Comparative Statement Analysis of BSNL

A
Summer Training Project Report

On
“Comparative
Comparative Statement Analysis”
Analysis
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 : Submitted by
Mrs. Ritu Singh Reena Gupta
(HOD) MBA (Finance)
MBA III sem
Acknowledgement
Executive Summary
Chapter-1 Introduction
1.1. Overview of the BSNL
1.2. Objectives of the study
1.3. 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
1.4. Comparative Study
1.5. SWOT Analysis
Chapter-2 Research Methodology

2.1. Statement of the Problem
2.2. Research Design
2.3. Methodology
2.4. Sampling Techniques used
2.5. Selection of Sample Size
2.6. Data Collection
2.7. Statistical Tools Used
2.8. Limitations of the Study
Chapter-3 Data Analysis and Findings
3.1. Introduction
3.2. Comparative Balance Sheet of BSNL 2008 & 2007
3.7. Common Sheet of BSNL
Chapter-4 Conclusion and Suggestions
4.1. Finding
4.2. Analysis
4.3. Conclusion
4.4. Suggestions
Appendix
Bibliography
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 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 our all friends who heartening
me to complete this project.
EXECUTIVE SUMMARY
This project is based on Balance sheet and profit and loss accounts 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
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 tele-

voting, 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 semi-
illetrate 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
GPRS/WAP/MMS
DEMOs
TARIFF
• BSNL WLL
• INTERNET SERVICES
NETWORK
BROADBAND
WI-FI
CO-LOCATION SERVICE
BSNL WEB HOSTING
DIAL UP INTERNET
SMS& BULK SMS
• 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
• TELEX/ TELEGRAPH
• EPABX
EPABX
FREE EPABX
CENTREX
• HVNET
• INMARSAT
• 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) CO Strategic Business Plans (COSBP)
Account officer TR 1st AO Mob. AO Telecom Revenue 2nd

Mr. S.S. Bahdoriya Mr. Manoj yadav Mr. SC Jain
AO SBP AO Pay AO Cash

Mr. Ram Sadal Mr. Naagar Mr. Ram Avatar
Jr. Account Officer

Mr. R.S. Yogik
Section Supervisor Sr. Trunk Supervisor Peon

Mr. Chandrshekhar Mr. K.N. Duwedi 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 unless-
a. 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 008-2007:
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
Percentage
up to march up to march Absolute Change
Particulars 31, 2007 31, 2008 change Rs. (%)
Assets
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
Advance to contactors 39,448 39,448 - 0.00

Deposit with Electricity
Board/other 2,086 2,138 52 2.49
Total A 6,833,954 6,834,025 71 0.001

Liabilities
Customer Deposits 391,656 393,704 2,048 0.52

Earnest Money
Deposits 12,525 12,158 (367) -2.93
Security Deposit from
Contractors/ Suppliers 29,454 29,099 (355) -1.21
Working Expense
Liability as on 1st
October 2000 38,283 42,666 4,383 11.45
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
Chapter 2
Research Methodology
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 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
2.7 Limitations of Study
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 has to make
interpretation and draw own conclusion
Different people may interpret the same analysis in different ways.

