value added services. The implementation of CDR based system will also generate the following benefits: Plugging of leakage of revenue. Formulation of appropriate marketing strategies –

Accounting Policies Basis of Preparation of Financial Statements The

financial

statements

of

Bharat

Sanchar

Nigam

Limited (the

“Company” or “BSNL”) are prepared under the historical cost convention adopting the accrual method of accounting in accordance with Indian Generally Accepted Accounting Principles

and in accordance

with the provisions of the

Companies Act, 1956 (the “Act”).

Revenue Recognition Income from services is accounted for on accrual basis and in conformity with Accounting Standard – 9 of ICAI. Accordingly, a) Revenue for all services is recognized when earned and are realizable at the time of billing. Unbilled 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. Provision is made in respect of bills considered to be disputed (by the management), debts outstanding for more than two years and for debts due for less than 2 years, to the extent considered necessary by the management. b) Installation Charges recovered from subscribers at the time of new telephone connections are recognized as income in the first year of the billing. c) 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 being billed nor provided for. d) Sale proceeds of scrap arising from maintenance and project works are taken into miscellaneous income in the year of sale. e) Income from 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 could not be ascertained. f) Wherever there is uncertainty in realization of income, such as liquidated damages, claims on Government Departments & local authorities etc., these are recognized on collection basis. g) The claims on account of reimbursement for provision of infrastructure,

operation and maintenance of Village Public Telephones (VPTs) and Rural Household Connections (RDELs) receivable from U.S.O. fund are accounted for as revenue on account of the fact that the claim for infrastructure cannot be credited to the concerned asset account since the claim amount could not be segregated asset wise. h) 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.

Fixed Assets a) Fixed assets are carried at cost less depreciation. Cost includes directly related establishment and other expenses including employee remuneration and benefits, directly identifiable to the construction or creation of the assets. b) Expenditure

on replacement

of

assets, equipments,

instruments

and

rehabilitation works is capitalized if, in the opinion of the management, it results in enhancement of revenue generating capacity. c) Assets are capitalized to the extent completion certificates have been obtained, wherever applicable. d) The cost of stores and materials at the time of issue to a project, is debited to CWIP. e) Apparatus and plants principally consisting of telephone exchanges, transmission equipments and air conditioning plants etc. are capitalized as and when an exchange is commissioned and put to use. f) Cables are capitalized as and when ready for connection to the main system. g) Intangible assets are stated at cost of acquiring the same less accumulated depreciation / amortization.

Depreciation/Amortization Depreciation is provided based on the Written Down Value method at the rates prescribed in Schedule XIV to the Companies Act, 1956 except for Subscriber Installation. The Subscriber Installation is depreciated over the useful life of 5 years on Written Down Value method. Assets costing up to Rs. 5,000 are depreciated fully

in the year

of

purchase. Similarly, partition works costing up to Rs. 2,00,000 are depreciated fully in the year of construction. The

depreciation on machinery

&

tools

used both for

project

and

maintenance work is charged to profit and loss account instead of capitalization. All telephone exchange buildings, administrative offices and captive consumption assembling premises/workshops are considered as normal building and not as factory building. Accordingly depreciation is charged uniformly. Intangible assets such as Entry License Fee for Telecom Service operations are amortized over the license period (i.e. 20 years) and standalone computer software applications are amortized over the license period subject to maximum of 10 years as per straight line method.

Impairment Of Assets Assets, which are impaired by disuse or obsolescence, are segregated from the concerned assets category and shown as ‘Decommissioned Assets’ and provision made for the loss, if any, due to the difference between their net carrying cost and the net realizable value.

Investments Long-term investments are carried at cost, after providing for any diminution in value, if such diminution is of a permanent nature.

Inventories Inventories are valued at cost or net realizable value as the case may be - cost ascertained generally on weighted average method; obsolete/non moving inventories are valued at net realizable value.

Foreign Currency Transactions a) Transactions in foreign currency are recorded at the exchange rate prevailing on

the date of the transaction i.e. on the date of payment or

receipt as the case may be. b) All Foreign Currency Liabilities and monetary assets are stated at the exchange rate prevailing as at the date of Balance Sheet and the difference taken to Profit and Loss Accounts as Exchange Fluctuation Loss or Gain.

