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 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

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Company Secretary & Sr. GM (Legal) H.C. Pant Registered and Corporate Office Bharat Sanchar Bhawan, H.C. Mathur Lane, Janpath, New –110 001 Website: www.bsnl.co.in Corporate Identity Number U74899DL2000GOI107739 Statutory Auditors Walker Chandiok & Co., L–41 Connaught Circus, –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, –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

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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.

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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 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 – AND CONTRIBUTION OF BSNL be it 2G, 3G or 4G – to health care, finance, education etc. With the continued focus of To ensure inclusive development of the the Government for e-delivery, there is a huge Country, the Hon’ble Prime Minister of India potential of growth for the sector. has unleashed several new initiatives viz. , Make In India, Skill India and Swachh PERFORMANCE HIGHLIGHTS DURING Bharat Campaign. 2014-15 Being a leading Pan-India CPSU Telecom During the year 2014-15, the company Service Provider, ‘nation-building’ is deeply incurred a loss of Rs.8234.09 Crores [Previous imbedded in its core business activities. Your year 7,019.76Crore]. While the Income from Company contributed actively in the following

9 Government of India’s nation building SKILL DEVELOPMENT initiatives:- State of the Art Telecom Training Centres of DITIGAL INDIA INITIATIVES Your Company spread across the country are adequately equipped with telecom technology Your Company’s plans are completely in sync training and teaching. As part of the Skill with the Government of India’s ambitious Development Programme of the Government Digital India Programme, aiming to transform of India, in addition to already existing India into a digitally empowered society. programmes, various new programmes and Your Company is always on the forefront to schemes have been launched:- adapt the rapid technological changes and offer Training under National Skill Development new services to its esteemed customers. As part Training:-7674 students were allotted to BSNL of the Digital India initiatives, following new under the scheme. Out of the 7526 students services were launched during July 2015:- who joined the scheme, MoU Target was 6139 BSNL BUZZ:-BSNL BUZZ is a mass [i.e. 80%]. Whereas, 7214 students, forming communication platform that delivers content 95% of the MoU Target were trained under this and services to the mobile home screen of scheme. About 14,868 engineering students BSNL Mobile customers. The platform provides have undergone EETP certificate courses during non stop infotainment as well as public service the year under review, which is 100% more interactive messaging services. It is an easy to than the achievement of 2013-14. use platform that has the power to promote a variety of content, news, contests, subscription Skill Development initiatives under the New packs, coupons and advertising. It will also Telecom Policy 2012:- Under this scheme, help broadcast BSNL service offerings, social 17 Premier Telecom Training Centres of your awareness messaging and citizen alerts. Company has been registered under the skill The service will also deliver location-based building initiatives spearheaded by NITPRIT, information services in 7 languages. DoT. SPEEDPAY:-This is a mobile money solution In place of National Vocational Educational called SpeedPay, launched in partnership with Qualification Framework (NVEQF), Government Andhra Bank and Pyro networks pvt. limited. has introduced National Skill Qualification This model is based on Technology Adaptation Framework (NSQF). Your Company has for financial inclusion. This is an open prepaid developed 10 levels for NSQF in Telecom instrument which can be used as a means for Sector for 7 streams and submitted the same to purchase of goods and services at any card DoT /NITPRIT. accepting merchant locations and allows cash DISASTER MANAGEMENT withdrawal at ATMs/customer service point. This service will create a self-sustainable eco- Being a leading pan-India PSU Telecom Service system in rural areas and take the banking Operator, Your Company connects the remote, services to the customer. Launched initially in hilly and most difficult terrains of the country. As the States of and Telengana. such, Your Company always accords top priority to restoration of communication services on war MAKE IN INDIA footing whenever and wherever natural disasters In line with the Government’s initiatives, Your struck. Your Company positioned rapid action Company has taken several initiatives such as teams and restored communication facilities sourcing of domestically manufactured telecom when the devastative floods struck the State of J gears and equipments from the suppliers. & K during September 2014 and March 2015.

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SWACHH BHARAT ABHIYAN Company continued its engagement with social obligations to bridge the digital divide, Being a pan-India organization and fully aware apart from employee and their family welfare of the importance of the mission, Your Company programmes. The Company has constituted the carried out a detailed campaign and follow up Corporate Social Responsibility Committee of programmes across the country. the Board. OUR OUTLOOK FOR FUTURE CORPORATE GOVERNANCE We are right now in the Phase VII expansion The term Corporate Governance connotes mode for GSM based mobile services. The next putting in a system of best practices in the sphere growth in communication will be from mobile of governance, which in turn, lead to value data. Our huge fibre network could be utilized maximization for all the stakeholders. Existing for data penetration. We are actively pushing for governance practices have been strengthened Wi-Fi. We do not have 4G license, but we are further over the years with sustained focus integrating Wi-Fi with our 2G and 3G network. on excellence in all spheres. The Guidelines We have touched 300 Wi-Fi hotspots and plan on Corporate Governance for the Unlisted to complete 2,500 W-Fi hostspots by the end of CPSEs laid down by the Department of Public this financial year. Enterprises are being implemented by the Company since Financial year 2008-09. One thing is for sure, the tower businesses offers a good opportunity for BSNL to realise critical The Corporate Governance guidelines on Audit growth capital. It has 65000 towers, most of Committee, Remuneration Committee, Whistle them located in the interiors. As metros move Blower Policy and other compliances have now towards 100 per cent teledensity, the action is been enshrined in the Companies Act 2013 and bound to shift to smaller towns and rural areas are applicable to your company. relatively untapped territory. BSNL’s tower infra is already in place – good way for others to All the Members of the Board; and the Senior save investments and time. It also owns ample Management Personnel of the Company have spectrum. affirmed compliance with the Company’s Codes of Conduct for the Members of the Board and Over and above, the recent policy initiatives of the Senior Management Personnel, respectively. the Government of India are likely to strengthen Management Discussion and Analysis Report, the business model and growth of the service Report on Corporate Governance, together provisioning sector, especially the Telecom with the Secretarial Audit Report in Form MR-3 Services. and Certificate on Compliance of applicable CORPORATE SOCIAL RESPONSIBILITY norms of Corporate Governance forms part of the Board Report. Quarterly progress reports The Company, being wholly owned on the implementation of CG Norms for the Government Company has been taking up unlisted CPSEs issued by the DPE are being sent various CSR initiatives even prior to coming into regularly to the Administrative Ministry. force of the provisions of the Act of 2013. The Company had its own CSR Policy which is now AWARDS AND ACCOLADES being aligned with the CSR Policy requirements For Energy Conservation, the Govt. of under the Companies Act 2013. Owing to gave 1st Prize of Rs. 2 Lac and 2nd Prize of Rs. losses being incurred by the company since 1 Lac to TE Building Ambala City and Hissar, the year 2009-10, no specific amount could respectively. be earmarked for CSR activities. However, the Company, being a wholly owned Government The State Energy Conservation Award of

11 commendation received by the TE Building I sincerely acknowledge the unstinted support, Chinnakada, from the Govt. of Kerala. guidance and encouragement Your Company received from various Ministries/Departments, ‘Certificate of Merit’ by Bureau of Energy Authorities and Agencies of the Government Efficiency for Energy Conservation to TE of India and the State Governments/Union Building Karnal and Hissarin Haryana Telecom Territory Administrations, particularly, the Circle. Department of Ministry of ALTTC Ghaziabad has been declared as the Communications and IT, Govt. of India. Centre of Excellence (CoE) for Broadband by I would like to convey my appreciation and International Telecom Union (ITU) for 3 years thankfulness to my colleagues on the Board wef 2015. for their invaluable support, guidance and OUR BIGGEST ASSET – HUMAN encouragement throughout. RESOURCE I would like to acknowledge the commitment, With greater focus on positive employee drive and expertise of all the Employees of the employer relationship, apart from a best HR Company and would like to place on record policy, the Company also has an array of their unflinching dedication, commitment and employee welfare programmes. The Company’s contribution to strengthen the Company on all employee strength as on 31.3.2015 stood fronts. at 2,25,512. Highly skilled and motivated, I would like to express my sincere gratitude to the Employees form the Core asset of the all our stakeholders for continued faith reposed organization. on BSNL in connecting India. ACKNOWLEDGEMENTS On behalf of the Board of Directors I would like Thank you, to convey my gratitude and deep appreciation Jai Hind! to our esteemed Subscribers, Suppliers of various equipments and services, Franchisees, Retailers, Business Associates, and Bankers of the Company who have always been a source Anupam Shrivastava of strength. Chairman and Managing Director

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BOARD’S REPORT

Dear Members, Your Directors have great pleasure in presenting the 15th Annual Report of your company, alongwith the Audited Statement of Accounts, both Statutory and Secretarial Auditors’ Report and Comments and Review of the Comptroller and Auditor General of India, on the Accounts for the financial year ended March 31, 2015. FINANCIAL PERFORMANCE The financial performance for fiscal 2014–15 is summarized as below:

S. No Particulars 2014–15 [Rs. in Lacs]

1 Income from services 1 2,724,223 2 Other Income 2 140,297 3 Expenditure [Excluding Interest and depreciation] 3 2,797,263 4 Profit before interest, depreciation and tax [EBIDTA] 4 = 1+2–3 67,257 5 Depreciation 5 881,680 6 Interest 6 50,189 7 Profit/(Loss) before prior period adjustment 7=4–(5+6) (864,612) 8 Prior period adjustments 8 19,652 9 Profit/loss before tax 9=7+8 (884,264) 10 Provision for deferred tax 10 60,933 Tax Provision for the year Tax Provision for the earlier years Wealth tax (78) 11 Net Profit/Loss for the year 11=9+10 (823,409) AMOUNTS PROPOSED TO BE CARRIED TO GENERAL RESERVES: NIL LOAN AND INVESTMENT BY THE COMPANY Pursuant to the approval and directive of Ministry of Communications and IT, Department of Telecommunications, which is the Administrative Ministry/Department, the Company has made following investments:– Pursuant to the Government of India, Ministry of Communications and IT, Department of Telecommunications order, Rs. 200 crores [Rupees Two Hundred Crores] in the 7% Redeemable cumulative preference shares each of Rs. 100/– fully paid up, in the financial year 2002–03 in M/s ITI Limited. Pursuant to the Government of India, Ministry of Communications and IT, Department of Telecommunications’ Presidential directive No. 10–24/2011–SU.1, dated 22.11.2011 directing

13 BSNL to become initial subscriber as well as acquire shares in the proposed SPV/ Company being promoted by the Government for creating National Optical Fibre Network, BSNL has become a Member of the Bharat Broadband Networks Limited (BBNL); and, as directed by the Government, invested a sum of Rs.10/– [Rupees Ten only] towards One Equity Share of Rs.10/– [Rupees Ten only] being fully paid up for cash at par. DIVIDENDS In view of the losses suffered by the Company, Your Directors do not recommend any dividend for the year. BORROWINGS Opening balance of borrowings stood at Rs. 3738.5329 crores as on 1.4.2014. During the year under review, your company borrowed Rs. 8902.33953 crore and repaid an amount of Rs. 6255.9676 crore. The loan balance as on 31.3.2015 stood at Rs. 6384.90513 crore. CREDIT RATING Your Company has been assigned the highest Credit Rating AAA(SO) [Triple A Structured Obligation] by M/s CARE Ratings for Company’s Long Term Bank Facility of Rs. 8000 Crores. The rating signifies that instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. DEMAT FACILITY TO THE SHAREHOLDERS Pursuant to the directives of the Government of India, Ministry of Communications and IT, Department of Telecommunications, vide their communication No.10–16/2014–SU.I, dated the 28th November 2014 for dematerializing the shares of BSNL held in paper mode, your Company has obtained International Security Identification Number(ISIN) for both the Equity and Preference Shares of the Company being held by the President of India. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE During the year 2014–15, the company incurred a loss of Rs. 8234.09 Crores [Previous year 7,019.76 Crore]. While the Income from services is Rs. 27242.23 Crores [Previous year Rs. 26,153.26 Crore], other income was Rs. 1402.97 Crores [Previous year Rs. 1,843.09 Crore]. There was an increase of 4.16% in Income from services in comparison to previous year, the other income decreased by 23.88%. There was an increase of 2.32 % in the total Income in comparison with the previous year. The Employee benefit expenses and Office & Administration expense has shown a decrease of 3.06% and 1.54% respectively. The positive revenue growth of 2.10% in the year under review in comparison to previous years is testimony to the turning around of the Company. MEMORANDUM OF UNDERSTANDING [MoU] WITH THE DEPARTMENT OF TELECOM In compliance with the guidelines for “MoU Signing and Monitoring Mechanism” issued by the Department of Public Enterprises, Government of India, Your Company has been signing the

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MoU with the Department of Telecommunications since 2004–05. Your Company obtained FAIR ranking for the MoU 2014–15. PHYSICAL PERFORMANCE Your Company, despite operating in a very highly competitive and consumer driven market with pressure on earnings was able to restrain the negative trend to some extent. The status of MoU Targets and Net Achievements in respect of physical performance during the year 2014-15 is as follows:-

SNo Item Unit MoU Status Status Net %age of Target for as on as on achievement achievement 14-15 31.3.2014 31.3.2015 during against 2014-15 annual target 1 Total Lakh 100.00 1,131.37 932.40 –198.98 –198.98 Telephone Conn connection 1(a) Wireline “ 0.00 184.88 164.12 –20.76 1(b) WLL “ 0.00 22.49 19.85 –2.64 1(c) Mobile “ 100.00 924.00 748.42 –175.58 –175.58 1(d) Mobile “ 549.55 597.20 47.64 (VLR) 2 Total Lakh 100 1,275.31 1,320.29 44.99 44.99 switching Lines capacity 2(a) Wireline “ 383.99 376.89 –7.11 2(b) WLL “ 84.54 83.64 –0.90 2(C) Mobile “ 100 806.78 859.78 52.99 3(a) Broadband Lakh 30 99.65 99.09 –0.56 Wireline cons 3(b) FTTH Nos 25,146 41,584 16,438 3(c) EVDO Nos 93,671 86,024 –7,647 connection 3(d) Wimax Nos 124,963 119,134 –5,829 connection 3(e) 3 G Lakh 67.68 89.24 21.57 cons 4 OF Cable Route 20,000 734,323 745,345 11,022 55.11 Kms

15 SERVICES AND PLANS CONSUMER FIXED ACCESS BSNL NGN Network The next generation network (NGN) is a packet-based network to provide telecommunication services to make use of multiple types of traffic, such as voice, data and multimedia. This will provide platform for Fixed Mobile convergence to valued customers. All 8 main core exchanges in entire country got commissioned and 136 such NGN Switches connected to Main Core Exchanges have started working. Your Company has chalked out a massive plan to migrate existing voice and data customers to NGN platform to provide basic telephone and supplementary services using internet protocol(IP) Your Company is in the process of migrating C-DOT TDM Technology exchanges covering most of the rural India with NGN solution being developed by C-DOT. Field trials are already over. Your management has accorded administrative approval to the project for migration of C–DOT exchanges to NGN network. MoU has already been signed between BSNL and C DOT and PO has been issued. In the first phase, 100 locations are being covered and balance sites will be covered in Phase–2. Deployment of modern and state of the art CDR based billing and customer care system and induction of NGN Technology in land line switehces will enable the Company to provide its customers the latest value added services and features both for voice and data services. This will provide a boost to the growth of this segment. With this, Company will be able to offer new services, VAS to the fixed line customers such as: Wide Area IP Centrix, Multi media video conferencing, prepaid solution with all functionalities, Fixed Mobile convergence, Personalised Ring Back Tone(PRBT) etc. Wi–fi Hot Spots Wi-fi, the new broadband technology enables the users to surf high-speed broadband net anywhere, anytime at affordable costs. To enable the visitors to have seamless connectivity at important tourist locations such as Ganga Ghats at Varanasi, Taj Mahal at Agra, Hussain Sagar Lake-Hyderabad, as well as in three cities – Bengaluru, Vijayawada and Bilaspur have already been covered under wi-fi hotspot scheme. 2500 such hotspots are planned during the year 2015-16, by deploying 2G/3G mobile data Wi-Fi off load solution on pan-India basis. This will usher into a much faster and reliable internet through mobile devices to the customers. Your Company is offering free wi-fi surfing for 30 minutes per day per customer. Unlimited Free Calls Scheme During May 2015, Your Company launched an innovative scheme for the landline customers which allows unlimited free call to any network from 09 PM to 07 AM on all days without any direct/indirect charges. Positive response of the customers had resulted in creating demand for the BSNL Landline services. BROADBAND SERVICES Your Company has been making continuous efforts for improvement in Operation and Maintenance

16 Annual Report 2014-15 of Broadband services. All the targets set by TRAI regarding QoS have been met by the Company in all the four quarters for the year under review. To offer Intelligent Network (IN) services, new platforms have been established at two locations namely Chandigarh and Pune. Billing of IN services has been started through state of art CDR project.

Shri Ravi Shankar Prasad, Hon’ble Minister for Communication and IT, at the launch of Wi-Fi facility at Lord Jagannath Temple, Puri on 7.9.2015 PTN tender for expansion of IP aggregation network & NMS tender was finalized and floated. Automatic BB provisioning and Inventory management system Metasolv was successfully implemented in 100 SSAs. Traffic re-engineering at BNG level was successfully undertaken to improve BB services and by way of diversions etc., increased utilization was ensured. MOBILE SEGMENT Your Company’s GSM services offered under the brand name of BSNL Mobile Services registered a healthy growth during the year under review. During the period commencing May 2014 to May 2015, active customer base has registered a positive growth of 47 lakh customers. To strengthen the mobile network, during the year under review, your Company added 3400 Towers. To reduce congestion and arrest the call drops, under Phase VII expansion programme, 15000 new BTSs were got commissioned. These will add to the revenue generation of the company in the coming days. Efforts are being made to replace the old equipment, to save AMC costs and derive benefits of

17 low OPEX and state of art features including high data capabilities. High capacity data node and associated equipments have been inducted in the network resulting in exponential growth in data traffic and commensurate revenue from data. Future plans include induction of technical innovation in mobile technology like integration of Wi- Fi Hotspot/Femto Cell / LTE/4G with existing GSM/UMTS networks. All India Free Roaming with effect from 15.6.2015 Your Company has launched free incoming calls to its mobile customer while in roaming all across the country w.e.f. 15.06.2015., on pan-India basis. This scheme will benefit crores of existing as well as new subscribers. Now BSNL mobile customers will not need to carry multiple SIMs and handsets during roaming. This has made the saying One Nation One Number a reality. DITIGAL INDIA INITIATIVES Being a leading pan–India public sector telecom service provider, Your Company’s plans are completely in sync with the Government of India’s ambitious Digital India Programme, aiming to transform India into a digitally empowered society. Your Company is always on the forefront to adapt the rapid technological changes and offer new services to its esteemed customers. As part of the Digital India initiatives, following new services were launched during July 2015. BSNL BUZZ services

Shri Ravi Shankar Prasad, Hon’ble Minister for Communication & Information Technology launching BSNLBUZZ and Speedpay service of BSNL at Bharat Sanchar Bhawan New Delhi on 3.7.2015.