Chapter 3
Chapter 3
Calculation of Data
3.1 Introduction
Financial statements are prepared primarily for decision making. They play a
dominant role in setting the framework of managerial decisions. But the information
provided in the financial statement is not an end in itself as no managerial can be
drawn from these statement alone. However, the information provided in the financial
statement is of immense use in making decision through analysis and interpretation of
financial statements. Financial analysis is ‘the process of identifying the financial
strengths and weaknesses of the firm by properly establishing relationship between
the item of the balance sheet and the profit and loss account’. There are various
methods used in analyzing financial statements, such as comparative statements, trend
analysis, common-size statement, schedule of change in working capital, funds flow
and cash flow analysis, cost-volume-profit analysis and ratio analysis.
The term financial analysis’, also know as analysis and interpretation of
financial statement, refers to the process of determining financial strengths and
weaknesses of the firm of the firm by establishing strategic relationship between the
item the balance sheet, profit and loss account and other operative data.
“Financial analysis is a process of evaluating the relationship
between component parts of a financial statement to obtain a
better understanding of a firm’s position and performances”
According to Matclf and Titard
“Financial statement analysis is largely a study of relationship
among the various financial factors in a business as disclosed
by single set-of statements and a study of the trend of these
factors as shown in a series of statement”.
According to Myers
The term ‘financial statement analysis’ include both ‘analysis’ and ‘interpretation’.
The analysis and interpretation of financial analysis statements is essential to bring
out the mystery behind the figure in financial statements. Financial statement is an
attempt to determine the significance and meaning of the financial statement data so
the forecast may be made of the future earning, ability to pay interest and maturities
and profitability of a sound dividend policy.
Types of Financial Analysis
I can classify various types of financial analysis into different categories
depending upon (i) the material used, and (ii) the method of operation followed in the
analysis or the modus operandi of analysis.
(i) On the basis of material used: According to material used, financial analysis
can be of two types (a) external analysis and (b) internal analysis.
a. External Analysis: This analysis is done by outsiders who do not have

access to the detailed internal accounting records of the business firm.
These outsiders include investors, potential investors, creditors,
potential creditors, government agencies, credit agencies and the
general public. For financial analysis, this external party to the firm
depends almost entirely on the published financial statement. External
analysis, thus serves only a limited purpose. However, the changes in
the government regulations requiring business firm makes available
more detailed information to the public through audited accounts have
considerably improved the position of the external analysis.
b. Internal Analysis: The analysis conducted by persons who have

access to the internal accounting records of a business firm is known as
internal analysis. Such an analysis can, therefore, be performed by
executive and employees of the organization as well as government
agencies which have statutory powers vested in them. Financial
analysis for managerial purpose is the internal type of analysis that can
be effected depending upon the purpose to be achieved.
(ii) On the basis of modus operandi: According to the method of operation

followed in the analysis financial can also be of two types: (a) horizontal
analysis (b) vertical analysis.
a. Horizontal Analysis: Horizontal analysis refers to the comparison of

financial data of a company for several years. Thus figure for this type
of analysis are presented horizontally over a number of columns. The
figures of the various years are compared with standard or base years.
A base year chosen as beginning point. This type of analysis is also
called ‘Dynamic Analysis’ as it is based on the data from year to year
rather than on data of any one year. The horizontal analysis makes it
possible to focus attention on items that have changed significantly
during the period under review. Comparison of an item over several
periods with a base year may show a trend developing. Comparative
statement and trend percentages are two tools employed in horizontal
analysis.
b. Vertical Analysis: Vertical analysis refers to the study of relationship

