OF the COMPANIES ACT 2013 on the FINANCIAL STATEMENTS of BHARAT SANCHAR NIGAM LIMITED for the YEAR ENDED 31St MARCH 2015
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15th ANNUAL REPORT For the Financial Year ended 31.3.2015 BHARAT SANCHAR NIGAM LIMITED Annual Report 2014-15 CONTENTS DETAILS PAGE NO CMD and the Board of Directors 04 – 06 Vision and Mission 07 – 08 Chairman and Managing Director’s Message 09 – 12 Board’s Report 13 – 46 Management Discussion and Analysis Report 47 – 48 Report on Corporate Governance 49 – 77 Financial Statements [Balance Sheet, P & L Account, Cash Flow Statement, 78 – 129 Notes forming part of the Financial Statements] Auditor’s Report 130 – 165 Addendum to Directors Report 166 – 176 Comments of the Comptroller and Auditor General of India on the Accounts 177 – 179 Replies of the Management to the Comments of the Comptroller and Auditor 180 – 184 General of India on the Accounts BOARD OF DIRECTORS Shri Anupam Shrivastava Shri A.N. Rai Shri N.K. Gupta Chairman and Managing Director Director(Enterprise) Director (CFA) [Wef 15.1.2015] [Upto 31.7.2015] Smt. Sujata Ray Shri N.K. Mehta Shri R.K. Mittal Director (HRD) Director(E) Director (CM) [Wef 8.7.2015] [Wef 1.8.2015] [Wef 04.11.2015] Shri N. Sivasailam Smt. Aruna Sundararajan Smt. Darshana Momaya Dabral Government Director Government Director Government Director [Wef 21.10.2015] [Upto 21.10.2015] [Upto 18.9.2015] Chairman, Nom. & Rem.Com Chairman, Audit Committee Smt. Padma Iyer Kaul Smt. Rita A. Teaotia Shri Ajai Vikram Singh Prof. N. Balakrishnan Government Director Government Director Director Director [W.e.f. 18.9.2015] [Upto 29.7.2015] Chairman, Nom. & Rem.Com Chairman, Audit Committee [Upto 16.7.2015] [Upto 16.7.2015] Details of additional charges entrusted by the Govt. of India MoC& IT DoT to Whole Time Functional Directors time to time is available in the chapter of Directors at Board Report 4 Annual Report 2014-15 Company Secretary & Sr. GM (Legal) H.C. Pant Registered and Corporate Office Bharat Sanchar Bhawan, H.C. Mathur Lane, Janpath, New Delhi–110 001 Website: www.bsnl.co.in Corporate Identity Number U74899DL2000GOI107739 Statutory Auditors Walker Chandiok & Co., L–41 Connaught Circus, New Delhi–110 001. Cost Auditors Balwinder & Associates, Cost Accountants, F–125 Phase VIIIB Indl Area Mohali, Punjab–160071 Secretarial Auditors M/s VAP & Associates, Company Secretaries, 387, First Floor, Shakti Khand–3, Indirapuram, Ghaziabad–201010, U.P. Bankers State Bank of India, Punjab National Bank, Corporation Bank, ICICI Bank, Union Bank of India, Canara Bank, INDUSIND Bank, YES Bank, Central Bank of India, Allahabad Bank, United Bank of India, Indian Bank, Syndicate Bank, Oriental Bank of Commerce, Bank of India Depository National Securities Depository Limited, 4th Floor A Wing, Trade World, Kamla Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai–400013. Registrar and Transfer Agent Indus Portfolio Private Limited, G–65 Bali Nagar, New Delhi–110015. Phone: 011–47671214/ Fax 011–25449863 5 OUR BUSINESS Mobile Services Broadband Services GSM :– 2G, GSM 3G Landline Broadband CDMA :– Mobile, CDMA Fixed and CDMA 3G Mobile Broadband Data Card Services GSM Wi–Fi WiMAX Broadband Dial up Internet (DIAS) Fiber Broadband(FTTH) CDMA Broadband :– EVDO Prepaid, EVDO Postpaid, EVDO Router. Enterprise Business Landline Services Enterprise Voice and Mobility:– EPABX, Voice Telephone Lines, FLPP B–fone, Phone plus VPN, ISDN/PRI/BRI, Centrex, 2G/3G Mobile, services Blackberry services Intelligent Network Services:– Universal ITC, Internet Data Centre Services:– IDC Overview, UAN service, Toll free numbers/services, VPN Managed Colocation services, Managed/ service, Televoting services Hosting Services, Managed IT Services, Cloud Services(PCaas) BSNL PCO:– FLPP–PCO Enterprise Data Services:– Leased Circuit(DLC), PRI/BRI/Dial–up Internet:– Dial up internet, MPLS VPN, Internet Leased Line, VSAT, VPN ISDN PRI, ISDN BRI Services (Over BB, CDMA/3G) Enterprise Broadband:– Wi–Max, Wi–Fi, EVDO, DSL Broadband/FTTH Broadband Managed Services:– Managed Network Services(MNS), Managed Global Audio Conferencing, Managed SaaS(Mail), Internet Data Centre Other Enterprise Services:– Web Colocation, Fleet Tracking, Video Conferencing(VC), Video Surveillance, Web Hosting, USOF Project and host of other innovative Enterprise Business Solution Services 6 Annual Report 2014-15 VISION AND MISSION VISION Be the leading telecom service provider in India with global presence Create a customer focused organization with excellence in customer care, sales and marketing Leverage technology to provide affordable and innovative telecom services / products across customer segments MISSION a) Be the leading telecom service provider in India with global presence Generating value for all stakeholders – employees, shareholders, vendors & business