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BSNL BUZZ is a mass communication platform that delivers content and services to the mobile home screen of BSNL Mobile customers. The platform provides non stop infotainment as well as public service interactive messaging services. It is an easy to use platform that has the power to promote a variety of content, news, contests, subscription packs, coupons and advertising. It will also help broadcast BSNL service offerings, social awareness messaging and citizen alerts. The service will also deliver location–based information services in 7 languages. BSNL BUZZ has two distinct services enabled by cell broadcast – cell info and an interactive messaging service platform, LiveScreen based easy to use interactive mobile marketing service. The cell info service provides a non–interactive messaging service to millions of BSNL users communicating BSNL services offerings, social awareness messaging and citizen alerts. The CelltickLiveScreen based service branded as BSNL Buzz is an interactive messaging service providing users an easy way to get content and services in local languages and script that is personalized for the users. The service is DND compliant and provides users with simple interactive content discovery. This broadcast, capable of broadcasting one single message to reach all mobile handsets in an area will be of greater use in Agriculture, Disaster Management and host of other Government initiatives. As this cell broadcast is not affected by traffic load, Disaster Management System of the country will get further strengthened.

Dt.26.06.2015- Shri Anupam Shrivastava,CMD BSNL contributing in SWACHH BHARAT ABHIYAN organized at BSNL Corporate office,Bharat Sanchar Bhawan, Janpath, NEW Delhi. SPEEDPAY Services This is a mobile money solution called Speed Pay, launched in partnership with Andhra Bank and Pyro networks pvt. limited. This model is based on Technology Adaptation for financial inclusion. This is an open prepaid instrument which can be used as a means for purchase of goods and services at any card accepting merchant locations and allows cash withdrawal at ATMs/customer service point. This service will create a self-sustainable eco-system in rural areas and take the banking

19 services to the customer. Launched initially in the States of Andhra Pradesh and Telengana. Highlights of this service are: Domestic money transfers; Deposit & Withdrawal of cash at BSNL retail outlets; DTH and post paid bill payments; Mobile Airtime & Ticket and host of other services which are in pipeline. ENTERPRISE BUSINESS The revenue from Leased Line Circuits segment is growing continuously year on year basis for the last three years. Revenue from this segment during 2014-15 was Rs. 2470.63 crores. There is an increase in revenue despite stiff competition and continuous downward revision in tariff for all type of Enterprise circuits. The Company has started providing Internet Data Centres (IDCs) services and AUA (Authenticative User Agency) services, which have become a new stream of revenue for the Company. ILD BUSINESS Strategic Alliances/Business Development programmes Your Company is a consortium member of Europe India Gateway cable system (EIG). Company participated in EIG’s first upgrade and obtained 50 G capacity at a cost of Rs. 5.6 crores. Has leased 216 GB International Internet Bandwidth for its broadband operations. An MoU has also been signed between the Company and BSCCL on 12.5.2014 for hiring of International Bandwidth for improving connectivity to North East Region. Following plans are envisaged for future: (a) To establish interconnect with South Africa Telecom(SAT) and other carriers, to increase connectivity with various regions of the world; (b) Establishing bilateral agreement with foreign carriers, which will help in improving QoS of outgoing calls leading to increase in customer satisfaction and increase incoming traffic so as to increase revenues; (c)Establishing ILD gateway and hiring of 10G International internet Bandwidth at Agartala, which will improve internet connectivity to North East Region of the Country. CUSTOMER CARE Being the communication source of common man, your organization attaches significant importance to the customer care segment. Total number of 4250 Customer Service Centres are in operation across the country. These centres work on single window concept; and in general, remain open from 08 AM to 08 PM on working days. Performance of the Company on QoS against the MoU Target for the year 2014-15 is as follows:-

SNo Name of the Parameter TRAI Benchmark Achievement 1 Fault incidences (No. of faults/100 subscribers/ <7 4.2 month) Fault Clearance 2 For urban areas (i) By next day > 85% 93.7% (ii) Within 5 days 100% 100% 3 For Rural and Hilly Areas

20 Annual Report 2014-15

SNo Name of the Parameter TRAI Benchmark Achievement (i) By next day > 75% 91.45% (ii) Within 7 days 100% 100% 4. Mean time to repair 10 Hrs 5.9 Hrs 5. Call completion rate within local network >55% 70.35% 6 %age request for Termination/closure of 100% 100% service complied within 7 days 7 Congestion on POI >0.5% >0.5% Target for restoration of OFC fault was fixed as 8 Hrs. The OFC network reliability fault restoration time is being monitored. The overall achievement of OFC fault restoration time is 8.47 Hrs. Southern Telecom Region has developed Fault Management System(FMS) software/ Transnet for OFC fault booking and monitoring. The work for implementation of Transnet in the Company’s network is under progress. The Route Kilometers, system and staff data of all the circles and regions has been entered into the system. Target of completion of all the work related to data entry was fixed as 31.5.2015. In FMS system as and when there is break of fibre of a route an SMS is sent by the system to the concerned SDE/DET as per escalation policy. 15 circles and all the 4 regions have started to use FMS for OFC faults booking and monitoring. Your Company has a Pan India presence with capacity of 37.7 Mn Lines with copper cable network in wide urban and rural areas. At present, only 16.41 Mn connection are working and after migration to NGN there will be opportunity to use the existing cable to provide wireline connections for Voice & Broad Band Services with new features and Value Added Services. PROVISION AND OPERATION OF SATELLITE BASED SERVICES USING GATEWAY INSTALLED IN INDIA USING INMARSAT TECHNOLOGY The work on installation of gateway at Sikandarabad (U.P) is underway for the provisioning and operations of the satellite based services using INMARSAT Technology. ADDITIONAL REVENUE STREAMS Company owns large land portions across India (15000 parcels; 8000 Acres; 34 Million SQM) which are lying underutilized. Your Company has identified 82 land parcels for this monetizing exercise in Phase-I. A pilot project for 10 locations admeasuring 125 Acres – 0.50 MnSqm has already been taken up by the Company [ 3 Mumbai, 2 Noida, 1 Chennai, 1 Tiruvananthapuram, 2 Kolkatta and 1 Gurgaon]. Monetization of these lands is proposed to be done through PPP Model by engaging a Developer. Case for 7 lands out of these 10 lands has been sent to the Administrative Ministry – D/o Telecommunications for granting approval. Further action shall be taken as per the directions received from them. In addition, Third Party Quality Audit Agency work costing Rs. 750 crores and Rs. 500 crores for IIT Hyderabad and Panchayati Raj Department of the Govt. of Haryana, Staff Quarter work costing Rs.30 crores for Bank of Baroda, Hostel Work costing Rs. 32.50 crores for National Insurance Authority Pune, etc., are expected in the Financial Year 2015-16. Company’s Architectural Wing is undertaking consultancy works exclusively for Department of Post, NICF, Department of Telecom etc. In addition, the wing is also carrying out PMC Works for the State Governments of Kerala, HP, Indian Army, Indian Airforce, PNB, UCO Bank, KVS,

21 MANUU, CPRI, NPTI etc. Against annual targets of Rs.4.0 crores set for the financial year 2014-15, revenue target of Rs. 4.47 crores was achieved in External Projects (PMC). Similarly, the Electrical Wing of your Company also undertakes various external works. During the year under review, Rs.56.90 crore revenue was earned from external electrical works. DEVELOPMENT OF RURAL TELECOM NETWORK Your Company is committed to provide Village Public Telephones(VPTs) in remote, rural and far flung areas on pan-India basis at the behest of USOF, DoT. The Company has already provided VPTS in 5,78,396 villages out of 5,93,601 villages as per Census 2001. Roll out period of New VPT Agreement expired on 31.3.2015 and subsidy support under this agreement is upto 26.2.2016. Your Company has taken up the case with the USOF DoT to extend the roll out period upto 31.3.2015 and subsidy support upto 26.2.2021. Approval is awaited. The period of SPV installation on CDMA VPTs expired on 31.3.2015. USOF has already been requested to extend the SPV provisioning date upto 30.6.2015. COMPUTERISATION AND IT For implementation of IPV6, action for Design, Development and Deployment work is in progress. FTTH solution deployed in all four CDR Data Centres and migration of FTTH service on CDR system is complete. ERP The work on implementation of ERP is in progress. So far, in 30 out of 49 units implementation has been completed successfully. The implementation in remaining units is expected to be completed by November 2015. The main modules being implemented in ERP are: FICO (Finance Control), HCM (Human Capital Management), PS (Project systems), REM (Real Estate Management), PM (Plant and Machinery) and (MM) Materials Management. CONVERGENT BILLING Your Company is in the process of establishing a converged IT platform for customer care and billing of all its services including GSM, Landline, Broadband, Enterprise Business, Prepaid and Postpaid, Value Added Services, Franchisee management etc. The process of getting the system in place is in progress. TELECOM FACTORIES Telecom Factories of your Company located at Kolkatta, Gopalpur, Kharagpur, Jabalpur, Richhai, Bhilai and Mumbai are in-house manufacturing units engaged in production of various telecom products. These factories with a staff strength of 2004 as on 1st April 2015, clocked the output of Rs. 229.53 crore in the year under review. A target of Rs. 721 crores has been set for the financial year 2015-16. Your Directors have initiated several initiatives For augmenting the revenue Accordingly, as part of monetization of idle resources of telecom Factory at Kharagpur, APO has been issued to M/s Camel Group Co. Ltd for setting up manufacturing facilities for production of latest technology batteries for telecom and non telecom applications on revenue share basis. RFP for setting up manufacturing facilities for solar power supply system for telecom and non telecom applications at TF Bhilai has been invited on 28.11.2014.

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To meet the increased demand for NOFN, the production capacity of PLB HDPE Telecom Duct has been augmented in the Telecom Factories. Besides the existing set up, 60,000 Km of Duct has been added to meet the requirement of PLB HDPE Duct, exclusively for NOFN Project by hiring 12 Nos of machinery lines. HUMAN RESOURCES AND INDUSTRIAL RELATIONS Industrial relations Industrial relations have remained by and large cordial during the year under review. CORPORATE RESTRUCTURING PLANS Consolidation of SSAs into Business Areas headed by GMs has been implemented in UP (East), UP(West), Chattisgarh and Circles during the year 2014-15. It will be implemented in phases in other circles with the roll out of ERP project. Your Directors plan to recruit officers at Management Trainee level to cater to the future need of managerial manpower. Meanwhile, to fill the vacancies at CGM/PGM/GM level, action to recruit Government officers under Rule 37 of CCS Pension Rules is in progress. TRAINING OF EMPLOYEES Apart from imparting training to the employees of the organization, state of art telecom training centres of the Company located at various places across the country are also playing an important role in nation building at various levels. Training to the Employees MoU Targets and achievements of the segment are as follows:–

Total MoU Target Achievement Percentage of Number in Nos. achievement Training for Fresh Recruits 1191 1191 [100%] 1173 98.50% In house training to 236580 41144 [10% of total 41144 17% employees employees] Training under National Skill Development Training 7674 students were allotted to BSNL under the scheme. Out of the 7526 students who joined the scheme, MoU Target was 6139 [i.e. 80%]. Whereas, 7214 students, forming 95% of the MoU Target were trained under this scheme. About 14,868 engineering students have undergone EETP certificate courses during the year under review, which is 100% more than the achievement of 2013–14. Revenue under Training programmes During the period under review, training centres/field units have reported revenue of about Rs. 22.82 crores by providing vocational training to 1,00,536 students/external trainees. Skill Development initiatives under the New Telecom Policy 2012 Under this scheme, 17 Premier Telecom Training Centres of your Company has been registered under the skill building initiatives spearheaded by NITPRIT, DoT.

23 In place of National Vocational Educational Qualification Framework (NVEQF), Government has introduced National Skill Qualification Framework (NSQF). Your Company has developed 10 levels for NSQF in Telecom Sector for 7 streams and submitted the same to DoT /NITPRIT. TSDSI Membership and participation in study groups Your Company is a Member of Telecommunications Standards Development Society, India (TSDSI) under Govt. Category. Officers of the Company were nominated for active participation in the following study groups of the TSDSI:– Machine to Machine (M2M) communication group; Core Networks (CN) study group; and Radio Networks and Spectrum(RNES). Foreign Deputations During the period under review, 41 officers of the Company were deputed abroad for courses under CTO PDT Training Programme and for attending exhibitions/meetings/conferences to have first hand information on latest developments taking place in telecommunications. RESERVATION POLICIES OF THE CENTRAL GOVERNMENT Government policies with regard to reservations for various categories of employees in the matters of recruitments and promotions are being followed. A glimpse of representation of Scheduled Caste, Scheduled Tribe, OBC, Ex-Servicemen, Physically Disabled employees and their representation as on 31.3.2015:-

Group Total No. of Scheduled Scheduled OBC Ex-Servicemen Employees Caste Tribe Executive 46694 7729 2388 5986 138 Non-Executive 178818 32582 9303 14582 404 Total 225512 40311 11691 20568 542

Category Executive Non-Executive Total Blindness of low vision 0 28 28 Hearing Impairment 9 19 28 Locomotor Disability or Cerebral Palsy 172 325 497

BENEFITS TO FEMALE EMPLOYEES AND PERSONS WITH DISABILITIES The number of women employees is 7821 No. of Executives and 25998 No. of Non-Executives. Apart from the maternity leave of 180 days Child Care leave as per the provisions of DoP& T instructions on the subject is available for all the women employees. Special allowance for child care for women employees with disabilities @ Rs.1000/- per month per child maximum for two children till the child attains two years is being granted. Double the rates of transport allowance for eligible physically handicapped employees is being granted.

24 Annual Report 2014-15

As far as possible, subject to administrative constraints, persons with disabilities are posted near their native places within the region. COMPLAINTS COMMITTEE FOR REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACES Pursuant to the provisions of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013 and in compliance with the guidelines of the Government on the subject, your Company has established an Internal Complaints Committee (ICC) at the Corporate Office and at Circle/SSA level to redress complaints received regarding sexual harassment. All employees are covered under this policy. The following is the summary of sexual harassment complaints received and disposed off during the year 2014-15:- No. of complaints received – 14 No. of complaints disposed of – 09 AWARDS AND ACCOLADES The Govt. of Haryana gave 1st Prize of Rs. 2 Lac and 2nd Prize of Rs. 1 Lac for Energy Conservation in TE Building Ambala City and Hissar, respectively. The State Energy Conservation Award of commendation received by the TE Building Chinnakada, Kerala from the Govt. of Kerala. Certificate of Merit by Bureau of Energy Efficiency for Energy Conservation in TE Building Karnal and Hissar Haryana. ALTTC Ghaziabad has been declared as the Centre of Excellence (CoE) for Broadband by International Telecom Union (ITU) for 3 years wef 2015. RIGHT TO INFORMATION In line with the directions contained in the Right to Information Act 2005, Your Company has nominated CPIOs for respective branch at the Corporate Office as well as the field units of the Company for providing information to citizens. The details of the CPIOs is posted in the website of the company at www.bsnl.co.in IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY The Government’s guidelines on the implementation of the official language policy is followed scrupulously. Your Company has a full fledged official language Wing. Unicode software has been installed in all the computers to encourage increased use of Hindi in official work and employees are also trained to use Unicode software. OL Wing carries out inspection of Circles. Skill development workshops are held frequently for sharpening the skills of employees. COMPLIANCES All the Senior Management Personnel including key managerial personnel handling different verticals/units have been delegated with administrative and financial powers thereto, are responsible

25 to ensure adherence to all the applicable laws, rules, guidelines etc., and ensures implementation of the enterprise risk management policy of the company as a routine, while taking or processing the detail for decision or approval by the competent authority(ies). The Company Secretary ensures the compliance of all the applicable provisions of the Companies Act and other applicable corporate laws. Being the successor and assigns of the erstwhile Departments of Telecom Services and Telecom Operations with vast geographical spread, the BSNL follows the existing system. Accordingly, all the litigations before the Hon’ble Courts/Tribunals/Arbitrators are handled by the respective verticals and units under their control with the help of Advocates. No significant and material orders passed by the Hon’ble Courts/Tribunals/Regulators that would impact the going concern status of the Company and its future operations were reported by any of the units. CORPORATE GOVERNANCE The term Corporate Governance connotes putting in a system of best practices in the sphere of governance, which in turn, lead to value maximization for all the stakeholders. Existing governance practices have been strengthened further over the years with sustained focus on excellence in all spheres. The Guidelines on Corporate Governance for the Unlisted CPSEs laid down by the Department of Public Enterprises are being implemented by the Company with effect from the year 2008-09. The Corporate Governance guidelines on Audit Committee, Remuneration Committee, Whistle Blower Policy and other compliances have now been enshrined in the Companies Act 2013 and are applicable to your company. All the Members of the Board; and the Senior Management Personnel of the Company have affirmed compliance with the Company’s Codes of Conduct for the Members of the Board and the Senior Management Personnel, respectively. Management Discussion and Analysis Report, Report on Corporate Governance, together with the Secretarial Audit Report in Form MR–3 forms part of this Report. Quarterly progress reports on the implementation of CG Norms for the unlisted CPSEs issued by the DPE are being sent regularly to the Administrative Ministry. Your Company has obtained certificate from the Secretarial Auditor M/s VAP & Associates Company Secretaries, regarding compliance of conditions of corporate governance as stipulated in the Guidelines on Corporate Governance for Central Public Sector Enterprises 2007 and revised further vide No. 18(8)/2005–GM, dated 14.5.2010 issued by the Department of Public Enterprises, which forms part of this report. MEETINGS OF THE BOARD The Board of Directors of your Company met 7 times during the financial year 2014-15. Details of the attendance of directors etc., form part of the Corporate Governance Report which is a part of this Report. [Refer to the Chapter on Board Meetings held, Attendance of Directors etc.] CORPORATE SOCIAL RESPONSIBILITY COMMITTEE The Company, being wholly owned Government Company has been taking up various CSR