of the various items in the financial statements of one accounting
period. In this types of analysis the figure from financial statement of a
year are compared with a base selected from the same year’s statement.
It is also knows as ‘Static Analysis’. Common-size financial analysis
statement and financial ratio are the tools employed in vertical
analysis. Since vertical analysis considers data for one time period
only, it is not conducive to a proper analysis of financial statements.
However, it may be used along with horizontal analysis to make it
more effective and meaningful.
Procedure of Financial Statements
There are three steps involved in the analysis of financial statements. These
are: (i) selection (ii) classification (iii) interpretation, the first step involves selection
of information (data) relevant to the purpose of analysis of financial statements. The
second step involved is the methodical classification of the data and the third step
include drawing and conclusions.
The following procedure is adopted for the analysis and interpretation of financial
statements:
1. The analysis should acquaint himself with the principal and postulates of
accounting. He should know the plans and policies of the management so that
he may be able to find out whether these plans properly executed or not.
2. The extent of analysis should be determined so that the sphere of work may be
decided. If the aim is to find out the earning capacity of the enterprise than
analysis of income statement will be undertaken. On the other hand. If
financial position is to be studied then balance sheet analysis will be
necessary.
3. The financial data given in the statement should be re-organized and re-
arranged. It will involve the grouping of similar data under same heads,
breaking done of individuals components of statements according to nature.
The data is reduced to a standard form.
4. A relationship is established among financial among financial statements with
the help tools and techniques of analysis such as ratio, trends, common size,
funds flow etc.
5. The information is interpreted in a simple and understandable way. The
significance and utility of financial data is explained for helping decision-
talking.
6. The conclusions drawn from interpretation are presented to the management in
the form if reports.
Methods or Devices of Financial Analysis
The analysis and interpretation of financial statements is used to determine the
financial position and result of operation as well. A number of methods or devices are
used to study the relationship between different statements. An effort is made to use
those devices which clearly analysis position of the enterprise.
The following methods of analysis are generally used:
Comparative Statement
Trend analysis
Common Size Statement
Cash Flow Analysis
Funds flows
Ratio analysis
Cost – volume - Profit analysis
.
Comparative Statement: Comparative balance sheet analysis is the study of the
trend of the same items, group of item and computed item in two or more balance
sheets of the same business enterprise on different data.
Trend analysis: This method determines the direction upwards and involves the
computation of the percentage relationship that each statement item bears to the same
item in base year.
Common size Statement: The common size statements balance sheet statements are
shown in analytical percentages. The figures are shown as percentages of total assets,
total liabilities and total sales. Total assets are taken as 100 and different assets are
expressed as a percentage of the total, similarly various liabilities are taken as a part
of total liabilities.
Cash flow Statement: Cash flow statement is a statement which describes the inflow
(sources) and outflow (uses) of cash and cash equivalent in an enterprise during a
specified period of time.
Ratio Analysis: Ratio is a simple arithmetical expression of the relationship of one

number to another. It may be defined as the indicated quotient of two mathematical
expressions.
Cost – Volume – Profit Analysis: Cost – Volume – Profit Analysis is a technique for
studying the relationship between cost, volume and profit. Profit of an understanding
depend upon a large number of factors. But the most important of these factors are the
cost of manufacture, volume of sales and the selling prices of the product.
Comparative Statements
The comparative financial statements of the financial position at different

positions; at time. The elements of financial position are shown in a comparative form
so as to given an idea of financial position at two or more periods. Any statement
prepared in a comparative form will be covered in comparative statements. From
practical point of view , generally two financial statements (balance sheet and income
statement) are prepared in comparative form for financial analysis purpose. Not only
the comparison of the figures of two financial position and operative results. The
comparative statement show :
• Absolute figures ( rupee amounts )
• Changes in absolute figures i.e., increase or decrease in absolute figures.
• Absolute data in terms of percentages.
• Increase or decrease in terms of percentages.
The financial data will be comparative only when same accounting principles are used
in preparing these statements. In case of any deviation in the use of accounting
principles this fact must be mentioned at the foot of financial statements and the
analyst should be careful in using these statements. The two comparative statements
are (i) Balance sheet, and (ii) income statement.
Comparative Balance Sheet