Extraordinary Items Extra-ordinary items of income and expenditure, as covered by AS – 5, are disclosed separately.

Manufacturing Expenses Expenses incurred at Factory units are allocated to the cost of the manufactured products.

Prior Period Items Items of Income/expenditure exceeding Rs. 5 lakh are only considered for being treated as 'prior period items'.

Taxes on Income 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 AS-22, Deferred Tax Liability is recognized on the timing differences between accounting income and the taxable income for the period taking into consideration the contents of Accounting Standard Interpretations 3 and quantified using the tax rates in force or substantively enacted as on the Balance Sheet date. Deferred Tax Assets are recognized and carried forward to the extent there is a virtual certainty that such deferred tax assets can be realized.

Provisions Provisions are recognized 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.

Contingent Liabilities 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.

Earning Per Share Earning Per Share ("EPS") comprises the Net Profit after tax (excluding extraordinary income net of tax). The number of shares used in computing Basic & Diluted EPS is the weighted average number of shares outstanding during the year.

Segment Reporting The primary segment consists of ‘basic’ and ‘cellular’ 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. The following specific accounting policies have been followed for segment reporting: Segment Revenue includes service income and other income directly identifiable with/allocable to the segment. Income/expense, which relates to the Company, as a whole and not allocable to

individual

business

segment

is

included

in

“Un-allocable

Corporate

Income/expense respectively”. Expenses that are directly identifiable with/allocable to segments are considered for determining Segment Results. 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

Finance Policy of BSNL Standards of Financial Proprieties Ever officer incurring or authorizing expenditure from public funds should be guided by high standards of financial propriety. Every officer should also enforce financial order and strict economy at every step and see that all relevant financial rules and regulations are observed, by his own officer and by subordinates disbursing officers. Among the principles on which emphasis is generally laid are the following: 1. Every officer is expected to exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own money. 2. The expenditure should be prima-facie more that the occasion demands. 3. No authority should exercise its powers of sanctioning expenditure to pass an order which be directly or indirectly to its own advantages. 4. Expenditure from pubic moneys should not be incurred for benefit of a person or section of the people unlessa. a claim for the amount could be enforce in a Court of Law, or b. the expenditure is in pursuance of a recognised policy or custom. 5. The amount of allowances granted to meet expenditure of a particular type should be so regulated that the allowances are not on the whole a source of profit to the recipients. 6. The responsibility and accountability of every authority delegated with financial powers to procure any item or service on Government account is total and indivisible. Government expects that the authority a concerned will have the public interest uppermost in its mind while making a procurement decision. The responsibility is not discharged merely by the selection of the cheapest offer. 7. Whenever called for, the concerned authority must place on record in precise terms, the considerations which weighed with it while talking the procurement decision.

1.4 Comparative Study Between Years 2008-2007: During the current financial year, the management based on physical verification of fixed assets and inventory and reconciliation of various heads of assets and liabilities in the subsidiary and general ledgers which has resulted into increase/decrease in the following assets and liabilities taken over as on 01st October 2000 amounting to net reduction in the assets of Rs.5,910 lakh (P.Y. - Rs. 25,452 lakh): Figures in Lakhs of Rupees

up to march 31, 2007

up to march 31, 2008

Absolute change Rs.

Percentage Change (%)

Fixed Assets

5,417,921

5,416,697

(1,224)

-0.02

Capital WIP

503,112

502,631

(481)

-0.10

Inventory

188,647

188,681

34

0.02

Sundry Debtors

682,740

684,430

1,690

0.25

39,448

39,448

-

0.00

2,086

2,138

52

2.49

6,833,954

6,834,025

71

0.001

391,656

393,704

2,048

0.52

12,525

12,158

(367)

-2.93

29,454

29,099

(355)

-1.21

38,283

42,666

4,383

11.45

Particulars Assets

Advance to contactors Deposit with Electricity Board/other Total A Liabilities Customer Deposits Earnest Money Deposits Security Deposit from Contractors/ Suppliers Working Expense Liability as on 1st October 2000 Contractors Bills payable as on 1st October 2000

10,008

10,280

272

2.72

Net Assets taken over by the Company

6,352,028

6,346,118

(5,910)

-0.09

Total B

6,833,954

6,834,025

71

0.001

Interpretation of Comparative Balance Sheet The comparative balance sheet of the company reveals that during 2008 there has been on increase in final assets of Rs. 1224 lakh i.e. 0.02% while long term liabilities to other side have relative increase by Rs. 4383 lakh and contractor bill pay has increased by Rs 272 lakh. This fact depicts the policy of the company is to purchase fixed assets from the long-term sources of finance there by not affect the working capital.