26 Annual Report 2014-15 initiatives even prior to coming into force of the provisions of the Act of 2013. The Company had its own CSR Policy which is now being aligned with the CSR Policy requirements under the Companies Act 2013. Owing to losses being incurred by the company since the year 2009- 10, no specific amount could be earmarked for CSR activities. However, the Company, being a wholly owned Government Company continued its engagement with social obligations to bridge the digital divide, apart from employee and their family welfare programmes. However, pursuant to the provisions contained in the Section 135 of the Companies Act 2013 and Rules thereunder, Your Board, in its 154th meeting held on 7.3.2014 constituted the Corporate Social Responsibility Committee (CSR Committee) of the Board comprising Shri Ajai Vikram Singh Independent Director, Shri A.N. Rai Director (Enterprise) and Shri N.K. Gupta Director(CFA) as Members and the Secretary of the Company as the Secretary of the Committee. The Terms of Reference of the CSR Committee are as per the provisions of the Section 135 and other applicable provisions of the Companies Act 2013 and Rules made thereunder. Consequent upon the retirement of Shri A.N. Rai Director(E) on superannuation wef A/N 31.7.2015 and the completion of the three years tenure of appointment of Shri Ajai Vikram Singh Director on 16.7.2015, to comply with the provisions of the Act, Your Directors, in their 164th meeting held on 28.8.2015, re-constituted the Committee comprising (i) Smt Darshana Momaya Dabral, Govt. Director (ii) Smt. Sujata Ray Director (HRD) and (iii) Shri N.K.Gupta, Director(CFA). Consequent upon the appointment of Smt. Padma Iyer Kaul DDG [LFA] in DoT as Govt. Director in place of Smt. Darshana Momaya Dabral wef 18.9.2015, the Board of Directors have re-constituted the Committee comprising (i) Smt. Padma Iyer Kaul Govt. Director (ii) Smt. Sujata Ray Director (HRD) and (iii) Shri N.K. Gupta, Director (CFA).Secretary of the Company as the Secretary of the Committee. Quorum for the meetings and the Terms of Reference of the Committee are as prescribed under Section 178 and other applicable provisions of the Companies Act 2013 & Rules thereunder and the Guidelines, Instructions, Exemption Notifications, Orders etc. if any, to be/being issued by the Government of India time to time and remain in force for the time being. NOMINATION AND REMUNERATION COMMITTEE To comply with the provisions contained in Section 178 of the Companies Act 2013, the Board of Directors, in their 162nd meeting held on Tuesday, the 7th day of April 2015 constituted the Nomination and Remuneration Committee of the Board by re-constituting the existing Remuneration Committee of the Board. The Committee comprise Shri Ajai Vikram Singh, Non official Part Time (Independent) Director - Chairman, Prof. N. Balakrishnan, Non official Part Time (Independent) Director, Member, Smt. Rita A. Teaotia, Government Nominee Director, Member and Smt. Darshana Momaya Dabral, Government Nominee Director, Member. Secretary of the Company acts as the Secretary of the Committee. Terms of Reference, Roles and Responsibilities of the Committee shall be as per the provisions of Section 178 and other applicable provisions of the Companies Act 2013, Rules thereunder and the Guidelines, Instructions, Exemption Notifications, Orders etc. if any, to be/being issued by the Government of India time to time and remain in force for the time being. Being a wholly owned Government Company, the appointments, terms and conditions and remuneration of the Chairman and Managing Director and Whole Time Functional Directors are governed by the orders of the Govt. of India Department of Public Enterprises. Pursuant to the Govt. of India, Ministry of Corporate Affairs Notification No. 1/2/2014–CL.V, dated 5.6.2015,

27 provisions contained sub-sections (2)(3) and (4) of the Section 178 of the Act of 2013 are applicable to the Company with regard to appointment and remuneration of senior management and other employees. Consequent upon the completion of the three years tenure of appointment of Shri Ajai Vikram Singh and Prof. N. Balakrishnan Directors on 16.7.2015, all the four slots of Non official Part Time (Independent) Directors have fallen vacant and the Committee was left with only one member Ms. Darshana Momaya Dabral. Administrative Ministry, viz., Ministry of Communications and IT, D/o Telecommunication has already been requested to expedite the appointment of Non official Part Time (Independent) Directors. Smt. Aruna Sundararajan has been appointed as Govt. Director in place of Mrs. Rita A. Teaotia wef 29.7.2015. Pending appointment of Non official Part Time / Independent Directors, to comply with the provisions of the Act, Your Directors, in their 164th meeting held on 28.8.2015 re-constituted the Committee, comprising both the Government Directors and the CMD as Members and the Director (HRD) as Regular Invitee. Secretary of the Company acts as the Secretary of the Committee. Quorum for the meetings and the Terms of Reference of the Committee are as prescribed under Section 178 and other applicable provisions of the Companies Act 2013 & Rules thereunder and the Guidelines, Instructions, Exemption Notifications, Orders etc. if any, to be/being issued by the Government of India time to time and remain in force for the time being. The Committee, in its 6th meeting held on 18.9.2015 elected Smt. Aruna Sundararajan Govt. Director as Chairman of the Committee. Consequent upon the appointment of Shri N. Sivasailam Additional Secretary(T) in the D/o Telecom as Govt. Director by the GoI, MoC& IT DoT in place of Smt. Aruna Sundararajan with effect from 21.10.2015, Shri N. Sivasailam is a Member of the Committee. Consequent upon the appointment of Smt. Padma Iyer Kaul DDG (LFA) in the D/o Telecom as Govt. Director by the GoI, MoC& IT DoT in place of Smt. Darshana Momaya Dabral with effect from 18.9.2015, Smt. Padma Iyer Kaul is a Member of the Committee. AUDIT COMMITTEE OF THE BOARD Pursuant to the provisions contained in Section 177 of the Companies Act 2013 and Rules thereunder, the Board of Directors of the Company, in their 159th meeting held on 9th December 2014 re- constituted the Audit Committee of the Board, with the following Members – Shri AjaiVikram Singh, Non official Part Time (Independent) Director, Prof. N. Balakrishnan , Non official Part Time (Independent) Director, and Mrs. Darshana Momaya Dabral, Government Nominee Director. While the Director (Finance) shall be the regular invitee, Secretary of the Company acts as the Secretary of the Committee. The Committee, in its 57th meeting elected Prof. N. Balakrishnan as the Chairman of the Committee. Consequent upon the completion of the three years tenure of appointment of Shri Ajai Vikram Singh and Prof. N. Balakrishnan, Directors on 16.7.2015, the Committee was left with only member Ms. Darshana Momaya Dabral. Smt. Aruna Sundararajan has been appointed as Govt. Director in place of Mrs. Rita A. Teaotia wef 29.7.2015. Pursuant to the provisions contained in the Section 177 and other applicable provisions if any, of the Companies Act 2013 pending appointment of Non official Part Time (Independent) Directors, Your Directors, in their 164th meeting held on 28.8.2015 re-constituted the Audit Committee of

28 Annual Report 2014-15 the Board comprising comprising both the Government Directors and Director (HRD) as Members. Secretary of the Company acts as the Secretary of the Committee. Director (Finance) is regular invitee. The Committee, in its 59th meeting held on 18.9.2015 elected Smt. Aruna Sundararajan Govt. Director, as Chairman of the Committee. Consequent upon the appointment of Shri N. Sivasailam Additional Secretary(T) in the D/o Telecom as Govt. Director by the GoI, MoC& IT DoT in place of Smt. Aruna Sundararajan with effect from 21.10.2015, Shri N. Sivasailam is a Member of the Committee. Consequent upon the appointment of Smt. Padma Iyer Kaul DDG (LFA) in the D/o Telecom as Govt. Director by the GoI, MoC& IT DoT in place of Smt. Darshana Momaya Dabral with effect from 18.9.2015, Smt. Padma Iyer Kaul is a Member of the Committee. The Quorum for the meetings and the Terms of Reference of the Committee are as prescribed under Section 177 and other applicable provisions of the Companies Act 2013 & Rules thereunder and the Guidelines, Instructions, Exemption Notifications, Orders etc. if any, to be/being issued by the Government of India time to time and remain in force for the time being. DETAILS OF THE BOARD COMMITTEE MEMBERSHIPS AND CHAIRMANSHIPS OF THE DIRECTORS The details of Memberships of the Committees and Chairmanship of the Committees held across the companies is available in the Report on Corporate Governance forming part of this Report. VIGIL MECHANISM In compliance of CVC / DPE Guidelines, BSNL already has a full fledged Vigilance Mechanism, headed by an independent CVO. Pursuant to the mandate of the DPE’s MoU Task Force mandating for establishing a Whistle Blower mechanism; and, in compliance with the provisions of the Companies Act 2013, the Company has also put in place in place a Whistle Blower Policy. Same has been circulated widely and posted in the intranet portal of the company and is also being posted in the corporate website of the company. Under this mechanism, protected disclosure can be made by the whistle blower to the Chairman of the Audit Committee. Particulars of the Vigilance mechanism under CVC compliance are posted in the company’s website at www.bsnl.co.in at ‘contact us’. Further, BSNL has also entered into an agreement with the Transparency International to ensure transparency in tendering process. Further, apart from the Audit by the C&AG of India, Statutory and Branch Audits, Amenability to the Writ Jurisdiction of the Court, GoI’s Rules and Regulations, BSNL has its own Conduct, Disciplinary and Appeal Rules covering all the classes of employees including the Functional Directors. The Members of the Board and Sr. Management Personnel are also governed by the Code of Conduct laid down in accordance with the CG Norms. RISK MANAGEMENT BSNL, by virtue of being the successor of erstwhile Central Government Departments of the Telecom Services (DTO) and Telecom Operations (DTO) already had a codified set up with in built mechanism to foresee the potential risks and methods to arrest, control, ignore and/or respond to the risks. However, as mandated by the Department of Public Enterprises through Guidelines on Corporate Governance Norms for the Un–Listed CPSEs – further revised and made mandatory for

29 the CPSEs vide No.18(8)/2005–GM, dated the 14th May 2010–Company has laid down a Enterprise Risk Management Policy. For managing the affairs of the Company, the Board of Directors of the Company has delegated its powers to the Management Committee of the Board (MCB), the CMD and the Functional Directors and Below Board Functionaries, viz., the Executive Directors/CGMs/PGMs/GMs/TDMs/DGMs etc., as the case be. Considering the size and geographical spread of the organization vis–à–vis the delegation of powers made to the business heads and unit heads – who carry out the task of undertaking the risk management as a part of the normal business practice by integrating and aligning the same with corporate and operational objectives –the Business Heads in the Corporate Office; CGMs/PGMs/GMs and Other Unit Heads of the field units were designated as the Risk Management Administrators [RMAs]. With a view to continuously train and develop the employees in the risk management techniques segment, Risk Management Training Courses specially designed for the Senior Management Personnel who function as the Risk Management Administrators are being organized at the Training Centres of the Company. Establishing Risk Monitoring Centres being one of the Dynamic Parameters, for “Overseeing the mechanism of Enterprise Risk Management Mechanism”, inter–alia, the periodical review of risk assessment and minimization procedures, submission of recommendations / reports to the Executive Management and the Audit Committee of the Board, a ERM Committee comprising of all the Executive Directors has been constituted with Executive Director(Corporate Affairs) as Convenor. In addition to already existing Risk Management Policy which mandates the Risk Management Administrators for ensuring efficient litigation management and compliance of all applicable provisions of the laws, as directed by the Administrative Ministry, detailed instructions have been issued to all concerned to ensure and comply with the provisions of the NLP-2010. Accordingly, the Unit Heads of the Corporate Office and GM/DGM in–charge of Administration in the field units are the Nodal Officers for respective unit for overall policy implementation, who will be assisted by the “Officer-in-charge of litigation”, who shall be responsible for litigation administration and management of respective unit. CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION Your Company is engaged in service providing sector. As a responsible corporate citizen, your Company is fully concerned and committed as regards its responsibility for Environmental Protection. Therefore, all required measures for Energy Conservation and Use of Alternate Renewable Energy Resources are being taken at all levels. As per Company’s Energy Policy 2010, the energy efficient products are being used regularly. The implementation of Energy conservation measures is constantly being monitored. The steps taken have resulted in a saving of Rs. 97.2 crores against a target of Rs. 75 crores. In future, Your Company plans for provision of Renewable Energy Technologies for sustainable development due to energy saving and thereby reducing the carbon footprints too. FOREIGN EXCHANGE EARNINGS AND OUTGO Earned:- 135.53 Crore Used:- 116.22 Crore

30 Annual Report 2014-15

ADEQUACY OF INTERNAL FINANCIAL CONTROLS Being the successor of erstwhile Central Government Departments of Telecom Services and Telecom Operations, your company has a well defined and planned internal control systems and procedures commensurate with its size and operations. Internal checks are routinely carried out by the internal audit teams all over the country. Internal audit wing of the Company is headed by a Principal General Manager (PGM) level officer. Apart from its own Internal Audit machinery, Your Company, being the Central Public Sector Enterprise, is subject to the Resident Audit Office scheme of the Director General of P & T Audit under the aegis of C & AG of India, CVC Mechanism with independent CVO and the Guidelines of the Department of Public Enterprises. DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE ACT The Company neither invited nor accepted Deposits from the public which are covered under the Chapter V of the Companies Act 2013. RELATED PARTY DISCLOSURES The company has not entered into any material financial or commercial transactions with the Key Managerial Personnel, the Directors or the Management or their relatives or the companies and firms etc., in which they are either directly or through their relatives interested as Directors and/ or Partners except with the certain PSUs, where the Directors are Directors without the required shareholdings. The Company has obtained disclosures from all the Directors in this regard, which were noted by the Board. EXTRACTS OF ANNUAL RETURN Information required to be disclosed pursuant to Section 134(3)(a) of the Companies Act 2013 with respect to details being part of the extracts of the Annual Return, in Form MGT-9 forms part of the Report (Annexure-1). DIRECTORS RESPONSIBILITY STATEMENT To the best of knowledge and belief, and in terms of information and explanation offered and records submitted, the Directors of the Company pursuant to the provisions of Section 134 (3) (c) of the Companies Act, 2013 hereby confirm: (a) that in the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures; (b) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) that the directors had taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of Companies Act 1956 and 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) that the directors had prepared the annual accounts on a going concern basis;

31 (e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; (f) that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DISCLOSURES AND DECLARATION BY THE DIRECTORS The Company has complied with the provisions contained in Section 164 of the Companies Act 2013. None of the Directors of your Company is disqualified as per provision of Section 164 of the Companies Act 2013. Pursuant to the Govt. of India, Ministry of Corporate Affairs Notification No.1/2/2014-CL.V, dated 5.6.2015, the provisions contained in sub-section (2) of Section 164 are not applicable to BSNL being a wholly owned Government Company. STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS Pursuant to the provisions contained sub-section (7) of the Section 149, the Non official Part Time (Independent) Directors of the Company made declaration that they meet the criteria of independence as provided in sub-section (6) of the Companies Act 2013 which was noted by the Board of Directors. SEPARATE MEETING OF THE INDEPENDENT DIRECTORS No meeting of the Non-official Part Time (Independent) directors took place during the year under review. MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES Your Company being a Government Company, is exempted to furnish information under Section 197 of the Companies Act 2013 vide Notification dated 5.6.2015 issued by the Govt. of India, Ministry of Corporate Affairs. Further, being a wholly owned Government Company, the appointments, terms and conditions and remuneration of the Chairman and Managing Director and Whole Time Functional Directors are governed by the orders of the Govt. of India Department of Public Enterprises. COMPANY’S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION Size of the Board Being a Government Company, the power to appoint or remove a Director vest with the President of India. The Article of Association provides that the minimum strength of the Board shall not be less than three (03) and the maximum at fifteen (15). Composition of the Board The Board comprise 12 Directors, of which 6 [including the CMD] are whole time Directors; 2 Government Nominee Directors and 4 Non-official Part Time (Independent) Directors. Thus, the Board has the optimum mix of 50% Whole-time and 50% part-time Directors. The composition is as per the Corporate Governance Norms for the unlisted CPSEs, laid down by the Department of Public Enterprises. The following women Directors were there on the Board, during the year under review:– (a) Smt Rita Amitabh Teaotia Government Director [Wef 4.9.2012 to 29.7.2015]

32 Annual Report 2014-15

(b) Smt. Darshana Momaya Dabral, Government Director [Wef 29.9.2014 to 18.9.2015] Smt. Sujata Ray, who was appointed as Director(HRD) by the Government of India, Ministry of Communications and IT, D/o Telecommunications assumed the charge of duties wef 8.7.2015. Government of India, Ministry of Communications and IT, D/o Telecommunications appointed Smt. Aruna Sundararajan Additional Secretary & Administrator USOF in D/o Telecom as Govt. Director in place of Smt. Rita A.Teaotia wef 29.7.2015. Government of India, Ministry of Communications and IT, D/o Telecommunications appointed Smt. Padma Iyer Kaul DDG[LFA] in D/o Telecom as Govt. Director in place of Smt. Darshana Momaya Dabral with effect from 18.9.2015. Formal Annual Evaluation Pursuant to Govt. of India, Ministry of Corporate Affairs Notification No. 1/2/2014-CL.V, dated 5.6.2015, following provisions of the Companies Act 2013 relating to Appointment of Directors, their Remuneration and Evaluation etc., are not applicable to BSNL:– Clause (e) of sub-section (3) of Section 134 relating to directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters prescribed under Section 178 (3); Clause (p) of sub-section (3) of Section 134 regarding formal annual evaluation made by the Board of its own performance and that of its committees and individual directors. The Govt. of India, through the Administrative Ministry appoints the CMD, the Whole Time Functional Directors, Government Nominee Directors and the Non official Part Time (Independent) Directors on the Board of Directors of the Company. Terms and conditions of Appointment of CMD and Whole Time Directors and their Remuneration is determined by the Govt. of India; and, their evaluation is being done by the appropriate mechanisms as laid down by the Govt. of India time to time. Your Company, being a wholly owned Government Company under the aegis of the Govt. of India, Ministry of Communications and IT, D/o Telecommunications, is amenable to and governed by the Orders, Instructions, Guidelines etc., of the Govt. of India’s Nodal Ministry/Department. Accordingly, the Board diversity of the Company is being maintained by the Administrative Ministry in accordance with the Guidelines of the Department of Public Enterprises(DPE). CHANGES THAT TOOK PLACE IN BOARD OF DIRECTORS AND KMPs  Government of India, Ministry of Communications and IT, Department of Telecommunications vide order No.1-4/2013–PSA(Pt.1), dated 15th January 2015 appointed Shri Anupam Shrivastava Director (Consumer Mobility) as Chairman & Managing Director in scale of pay of Rs. 80,000–1,25,000/– (IDA) for a period of five years from the date of his assumption of the charge of the post, or till the date of his superannuation, or until further orders, whichever is the earliest. Shri Shrivastava assumed the Charge of the office of CMD w.e.f. the A/N of 15th January 2015 and relinquished the charge of the office of Director (CM) from that date. Prior to this, Additional charge of the post of CMD was held by Shri A.N. Rai Director (Enterprise) w.e.f. 1.7.2014 to 15.1.2015 pursuant to Government of India, Ministry of Communications & IT, D/o Telecommunications, Order No. 1-1/2014-PSA dated 30.6.2014 which was extended from time to time. Shri R.K. Upadhyay was the CMD, till 30.6.2014.