The comparative balance sheet analysis is the study of the trend of the same
items, group of items and computed items in two or more balance sheet of the same
business enterprise on different dates. The changes in periodic balance sheet items
reflect the conduct of a business. The changes can be observed by comparison of the
balance sheet at the beginning at the end of period and these changes can help in
forming an opinion about the progress of an enterprise. The comparative balance
sheet has two columns for the data of original balance sheets. A third column is used
to show increases in figures. The fourth column may be added for added for giving
percentages of increases or decrease.
3.2 Comparative Balance Sheet of BSNL 2008 & 2007
Table 3.1
Particular 2008 2007 Incr./Decr. %
SOURCES OF FUNDS
shareholder's Funds
Capital 1250000 1250000 0 0
Reserve and Surplus 7562825 7444802 118023 1.59
Loan Funds
Unsecured Loans 338887 554366 (215479) -38.87
Deferred Tax Liability - net 131053 124605 6448 5.17
Total 9282765 9373773 (91008) -0.97
APPLICATION OF FUNDS
Fixed Assets
gross block 12457823 11864901 592922 5.00
Less:Deperecation 6987974 6071511 916463 15.09
Net Block 5469849 5793390 (323541) -5.58
Capital Work in Progress 266562 256860 9702 3.78
Decommissioned Assets 389 6444 (6055) -93.96
5736800 6056694 (319894) -5.28
Investment 20000 20000 0 0
Current Assets,Loans and Advances
Inventories 322006 242847 79159 32.60
Sundry Debtors 546551 558066 (11515) -2.06
Cash and Bank Balances 4055158 3745296 309862 8.27
Other Current Assets-Accrued intrest 137687 114148 23539 20.62
Loan and Andvances 744441 714431 30010 4.20
5805843 5374788 431055 8.02
Less:Current Liabilities and Provision
Current Liabilities 1739788 1667919 71869 4.31
Provision 606321 514858 91463 17.76
2346109 2182777 163332 7.48
Net Current Assets 3459734 3192011 267723 8.39
Inter/Intra Circle Remittance 66231 105068 (38837) -36.96
Total 9282765 9373773 (91008) -0.97
Comparative Balance Sheet In Rs.
8000000
7000000
6000000
5000000 year 2008
4000000
3000000 year 2007
2000000
1000000
0
Inventories
Provision
Inter/Intra Circle
Unsecured
Decommissione
Loan and
Capital
Net Block
Cash and Bank

Figure 3.1: Comparative Balance Sheet Chart
Comparative Balance Sheet In %

40
20
0
Inventories
Provision
Inter/Intra Circle
Unsecured
Decommissione
Loan and
Capital
Net Block
Cash and Bank
(20)
(40) percentages
(60)
(80)
(100)
(120)
Figure 3.2: Comparative Balance Sheet Chart in %

Procedure of Comparative Balance Sheet
1. The Comparative balance sheet has two columns for the data of original balance
sheet.
2. Third column is used to show increases in figures.
3. The Fourth column may be added for giving percentages of increase or decrease.
Interpretation of Comparative Balance Sheet (Table 3.1)

The comparative balance sheet of the company reveals that during 2008
there has been on decrease in fixed assets of Rs. 319894 lakh i.e. -5.28% while
long term liabilities to outsiders have relatively decrease by Rs. 91008 lakh i.e.
-0.97. This fact depicts the policy of the company is to not purchase fixed assets
from the long-term sources of finance there by not affect the working capital.
Current assets have increased by Rs. 163,332 lakh and cash and bank
balances also increased Rs. 309,862 i.e. 8.27%, investments not increased on the
other hand there has been an increase in inventories amount Rs. 79,159 lakh
i.e.32.60%. The current liabilities have increased by Rs. 163,332 lakh i.e. 7.84 %.
This further confirms that the company has revised long term finances.

Table 3.2
SOURCES OF FUNDS
shareholder's Funds
Capital 1250000 1250000 0 0
Loan Funds
Unsecured Loans 554366 728393 (174027) -23.89
Deferred Tax Liability - net 124605 170400 (45795) -26.88
Total 9373773 8974444 399329 4.45
Fixed Assets
gross block 11864901 11169203 695698 6.23
Less: Deprecation 6071511 5150354 921157 17.89
Net Block 5793390 6018849 (225459) -3.75
Capital Work in Progress 256860 382048 (125188) -32.77
6056694 6408243 (351549) -5.49
Investment 20000 20000 0 0
Current Assets, Loans and
Advances
Inventories 242847 278922 (36075) -12.93
Sundry Debtors 558066 630205 (72139) -11.45
Other Current Assets-Accrued
interest 114148 63627 50521 79.40
Loan and Advances 714431 923207 (208776) -22.61
5374788 4953909 420879 8.50
Less:Current Liabilities and
Provision
Provision 514858 888223 (373365) -42.04
2182777 2500547 (317770) -12.71
Inter/Intra Circle Remittance 105068 92839 12229 13.17
Total 9373773 8974444 399329 4.45
Compararive Balance Sheet In Rs.
8000000
7000000
6000000
5000000 year 2007
4000000
3000000 year 2006
2000000
1000000
0
Inventories
Provision
Inter/Intra Circle
Unsecured
Decommissione
Loan and
Capital
Net Block
Cash and Bank