Current assets have increased by Rs. 1261 lakh and advance of contractor not increased on the other hand there has been an increase in inventories amount Rs. 34 lakh. The current liabilities have increased by Rs. 4582 lakh i.e. 0.06%. This further confirms that the company has revised long term finances.

The overall financial position of the company is satisfactory.

1.5 SWOT Analysis: STRENGTHS: •

Pan-India reach

•

Experienced telecom service provider

•

Total telecom service provider

•

Huge Resources (financial & technical pool)

•

Huge customer base

•

Most trusted telecom brand

•

Transparency in billing

•

Easy deployment of new services

•

Copper in last mile can be used for easy broadband deployment

•

Huge Optical Fibre network and associated bandwidth

WEAKNESSES: •

Non-optimization of network capabilities

•

Poor marketing strategy

•

Bureaucratic organizational set up

•

Inflexibility in mindset (DOT period legacies)

•

Limited number of value added services

•

Poor franchisee network

•

Legacy of poor service image

•

Huge and aged manpower

•

Procedural delays

•

Lack of strategic alliances

•

Problems

associated

with

incumbency

like

outdated

technologies,

unproductive rural assets, social obligations, political interference, •

Poor IT penetration within organization

•

Poor knowledge Management

OPPORTUNITIES •

Tremendous market growing at 20 lac customers per month

•

Untapped broadband services

•

Untouched international market

•

Can capitalize on public sector image to grab government’s ICT initiatives

•

ITEB service markets

•

Diversification of business to turn-key projects

•

Leveraging the brand image to source funds

•

Almost un-invaded VSAT market

•

Fuller utilization of slack resources

•

Can make a kill through deep penetration and low cost advantage

•

Broaden market expected from convergence of broadcasting, telecom and entertainment industry

THREATS •

Competition from private operators

•

Keeping pace with fast technological changes

•

Market maturity in basic telephone segment

•

Manpower churning

•

Multinational eyeing Indian telecom market

•

Private operators demand for sharing last mile

•

Decreasing per line revenues due to competitive pricing

•

Private operators demand to do away with ADC can seriously effect revenues

•

Populist policies of government like “OneIndia” rates

Chapter 2 Research Methodology

2.1

Statement of Problem: The research is carried on in a proper planned and systematic manner. The research was particularly based departmental research. We have to move to various department and meet people which include their names and contact numbers given by BSNL training and Planning department. During the department we have to know about to departmental works by explaining the working process of a particular department. Each department presences section supervisors (SS) this SS will provide various data of relative department and give opportunity to handling the working process and resolve our doubts.

2.2

Research Design & Methodology:

Research The research design of this project is exploratory. Though each research study has its own specific purpose but the research design of this project on BSNL is exploratory in nature as the objective is the development of the hypothesis rather than their testing. The research designs methods of financial analysis. Through of comparative balance sheet in comparative statement, I am studying on balance sheet of BSNL of five year. So taking comparative statement, I am going to analyzed of five years balance sheet of BSNL

Methodology Every project work is based on certain methodology, which is a way to systematically solve the problem or attain its objectives. It is a very important guideline and lead to completion of any project work through observation, data collection and data analysis.

“Research Methodology comprises of defining & redefining problems, collecting, organizing & evaluating data, making deductions & researching to conclusions.” According to Clifford Woody, Accordingly, the methodology used in the project is as follows: Defining the objectives of the study Framing of questionnaire keeping objectives in mind (considering the objectives) Feedback from the employees, Analysis of feedback, Conclusion, findings and suggestions.

2.3

Sampling Technique Used: This research has used convenience sampling technique.

2.4

Sampling technique: Convenience sampling is used in exploratory research where the researcher is interested in getting an inexpensive approximation of the truth. As the name implies, the sample is selected because they are convenient

2.5

Selection of Sample Size: Survey of each department.

2.6

Sources of Data Collection: Research will be based on two sources: 1. Primary data 2. Secondary data

1) Primary Data: Survey: Primary data was collected by departmental survey for BSNL.