33 Consequent upon the appointment and assumption of the charge of CMD by Shri Anupam Shrivastava on 15.1.2015, Shri A.N. Rai Director(E) relinquished the additional charge of the post of CMD.  Government of India, M/o C & IT, DoT vide No.1-1/2015–PSA, dated 8th July 2015, appointed Smt. Sujata Ray as Director (HRD) in the scale of pay of Rs. 75,000–1,00,000/– on immediate absorption basis for a period of five years from the date of assumption of charge of the post, or till the date of her superannuation, or until further orders, whichever is the earliest. Smt. Sujata Ray assumed the charge of office of Director(HRD) on 8th July 2015. Prior to this, pursuant to the Government of India, Ministry of Communications & IT, D/o Telecommunications, Order No.1-4/2012–PSA, dated the 19.6.2012 which was extended from time to time Shri A.N. Rai Director(E) was holding the additional charge of the post of Director (HRD). Consequent upon the appointment and assumption of the charge of Director(HRD) by Smt. Sujata Ray on 8.7.2015, Shri A.N.Rai relinquished the additional charge of Director(HRD).  Pursuant to the Govt. of India, Ministry of Communications and IT D/o Telecommunications Order No.1-7/2010–PSA, dated 17.7.2012, Shri Ajai Vikram Singh and Prof. Balakrishnan were appointed by the President of India under Article 111 of the Articles of Association of the Company as Non official Part Time (Independent) Directors, for a period of three years or until further orders, whichever is earlier. Consequent upon the completion of the three years tenure of appointment on 16.7.2015, Shri Ajai Vikram Singh and Prof. Balakrishnan are ceased to be Directors with effect from 17.7.2015.  On attaining the age of superannuation Shri A.N. Rai Director (Enterprise) retired from service wef A/N of 31.7.2015.  Pursuant to the Government of India, Ministry of Communications and IT, D/o Telecommunications Order No. 5-2/2013–PSA(Pt.1), dated 29.7.2015 read with the provisions of the Section 161 of the Companies Act 2013 and Article 111 of the Articles of Association of the Company Smt. Aruna Sundararajan has been appointed as Government Nominee Director on the Board of Directors of the Company in place of Smt. Rita A. Teaotia, with effect from 29.7.2015.  Government of India, M/o C & IT, DoT vide No.1–5/2014–PSA dated 27th May 2015 appointed Shri N.K. Mehta ED (IT & CA) as Director (Enterprise) on immediate absorption basis, in scale of pay of Rs. 75000-100000/–(IDA) for a period of five years from the date of assumption of charge of the post on or after 1.8.2015 or till the date of his superannuation, or until further orders whichever is the earliest. Shri Mehta assumed the charge of office of Director(Enterprise) on 1st August 2015(F/N).  Government of India, Ministry of Communications & IT, D/o Telecommunications, vide Order No.1-4/2012–PSA dated 5.2.2014 entrusted the additional charge of the post of Director (Finance) to Shri Anupam Shrivastava Director (CM) and, vide further orders, extended the same time to time. Consequent upon his elevation as CMD w.e.f. 15.1.2015, the said additional charge continued with him vide GoI, MoC & IT, DoT order No. 1-2/2015–PSA dated 22.1.2015; and, vide further orders, extended the same time to time.  Thereafter, Government of India, Ministry of Communications & IT, D/o Telecommunications, vide No.1-2/2015–PSA dated 21.10.2015 entrusted the Additional Charge of the post of Director(F) to Ms.S.T.RAY (Smt. Sujata Ray) Director (HRD) with immediate effect, for a period upto 29.2.2016, or till the appointment of a regular incumbent to the post, or until

34 Annual Report 2014-15

further orders, whichever is the earliest. During the period of holding additional charge as aforesaid, Ms.S.T.Ray will not be entitled to any additional remuneration.  Government of India, Ministry of Communications and IT, Department of Telecommunications vide No.1-2/2015–PSA, dated 22.1.2015 entrusted the additional charge of the post of Director (Consumer Mobility) to Shri N.K. Gupta Director (Consumer Fixed Access) for a period of three months wef 16.1.2015 or until further orders, whichever is the earliest.  Thereafter, GoI, MoC& IT, DoT vide No.1-2/2015–PSA, dated 14.5.2015 entrusted the additional charge of the post of Director(CM) to Shri AN Rai Director(Enterprise) with immediate effect for a period upto 31.7.2015.  Consequent upon the retirement of Shri A.N.Rai on superannuation wef A/N 31.7.2015 and assumption of the charge of office of Director(E) by Shri N.K. Mehta wef 1.8.2015, the Government of India, M/o C & IT, D/o Telecommunications, vide Order No. 1-2/2015(Pt.), dated 3.8.2015 entrusted the additional charge of the post of Director(CM) to Shri N.K.Mehta Director(E) for a period of three months wef 1.8.2015 or till the appointment of regular incumbent or until further orders, whichever is earliest.  Pursuant to the Government of India, Ministry of Communications and IT, D/o Telecommunications Order No. 5-2/2013–PSA(Pt.III), dated 18.9.2015 read with the provisions of the Section 161(3) of the Companies Act 2013 and Article 111 of the Articles of Association of the Company Smt. Padma Iyer Kaul has been appointed as Government Nominee Director on the Board of Directors of the Company in place of Smt. Darshana Momaya Dabral with effect from 18.9.2015.  Pursuant to the Government of India, Ministry of Communications and IT, D/o Telecommunications Order No. 5-2/2013–PSA(Pt.I), dated 21.10.2015 read with the provisions of the Section 161(3) of the Companies Act 2013 and Article 111 of the Articles of Association of the Company Shri N. Sivasailam has been appointed as Government Nominee Director on the Board of Directors of the Company in place of Smt. Aruna Sundararajan with effect from 21.10.2015.  Government of India, Ministry of Communications and IT, D/o Telecommunications vide Order No.1-3/2015-PSA, dated 3.11.2015, have appointed Shri R.K.Mittal Director(CM) on immediate absorption basis in the scale of pay of Rs.75000-100000(IDA) for a period of five years from the date of his assumption of charge of post, or till the date of superannuation, whichever is the earliest. Shri Mittal assumed the charge of office wef 4.11.2015(F/N).  Consequent upon the assumption of the charge of office of Dir(CM) by Shri Mittal, Shri N.K.Mehta relinquished the additional charge of the post of Dir(CM). Your Directors place on record their deep appreciation for the valued contribution made by Shri A.N. Rai Director (Enterprise), Smt. Rita Amitabh Teaotia, Smt. Darshana Momaya Dabral and Smt. Aruna Sundararajan Government Directors, Shri Ajai Vikram Singh and Prof. N. Balakrishnan Non official Part Time (Independent) Directors, during their association with the company. STATUTORY AUDITORS M/s Walker Chandiok & Co., Chartered Accountants, New Delhi were appointed as Statutory Auditors of the Company by the Comptroller & Auditor General of India. In addition to the Statutory Auditors 46 Branch Auditors were also appointed for the year 2014-15. The Report of the Statutory Auditors and the comments of the Comptroller and Auditor General of India, alongwith replies of the Management thereto forms part of this Report.

35 COST AUDITORS Your Board has appointed M/s Balwinder & Associates, Cost Accountants Firm Registration No. 000201 as Cost Auditor of the Company for conducting the Cost Audit and Accounting Separation Report (ASR) Audit for the financial year 2015-16. Further, pursuant to the provisions of Section 148 of the Companies Act 2013 and Rule 14(a) of the Companies (Audit and Auditors) Rules 2014, as recommended by the Audit Committee, Your Board has approved the remuneration of Rs. 3,99,000/- [Rupees Three Lakh Ninety–Nine Thousand only] plus applicable taxes as Audit Fee to the Cost Auditor, subject to ratification of the same by the Members in the ensuing Annual General Meeting. The Cost Audit Report for the year 2013-14 was filed with the MCA, Registrar of Companies on 12.1.2015. SECRETARIAL AUDITORS Pursuant to the provisions contained in Section 204 of the Companies Act 2013 and Rules thereunder, your Board appointed M/s VAP & Associates, Company Secretaries [ COP No.13901 ] the Secretarial Auditor of the Company for conducting the Secretarial Audit for the year 2014-15. The Secretarial Auditor submitted their Report in Form MR–3, which forms part of this report.

Dt.23.07.2015- Shri Rakesh Garg, Secretary DOT,ShriAnupamShrivastava,CMD,BSNL congratulating through video call from Sanchar Bhawan New Delhi to winners of photo and video competition organized by BSNL at Wi-Fi Hotspots on 04.07.2015 to promote Wi-Fi services among customers.

36 Annual Report 2014-15

GENERAL Your Directors state that there is no disclosure or reporting required in respect of following, as no transactions under these provisions were reported / took place during the year under review:- (i) The Company is neither a subsidiary nor has subsidiaries, joint-ventures or associate companies during the year; (ii) Details relating to Deposits covered under Chapter V of the Act; (iii) Section 43 – Relating to Issue of Equity Shares with differential rights; (iv) Section 54 – Relating to Issue of Sweat Equity shares; (v) Section 62 – Employees Stock Option Scheme; (vi) Proviso to Section 67(3) – Details of voting rights not exercised directly by the employees in respect of shares to which the scheme for provision of money for purchase of subscription for shares by employees or by trustees for the benefit of employees, as per the Rule; (vii) Section 131 – Reasons for revision of financial statement and Board Report (ix) Section 188 – Contract with the related parties.

37 ACKNOWLEDGEMENTS Your Directors would like to place on record their sincere appreciation and gratitude to the Government of India Ministry of Communications and IT, De/o Telecommunications and other Ministries/Departments, subscribers of Company’s telecom services, the stakeholders, and bankers and to all the State Governments and regulatory authoritiesfor their continued cooperation and invaluable support. Your Directors express their deep appreciation for the hardwork and dedicated efforts put in by the employees at all levels and look forward to their continued contribution in achieving the mission and objective of the Company.

For and on behalf of the Board of Directors,

Sd/– [ANUPAM SHRIVASTAVA] Place: NEW DELHI CHAIRMAN AND MANAGING DIRECTOR Dated: 17.11.2015

DECLARATION BY THE CHAIRMAN AND MANAGING DIRECTOR REGARDING COMPLIANCE WITH THE CODE OF CONDUCT BY THE BOARD MEMBERS AND THE SENIOR MANAGEMENT PERSONNEL OF THE COMPANY DURING THE FINANCIAL YEAR 2014–15 I, Anupam Shrivastava, Chairman and Managing Director Bharat Sanchar Nigam Limited, do hereby declare that all the Members of the Board and the Senior Management Personnel of the Company have affirmed their compliance to the Code of “Conduct for Board Members and the Senior Management Personnel” during 2014-15

Sd/– [ANUPAM SHRIVASTAVA] Place: NEW DELHI CHAIRMAN AND MANAGING DIRECTOR Dated: 25.8.2015

38 Annual Report 2014-15

ANNEXURE 1 FORM MGT–9 EXTRACT OF ANNUAL RETURN As on the financial year ended on 31.03.2015 [Pursuant to section 92(3)of the Companies Act 2013 and Rule 12(1) of the Companies (Management and Administration) Rules 2015] I. REGISTRATION AND OTHER DETAILS

(i) CIN U74899DL2000GOI107739 (ii) Registration Date 15th September 2000 (iii) Name of the Company Bharat Sanchar Nigam Limited (iv) Category/Sub-category of the Wholly Owned Government Company Company (v) Address of the Registered office and Bharat Sanchar Bhawan, Harish Chandra Mathur contact details Lane, Janpath, New Delhi-110001. H.C.Pant, CS & Sr.GM(L) / PH; 23353395 / Fax: 23353389 / Mail: [email protected] (vi) Whether listed company Un–Listed (VII) Name, Address and Contact details of Indus Portfolio Private Limited, Shri Bharat Registrar and Transfer Agent, if any Bhushan Manager–SHR, G-65, Bali Nagar, New Delhi–110015. Phone 011-47671214/47671217 Fax 25449863 II. PRINCIPAL ACTIVITIES OF THE COMPANY All the business activities contributing 10% of the total turnover of the company shall be stated:

SNo Name and Description of NIC code of the Product/ % of total turnover of the main products/services Service company 1 Basic services Not available 34.58 2 Cellular services Not available 47.84 3 Broadband services Not available 17.58 III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

S. No Name and Address of CIN/GLN Holding/subsidiary/ % of shares held Section the Company Associate NOT APPLICABLE

39 IV. SHARE HOLDING PATTERN ( Equity Share Capital Breakup as percentage of Total Equity) (i) Category-wise Share Holding

Category of No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Shareholders change during the year Demat Physical Total % of Demat Physical Total % of Total Total shares Shares A. Promoters (1) Indian (g) Individual/ – – – – – – – – – HUF (h) Central Govt. – Equity: Equity: 100% Equity: Equity: 100% – 500,00,00,000 500,00,00,000 500,00,00,000 500,00,00,000 Preference: Preference: Preference: Preference: 750,00,00,000 750,00,00,000 750,00,00,000 750,00,00,000 (i) State Govt(s) – – – – – – – – – (j) Bodies Corp – – – – – – – – – (k) Banks/FI – – – – – – – – – (l) Any other… – – – – – – – – – Sub–Total (A)(1) – Equity: Equity: 100% – Equity: Equity: 100% – 500,00,00,000 500,00,00,000 500,00,00,000 500,00,00,000 Preference: Preference: Preference: Preference: 750,00,00,000 750,00,00,000 750,00,00,000 750,00,00,000

(2) Foreign (a) NRIs – – – – – – – – – – Individuals (b) Other– – – – – – – – – – Individuals (c) Bodies Corp – – – – – – – – – (d) Banks/FI – – – – – – – – – (e) Any other – – – – – – – – – Sub–Total (A)(2) – – – – – – – – – Total Equity: Equity: 100% – Equity: Equity: 100% – Shareholding of 5,00,00,00,000 5,00,00,00,000 5,00,00,00,000 5,00,00,00,000 Promoter (A) = Preference: Preference: Preference: Preference: (A)(1) + (A)(2) 7,50,00,00,000 7,50,00,00,000 7,50,00,00,000 7,50,00,00,000

B. Public Shareholding 1,.Institutions (a) Mutual Funds – – – – – – – – – (b) Banks/FI – – – – – – – – – (c) Central Govt. – – – – – – – – – (d) State Govt(s) – – – – – – – – – (e) Venture – – – – – – – – – Capital Funds (f) Insurance – – – – – – – – – Companies

40 Annual Report 2014-15

Category of No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Shareholders change during the year Demat Physical Total % of Demat Physical Total % of Total Total shares Shares (g) FIIs – – – – – – – – – (h) Foreign – – – – – – – – – Venture Capital Funds (i) Others – – – – – – – – – (Specify) Sub–Total(B)(1) – – – – – – – – – 2.Non- Institutions (a) Bodies Corp – – – – – – – – – (i) Indian – – – – – – – – – (ii) Overseas – – – – – – – – – (b) Individuals – – – – – – – – – (i) Individual – – – – – – – – – shareholders holding nominal share capital upto Rs.1 lakh (ii) Individual – – – – – – – – – shareholders holding nominal share capital in excess of Rs.1 lakh (c) others – – – – – – – – – (specify) Sub–Total (B)(2) – – – – – – – – – Total Public – – – – – – – – – Shareholding (B) = (B)(1) + B(2) C.Shares held – – – – – – – – – by Custodian for GDRs & ADRs Grand Total (A – – – – – – – – – + B + C)

(ii) Shareholding of Promoters

Sl. Shareholders Shareholding at the beginning of the year Shareholding at the end of the year % change No Name in share holding No. of Shares % of total % of Shares No. of Shares % of total % of Shares during shares of Pledged shares of Pledged / en- the year the Com- / encum- the Com- cumbered to pany bered to pany total shares total shares 1 The President Equity: 100% NIL Equity: 100% NIL NIL of India and 5,00,00,00,000 5,00,00,00,000 Nominees of Preference: Preference: President of 7,50,00,00,000 7,50,00,00,000 India

41 (iii) Change in Promoters’ shareholding (please specify, if there is no change

S. Shareholding at the beginning of Cumulative Shareholding during the No the year year No. of Shares % of total No. of Shares % of total shares shares of the of the company Company At the beginning of the year Equity: 100% Equity: 100% 5,00,00,00,000 5,00,00,00,000 Preference: Preference: 7,50,00,00,000 7,50,00,00,000 Date wise Increase/Decrease in Promoters There is no change in the promoters holding during the year 2014-15. Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer / bonus /sweat equity etc.) At the End of the Year Equity: 100% Equity: 100% 5,00,00,00,000 5,00,00,00,000 Preference: Preference: 7,50,00,00,000 7,50,00,00,000 (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters, and Holders of GDRs and ADRs):

S. Shareholding at the beginning of the Cumulative Shareholding during No year the year For each of the Top 10 Shareholders No. of Shares % of total shares of No. of Shares % of total shares of the Company the company At the beginning of the year NIL NIL NIL NIL Date wise Increase/Decrease in Promoters NIL NIL NIL NIL Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer / bonus /sweat equity etc.) At the end of the year (or on the date of separation, NIL NIL NIL NIL if separated during the year)

(v) Shareholding of Directors and Key Managerial Personnel:

S. Shareholding at the beginning of Cumulative Shareholding during No the year the year For each of the Directors and KMP No. of Shares % of total shares No. of Shares % of total shares of the Company of the company At the beginning of the year NIL NIL NIL NIL Date wise Increase/Decrease in Promoters NIL NIL NIL NIL Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment /transfer /bonus / sweat equity etc.) At the end of the year NIL NIL NIL NIL

42 Annual Report 2014-15

V. INDEBTEDNESS Indebtedness of the Company including interest outstanding / accrued but not due for payment

Secured Loans Unsecured Loans Deposits Total excluding Indebtedness deposits [Amounts in Crores of Rupees] Indebtedness at the beginning of the financial year (i) Principal Amount 0 3738.5329 0 3738.5329 (ii) Interest due but not paid 0 0 0 0 (iii) Interest accrued but not due 0 3.5327 0 3.5327 Total (i) + (ii) + (iii) 0 3742.0656 0 3742.0656 C. Change in Indebtedness during the financial year Addition 56.1948 8846.1447 0 8902.33953 Reduction 0 6255.9673 0 6255.9673 Net Change 56.1948 2590.17743 0 2646.37223 Indebtenness at the end of the financial year (i) Principal Amount 56.1948 6328.71033 0 6384.90513 (ii) Interest due but not paid 0 0 0 0 (iii) Interest accrued but not due 0.0162 2.8767 0 2.8929 Total (i) +(ii)+(iii) 56.2110 6331.5870 0 6387.7980 VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Chairman and Managing Director and Whole Time Directors

S. Particulars of Total No Remuneration Amount Shri R.K. Shri Shri Anupam Shri N.K. Upadhyay A.N. Rai Shrivastava Gupta CMD* [*Upto Director(E) CMD Director(CFA) 30.6.2014] [Amounts in Rupees] 1 Gross Salary (a)Salary as per provisions 687021 2597564 2071380 2441167 7797132 contained in Section 17(1) of the Income Tax Act 1961 (b)Value of Perquisites u/s 35751 96519 113150 99984 345404 17(2) Income-Tax Act 1961 ©Profits in lieu of salary – – – – – under Section 17(3) of Income Tax Act 1961 2 Stock option – – – – –

43 S. Particulars of Total No Remuneration Amount Shri R.K. Shri Shri Anupam Shri N.K. Upadhyay A.N. Rai Shrivastava Gupta CMD* [*Upto Director(E) CMD Director(CFA) 30.6.2014] [Amounts in Rupees] 3 Swat Equity – – – – – 4 Commission – – – – – –as % of profit – – – – – –others, specify – – – – – 5. Others, please specify – – – – – Total(A) 722772 2694083 2184530 2541151 8142536 Ceiling as per the Act Being a wholly owned Govt. Company, provisions of Section 197 relating to managerial remuneration are fully exempt to the Company, pursuant to Govt. of India, Ministry of Corporate Affairs Notification GSR 463(E), dated 5.6.2015. B. Remuneration to other Directors:

SNo Particulars of Total Remuneration Amount Shri Ajai Prof. N. Smt.RitaA. Smt.Darshana Momaya Vikram Singh Balakrishnan Teaotia Govt. Dabral Govt. Director Director Director Director [Wef 29.9.2014] [Amount in Rupees] 3.Independent Directors – – – –Fee for attending Board 1,20,000 1,00,000 – – 2,20,000 Committee meetings –Commission – – – – – –Others, please specify – – – – – Total(1) 1,20,000 1,00,000 – – 2,20,000 4.Other Non Executive – – NIL NIL NIL Directors –Fee for attending Board – – NIL NIL NIL Committee meetings –Commission – – NIL NIL NIL –Others, please specify – – NIL NIL NIL Total(2) – – NIL NIL NIL Total(B) = (1 + 2) 1,20,000 1,00,000 NIL NIL 2,20,000 Total Managerial 1,20,000 1,00,000 NIL NIL 2,20,000 Remuneration

44 Annual Report 2014-15

SNo Particulars of Total Remuneration Amount Shri Ajai Prof. N. Smt.RitaA. Smt.Darshana Momaya Vikram Singh Balakrishnan Teaotia Govt. Dabral Govt. Director Director Director Director [Wef 29.9.2014] [Amount in Rupees] Overall Ceiling as per Rule 4 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules the Act 2014 provides for maximum of Rs.1,00,000/- per meeting.

The Board of Directors, in their 112th meeting held on 2.7.2008, pursuant to the provisions contained in Article No.115 of the AoA of the Company, fixed the sitting fee as Rs.10,000/– per meeting of the Board or Committees thereof.

Being a wholly owned Govt. Company, provisions of Section 197 relating to managerial remuneration are fully exempt to the Company, pursuant to Govt. of India, Ministry of Corporate Affairs Notification GSR 463(E), dated 5.6.2015.

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

SNo Particulars of Remuneration Shri H.C.Pant, – – – – Total Company Secretary& Amount Sr.GM(L)

1 Gross Salary [Amount in Rupees] (a)Salary as per provisions 2173479 – – – – 2173479 contained in Section 17(1) of the Income Tax Act 1961 (b)Value of Perquisites u/s 17(2) 280899 – – – – 280899 Income-Tax Act 1961 ©Profits in lieu of salary under – – – – – – Section 17(3) of Income Tax Act 1961 2 Stock option – – – – – – 3 Swat Equity – – – – – – Commission – – – – – – –as % of profit – – – – – – –others, specify – – – – – – 5. Others, please specify – – – – – – Total 2454378 – – – – 2454378 VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:

Type Section of the Brief Details of Authority Appeal made, Companies Description Penalty/ [RD / if any (give Act Punishment NCLT/ details) Compounding COURT] fees imposed A.COMPANY Penalty NIL NIL NIL NIL NIL Punishment NIL NIL NIL NIL NIL Compounding NIL NIL NIL NIL NIL

45 Type Section of the Brief Details of Authority Appeal made, Companies Description Penalty/ [RD / if any (give Act Punishment NCLT/ details) Compounding COURT] fees imposed B.DIRECTORS Penalty NIL NIL NIL NIL NIL Punishment NIL NIL NIL NIL NIL Compounding NIL NIL NIL NIL NIL C.OTHER OFFICER IN DEFAULT Penalty NIL NIL NIL NIL NIL Punishment NIL NIL NIL NIL NIL Compounding NIL NIL NIL NIL NIL

22.09.2015-A glimpse of HOCC meeting held at BSNL Corporate office,New Delhi.

46 Annual Report 2014-15

ANNEXURE 2 MANAGEMENT DISCUSSION AND ANALYSIS REPORT INDUSTRY STRUCTURE AND DEVELOPMENTS The focus and thrust of the Government of India on Digital India has added philip to the Indian Telecom and IT Sector, which are poised for a major breakthrough in the coming days. The applications based mobile technology is fast emerging as the prime enabler of the economic growth. The advancement of technology and new applications had just taken the mobile – be it 2G, 3G or 4G - to health care, finance, education. With the continued focus of the Government for e-delivery, there is a huge potential of growth for the sector. With the availability of right environment, it appears, this sector may sustain its forward growth. MAJOR REGULATORY DEVELOPMENTS/CHALLENGES STRENGTHS / OPPORTUNITIES/WEAKNESS/THREATS Spread across the nook and corner of the country - connecting remote and inaccessible areas, BSNL has a bold and strong presence in the country as a leading public sector telecom service provider. With a huge tower network, large back-haul capacity and state of art last mile connectivity, BSNL has strong potential to emerge as a stable player in the competitive, technology and tariff driven market. Well-trained and technically sound workforce of the Company makes it unique. The products and services being subject to regulatory framework added with multiple presence of other private operators, churning of customers is a major concern. Complete Mobile Number Portability and host of other regulatory measures tend to have an impact on the operations. OUTLOOK The Digital India mission of the Government aiming to transform and prepare the country for a knowledge society future poses a strong business case for the telecom and IT sector. The nine pillars of the Digital India mission viz., Broadband highways, Universal Access to Mobile Connectivity, Public Internet Access Programme, e-Governance - Reforming Government through Technology, e-Kranti - Electronic Delivery of Services, Information for All, Electronics Manufacturing, IT for Jobs and Early Harvest Programmesare, no doubt, will lay a strong foundation for further spread of the operations. Your Company having presence all across the country will play significant role under Digital India Mission. RISKS AND CONCERNS INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Being the successor of erstwhile Central Government Departments of Telecom Services and Telecom Operations, your company has a well defined and planned internal control systems and procedures commensurate with its size and operations. Internal checks are routinely carried out by the internal audit teams all over the country. Internal audit wing of the Company is headed by a Senior Management level officer. Apart from its own Internal Audit machinery, Your Companyis subject to the Resident Audit Office scheme of the Director General of P & T Audit under the aegis of C & AG of India, CVC Mechanism

47 with independent CVO and the Guidelines of the Department of Public Enterprises. In addition, for each financial year, the Statutory and Branch Auditors are appointed by the C & AG of India. In accordance with the Guidelines on Corporate Governance Norms issued by the Department of Public Enterprises, the Audit Committee of the Board had discussions with the Internal Audit Teams and reviewed the Internal Audit Paras. Further, pursuant to the directions of the Government of India, Ministry of Corporate Affairs for Cost Audit of the Telecommunication Companies by the Cost Accountants, your Company has appointed Cost Auditors. Pursuant to the mandate of the Companies Act 2013, the appointments of Internal Auditors and the Secretarial Auditor for the year 2014-15 were made by the Board of Directors consequent upon related provisions of the Act coming into force. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE During the year 2014-15, the company incurred a loss of Rs. 8234.09 Crores [Previous year 7,019.76 Crore]. While the Income from services is Rs. 27242.23 Crores [Previous year Rs. 26,153.26 Crore], other income was Rs. 1402.97 Crores [Previous year Rs. 1,843.09 Crore]. There was an increase of 4.16% in Income from services in comparison to previous year, the other income decreased by 23.88%. There was an increase of 2.32% in the total Income in comparison with the previous year. The Employee benefit expenses and Office & Administration expense has shown a decrease of 3.06% and 1.54% respectively. The positive revenue growth of 2.10% in the year under review in comparison to previous years is testimony to the turning around of the Company. ENVORONMENTAL PROTECTION AND CONSERVATION, TECHNOLOGICAL CONSERVATION, RENEWABLE ENERGY DEVELOPMENTS, FOREIGN EXCHANGE CONSERVATIONS BSNL is a telecom service providing Company. As a responsible corporate citizen, the Company is fully concerned and committed as regards its responsibility for Environmental Protection. Therefore, all required measures for Energy Conservation and Use of Alternate Renewable Energy Resources are being taken at all levels. As per Company’s Energy Policy 2010, the energy efficient product are being used regularly. The implementation of Energy conservation measures is constantly being monitored. The steps taken have resulted in a saving of Rs. 97.2 cr against a target of Rs. 75 crores. In future, the Company plans for provision of Renewable Energy Technologies for sustainable development due to energy saving and thereby reducing the carbon footprints too. CAUTIONERY STATEMENT These discussions are forward looking within the meaning of the applicable laws and regulations. Actual performance may deviate or vary from the explicit or implicit expectations.

48 Annual Report 2014-15

ANNEXURE 3 REPORT ON CORPORATE GOVERNANCE

Corporate Governance, in plain terms aims to maximize the value of all the stakeholders through a set of guidelines and principles. Being a leading pan-India telecom service provider to the nation, BSNL is committed to adopting the globally accepted best corporate governance norms practices. With highly institutionalized system aiming for transparency, disclosures and internal control, BSNL has already been complying with most of the codified norms, viz.–  Composition of the Board;  Complete conformity with Board procedure, specially, the Secretarial Standards laid down by the Institute of Company Secretaries of India;  Constitution of the Audit Committee of the Board headed by Non-official Part-Time (Independent) Director, with 2/3rd of the Members comprising other than Whole-–time Directors;  Constitution of the Nomination and Remuneration Committee of the Board as mandated by the Section 178 of the Companies Act 2013;  Constitution of the Corporate Social Responsibility Committee (CSR Committee) of the Board, as mandated by the provisions of Section 135 of the Companies Act 2013 and Rules thereunder;  Clear cut demarcation of powers with Delegation of Financial and Administrative Powers to the Management Committee of the Board, CMD and the Functional Directors, and below Board–level executives;  Conduct, Discipline and Appeal Rules for all the Employees and reporting systems;  Code of Conduct for the Members of the Board and annual affirmation to the Code by the Members of the Code;  Code of Conduct for the Senior Management Personnel of the Company and annual affirmation to the Code by the Senior Management Personnel;  Disclosures by the Directors to the Board of Directors and filing of requisite forms evidencing the taking note of the disclosures by the Board with the appropriate authorities;  Enterprise Risk Management Policy of the Company;  Appointment of Statutory and Branch Auditors by the C & AG of India;  Appointment of Cost Auditors;  Appointment of Secretarial Auditor;  Certification of compliance of Corporate Governance Norms by an outside practicing professional;  Audit jurisdiction of the DG P & T’s Resident Audit Office scheme,  Dedicated Internal Audit Set up;  Amenability with the Guidelines of Central Vigilance Commission;  Outside independent personnel as CVO;

49  Dedicated and full-fledged Vigilance set up across the units of the country;  Whistle blower policy in vogue;  Compliance of the Orders and Guidelines of the Government of India – Department of Public Enterprises, Administrative Ministry and host of other compliances.

BOARD OF DIRECTORS Size of the Board Being a wholly owned Government Company, the provisions of the Companies Act 2013 relating to appointment, remuneration, evaluation etc., of the Directors are not applicable to your Company. The power to appoint or remove a Director vest with the President of India. The Article of Association provides that the minimum strength of the Board shall not be less than three (03) and the maximum at fifteen (15). Composition of the Board The Board comprise of 12 Directors, of which 6 [including the CMD] are whole time Directors; 2 Government Nominee Directors and 4 Non-official Part Time Directors. Thus, the Board has the optimum mix of 50% Whole-time and 50% part–time Directors. The composition is as per the Corporate Governance Norms for the unlisted CPSEs, laid down by the Department of Public Enterprises. The details of the composition of the Board of Directors is as follows:– Whole-Time Directors [06 including CMD] Chairman and Managing Director Shri AnupamShrivastav w.e.f. 15.1.2015. Prior to this, Additional charge of the post of CMD was held by Shri A.N. Rai Director(Enterprise) w.e.f. 1.7.2014 to 15.1.2015 pursuant to Government of India, Ministry of Communications & IT, D/o Telecommunications, Order No. 1-1/2014-PSA dated 30.6.2014 which was extended from time to time. Shri R.K.Upadhyay was the CMD till 30.6.2014. Director (Enterprise) Shri A.N. Rai Upto 31.7.2015. Shri N.K. Mehta Wef 1.8.2015 Director(CFA) Shri N.K. Gupta [Wef 1.6.2012] Director(CM) Shri R.K.Mittal [Wef 4.11.2015] Shri Anupam Shrivastava Upto 15.1.2015 Consequent upon the elevation of Shri Anupam Shrivastava as CMD, GoI, MoC& IT, DoT vide Order No.1-2/2015-PSA, dated 22.1.2015 entrusted the additional charge of the post to Shri N.K. Gupta Director(Consumer Fixed Access) for a period of three months wef 16.1.2015 or until further orders, whichever is the earliest. Thereafter, vide orders of even number dated 14.5.2015 entrusted

50 Annual Report 2014-15 the additional charge of the post of Director(CM) to Shri AN Rai Director(Enterprise) with immediate effect for a period upto 31.7.2015. On attaining the age of superannuation, Shri Rai retired from service wef 31.7.2015. Thereafter, consequent upon the joining of Shri N.K.Mehta as Director(E), GoI, MoC & IT, vide order Order No. 1-2/2015(Pt.), dated 3.8.2015 entrusted the additional charge of the post of Director (CM) to Shri N.K.Mehta Director(E) for a period of three months wef 1.8.2015 or till the appointment of regular incumbent or until further orders, whichever is earliest. Consequent upon the appointment and joining of Shri R.K.Mittal as Dir(CM) wef 4.11.2015, Shri Mehta relinquished the said additional charge of the post of Dir (CM). Director (Finance) Government of India, Ministry of Communications & IT, D/o Telecommunications, vide Order No.1-4/2012-PSA dated 5.2.2014 entrusted the additional charge of the post of Director(Finance) to Shri Anupam Shrivastava Director (CM) and, vide further orders, extended the same time to time. Consequent upon his elevation as CMD w.e.f. 15.1.2015, the said additional charge continued with him vide GoI, MoC & IT, DoT order No. 1-2/2015–PSA dated 22.1.2015; and, vide further orders, extended the same time to time. Thereafter, Government of India, Ministry of Communications & IT, D/o Telecommunications, vide No.1-2/2015-PSA dated 21.10.2015 entrusted the Additional Charge of the post of Director(F) to Ms.S.T. RAY (Smt. Sujata Ray) Director (HRD) with immediate effect, for a period upto 29.2.2016, or till the appointment of a regular incumbent to the post, or until further orders, whichever is the earliest. During the period of holding additional charge as aforesaid, Ms. S.T. Ray will not be entitled to any additional remuneration. Director (HRD) Smt. Sujata Ray,wef 8.7.2015. Prior to this, pursuant to the Government of India, Ministry of Communications & IT, D/o Telecommunications, Order No.1-4/2012-PSA, dated the 19.6.2012 which was extended from time to time Shri A.N.Rai Director(E) was holding the additional charge of the post of Director (HRD). Government Nominee Directors [02 ] 1. Smt. Rita A. Teoatia Additional Secretary(T) in DoT [Upto 29.7.2015] 2. Smt.Aruna Sundararajan, Addl Secretary & Administrator USOF in DoT [Wef 29.7.2015 to 21.10.2015] 3. Smt. Darshana Momaya Dabral, DDG [TPF] in DoT [Wef29.9.2014 to 18.9.2015] 4. Smt. Padma Iyer Kaul DDG [LFA] in DoT [Wef 18.9.2015] 5. Shri N.Sivasailam Additional Secretary(T) in DoT [Wef 21.10.2015] Non–official Part–Time Directors [04] 1. Shri Ajai Vikram Singh, Director [Upto 16.7.2015] 2. Prof.N. Balakrishnan, Director [Upto 16.7.2015] Shri Anupam Shrivastava CMD [ Wef 15.1.2015] [DIN: 06590535] :– Shri Anupam Shrivastava is a 1981 batch of Indian Telecom Service (ITS) Officer who has around three decades of experience in