100
80
60
40
20 percentages
0
Inventories
Provision
Inter/Intra Circle
Unsecured
Decommissione
Loan and
Capital
Net Block
Cash and Bank
-20
-40
-60

sheet.

The comparative balance sheet of the company reveals that during 2007there
has been a decrease in fixed assets of 351,549 i.e. -5.49% while long term liabilities to
outsiders have increased by Rs. 399329 i.e. 4.45%. There has also been increase of
Rs. 619151 lakhs, i.e. 9.07% in reserves and surplus of the company. Thus, the
company has used long-term resources to finance additional working capital.
The current assets have increased by Rs. 420879 lakhs, i.e. 8.50% and cash
and bank balance has increased by Rs. 687348 lakhs, on the other hand , The current
liabilities have increased only by Rs. 55595 lakhs, i.e. 3.45%.
Inventories have decreased from Rs. 278922 iakhs to Rs. 242847 lakhs, i.e.
12.93% which shows that there have increased in demand. It is better for business.

3.4 Comparative balance sheet of BSNL 2006 & 2005
Table 3.3
SOURCES OF FUNDS
shareholder's Funds
Capital 1250000 1250000 0 0
Loan Funds
Unsecured Loans 728393 822089 (93696) -11.40
Deferred Tax Liability - net 170400 304402 (134002) -44.02
Total 8974444 8404402 570042 6.78
Fixed Assets
gross block 11169203 10410216 758987 7.29
Less: Deprecation 5150354 4233309 917045 21.66
Net Block 6018849 6176907 (158058) -2.56
Capital Work in Progress 382048 457226 (75178) -16.44
6408243 6642178 (233935) -3.52
Investment 20000 20000 0 0
Current Assets, Loans and
Advances
Inventories 278922 224535 54387 24.22
Sundry Debtors 630205 663703 (33498) -5.05
interest 63627 14368 49259 342.84
Loan and Advances 923207 752160 171047 22.74
4953909 3847879 1106030 28.74
Less: Current Liabilities and
Provision
Provision 888223 738616 149607 20.26
2500547 2200157 300390 13.65
Inter/Intra Circle Remittance 92839 94502 (1663) -1.76
Total 8974444 8404402 570042 6.78
8000000
7000000
6000000
5000000 year 2006
4000000
3000000 year 2005
2000000
1000000
0
Inventories
Provision
Inter/Intra Circle
Unsecured
Decommissione
Loan and
Capital
Net Block
Cash and Bank

Comparative Balance Sheet in %

400
350
300
250
200
150 percentages
100
50
0
-50
Inventories
Provision
Inter/Intra Circle
Unsecured
Decommissione
Loan and
Capital
Net Block
Cash and Bank
-100

sheet.

The comparative balance sheet of the company reveals that during 2006 there
has been a decrease in fixed assets of Rs. 233935 lakhs, i.e. 3.52% while long-term
liabilities to outsiders have increased by Rs. 570042 lakhs, i.e.6.78%. There has also
been increase by Rs. 797740 lakhs, i.e. 13.23% in reserve and surplus of the company.
Thus, the company has used long term resources to finance additional working
capital.
The current assets have increased by Rs. 1106030 lakhs, i.e. 28.74% and cash
has increased by Rs. 864835 lakhs. On the other hand, there has been increased in
inventories amounting to Rs. 54387 lakhs. The current liabilities have increased only
by Rs. 150783 lakhs, i.e. 10.32%. These further confirm that the company has raised
long term finance even for the current assets resulting into an improvement in the
liquidity position of the company.