2) Secondary Data: Secondary data will consist of different literatures like books which are published, articles, internet, the company manuals and websites of company- www.bsnl.com. In order to reach relevant conclusion, research work needed to be designed in a proper way. This research methodology also includes:Familiarization with the concept of finance and its various merits, demerits. Thorough study of the information collected. Conclusions based on findings.

2.6

Statistical Tools Used The main statistical tools used for the collection and analyses of data in this project are: Bar Diagrams Line Charts

Limitations of Study

2.7

Financial analysis is a powerful mechanism of determining financial strengths and weaknesses of a firm but, the analysis is based on the information available in the financial statements. We has also careful about the impact of price level chances, windows-dressing of financial statements, changes in accounting policies of BSNL, accounting concepts and conventions, and personal judgments etc. Due to the following unavoidable and uncontrollable factors the factors, the result might not be accurate. Some of the problems faced while conducting the survey are as follows:Chances of some biasness could not be eliminated. A majority of respondents show lack of cooperation and are biased towards their own opinions.

Some of the important Limitations of financial analysis are however, summed up as below: It is only a study of interim reports. Financial analysis is based upon only monetary information and non-monetary factors are ignored. As the financial statements are prepared on the basis of a going concern, it does not give exact position. Thus accounting concepts and conventions cause a serious limitation to financials analysis. Changes in accounting procedure by a firm may often make financial analysis misleading. Analysis is only a means and not an end in itself. We interpretation and draw own conclusion

Different people may interpret the same analysis in different ways.

has to make

Chapter 3 Data Analysis and Findings

3.1

INTRODUCTION Financial Management is that managerial activity which is concerned with the

planning and controlling of the firms financial resources. Financial management focuses on finance manager performing various tasks as Budgeting, Financial Forecasting, Cash Management, Credit Administration, Investment Analysis, Funds Management, etc. which help in the process of decision making. Financial management includes management of assets and liabilities in the long run and the short run. The management of fixed and current assets, however, differs in three important ways: Firstly, in managing fixed assets, time is very important; consequently discounting and compounding aspects of time element play an important role in capital budgeting and a minor one in the management of current assets. Secondly, the large holdings of current assets, especially cash, strengthen firm’s liquidity position but it also reduces its overall profitability. Thirdly, the level of fixed as well as current assets depends upon the expected sales, but it is only the current assets, which can be adjusted with sales fluctuation in the short run. Here, we will be focusing mainly on management of current assets and current liabilities. Management of current assets needs to seek an answer to the following question: 1. Why should you invest in current assets? 2. How much should be invested in each type of current assets? 3. What should be the proportion of short term and long-term funds to finance the current assets? 4. What sources of funds should be used to finance current assets?

CONCEPT OF WORKING CAPITAL Working Capital Management is the process of planning and controlling the level and mix of current assets of the firm as well as financing these assets. Specifically, Working Capital Management requires financial managers to decide what quantities of cash, other liquid assets, accounts receivables and inventories the firm will hold at any point of time.

Working capital is the capital you require for the working i.e. functioning of your business in the short run. Gross working capital refers to the firm’s investment in the current assets and includes cash, short term securities, debtors, bills receivables and inventories. It is necessary to concentrate on the fact that the investment in the current assets should be neither excessive nor inadequate. WC requirement of a firm keeps changing with the change in the business activity and hence the firm must be in a position to strike a balance between them. The financial manager should know where to source the funds from, in case the need arise and where to invest in case of excess funds. The dangers of excessive working capital are as follows: 1. It results in unnecessary accumulation of inventories. Thus the chances of inventory mishandling, waste, theft and losses increase 2. It is an indication of defective credit policy and slack collection period. Consequently higher incidences of bad debts occur which adversely affects the profits. 3. It makes the management complacent which degenerates into managerial inefficiency 4. Tendencies of accumulating inventories to make speculative profits grow. This may tend to make the dividend policy liberal and difficult to copes with in future when the firm is unable to make speculative profits. The dangers of inadequate working capital are as follows: 1. It stagnates growth .It becomes difficult for the firms to undertake profitable projects for non-availability of the WC funds. 2. It becomes difficult to implement operating plans and achieve the firms profit targets 3. Operating inefficiencies creep in when it becomes difficult even to meet day-to-day commitments. 4. Fixed assets are not efficiently utilized. Thus the rate of return on investment slumps. 5. It renders the firm unable to avail attractive credit opportunities etc. 6. The firm loses its reputation when it is not in position to honor its short-term obligations. As a result the firm faces a tight credit terms.