51 the field of telecommunications. He is BE (Electronics &Communications) and is also MBA (Mktg.). He has taken telecommunication trainings in India & Japan. Prior to his present assignment as CMD, Shri Shrivastava joined BSNL Corporate Office as Director (CM) on 1st May, 2013 and is responsible for the growth of mobile business of GSM / CDMA / WIMAX in BSNL, including all activities related to Sales & Marketing, VAS, Tariff finalization & revenue. As Zonal Director for North Zone he is responsible for monitoring growth and maintenance of Telecom Network in 8 Circles. Prior to this assignment, Shri Shrivastava had held the post of Sr. GM, Ajmer TD where he gave special attention to Sales & Marketing of telecom products in the SSA which resulted in physical growth of connections in all segments and increased revenue for the SSA. Ajmer SSA was chosen for the pilot project for NOFN which was successfully completed ahead of target. His contributions in providing quality service to BSNL customers have been widely acknowledged and he strived to achieve benchmarks prescribed by TRAI / BSNL C.O. for various service parameters. Shri Shrivastava also worked as GM Jodhpur SSA and during his stint there he gave record number of mobile and landline connections with special emphasis on data and broadband business. He also has experience of working as GM (BB) in Telecom Circle with additional charge of Marketing and Enterprise Business. Shri Shrivastava also has overseas working experience in Zimbabwe where he was posted in Harare while representing TCIL as Task Force Leader to upgrade their telecom services. Due to his hard work and coordination skills the fault rate was drastically curtailed which was well appreciated by PTC Zimbabwe and TCIL management. He was associated with 6th G-15 Summit in Harare in 1996. Shri Shrivastava has delivered lectures extensively in different institutions both in India and abroad including many universities and management colleges. He also organized many seminars and skill up-gradation courses at many places. A firm believer in team work, Shri Shrivastava always sets examples by himself and uses latest technological applications to promote and inculcate team work amongst his subordinates and maintain synergy with superiors in BSNL management. Shri A.N. Rai Director (Enterprise) [DIN: 05100500] [Upto 31.7.2015]:- Shri A.N. Rai assumed the charge of office of Director(Enterprise) on 19.9.2011. Shri Rai, officer of Indian Telecommunications Service 1977 batch holds B.Tech Degree in electronics and communications Engineering from BHU Varanasi. Shri Rai, was actively associated with Installation, Commission and Maintenance of Switching equipments at various places in the country. He was also trained in Digital Telephone systems in various countries like UK, Germany and USA. As senior telecom management professional, he was involved with Development, Operation and Maintenance of Telecom Services at various places like Allahabad, Kanpur etc. As Deputy Director General at the Corporate Office, he handled Rural Networking and CMTS areas. Prior to the joining as Director(Enterprise), he was the Chief General Manager of Orissa Circle of the BSNL, which bagged the prestigious “Telecom Circle of the Year 2010-11 Award”. Shri N.K. Gupta Director (CFA) [DIN: 01140881]:- Shri Naresh Kumar Gupta took over as Director CFA in BSNL on 1st June 2012. Shri Gupta is B.E. from Delhi College of Engineering (DCE), in Electronics and Communications. He joined the Department of Telecommunications, Government of India through Indian Telecommunications Services (ITS) Group A 1978 batch. Since then he has worked in various capacities in different units of DoT/TEC/BSNL/MTNL and has versatile experience covering almost all the fields in telecommunications including installation, operations, development and management of telecom networks, sales and marketing and financial management etc. Before joining as Director (CFA) on the BSNL Board, N K Gupta was working as Chief General Manager Punjab Telecom Circle in BSNL and prior to that he was heading the Information Technology division for CFA business unit of BSNL. He in the capacity of DDG (I) TEC was instrumental in framing specifications and Network architecture against which BSNL and MTNL have implemented

52 Annual Report 2014-15 their broadband Networks. He has represented DoT in many committees of TRAI, DIT, and also in various Inter–Ministerial Committees like committee on preparing encryption policy, E-Commerce and Information Security working Group. He has widely travelled abroad and represented India in number of UN & ITU meetings including World Summit on Information Society in Geneva andother important assignments. He was an active member of Apex Committee involved in the planning and execution of NIB-II of BSNL and also framing the specification for ERP implementation in BSNL which is currently in progress. He was deeply involved in Pan–India Roll out of zonal OSS and BSS for Wire-line and Broadband segment which helped BSNL to changeover from decentralized 334 SSA level systems to 4 zonal data centres with implementation of world class COTS applications. N K Gupta is also instrumental in conceptualizing BSNL entry in to the Data Center (IDC) Services business for opening up a new revenue stream by leveraging BSNL’s existing infrastructure with an innovative revenue share model. Presently BSNL is in the process of acquiring IDC business. As Director (CFA) BSNL, he is mainly responsible for improving the Systems and Methods to achieve optimal performance and maximum utilization of BSNL’s extensive country-wide Infrastructure and network. He is also responsible for achieving business interests of the Company by way of high customer satisfaction and timely provision of quality services in BSNL CFA segment. He is also responsible for induction & adoption of new technologies and committed to provide state-of-the-art modern and world class telecom services in the highly competitive environment. Smt. Sujata Ray Director (HRD) [DIN: 07240022] [Wef 8.7.2015]:- Smt. Ray has taken over as Director (HRD) of BSNL on 8.7.2015. A post graduate from Calcutta University, she belongs to the 1982 batch of the Indian P&T Accounts and Finance Service, having over 32 years of experience in the field of telecom finance. Prior to her present assignment, Smt. Ray was Executive Director (Finance) in the Company since April 2014. She has rich and varied experience encompassing postings in the Department of Telecommunications both in the Ministry as well as in MTNL and BSNL, the two major PSUs. While serving in various capacities as General Manager and Principal General Manager, she has acquired rich experience in Corporate Accounts, Budgeting and Corporate Finance. She is also a strong proponent of the Integrated Finance approach having functioned as IFA for more than a decade in various territorial maintenance and project Circles of the Company. In fact, as Executive Director, Smt. Ray performed the role of rendering financial advice to the Functional Directors inclusive of financial appraisal of various projects and significant procurement issues. While heading the Finance Wing of the Company, she demonstrated strong leadership qualities in guiding and motivating small and large functional teams to achieve the ascribed business goals. Smt. Ray has also substantial experience in handling HR and personnel issues over the past few years. She has headed or actively participated in key Committees relating to important HR matters of BSNL. Having been a keen member of the Steering Committee for implementing ERP in the Company, she is actively involved in formulation of HR plan of BSNL which is an integral part of its revival plan. She is a firm believer in the power of positive thinking and the strength of soft skills in her new role of developing the vast human resources of the Company. Smt. Ray is a voracious reader and has received extensive training in India and abroad. Shri N.K. Mehta Director (Enterprise) [DIN: 07247767 ] [Wef 1.8.2015]:- Shri Mehta, an Indian Telecommunication Service officer of 1981 batch joined as Director (Enterprise) BSNL on 01.08.2015. He is a Bachelor of Engineering with Honours in Electronics & Communication and MBA in HR. He has more than three decades of rich and diversified experience in Telecom

53 Management, Network Operations, Project Management, Business Development, Human Resource Management and Development. Before joining BSNL as Director(E), he was working as Executive Director(IT) with additional charge of ED (CA) in BSNL. As ED(IT) he successfully rolled out ERP system in BSNL, improved the productivity within organization through BPR. As ED(CA) has handled Regulatory Affairs, Material Management, Corporate Planning, IT Security Policy etc. While working on an overseas assignment as Area Manager with TCIL in Kingdom of Saudi Arabia, he was responsible for planning and execution and provisioning of Telecom Services in Alhasa & Riyadh city and execution of a Turnkey Telecom Network Project in 17 cities in KSA. As DGM, Area Manager and GM in MTNL, he was responsible for planning, O & M of Telecom Network, Sales and Marketing of Telecom Services, CRM, Human Resource Management and development and Financial Management. As GM(Trg) in MTNL, he successfully transformed an obscure inhouse training centre into a centre of excellence and a profit centre. Served as GM(EB) &later on as CGM (EB) in MTNLfrom November 2010 to April 2014. As Director(E) BSNL, he is responsible for formulating and implementing policies for sustainable growth of the Enterprise and wholesale Business and Managing core-Network. Enterprise customers include small, medium and large corporate, Central/State Government Departments and Public Sector Undertakings. Whe wholesale business covers India and International Carriers and Internet Service Providers. All deals pertaining to the ILD and NLD network falls within his jurisdiction. His core network responsibilities include procurement, installation, commissioning and O & M of all transmission equipment as well as planning, installation, maintenance and management of all MPLS core network. As head of these business, he is responsible for the creation of innovative and affordable products, superior sales, marketing and customer service and excellence in network operations. Shri R.K. Mittal Director(CM) [DIN 07334039] [Wef 4.11.2015]:- Rakesh Kumar Mittal, an officer of Indian Telecommunications Service 1981 batch, is a Graduate in Electrical (Electronics) Engineering from Delhi College of Engineering. He assumed the charge of the Consumer Mobility Vertical on 4.11.2015. Prior to the current assignment, he was General Manager in MTNL Delhi. At MTNL he was in charge of MM, IT & Tech/Plg in Corporate office. He started his career in Department of Telecommunications and held various positions in the field formation. He has been responsible for procurement of ADSL2+ and 3G technologies for the 1st time in India by any of the operator. He attended various training programmes in India and abroad. Ms. Rita A. Teoatia Government Director [DIN: 02876666] [Upto 29.7.2015]:- Ms. Rita Teaotia joined the Indian Administrative Service in the year 1981 and served in the districts of Panchmahal and Gandhinagar in . Subsequently, she worked in the energy sector as MD, Gujarat Industries Power Company Ltd., and Secretary (Energy). She has worked extensively at policy making and strategic levels in the fields of Education, Health, Women’s Development and rural Development. From 2003-2007, she worked in the Government of India as Joint Secretary in the Ministry of Health and Family Welfare. Prior to the present assignment, she also served as Additional Secretary, in the Department of Electronics and Information Technology (DeitY),from 19th March, 2012. In this capacity, she headed the National e-Governance Plan, which entailed working closely with all State Governments and arms of DeitY, including National Informatics Centre(NIC), Standardisation Testing and Quality Certification (STQC) Directorate, Centre for Development of Advance Computing (C-DAC) and National Institute of Smart Governance(NISG).At present, she is

54 Annual Report 2014-15 serving as Additional Secretary in the Department of Telecommunications and ex officio Secretary of the Telecom Commission. Ms. Rita Teaotia has received four National e-Governance awards for applications developed during her various assignments. She holds a Masters in Medieval and Modern Indian History from the University of Lucknow. Smt. Aruna Sundararajan, Government Director [DIN: 03523267] [Wef 29.7.2015 to 21.10.2015]: Senior Member of the Indian Administrative Services, India’s premier civil service, with over 32 years of experience in the national and federal governments. Currently, Addl. Secretary, Telecom & Administrator Universal Service Obligation Fund, Govt. of India & CMD BBNL ( Ltd) heading the National Optic Fibre Network Project is NOFN under the ‘Digital India’ Program. Professional Highlights:– As Administrator USOF, Mrs.Aruna Sundararajan is the custodian of the telecom fund to provide rural telecom access to unserved areas of the sub-continent. The total portfolio of projects under implementation by the Fund in India encompasses the NOFN(National Optic Fibre Network) to provide optic fibere connectivity to India’s 250,000 Gram Panchayats (villages) across India, mobile connectivity to the uncovered village across North East Region of India, Himalayan areas, border states and tribal and hilly pockets. Mrs. Aruna Sundarajan also heads Bharat Broadband Network Limited (BBNL) (the SPV) established for overseeing India’s rural high-speed broadband project which aims to provide access to 600 million Indians under the “Digital India” Programme. Achievements:–

 Established the National Internet Centre Project covering 100,000 villages across the country under India’s National e-Governance Programme (NeGP).  Commissioned India’s first wireless connectivity project at Malappuram district in Kerala.  As head of Digital Inclusion under the Central Government’s national e-governance programme, spearheaded the establishment of state-wise IT infrastructure including Wide Area Networks and Data centres across 28 States in India. Recognition/Awards:– Honoured as one of the top women achievers by “India Today” magazine in 2009. Also featured by Forbes Magazine in Aug 2012 in the list of eminent Indians who have spearheaded change. Shri N. Sivasailam [DIN: 00131008] Govt. Director [Wef 21.10.2015]:- Shri N. Sivasailam is an officer of the 1985 batch of the Indian Administrative Service allotted to Cadre. He graduated in Mechanical Engineering from University of Delhi. He did his Post Graduate studies at the Faculty Management Studies, University of Delhi and at the London School of Economics in Business Administration and Social Policy & Planning in Business Administration and Social Policy & Planning in Developing Countries respectively. He also has a Post Graduate Diploma in Intellectual Property Rights Law (IPRL) from the National Law School of India University, Bangalore. His last assignment in cadre was at the Department of Public Enterprises, Government of Karnataka where he served in the position of Additional Chief Secretary. He has served in the Departments of Health & Family Welfare and Forest, Ecology & Environment Departments of the Govt. of Karnataka as Principal Secretary. He has served Bangalore Metro Rail Corporation Ltd, the Karnataka State Beverages Corporation Limited and Rajiv Gandhi Rural Housing Corporation Ltd. as Managing Director, in earlier stints in the Cadre besides serving an assignment as Secretary in the Rural Development & Panchayat Raj

55 Department of the State Government. In his earlier stint with the Central Government, he served as Deputy Secretary (AIS) in the M/o Personnel, Public Grievances and Pensions. Presently, he is serving as Additional Secretary (Telecom) and is also ex-officio Secretary of the Telecom Commission in the Government of India. He has been a Member of National Award Winning Teams in Panchayat Raj Administration and E-governance applications. Smt. Darshana Momaya Dabral, Government Director [DIN: 06975127] [Upto 18.9.2015]:- (I P&T AFS, 1990 Batch):- As an Indian Civil Servant (Batch 1990), have nearly 24 years of senior level experience at Central Government in the Dept. of Telecommunication in the areas of Planning, Budgeting, Accounts, Revenue, Finance, Administration and overall Financial Management. Throughout involved in key positions of critical decision making and tasks of organisational& national transformation through drafting and implementation of legislations for new polices. Strengths: Leadership, focusing on collaborative team efforts, process orientation and inculcation of transparency & accountability to extract desired levels of work efficiency and performance. Completed PGDM (FM) (12-14) at National Institute of Finance Management Faridabad, on deputation basis. Presently posted as DDG(TPF) at DoT HQ, responsible for Ministry’s Budget and involved in financial advice to Public Sector Units under DoT. Smt. Padma Iyer Kaul Government Director [DIN:07303737 ] [Wef 18.9.2015]:- An officer of Indian P & T Accounts and Finance Service, at present, she is Deputy Director General in the D/o Telecommunications, handling the responsibility of Licence Finance Assessments. She is a post graduate of Delhi University. Shri Ajai Vikram Singh, Director [DIN : 02184840] [ Upto16.7.2015 ]:- Shri Ajai Vikram Singh was born at Ajmer and had his education at Mayo College (Senior Cambridge) and Government College (Graduation), Ajmer. After a short spell in the Private Sector, he joined the Indian Administrative Service(IAS) in 1967 and, after the initial training, was allotted to the Uttar Pradesh Cadre. He has served in various capacities in the State and Central Governments, both, in the field and in the Secretariats. He was District Magistrate in Ghazipur, Sultanpur, Moradabad, and Aligarh districts, as also Commissioner, Lucknow Division. He has served as Managing Director of two State enterprises (Rajasthan State Warehousing Corp-on deputation, & UP Export Corp.) In the Uttar Pradesh Secretariat, he has been Secretary, Small Industries; Secretary, Heavy Industries; Industrial Development Commissioner & Principal Secretary. In the Government of India, the postings have been with the Cabinet Secretariat, Ministry of Defence, Ministry of External Affairs, and the Ministry of Industries. He did the National Defence College (NDC) Course in 1984 during the first of his four tenures with the Ministry of Defence. He was posted as Minister (Supply) in the High Commission of India at London for two years.In November 2000, the State of Uttar Pradesh was bifurcated into Uttar Pradesh and Uttaranchal, and Shri Ajai Vikram Singh was appointed as the first Chief Secretary of the new State of Uttaranchal (Now Uttarakhand).In 2001, consequent to the re-organisation of the Ministry of Defence, he was appointed to the newly created post of Special Secretary (Acquisition). This involved setting up a new organization and evolving procedures for all capital acquisitions for the Armed Forces. Subsequently, he has been Revenue Secretary (Now the Ministry of Finance), Secretary, Ministry of Non-Conventional Energy Sources (now the Ministry of New & Renewable Energy), Secretary, Ministry of Road Transport & Highways, and Defence Secretary. During his various postings in the Central and State Governments, he has been Chairman of the following Companies:- Indo-Gulf Fertilisers Ltd., India Polyfibres Ltd., Pashupati Acrylon Ltd.,