Table 3.4
SOURCES OF FUNDS
shareholder's Funds
Capital 1250000 125000000 (123750000) -99.00
Reserve and Surplus 6027911 505183259 (499155348) -98.81
Deferred Government Grant 7200000 (7200000) -100.00
Loan Funds
Secured Loans
Unsecured Loans 822089 75376842 (74554753) -98.91
Deferred Tax Liability 304402 48033540 (47729138) -99.37
Total 8404402 760793641 (752389239) -98.90
APPLICATION OF FUND
Fixed Assets
Gross Block 10410216 952878982 (942468766) -98.91
Less: Depreciation 4233309 324262136 (320028827) -98.69
Net Block 6176907 628616846 (622439939) -99.02
Capital Work-in-Progress 457226 58549917 (58092691) -99.22
6642178 688644158 (682001980) -99.04
Investments 20000 2000000 (1980000) -99.00
Current Assets, Loans and Advances
Inventories 224535 23437496 (23212961) -99.04
Sundry Debtors 663703 39794505 (39130802) -98.33
Cash and Bank Balance 2193113 115574751 (113381638) -98.10
interest 14368 14368
Loans and Advances 752160 97040202 (96288042) -99.22
3847879 275846954 (271999075) -98.61
Provision
Liabilities 1461541 149280684 (147819143) -99.02
Provision 738616 58866140 (58127524) -98.75
2200157 208146824 (205946667) -98.94
Net Current Assets 1647722 67700130 (66052408) -97.57
Intra/Inter Circle Remittance 94502 2449353 (2354851) -96.14
Total 8404402 760793641 (752389239) -98.90
700000000
600000000
500000000
400000000 year 2005
300000000 year 2004
200000000
100000000
0
Investments
Deferred Tax
Deferred
Other
Capital
Capital
Net Current
Sundory
Liabilities

-94.00
Investments
Deferred Tax
Deferred
Other
Capital
Capital
Net Current
Sundory
Liabilities
-95.00
-96.00
-97.00
percentages
-98.00
-99.00
-100.00
-101.00

sheet.
3. The Fourth column may be added for giving percentages of increase or decrease

The comparative balance sheet of the company reveals that during 2005there
has been a decrease in fixed assets i.e. –99.46 % while long term liabilities to
outsiders have decreased by i.e. 98.94%. In this year company face profit decrease
problem but company having profit
The overall financial position of the company is satisfactory but compare 2004
company profit are not satisfactory.
Table 3.5

SOURCES OF FUNDS
shareholder's Funds
Capital 125000000 125000000 0 0
Deferred Government Grant 7200000 7200000 0 0
Loan Funds
Secured Loans 5100000 (5100000) -100.00
Unsecured Loans 75376842 78864381 (3487539) -4.42
Deferred Tax Liability 48033540 38289125 9744415 25.45
Total 760793641 688671517 72122124 10.47
APPLICATION OF FUND
Fixed Assets
Gross Block 952878982 853406778 99472204 11.66
Less: Depreciation 324262136 223305948 100956188 45.21
Net Block 628616846 630100830 (1483984) -0.24
Capital Work-in-Progress 58549917 92650554 (34100637) -36.81
Decommissioned Assets 1477395 1170342 307053 26.24
688644158 723921726 (35277568) -4.87
Investments 2000000 2000000 0 0
Current Assets, Loans and Advances
Inventories 23437496 30532810 (7095314) -23.24
Sundry Debtors 39794505 29451975 10342530 35.12
Cash and Bank Balance 115574751 34396844 81177907 236.00
Loans and Advances 97040202 68085928 28954274 42.53
275846954 162467557 113379397 69.79
Provision
Liabilities 149280684 173100827 (23820143) -13.76
Provision 58866140 33898939 24967201 73.65
208146824 206999766 1147058 0.55
Net Current Assets 67700130 (44532209) 112232339 -252.03
Intra/Inter Circle Remittance 2449353 7282002 (4832649) -66.36
Total 760793641 688671519 72122122 10
700000000
600000000
500000000
400000000 year 2004
300000000
200000000 year 2003
100000000
0
(100000000)
Deferred
Unsecured
Decommissione
Capital
Net Current
Net Block
Cash and Bank
Liabilities
Inventories