Net working capital refers to the difference between the current assets and the current liabilities. Current liabilities are those claims of outsiders, which are expected to mature for payment within an accounting year and include creditors, bills payable, bank overdraft and outstanding expenses. When current assets exceed current liabilities it is called Positive WC and when current liabilities exceed current assets it is called Negative WC.

The Net WC being the difference between the current assets and current liabilities is a qualitative concept. It indicates: •

The liquidity position of the firm

•

Suggests the extent to which the WC needs may be financed by permanent sources of funds

It is a normal practice to maintain a current ratio of 2:1. Also, the quality of current assets is to be considered while determining the current ratio. On the other hand a weak liquidity position poses a threat to the solvency of the company and implies that it is unsafe and unsound. The Net WC concept also covers the question of judicious mix of long term and short-term funds for financing the current assets.

Permanent and variable working capital: The minimum level of current assets required is referred to as permanent working capital and the extra working capital needed to adapt to changing production and sales activity is called temporary working capital.

NEED AND IMPORTANCE OF WORKING CAPITAL MANAGEMENT The importance of working capital management stems from the following reasons: 1. Investment in current assets represents a substantial portion of the total investment. 2. Investments in current asset and the level of current liabilities have to be geared quickly to change in sales, which helps to expand volume of business. 3. Gives a company the ability to meet its current liabilities 4. Take advantage of financial opportunities as they arise.

A firm needs WC because the production, sales and cash flows are not instantaneous. The firm needs cash to purchase raw materials and pay expenses, as there may not be perfect matching between cash inflows and outflows. Cash may also be held up to meet future exigencies. The stocks of raw materials are kept in order to ensure smooth production and to protect against the risk of non-availability of raw materials. Also stock of finished goods has to be maintained to meet the demand of customers on continuous basis and sudden demand of some customers. Businessmen today try to keep minimum possible stock as it leads to blockage of capital. Goods are sold on credit for competitive reasons. Thus, an adequate amount of funds has to be invested in current assets for a smooth and uninterrupted production and sales process. Because of the circulating nature of current assets it is sometimes called circulating capital.

FACTORS INFLUENCING THE WORKING CAPITAL REQUIREMENT

All firms do not have the same WC needs .The following are the factors that affect the WC needs: 1. Nature and size of business: The WC requirement of a firm is closely related to the nature of the business. We can say that trading and financial firms have very less investment in fixed assets but require a large sum of money to be invested in WC.

On the other hand Retail stores, for

example, have to carry large stock of variety of goods little investment in the fixed assets. 2. Manufacturing cycle: It starts with the purchase and use of raw materials and completes with the production of finished goods. Longer the manufacturing cycle larger will be the WC requirement; this is seen mostly in the industrial products. 3. Business fluctuation: When there is an upward swing in the economy, sales will increase also the firm’s investment in inventories and book debts will also increase, thus it will increase the WC requirement of the firm and vice-versa. 4. Production policy: To maintain an efficient level of production the firm’s may resort to normal production even during the slack season. This will

lead to excess production and hence the funds will be blocked in form of inventories for a long time, hence provisions should be made accordingly. Since the cost and risk of maintaining a constant production is high during the slack season some firm’s may resort to producing various products to solve their capital problems. If they do not, then they require high WC. 5. Firm’s Credit Policy: If the firm has a liberal credit policy its funds will remain blocked for a long time in form of debtors and vice-versa. Normally industrial goods manufacturing will have a liberal credit policy, whereas dealers of consumer goods will a tight credit policy. 6. Availability of Credit: If the firm gets credit on liberal terms it will require less WC since it can always pay its creditors later and vice-versa. 7. Growth and Expansion Activities: It is difficult precisely to determine the relationship between volume of sales and need for WC. The need for WC does not follow the growth but precedes it. Hence, if the firm is planning to increase its business activities, it needs to plan its WC requirements during the growth period. 8. Conditions of Supply of Raw Material: If the supply of RM is scarce the firm may need to stock it in advance and hence need more WC and viceversa. 9. Profit Margin and Profit Appropriation: A high net profit margin contributes towards the WC pool. Also, tax liability is unavoidable and hence provision for its payment must be made in the WC plan, otherwise it may impose a strain on the WC. Also if the firm’s policy is to retain the profits it will increase their WC, and if they decide to pay their dividends it will weaken their WC position, as the cash will flow out. However this can be avoided by declaring bonus shares out of past profits. This will help the firm to maintain a good image and also not part with the money immediately, thus not affecting the WC position. Depreciation policy of the firm, through its effect on tax liability and retained earning, has an influence on the WC. The firm may charge a high rate of depreciation, which will reduce the tax payable and also retain more cash, as the cash does not flow out. If the dividend policy is linked with net profits, the firm can pay fewer dividends by providing more depreciation. Thus depreciation is an indirect way of retaining profits and preserving the firms WC position.