associates Maximizing return on existing assets with sustained focus on profitability Becoming the most trusted, preferred and admired telecom brand To explore International markets for Global presence b) Creating a customer focused organization with excellence in sales, marketing and customer care Developing a marketing and sales culture that is responsive to customer needs Excellence in customer service–”friendly, reliable, time bound, convenient and courteous service” c) Leveraging technology to provide affordable and innovative products/services across customer segments Offering differentiated products/services tailored to different service segments Providing reliable telecom services that are value for money d) Providing a conducive work environment with strong focus on performance • Attracting talent and keeping them motivated • Enhancing employees skills and utilizing them effectively • Encouraging and rewarding individual and team/group performance e) Establishing efficient business processes enabled by IT Changing policies and processes to enable transparent, quick and efficient decision making Building effective IT systems and tools OBJECTIVES To be the Leading Telecom Services provider by achieving higher rate of growth so as to become a profitable enterprise. To provide quality and reliable fixed telecom service to our customer and thereby increase customers confidence. To provide customer friendly mobile telephone service, with focus on Value added service and data services, of high quality and play a leading role as GSM operator in its area of operation. 7 • Strategy for I. Rightsizing the manpower II. Providing greater customer satisfaction Contribute towards I. Broadband customers base in India as envisaged in draft National Telecom Policy 2011. II. Providing broadband connectivity to 2.5 lakhs Village Panchayats as per Government policy To leverage the existing infrastructure of BSNL for facilitating implementation of other government programmes and initiatives particularly in the rural areas. To look for the opportunity of possible expansion of BSNL footprint globally by exploring international telecom in developing markets such as Africa. Shri Ravi Shankar Prasad, Hon’ble Minister for Communication & Information Technology,addressing press meeting on occassion of launch of Wi-Fi facility at two Ghats of Varanasi. Shri Rakesh Garg, Secretary DOT,ShriAnupamShrivastava, CMD, BSNL were also present in the function on 8.2.2015. 8 Annual Report 2014-15 CHAIRMAN AND MANAGING DIRECTOR’S MESSAGE Dear Shareholders, services is Rs.27242.23 Crores [Previous year Rs. 26,153.26 Crore], other income was Rs. At the outset, I extend you all a hearty and 1402.97 Crores [Previous year Rs. 1,843.09 warm welcome on behalf of the Board of Crore]. Directors of Company in the Company’s 15th Annual General Meeting. The Company’s There was an increase of 4.16% in Income from Annual Financial Statements for the year 2014- services in comparison to previous year, the 15, alongwith the Board’s Report together with other income decreased by 23.88%. There was Management Discussion and Analysis and an increase of 2.32 % in the total Income in Report on Corporate Governance, Auditors comparison with the previous year. Report have been circulated to you. The Employee benefit expenses and Office & ECONOMY AND BSNL IN NATION Administration expense has shown a decrease BUILDING of 3.06% and 1.54% respectively. Despite the global imbalances, the Government The positive revenue growth of 2.10% in the of India’s initiatives have toned up and kept year under review in comparison to previous thegrowth path of the economy in forward years is testimony to the turning around of the graph. The Economic Survey for FY 15 forecast Company. the economy for a 8 per cent growth in the current fiscal. The Company has been making losses mainly because of depreciation of assets and Telecommunication services is a prime factor administrative costs, which account for 55% of in fostering the overall development. BSNL the revenues. However, the operational needs is one of the leading PSU Telecom Service are being through internal cash accruals. With provider engaged in providing affordable a topline of Rs. 28,000 Crores and a debt of Rs. telecommunication services across the nook and 4,500 crore, the situation is not that bad. corner of the country. Your Company, aware of its key responsibility has set forth ambitious The first priority is to change the direction of network expansion programmes. the company in such a way that losses are reduced year after year and there is enough The applications based mobile technology is fast compensation on depreciating assets. emerging as the prime enabler of the economic growth. The advancement of technology and GOVERNMENT OF INDIA’S INITIATIVES new applications had just taken the mobile