300
200
100
0 percentages
Deferred
Unsecured
Decommissione
Capital
Net Current
Net Block
Cash and Bank
Liabilities
Inventories
-100
-200
-300

sheet.
3. The Fourth column may be added for giving percentages of increase or decrease

The comparative balance sheet of the company reveals that during 2004 there has
been decrease in fixed assets of Rs. 35277568 lakhs, i.e. 4.87% while long-term
liabilities to outsiders have increased Rs. 72122122 lakhs, i.e. 10.00%. There has also
been increase of Rs. 70965248 lakhs, i.e. 16.34% in reserve and surplus of the
company. Thus, the company has used long-term resources to finance additional
working capital.
The current assets have increased by Rs. 113379397 lakhs, i.e. 69.79%. There has
been increased in cash by Rs. 81177907 lakhs, i.e. 35.12%.
There has been decreased in inventories amounting to 7095314 lakhs, i.e.23.24% and
there has also been decreased liabilities amounting to 23820145 lakhs, i.e. 13.37%.
which shows that the company is going on profit.

3.7 Common Sheet of BSNL
Table 3.6
2008 2007 2006 2005 2004 2003
Capital 1250000 1250000 1250000 1250000 125000000 125000000
Reserve and Surplus 7562825 7444802 6825651 6027911 505183259 434218011
Deferred Government Grant 0 0 0 0 7200000 7200000
Unsecured Loans 338887 554366 728393 822089 75376842 78864381
Secured Loans 0 0 0 0 0 5100000
Deferred Tax Liability - net 131053 124605 170400 304402 48033540 38289125
Fixed Assets 5736800 6056694 6408243 6642178 688644158 723921726
Investment 20000 20000 20000 20000 2000000 2000000
Inventories 322006 242847 278922 224535 23437496 30532810
Sundry Debtors 546551 558066 630205 663703 39794505 29451975
Cash and Bank Balances 4055158 3745296 3057948 2193113 115574751 34396844
Other Current Assets-Accrued intrest 137687 114148 63627 14368 0 0
Loan and Andvances 744441 714431 923207 752160 97040202 68085928
Current Liabilities 2346109 2182777 2500547 2200157 208146824 206999766
Net Current Assets 3459734 3192011 2453362 1647722 67700130 -44532209
Inter/Intra Circle Remittance 66231 105068 92839 94502 2449353 7282002
800000000
700000000
600000000 2008
500000000 2007
400000000 2006
300000000 2005
200000000 2004
100000000 2003
0
Inventories
Deferred
Secured
Fixed
Cash and
Loan and
Capital
Net Current
-100000000
Figure 3.11: Common Chart