CASH REQUIRED FOR WORKING CAPITAL For estimating the actual cash requirement you may follow the following two-step procedure: 1. Estimate the cash cost of various current assets requirement: The cash cost of a current asset is: Value of current asset (-) Profit element, if any, included in the value. (-) Non-cash charges like depreciation, if any, included in the value. 2. Deduct the spontaneous current liabilities from the cash cost of current assets: A portion of the cash cost of current assets is supported by trade credit and accruals of wages on expense, which may be referred to as spontaneous current liabilities. The balance left after such deduction has to be arranged from other sources

In 1997, the RBI permitted banks to evolve their own norms for assessment of the Working Capital requirements of their clients.

CASH FLOW BASED COMPUTATION OF WORKING CAPITAL Drawing up cash flow statements (monthly or quarterly) for the past few years clearly indicate the seasonal and secular trend in utilization of working capital. The projections drawn up by the entrepreneur may then be jointly discussed with the banker as modified in light of the past performance and the banker’s opinions. The peak cash deficit is ascertained from the cash budgets. The promoter’s share for such requirement maybe mutually arrived at by the banker and the borrower with the balance requirement forming the Bank financed part of Working Capital.

Cash flow based computation of working capital requirement has been recommended by the RBI for assessment of working capital requirement permitting the banks to evolve their own norms for such assessment

However the reluctance to provide the cash budgets thereby revealing additional information to the banks, has led to even larger companies shying away from Cash Budget method of assessing Working Capital. Consequently Cash Budget method is currently prevalent mainly in case of seasonal industries, construction sector as well as other entities whose operations are linked to projects.

WHY DOES A FIRM NEED CASH? i.

Transaction motive: firm needs cash for transaction purpose.

ii.

Precautionary motive: The magnitude and time of cash inflows and outflows is always uncertain and hence the firms need to have some cash balances as a buffer.

iii.

Speculative motive: All firms want to make profits from fluctuations in commodity prices, security prices, interest rates and foreign exchange rates .A cash rich firm is in a better position to exploit such bargains. Hence, the firm with such speculative leanings may carry additional liquidity.

The firm must decide the quantum of transactions and precautionary balances to be held, which depends upon the following factors: The expected cash inflows and outflows based on the cash budget and forecasts, encompassing long/short range cash needs of the firm. The degree of deviation between the expected and actual net cash flow. The maturity structure of the firm’s liabilities. The firm’s ability to borrow at a short notice, in case of emergency. The philosophy of management regarding liquidity and risk of insolvency The efficient planning and control of cash.

OPTIMAL CASH BALANCE

Cash balance is maintained for transaction purposes and an additional amount may be maintained as a buffer or safety stock. It involves a trade off between the costs and the risk. If a firm maintains a small cash balance, it has to sell its marketable securities and probably buy them later more often, than if it holds a large cash balance. More the number of transactions more will be the trading cost and vice-versa; also, lesser the cash balance, less will be the number of transaction and vice-versa. However the opportunity cost of maintaining the cash rises, as the cash balance increases.