56 Annual Report 2014-15

U.P. Textile Corporation and U.P. Finance Corporation. In addition, he has served as Director on the Boards of, inter-alia, the following Companies:– IFCI Ltd., BHEL Ltd., Maruti Udyog Ltd., HMT Ltd., Heavy Engineering Corp. Ltd., Andrew Yule Ltd., Bharat Bhari Udyog Nigam Ltd., Bharat Yantra Nigam Ltd., Hindustan Aeronautics Ltd., Mazagon Docks Ltd., Shipyard Ltd., and PICUP.Shri Ajai Vikram Singh superannuated from service on 31st July 2005, and is now living in his home-town, Ajmer, with his wife, son, daughter-in-law, and two grand-children. He is involved with issues connected with ecology, the environment, and local development. He is currently Chairman of the Pune based World Institute of Sustainable Energy(WISE), a society devoted to the spread of clean and renewable energy. He is also on the Board of Directors of Pipavav Defence& Offshore Engg. Co. Ltd., and Overseas Infrastructure Alliance Infrastructure Alliance(India) Pvt. Ltd. He has taken up the cultivation of Jojoba ( a non-edible oil bearing plant) and Aloe Vera on a trial basis in his village near Ajmer. Prof. N. Balakrishnan, Director [DIN: 00181842] [ Upto16.7.2015]:- Prof. N. Balakrishnan received his B.E. (Hons.) in Electronics and Communication from the University of Madras in 1972 and Ph.D. from the Indian Institute of Science in 1979. He then joined the Department of Aerospace Engineering as an Assistant Professor. He is currently the Associate Director of the Indian Institute of Science and a Professor at the Department of Aerospace Engineering and at the Supercomputer Education and Research Centre. His areas of research where he has more than 200 publications in the international journals and international conferences include Numerical Electromagnetics, High Performance Computing and Networks, Polarimetric Radars, Aerospace Electronic Systems, Information Security, Complex Social Networks and Digital Library. He has received many awards including the Padmashree by the President of India, 2002, Homi J. Bhabha Award for Applied Sciences, 2004, J C Bose National Fellowship in 2007, the Alumni Award for Excellence in Research for Science & Engineering by IISc, 2001, Millennium Medal of the Indian National Science Congress in 2000, Ph D (Honoris Causa) from Punjab Technical University in 2003, the CDAC-ACS Foundation Lecture Award in 2008 and the Academy Excellence Award, Defence Research and Development Organization in 2009. He was the NRC Senior Resident Research Associate at the National Severe Storms Laboratory, Norman, Oklahoma, U.S.A. from 1987-1989. He was a visiting research scientist at the University of Oklahoma in 1990, Colorado State University in 1991 and is a Visiting Professor at Carnegie Mellon University from 2000 till 2006. He is an Honorary Professor in Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR). He is a Fellow of the Academy of Sciences for the Developing World (TWAS), Indian National Science Academy, Indian Academy of Sciences, Indian National Academy of Engineering, National Academy of Sciences and Institution of Electronics & Telecommunication Engineers. He is one of the Directors of Data Security Council of India (Currently its Chairman), Central Bank of India, Bharat Sanchar Nigam Limited (BSNL) and of CDOT-Alcatel Research Centre at Chennai, a member of the Council of CDAC, Member of the Joint Advisory Board of Carnegie Mellon University at Qatar and Member of the Governing Council of IIT Kharagpur, He was one of the editors of the International Journal on Distributed Sensor Networks, and Editor–in–Chief, International Journal of World Digital Libraries. Till recently he was a member of the National Security Advisory Board and the Board of Governors of IIT Delhi and of IIT Madras. He was also one of the Directors of the Bharat Electronics Limited (BEL), a Part–Time Member of the Telecom Regulatory Authority of India. He is the National Coordinator of Indo–US Million Books to the Web Digital Library Projects (www.ulib.org and www.new.dli.ernet.in). He, along with his colleagues from India, China and the US created the world’s largest Digital Library which proudly hosts more than a million books that are freely accessible by any one anywhere and anytime. More details can be found at http:// swati.dli.ernet.in/balki

57 Appointment and Tenure of the Directors In terms of Article No. 111 of the Articles of Association, the Directors are appointed by the President of India. Functional Directors are appointed for a period/tenure of five years from the date of assumption of charge, or till the date of superannuation or until further orders of the President of India, whichever is the earliest. The salary and allowances are determined by the President of India. The Government Nominee Directors are appointed by the President of India from amongst the officials of the Government of India. Such nominee Director ceases to be a Director on his superannuation from Government Service or transfer from the respective Ministry/ Department. Non–official Part-Time Directors are appointed by the President of India for a period of three years from the date of assumption of charge. The appointment of the Non-official Part-Time Directors shall be at the pleasure of the President of India and other terms and conditions as may be deemed fit by the President of India from time to time in accordance with the Memorandum and Articles of Association of the Company. BOARD COMMITTEE MEETINGS AND PROCEDURES Institutionalised Decision Making Process With the aim of completely institutionalising the process of corporate governance and decision making by the Board of Directors, the Company has, well defined process of placing vital and sufficient information before the Board and/or committee(s) thereof. The Board of Directors have voluntarily constituted a standing committee for the purposes of general management and administration of business affairs of the Company named as “Management Committee of the Board (MCB), comprising of the CMD and all the Functional Directors as Members and the Company Secretary as the Secretary, and have delegated powers of general management of company’s business affairs to it. The Board of Directors have also delegated some of their powers to the CMD, Functional Directors, EDs and Senior Management Personnel of the Company. The Statutory standing Committees, viz., (a) the Audit Committee of the Board in accordance with the provisions of Section 177 of the Companies Act 2013; and, (b) the Nomination and Remuneration Committee of the Board in terms of Section 178 of the Companies Act 2013; and (c) the Corporate Social Responsibility (CSR) Committee pursuant to the provisions of the Section 135 of the Companies Act 2013 and Rules thereunder; and (d) Voluntary Standing Committee on Appellate & Review matters under BSNL CDA Rules 2006 have also been constituted by the Company. In addition, as and when need arises, Board constitutes Committee of Directors. Role of the Company Secretary in overall Governance Process The Company Secretary ensures that the Board procedures are followed and regularly reviewed. The Company Secretary endeavors that all the relevant information and documents are made available to the Directors by the different nodal units to facilitate an effective decision making in their meetings. Being the interface between the Board and the Executive Management, all the Senior Management Personnel of the Company take advice and services of the Company Secretary.

58 Annual Report 2014-15

The Company Secretary is also the interface between the management and the regulatory authorities for governance matters. Guidelines for the Board/Committee Meetings Details guidelines have been laid down by the Company secretariat especially with reference to preparation and submission of Agenda Notes, Circulation of decisions thereto etc. These are reiterated from time to time. The Agenda papers are prepared by the respective units under Business verticals headed by PGM/ Sr. GM/GM as the case be at corporate office, after considering complete technical, commercial, legal and financial aspects. After getting approval of the concerned ED/Functional Director/CMD/ MCB as the case be, in accordance with the delegation of Administrative and Financial Powers, the agenda papers are sent to the Company Secretariat for circulation amongst the Members of the Board / Committee(s) thereof as the case be. Observance of the Secretarial Standards issued by the Institute of the Company Secretaries of India The Institute of Company Secretaries of India (ICSI) has, evolved and laid down the best corporate practices in the form of Secretarial Standards. The Company has been adhering to the Standards relating to Board Meetings, General Meetings, Payment of Dividend, Maintenance of Records and Registers, Minutes of the Meetings, Passing of Resolution by Circulation, affixing of Common Seal, Board’s Report etc. Code of Conduct for the Members of the Board and the Senior Management Personnel In addition to the Company’s Conduct, Disciplinary and Appeal Rules, in line with the corporate governance norms, the Board of Directors of the Company have laid down a “Code of Conduct for the Members of the Board”. All the Members have affirmed compliance with the said code. Similarly, In addition to the Company’s Conduct, Disciplinary and Appeal Rules, in line with the corporate governance norms, the Board of Directors of the Company have laid down a “Code of Conduct for the Senior Management Personnel of the Company”. All the Senior Management Personnel have affirmed compliance with the said code. Scheduling of Board/Committee Meetings and Submission of Agenda Items for the Board/ Committee meetings. The meetings of the Board/Committee thereof are convened, keeping in view the statutory provisions and the convenience of the Members, with sufficient advance planning. The Agenda Notes are, generally sent minimum seven days in advance to facilitate meaningful and informed discussions; Wherever required, voluminous documents/documents of confidential nature are tabled at the meeting, with the approval of the meeting; The Board also discusses sensitive and urgent business proposals, without formal agenda note, depending on urgency and case to case basis; Wherever required, the Senior Management Personnel of the Company are called to make presentations before the Board/Committee on specific agenda notes. The Meetings of the Board/Committee are generally held at the Registered office of the Company at Delhi. Whenever required, meetings are also held outside the headquarters.

59 Recording of Minutes of the Board/Committee meetings Minutes of the proceedings of the Board of Directors and the Committees of the Board are recorded. The minutes are circulated amongst the Members of the Board/Committee(s) for their comments in a given time frame. The comments if any, received are discussed in the next meeting of the Board/ Committee, while confirming the minutes. All the minutes duly signed/initialed by the Chairman are entered into the Minutes Book. The unit heads submit Action Taken Report on the decisions of the previous meetings. COMPLIANCES All the Senior Management Personnel including key managerial personnel handling different verticals/units have been delegated with administrative and financial powers thereto, are responsible to ensure adherence to all the applicable laws, rules, guidelines etc., and ensures implementation of the enterprise risk management policy of the company as a routine, while taking or processing the detail for decision or approval by the competent authority(ies). The Company Secretary ensures the compliance of all the applicable provisions of the Companies Act and other applicable corporate laws. Being the successor and assigns of the erstwhile Departments of Telecom Services and Telecom Operations with vast geographical spread, the BSNL follows the existing system. Accordingly, all the litigations before the hon’ble Courts/Tribunals/Arbitrators are handled by the respective verticals and units under their control with the help of Advocates. Significant litigation if any, are reported by concerned vertical/unit to the management. INFORMATION PLACED BEFORE THE BOARD OF DIRECTORS Subject to the provisions of the Companies Act, Memorandum and Articles of Association of the Company, and the directives, guidelines of the Government on the subject, the Board of Directors have delegated all general powers of managing the company’s affairs to the Management Committee of the Board comprising CMD and the Functional Directors; EDs; and, the Senior Management Personnel of the Company. The Minutes of the Meetings of the Management Committee of the Board are placed before the Board in its meetings. In addition, information on following items is invariably placed before the Board of Directors:- (1) BUDGET (a) Annual Budget Estimates and revised budget estimates for capital expenditure; (b) Annual Budget Estimates and revised budget estimates for revenue account for operational expenditure; and c) Budget requirements for five year plans. (2) PLANS (a) Annual Plans; (b) Five Year Plans; (c) Manpower Plans; (d) Corporate Plans; and (e) Resource Mobilisation Plans. (3) ACQUISITIONS Acquiring shares, stocks, securities etc., of other Companies or Undertakings other than in Government guaranteed securities for short term and in duly registered employees consumer co–operative societies.

60 Annual Report 2014-15

(4) STRATEGIC DECISIONS a. Agreement involving foreign collaboration proposed to be entered into by the Company irrespective of the consideration involved; b Strategic Investments/decision and acquisition of shares/controlling stake/debentures/ bonds of other companies; and Decision with regard to formation of joint ventures, subsidiary companies and restructuring of organization. (5) PERSONNEL a. Creation of posts of the level of Executive Director; b Formulation of any changes in wage structure and scales of pay of employees of the company; c. Policy matters relating to allowances of the employees such as HRA, Performance Related Pay, Bonus etc. (6) ACCOUNTS Acceptance of periodical profit and loss accounts; and Declaration of Dividend. (7) Investment of the surplus funds of the company in acquisition of controlling stake/shares/ debentures/bonds in other companies. (8). All issues that are reserved for exclusive consideration by the Board of Directors by the Companies Act; and, the Memorandum and Articles of Association of the Company. (9) COMPLIANCE REPORTINGS UNDER THE CORPORATE GOVERNANCE NORMS NUMBER OF BOARD MEETINGS HELD DURING 2014-15; ATTENDANCE OF DIRECTORS IN THE BOARD MEETINGS & 14TH ANNUAL GENERAL MEETING HELD ON 29.9.2014 TOTAL BOARD MEETINGS HELDIN 2014-15: 07

Name and Designation No. of Board Attended the Directorships Remarks Meetings last AGM in other Attended out held on Companies of 7 Meetings 29.9.2014

Shri Anupam Shrivastava CMD [Wef 7 Present NIL Appointed as CMD and 15.1.2015] Director (CM) [Wef 1.5.2013 joined wef 15.1.15. to 15.1.2015]

Shri R.K. Upadhyay, CMD 1 N.A. – Retired on A/N of 30.6.14 [Upto 30.6.2014]

Shri A.N. Rai, CMD / Director (Ent.) & (HR) 7 Present – Relinquished the addl charge & (CM) [Upto 31.7.2015] of CMD wef 15.1.2015. Retired from service on 31.7.2015.

Shri N.K. Gupta Director (CFA) [Wef 6 Present NIL Assumed charge on 1.6.2012] 1.6.2012.

Smt. Sujata Ray, Director (HRD) [Wef NA NA NIL Assumed charge on 8.7.2015 8.7.2015]

Shri N.K. Mehta Director (Enterprise) [Wef NA NA NIL Assumed charge on 1.8.2015 1.8.2015]

Shri R.K. Mittal Director (CM) [Wef NA NA NIL Assumed charge on 4.11.2015] 4.11.2015

61 Name and Designation No. of Board Attended the Directorships Remarks Meetings last AGM in other Attended out held on Companies of 7 Meetings 29.9.2014

Shri Shahbaz Ali Govt. Director [Wef – N.A. 1 ) Appointed in place of Shri 14.2.2012 to 26.8.2014] Tangirala wef 14.2.2012

Ms. Rita A. Teaotia Govt. Director [Wef 6 – – Appointed in place of Shri 4.9.2012 to 29.7.2015] S.R. Rao wef 4.9.2012

Smt. Aruna Sundararajan, Govt. Director NA NA 1)) Appointed in place of Smt. [Wef 29.7.2015 to 21.10.2015] Rita A Teaotia wef 29.7.2015

Shri N. Sivasailam, Govt. Director [Wef NA NA NIL Appointed in place of 21.10.2015] Smt. A. Sundararajan wef 21.10.2015.

Smt. Darshana Momaya Dabral [Wef 4 Present NIL Appointed wef 29.9.14 29.9.2014 to 18.9.2015]

Smt. Padma Iyer Kaul [Wef 18.9.2015] NA NA NIL Appointed in place of Smt. D.M. Dabral wef 18.9.2015]

Shri Ajai Vikram Singh Director [Wef 7 Present ^^ 2& Appointed wef 17.7.2012 17.7.2012]

Prof. N. Balakrishnan Director [Wef 6 – 3&& Appointed wef 17.7.2012. 17.7.2012]

Note:- The disclosure of the Directorships are based on the disclosures received from the Directors. ) Government Nominee Director in TCIL, a wholly owned Govt. Company under the aegis of Moc& IT, DoT )) CMD, Bharat Broadband Networks Limited, a wholly owned Govt. Company under the aegis of Moc& IT, DoT & Independent Director in Pipavav Defence and Offshore Engineering Company Limited and Overseas Infrastructure Alliance(India) Private Limited. && Director in (i) Data Security Council of India (DSCI) – not for profit company registered under Section 8 of Companies Act 2013; (ii) Central Bank of India; and (iii) C–DOT Alcatel-Lucent Research Centre Pvt Ltd., under Chapter 1 Section 2(68) of new Companies Act 2013 as per disclosure for 14-15 and Director in Data Security Council of India(DSCI) and IFCI as per Disclosure for 15-16. ^^ The Audit Committee of the Board, in its 55th meeting held on 29.9.2014 elected Shri Ajai Vikram Singh as Chairman for the meeting. He attended the 14th AGM held 29.9.2014 as Chairman of the Audit Committee of the Board.

62 Annual Report 2014-15

DETAILS OF NUMBER OF COMMITTEE MEMBERSHIPS AND CHAIRMANSHIPS OF DIRECTORS

Name and Designation Details of Memberships of Board Committee Details of Chairmanships of Board Committee

Name of Name of Committee Name of Company Name of Company Committee Shri Anupam Shrivastava BSNL Audit Committee of the Board – – CMD [Wef 15.1.2015] Director (CM) BSNL Nomination and Remuneration – – [Upto15.1.2015] & (Fin) Committee of the Board [Wef 1.5.2013]

Shri R.K. Upadhyay, CMD BSNL Finance Committee of the – – [Upto 30.6.2014] Board

BSNL Remuneration Committee of – – the Board

BSNL Committee on Appellate & – – Review matters under BSNL CDA Rules 2006

Shri A.N. Rai, CMD / BSNL Remuneration Committee of – – Director (Ent.) & (HR) the Board [Upto 31.7.2015] BSNL Committee on Appellate & – – Review matters under BSNL CDA Rules 2006

BSNL Corporate Social Responsibility – – Committee of the Board

Smt. Sujata Ray Director BSNL Corporate Social Responsibility – – (HRD) [Wef 8.7.2015] Committee of the Board

BSNL Audit Committee of the Board

Shri N.K. Gupta Director BSNL Corporate Social Responsibility NIL NIL (CFA) [Wef 1.6.2012] Committee of the Board

Smt. Rita A. Teaotia Govt. BSNL Nomination and Remuneration – – Director [Upto29.7.2015] Committee of the Board

Smt. Aruna Sundararajan – – BBNL Executive Govt. Director Committee [Wef29.7.2015 to 21.10.2015] – – BSNL Audit Committee – – BSNL Nom. &Rem. Committee of the Board

Shri N. Sivasailam, Govt. BSNL Audit Committee Director [Wef 21.10.2015] BSNL Nomination and Remuneration Committee

Shri Shahbaz Ali, Govt. TCIL Remuneration Committee – – Director [Upto 26.8.14] TCIL CSR Committee

63 Name and Designation Details of Memberships of Board Committee Details of Chairmanships of Board Committee

Name of Name of Committee Name of Company Name of Company Committee

BSNL Audit Committee – –

BSNL Committee on Appellate & – – Review matters under BSNL CDA Rules 2006.

BSNL Remuneration Committee of – – the Board

Smt. Darshana Momaya BSNL Committee on Appellate & NIL NIL Dabral, Govt. Director [Wef Review matters under BSNL 29.9.2014 to 18.9.2015] CDA Rules 2006.

BSNL Nomination and Remuneration – – Committee of the Board

BSNL Audit Committee of the Board – –

BSNL CSR Committee of the Board

Smt. Padma Iyer Kaul Govt. BSNL Audit Committee of the Board – – Director [Wef 18.9.2015] BSNL Nom. & Rem. Committee of – – the Board

BSNL Committee on Appellate & – – Review matters under BSNL CDA Rules 2006.

BSNL CSR Committee of the Board – –

Shri Ajai Vikram Singh Pipavav Audit Committee; BSNL Remuneration Director [Wef17.7.2012 to Defence and CSR Committee; Committee 16.7.2015] Offshore Nomination & Remuneration Engineering Committee; and Company Ltd Business Development Committee.