Chapter 4
Conclusion and Suggestions
4.1 Finding:
According to my survey and calculating the important points are:
• Financial position of BSNL is not much good.
• The comparative balance sheet of BSNL reveals that after year 2004, decrease
the capital in year 2005 and same capital continue to year 2008 yet.
• Financial position of BSNL was much better in 2004 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 2004 to 2008,
• In year 2004, financial position of BSNL is good based on year 2003.
• In year 2005, financial position of BSNL is not good based on year 2003,
because in year 2005, capital has decreased and also investment.
• In year 2006, financial condition of BSNL is improved based on year 2005
not year 2003.
• In year 2007, financial position of BSNL is satisfactory based on year 2005
and 2006 but not improved based on year 2003 and 2004.
• In year 2008, financial position of BSNL is good based on year 2005 , 2006
and 2007 even than is not improved based on year 2003 and 2004.
• In year 2004, inventories are decreased based on year 2003. which, we can
see in graph. This is better. But in year 2008, inventories are increased based
on year 2005 , 2006 , 2007. this is not good of BSNL because increase in
inventories than decrease in demand.
4.3 Conclusion:
After overhauling the five 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 2004 comparison
2003 and present year.
• There was more investment in year 2004 because of this, year 2004 have earn
more profit based on year 2003 and compare the present year. If there are
more investment than financial position of BSNL may be improved and earn
more profit at present time.
• 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.
• Overall at present time, financial position of BSNL is not good based on year
2003 – 2004.
• There was earned more profit in year 2004 but year by year BSNL is on loss.
4.5 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 increase in investment of BSNL. So that could be earned
more profit. Because, if investment will be high than profit will be earned
high.
• 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.
• Time to time, there should be provided training of employee. So that they
could take information about the new technology of them proper working
process.
• 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.
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

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A

Summer Training Project Report

Bharat Sanchar Nigam Limited

IN THE PARTIAL FULFILLMENT OF THE DEGREE OF

Affiliated to jiwaji University, Gwalior

Chapter-2 Research Methodology

My summer training in B.S.N.L. GWALIOR, of duration 45 days has been

I would be pleased to thank Mr. Chandrshekhar This Acknowledgement

Further, in this Project

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

1.1 Overview of the BSNL:

Other objectives of this project are as follows:

Main Services being provided by BSNL

1. Universal Telecom Sevices : Fixed wireline services & Wireless in Local

BSNL Mobile Pre-paid Mobile

3. Internet: BSNL is providing internet as dial-up connection (Sancharnet)

4. Intelligent Network (IN): BSNL is providing IN services like tele-

BSNL Present & Future

Year of Broadband 2007

Former Indian Communications Minister Thiru Dayanidhi Maran had declared

Presently there is an intense competition in Indian Telecom sector and various

BSNL at Gwalior Circle

Chief General Manager (CGM)

Deputy General Manager (DGM) DGM DGM

Chief Accounting Officer TR (COTR) CO Strategic Business Plans (COSBP)

Account officer TR 1st AO Mob. AO Telecom Revenue 2nd

AO SBP AO Pay AO Cash

Jr. Account Officer

Section Supervisor Sr. Trunk Supervisor Peon

Organisation Functional Structure of BSNL Gwalior Circle

Bharat Sanchar Nigam Limited (known as BSNL) is a public sector

Therefore the focus should be on immediate implementation of CDR based

h) Other income by way of interest on loans to employees, security deposit

Foreign Currency Transactions

Prior Period Items

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

Advance to contactors 39,448 39,448 - 0.00

Total A 6,833,954 6,834,025 71 0.001

Customer Deposits 391,656 393,704 2,048 0.52

Total B 6,833,954 6,834,025 71 0.001

The overall financial position of the company is satisfactory.

2.2 Research Design & Methodology:

“Research Methodology comprises of defining & redefining

2.3 Sampling Technique Used:

2.4 Sampling technique: Convenience sampling is used in exploratory

2.6 Sources of Data Collection:

2.6 Statistical Tools Used

Some of the important Limitations of financial analysis are however, summed up as

Different people may interpret the same analysis in different ways.

a. External Analysis: This analysis is done by outsiders who do not have

b. Internal Analysis: The analysis conducted by persons who have

(ii) On the basis of modus operandi: According to the method of operation

a. Horizontal Analysis: Horizontal analysis refers to the comparison of

b. Vertical Analysis: Vertical analysis refers to the study of relationship

Common Size Statement

Cash Flow Analysis

Cost – volume - Profit analysis

Ratio Analysis: Ratio is a simple arithmetical expression of the relationship of one