KEY OF WORKING CAPITAL

Working capital may be classified in two ways: (a) On the basis of Concept (b) On the basis of time This classification from the point of view of financial manager. On the basis of time, working capital may be classified as:

KINDS OF WORKING CAPITAL

On the basis of Concept

Gross WC

On the basis of time

Net WC

Regular WC

(A)

Reserve WC

Permanent WC

Seasonal WC

Temporary WC

Special WC

On the basis of Concept There are two concept of working capital

(i)

(i)

Balance sheet Concept

(ii)

Operating Cycle

Balance Concept There are two interpretation of working capital under the balance sheet

concept (a) Gross Working Capital (b) Net Working Capital

(a)

Gross Working Capital : The gross working capital is the capital invested in total current assets of the enterprises

(b)

Net Working Capital : The term working capital to the next working capital. Net working the excess of current assets over current assets. Net working capital = current assets – current liabilities

(ii)

Operating cycle Concept The gross operating cycle of a firm is equal to the length of the inventories and receivables conversion period.

(c)

Gross Operating Cycle: = RMCP + WIPCP+ FGCP+ RCP Where

RMCP = Raw material conversion period WIPC = work –in -progress conversion period FGCP = Finished Goods conversion period RCP = Receivables conversion period

RMCP = Avg. stock of RM / RM Consumption per day WIPC = Avg. Stock of WIP / Total cost of production per day FGCP = Avg. Stock of finished Goods / total cost of sales per day RCP = Avg. Account Receivables / Net Credit sales per day

(d)

Net Operating Cycle : Gross operating Cycle Period – Payables Deferral period Payable Deferral Period =Avg. payables / Net credit purchases per day

Cash

Raw material

Work in progress

Debtors

Sales

Finished Goods

Working capital cycle

CALCULATION OF WORKING CAPITAL OF BSNL Calculation of Working Capital in four years

On the Basis of Gross Working Capital

Particular (Current Assets) Building materials Lines and Wires Cables Apparatus and Plants Telephone and Telex Instruments

2008 344 14,696 132,359 120,566 19,257

2007 466 16,354 106,839 83,342 19,268

2006 534 15,500 103,125 130,333 19,272

2005 400 12,300 104,564 65,548 19,365

Telegraph and Telex Spares Broad Band Equipments Satellite Based Broadband Equipments

150 10,218 414

149 1,168 227

155 1,652 235

153 1,109 365

Raw material (at Factory) Finished goods (at Factory) Finished Stock (at various Circles)

12,572 952 15,348

11,108 1,078 15,932

10,985 1,258 15,658

10,562 1,365 15,369

Stores Excess/(Short) in Inventory Account

20,189 150

13,016 2,186

16,015 1,264

19,489 1,856

Sundry Debtors Cash And Bank Balances Loans And Advances Inventories Gross WC / Total

546,551 4,055,158 744,441 322,006 6015371

558,066 3,745,296 714,431 242,847 5531773

630,205 3,057,948 923,207 278,922 5206268

663,703 2,193,113 752,160 224,535 4085956

Gross WC

R s (L ak h )

8000000 6000000 4000000 2000000

5531773

6015371

5206268

2006

2007

2008

4085956

0 2005

years

Interpretation

Above calculation shown in the year of 2008 the gross working capital (WC) is Rs. 60,15,371 and the WC of the year 2005 Rs. 40,85,956. This statement say the WC is increase in every year

On the Basis of Net Working Capital

Particular Building materials Lines and Wires Cables Apparatus and Plants Telephone and Telex Instruments

2008 344 14,696 132,359 120,566 19,257

2007 466 16,354 106,839 83,342 19,268

2006 534 15,500 103,125 130,333 19,272

2005 400 12,300 104,564 65,548 19,365

Telegraph and Telex Spares Broad Band Equipments Satellite Based Broadband Equipments

150 10,218 414

149 1,168 227

155 1,652 235

153 1,109 365

Raw material (at Factory) Finished goods (at Factory) Finished Stock (at various Circles)

12,572 952 15,348

11,108 1,078 15,932

10,985 1,258 15,658

10,562 1,365 15,369

Stores Excess/(Short) in Inventory Account

20,189 150

13,016 2,186

16,015 1,264

19,489 1,856

Sundry Debtors Cash And Bank Balances Loans And Advances Inventories Total of Current Assets (A)

546,551 4,055,158 744,441 322,006 6015371

558,066 3,745,296 714,431 242,847 5531773

630,205 3,057,948 923,207 278,922 5206268

663,703 2,193,113 752,160 224,535 4085956

Sundry Creditors Advances received from Customers and others Deposits from Customers and others Income received in advance against services Claims payable to DoT Claims payable to departments of Govt. of India Claims payable to Government companies Licence Fee and Transponder charges payable

606,327 32,802

597,419 24,176

498,365 27,256

564,235 65,258

582,676

613,555

525,864

586,565

48,569

39,027

47,589

48,489

37,610 19,176

48,521 12,469

54,961 17,654

48,753 15,864

79,094

68,584

65,864

63,654

4,662

40,644

45,846

42,696

Payable for revised wages Salary & Incentive payable to employees Payable to SAARC Countries Liabilities for services Liabilities for Construction account Claims Payable for USO Tower Other Provisions for expenses Other liabilities Interest accrued but not due on Deposits Total of liabilities (B) Net Working Capital A–B

121,318 83,679

18,930 84,692

19,631 85,693

20,984 82,981

251

569

465

512

63,730 1,128

62,649 -

59,894 -

61,854 -

80

-

-

-

41,780

37,154

38,658

40,458

13,524 3,241

16,252 3,275

15,856 3,846

14,489 3,964

1,739,647 4,275,724

1,667,916 1,507,442 1,660,756 3,863,857 3,698,826 2,425,200

Net Working Capital 5000000

4275724 3698826 3863857

Rs. (Lakh)

4000000 3000000

2425200

Net WC 2000000 1000000 0 2005 2006 2007 2008 Years

Interpretation Above calculation shown in the year of 2008 the net working capital (WC) is Rs. 42,75,724 and the net WC of the year 2005 Rs. 24,25,200. This statement say the Net WC is also increase in every year.

Comparative Graph of Working Capital

Rs. in Lakh

Comparative Graph 8000000 6000000 4000000 2000000 0

Net WC Gross WC

2005 2006 2007 2008 Years

Working Capital Net WC Gross WC

2005 2425200 4085956

2006 3698826 5206268

2007 3863857 5531773

2008 4275724 6015371

Chapter 4 Conclusion and Suggestions

According to my survey and calculating the important points are: •

Financial position of BSNL is not much good.

•

The comparative Graph of BSNL reveals that after year 2005, increase the working capital in year 2006 and same capital continue to year 2008 yet.

•

Financial position of BSNL was much better in 2005 compression to all year.

•

There are not good coordination in departments of BSNL.

•

Working process of BSNL take long time.

•

Handwriting work is more than computerizing work.

•

Qualification of employees is not match his posts.

•

Salary of employees is much better.

•

At present time, investment of BSNL is less than compression year 2004.

4.2 Analysis: From the calculation it was found that amongst year 2005 to 2008, •

In year 2005, financial position of BSNL is good based on year 2008.

•

In year 2006, financial condition of BSNL is improved based on year 2005.

4.3 Conclusion: After overhauling the Four years balance sheet of BSNL and all condition, I have to reached this conclusion that; •

There was much good financial position of BSNL in year 2008 comparison 2005 and present year.

•

Working process of BSNL is take very long time because of which, BSNL is not being able to progress. So improved the working process.

•

BSNL are facing the capital problem because of which financial position of BSNL are affected.

•

BSNL are paying more taxes. Because of paying more taxes, financial position of BSNL are affected.

•

4.5

There was earned more profit in year 2005 but year by year BSNL is on loss.

Suggestion:

The study has provided with the useful data from the respondents. There has a lot to be recommended. Following are the recommendations: •

There should be improved the working process of BSNL. Because working process of BSNL is take more time.

•

Departments of BSNL do not have good coordination. So there should be good coordination in departments of BSNL. If coordination will have good in departments, than there will not has to face any problem in proper work.

•

There should be good communication between each departments of BSNL.

•

There should be computerized work in BSNL. But also at this time, paper work are continue to see in many department.

•

There should be increase in investment of BSNL. So that could be earned more profit. Because, if investment will be high than profit will be earned high.

Appendix

Bibliography

Bibliography •

Management Accounting Shashi K. Gupta & R.K. Sharma

•

Financial Management I.M. Pandey.

•

Research Paper: Financial Analysis Hampton John J. Financial Decision Making, Second Ed p.75

•

Web sites o www.bsnl.co.in o www.google.com o www.mpbsnl.com

•

Annual Reports of BSNL 2006-2008.

•

Departmental Records