BSNL Audit Committee of the Board BSNL Nomination and Remuneration Committee of the Board

BSNL Corporate Social Responsibility Committee of the Board

Prof. N. Balakrishnan Central Bank of Management Committee BSNL Audit Committee Director [Wef 17.7.2012 to India of the Board 16.7.2015] upervisory Committee of the Central Bank of IT Strategy Board for monitoring of IT India Committee Projects in Banks

64 Annual Report 2014-15

Name and Designation Details of Memberships of Board Committee Details of Chairmanships of Board Committee

Name of Name of Committee Name of Company Name of Company Committee Shareholders/investors Data Security Chairman Grievances Committee Council of India(DSCI) not for profit Company under Sec 8 of the Companies Act 2013

Internal Training Policy Advisory Committee

BSNL Remuneration Committee IFCI Executive Committee

BSNL Nomination and Remuneration Committee of the Board

IFCI E-Governance Committee

IFCI CSR Committee

Shri N.K.Mehta Dir(E)[Wef – – – – 1.8.2015]

Shri R.K.Mittal Dir(CM) – – – – [Wef 4.11.2015]

Note:- The disclosure of the Memberships/Chairmanships are based on the disclosures received from the Directors. By virtue of holding the Additional Charges as were entrusted by the Govt. of India, M/o C & IT, D/o Telecom and further extended time to time, the Whole Time Directors were members of the Committees during relevant periods. Pending appointment of Non official Part Time / Independent Directors, to comply with the provisions of the Act, Your Directors, in their 164th meeting held on 28.8.2015 re-constituted the Nomination and Remuneration Committee of the Board, comprising both the Government Directors and the CMD as Members and the Director (HRD) as Regular Invitee. Secretary of the Company acts as the Secretary of the Committee. The Committee, in its 6th meeting held on 18.9.2015 elected Smt. Aruna Sundarajan as Chairman of the Committee. Shri N. Sivasailam AS (T) in DoT who has been appointed as Govt. Director in place of Smt. Aruna Sundararajan wef 21.10.2015; and Smt. Padma Iyer Kaul DDG (LFA) in DoT who has been appointed as Govt. Director wef 18.9.2015 in place of Smt. Darshana Momaya Dabral are Members of the Committee. Pursuant to the provisions contained in the Section 177 and other applicable provisions if any, of the Companies Act 2013 pending appointment of Non official Part Time (Independent) Directors, Your Directors, in their 164th meeting held on 28.8.2015 re-constituted the Audit Committee of the Board comprising comprising both the Government Directors and Director (HRD) as Members. Secretary of the Company acts as the Secretary of the Committee. Director (Finance) is regular

65 invitee. The Committee, in its 59th meeting held on 18.9.2015 elected Smt. Aruna Sundararajan Govt. Director as Chairman of the Committee. Smt. Padma Iyer Kaul, who has been appointed as Govt. Director wef 18.9.2015 in place of Smt. Darshana Momaya Dabral, is Member of the Committee. Shri N. Sivasailam AS (T) in DoT who has been appointed as Govt. Director in place of Smt. Aruna Sundararajan wef 21.10.2015; and Smt. Padma Iyer Kaul DDG (LFA) in DoT who has been appointed as Govt. Director wef 18.9.2015 in place of Smt. Darshana Momaya Dabral are Members of the Committee. Consequent upon the appointment of Smt. Padma Iyer Kaul DDG [LFA] in DoT as Govt. Director in place of Smt. Darshana Momaya Dabralwef 18.9.2015, the Board of Directors have re-constituted the CSR Committee of the Board comprising (i) Smt. Padma Iyer Kaul Govt. Director (ii) Smt. Sujata Ray Director (HRD) and (iii) Shri N.K. Gupta, Director (CFA). Secretary of the Company as the Secretary of the Committee. BOARD COMMITTEES The Company has the following Committees of the Board. VOLUNTARY COMMITTEES The Management Committee of the Board (MC of the Board) The Board of Directors of the Company, in their 118th meeting held on Thursday, the 26th day of February 2009, in super cession of all the extant instructions on the aforesaid subject, have, voluntarily constituted a Standing Committee of the Board, named, “Management Committee of the Board [MC of the Board], comprising the Chairman and Managing Director [CMD] as the Chairman, and the Functional Directors as Members, with the Company Secretary as the Secretary of the Committee. Further, the Board of Directors of the Company have also delegated to the aforesaid standing committee the powers for the management and administration of the business of the Company. The powers of the Board, in respect of the matters for which approval of the Board of Directors is statutorily required; or , the powers, which cannot be delegated; or, the matters, where, prior approval of the Government is necessary, have not been delegated. Committee on Appellate & Review matters under BSNL Conduct, Discipline and Appeal Rules 2006 To consider and decide all the appeal / review cases for and on behalf of the Board of Directors, wherever the Board is indicated as Appellate and Reviewing Authority in the CDA Rules 2006 of the Company, the Board of Directors, in their 135th meeting held on 26.8.2011, constituted a Standing Committee of the Board known as Committee on Appellate & Review matters under BSNL Conduct, Discipline and Appeal Rules 2006, comprising of Director (HR) and One Government Director and the Company Secretary as Secretary of the Committee. The minutes of each of the meetings of the Committee shall be submitted to the Board in the immediately following meeting of the Board. At present, the committee comprise Smt. Padma Iyer Kaul [Wef 18.9.2015] [Smt. Darshana Momaya Dabral Government Director upto 18.9.2015] and Smt. Sujata Ray Director (HRD).

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STATUTORY COMMITTEES CORPORATE SOCIAL RESPONSIBILITY COMMITTEE The Company, being wholly owned Government Company has been taking up various CSR initiatives even prior to coming into force of the provisions of the Act of 2013. The Company had its own CSR Policy which is now being aligned with the CSR Policy requirements under the Companies Act 2013.Owing to losses being incurred by the company since the year 2009- 10, no specific amount could be earmarked for CSR activities. However, the Company, being a wholly owned Government Company continued its engagement with social obligations to bridge the digital divide, apart from employee and their family welfare programmes. However, pursuant to the provisions contained in the Section 135 of the Companies Act 2013 and Rules thereunder, Your Board, in its 154th meeting held on 7.3.2014 constituted the Corporate Social Responsibility Committee (CSR Committee) of the Board comprising Shri Ajai Vikram Singh Independent Director, Shri A.N.Rai Director (Enterprise) and Shri N.K. Gupta Director (CFA) as Members and the Secretary of the Company as the Secretary of the Committee. The Terms of Reference of the CSR Committee are as per the provisions of the Section 135 and other applicable provisions of the Companies Act 2013 and Rules made thereunder. Consequent upon the retirement of Shri A.N. Rai Director(E) on superannuation wef A/N 31.7.2015 and the completion of the three years tenure of appointment of Shri Ajai Vikram Singh Director on 16.7.2015, to comply with the provisions of the Act, Your Directors, in their 164th meeting held on 28.8.2015, re-constituted the Committee comprising (i) Smt Darshana Momaya Dabral, Govt. Director (ii) Smt. Sujata Ray Director (HRD) and (iii) Shri N.K. Gupta, Director (CFA). Consequent upon the appointment of Smt. Padma Iyer Kaul DDG [LFA] in DoT as Govt. Director in place of Smt. Darshana Momaya Dabral wef 18.9.2015, the Board of Directors have re-constituted the Committee comprising (i) Smt. Padma Iyer Kaul Govt. Director (ii) Smt. Sujata Ray Director (HRD) and (iii) Shri N.K.Gupta, Director (CFA).Secretary of the Company as the Secretary of the Committee. Quorum for the meetings and the Terms of Reference of the Committee are as prescribed under Section 178 and other applicable provisions of the Companies Act 2013 & Rules thereunder and the Guidelines, Instructions, Exemption Notifications, Orders etc. if any, to be/being issued by the Government of India time to time and remain in force for the time being. NOMINATION AND REMUNERATION COMMITTEE To comply with the provisions contained Section 178 of the Companies Act 2013, the Board of Directors, in their 162nd meeting held on Tuesday, the 7th day of April 2015 constituted the Nomination and Remuneration Committee of the Board by re-constituting the existing Remuneration Committee of the Board. The Committee comprise Shri Ajai Vikram Singh, Non official Part Time (Independent) Director - Chairman, Prof. N. Balakrishnan, Non official Part Time (Independent) Director, Member, Smt. Rita A. Teaotia, Government Nominee Director, Member and Smt. Darshana Momaya Dabral, Government Nominee Director, Member. Secretary of the Company acts as the Secretary of the Committee. Terms of Reference, Roles and Responsibilities of the Committee shall be as per the provisions of Section 178 and other applicable provisions of the Companies Act 2013, Rules thereunder and the Guidelines, Instructions, Exemption Notifications, Orders etc. if any, to be/being issued by the Government of India time to time and remain in force for the time being.

67 Being a wholly owned Government Company, the appointments, terms and conditions and remuneration of the Chairman and Managing Director and Whole Time Functional Directors are governed by the orders of the Govt. of India Department of Public Enterprises. Pursuant to the Govt. of India, Ministry of Corporate Affairs Notification No.1/2/2014-CL.V, dated 5.6.2015, provisions contained sub-sections (2)(3) and (4) of the Section 178 of the Act of 2013 are applicable to the Company with regard to appointment and remuneration of senior management and other employees. Consequent upon the completion of the three years tenure of appointment of Shri Ajai Vikram Singh and Prof. N. Balakrishnan Directors on 16.7.2015, all the four slots of Non official Part Time (Independent) Directors have fallen vacant and the Committee was left with only one member Ms. Darshana Momaya Dabral. Administrative Ministry, viz., Ministry of Communications and IT, D/o Telecommunication has already been requested to expedite the appointment of Non official Part Time (Independent) Directors. Smt. Aruna Sundararajan has been appointed as Govt. Director in place of Mrs. RitaA. Teaotia wef 29.7.2015. Pending appointment of Non official Part Time / Independent Directors, to comply with the provisions of the Act, Your Directors, in their 164th meeting held on 28.8.2015 re-constituted the Committee, comprising both the Government Directors and the CMD as Members and the Director (HRD) as Regular Invitee. Secretary of the Company acts as the Secretary of the Committee. Quorum for the meetings and the Terms of Reference of the Committee are as prescribed under Section 178 and other applicable provisions of the Companies Act 2013 & Rules thereunder and the Guidelines, Instructions, Exemption Notifications, Orders etc. if any, to be/being issued by the Government of India time to time and remain in force for the time being. The Committee, in its 6th meeting held on 18.9.2015 elected Smt. Aruna Sundararajan Govt. Director as Chairman of the Committee. Consequent upon the appointment of Shri N. Sivasailam Additional Secretary(T) in the D/o Telecom as Govt. Director by the GoI, MoC& IT DoT in place of Smt. Aruna Sundararajan with effect from 21.10.2015, Shri N. Sivasailam is a Member of the Committee. Consequent upon the appointment of Smt. Padma Iyer Kaul DDG (LFA) in the D/o Telecom as Govt. Director by the GoI, MoC& IT DoT in place of Smt. Darshana Momaya Dabral with effect from 18.9.2015, Smt. Padma Iyer Kaul is a Member of the Committee. AUDIT COMMITTEE OF THE BOARD Pursuant to the provisions contained in Section 177 of the Companies Act 2013 and Rules thereunder, the Board of Directors of the Company, in their 159th meeting held on 9th December 2014 re-constituted the Audit Committee of the Board, with the following Members – Shri Ajai Vikram Singh, Non official Part Time (Independent) Director, Prof. N. Balakrishnan , Non official Part Time (Independent) Director, and Mrs. Darshana Momaya Dabral, Government Nominee Director. While the Director (Finance) shall be the regular invitee, Secretary of the Company acts as the Secretary of the Committee. The Committee, in its 57th meeting elected Prof. N. Balakrishnan as the Chairman of the Committee. Consequent upon the completion of the three years tenure of appointment of Shri Ajai Vikram Singh and Prof. N. Balakrishnan Directors on 16.7.2015, the Committee was left with only member Ms. Darshana Momaya Dabral. Smt.Aruna Sundararajan has been appointed as Govt. Director in place of Mrs. Rita A. Teaotia wef 29.7.2015. Pursuant to the provisions contained in the Section 177 and other applicable provisions if any, of

68 Annual Report 2014-15 the Companies Act 2013 pending appointment of Non official Part Time (Independent) Directors, Your Directors, in their 164th meeting held on 28.8.2015 re-constituted the Audit Committee of the Board comprising comprising both the Government Directors and Director (HRD) as Members. Secretary of the Company acts as the Secretary of the Committee. Director(Finance) is regular invitee. The Committee, in its 59th meeting held on 18.9.2015 elected Smt.Aruna Sundararajan Govt. Director, as Chairman of the Committee. Consequent upon the appointment of Shri N. Sivasailam Additional Secretary(T) in the D/o Telecom as Govt. Director by the GoI, MoC& IT DoT in place of Smt. Aruna Sundararajan with effect from 21.10.2015, Shri N. Sivasailam is a Member of the Committee. Consequent upon the appointment of Smt. Padma Iyer Kaul DDG (LFA) in the D/o Telecom as Govt. Director by the GoI, MoC& IT DoT in place of Smt. Darshana Momaya Dabral with effect from 18.9.2015, Smt. Padma Iyer Kaul is a Member of the Committee. The Quorum for the meetings and the Terms of Reference of the Committee are as prescribed under Section 177 and other applicable provisions of the Companies Act 2013 & Rules thereunder and the Guidelines, Instructions, Exemption Notifications, Orders etc. if any, to be/being issued by the Government of India time to time and remain in force for the time being. The Chairman of the Audit Committee was present in the last Annual General Meeting of the Company. NUMBER OF MEETINGS HELD DURING 2014-15 AND ATTENDANCE NO. OF MEETINGS HELD: 05

Name and Designation No. of meetings Remarks attended Prof. N. Balakrishnan Director 4 Board, in its 143rd meeting held on 28.8.12 Chairman [Upto 16.7.2015] inducted him as Member. The Committee in its 46th meeting held on 7.12.12 elected him as Chairman. The Committee re-constituted pursuant to Section 177 elected him as Chairman in 57th meeting. Shri Shahbaz Ali, Govt. – – Director Member[Upto 26.8.14] Shri Anupam Shrivastava 4 Consequent upon re–constitution of the Director (CM) [Upto 8.12.2014] Committee on 9.12.2014 by the Board in pursuance of Section 177 of the Act of 2013, he Ceased to be Member of the Committee. Shri Ajai Vikram Singh Director 5 He was elected as Chairman of the Meeting in [Upto 16.7.2015] the 55th meeting held on 29.9.2014. Mrs. Darshana Momaya Dabral 1 Inducted as Member by the Board in the Govt. Director [Wef 9.12.2014 Committee re-constituted pursuant to Section to 18.9.2015] 177 on 9.12.2014.

69 DISCLOSURES DIRECTORS REMUNERATION FUNCTIONAL DIRECTORS BSNL being a Government Company, and in terms of Article No. 111 of the Articles of Association of the Company, the remuneration payable to the Directors is determined by the President of India. The salary and other perks paid to the Key Managerial Personnel [a] Whole Time Functional Directors; [b] other than whole time directors during the year under review is as follows:-

Name Desgn. Salary incl. Other Benefits Contribution Total DA & Perks in CPF & Other Funds Shri Anupam Shrivastava CMD CMD 1862080 113150 209300 2184530 [Wef 15.1.2015] Director (CM) [Upto 15.1.2015] Shri R.K. Upadhyay [Upto CMD 620262 35571 66759 722772 30.6.2014] Shri A.N.Rai [Upto 31.7.2015] CMD/Dir (Ent.) 2343950 96519 253614 2694083 (HR) (CM) Shri N.K. Gupta [Wef 1.6.2013] Dir(CFA) 2197723 99984 243444 2541151 Shri H.C. Pant Co. Secy & Sr. 1942662 280899 230817 2454378 GM (Legal) TOTAL 8966677 626303 1003934 10596914 GOVERNMENT NOMINEE DIRECTORS The Government Nominee Directors are not paid any remuneration. NON–OFFICIAL PART–TIME DIRECTORS Non-official Part-Time Directors are paid a sitting fee at the rate of Rs.10,000/- [Rupees Ten Thousand only] for attending each meeting of the Board or Committee thereof in addition to TA/ DA to outstation Directors. There were no other pecuniary relationships or transactions of the Non-official Part-Time Directors vis-à-vis the Company. SHAREHOLDINGS BY THE DIRECTORS AND STOCK OPTIONS Being a hundred percent Government Owned Company, the shares are held by the President of India through Ministry of Communications and IT, Department of Telecommunications. The Directors are not required to hold any qualification shares. The company has not issued any stock options to its Directors/Employees. MATERIAL CONTRACTS/RELATED PARTY TRANSACTIONS The company has not entered into any material financial or commercial transactions with the Directors or the Management or their relatives or the companies and firms etc., in which they are either directly or through their relatives interested as Directors and/or Partners.

70 Annual Report 2014-15

LIST OF PRESIDENTIAL DIRECTIVES ISSUED IN THE PAST THREE YEARS

S. Year of Subject Status of Implementation No Issue 1 2012-13 – – 2 2013-14 I) No.61-01/2012–SU, dated 10.6.2013. In partial Implemented. Vide Order modification of OM No. 61-01/2009 dated No.1–16/2010-PAT 27.2.2009, the benefit of merger of 50% DA (BSNL) dated 10.6.2013, effectively amounting to 78.2% as on 1.1.2007 orders issued for allowing for the purpose of fitment in respect of the Board benefit of merger of 50% level and below Board level executives and Non- DA effectively amounting unionised supervisors and non-executives of BSNL to 78.2% as on 1.1.2007, was allowed from the date of issue of the order. No with prospective date i.e. arrears will be paid and the revised fitment on the date of issue of Presidential basis of DPE OM dated 2.4.2009 will be paid with Directive. prospective effect only. 3 2014–15 NIL NIL ANNUAL GENERAL MEETINGS Venue, Date and Time, where the previous three Annual General Meetings of the Company were held, including the details of the 15th Annual General Meeting are as follows:–

Meeting and Time Venue Details of Special Date Resolutions passed in the AGMs 12th AGM, 12.45 P.M., Regd & Corp. Office, Board Room, 3rd Floor – 28.9.2012 Bharat Sanchar Bhawan, H.C.Mathur Lane, Janpath, New Delhi–110 001. 13th AGM, 05.00 P.M. Regd & Corp. office, Board Room, 3rd floor, – 30.09.2013 Bharat Sanchar Bhawan, H.C.Mathur Lane, Janpath, New Delhi–110 001. 14th AGM, 12.30 P.M., Regd & Corp. office, Board Room, 3rd floor, – 29.09.2014 Bharat Sanchar Bhawan, H.C.Mathur Lane, Janpath, New Delhi–110 001. 15th, AGM, 12.30 P.M. Regd & Corp. office, Board Room, 3rd floor, – 17.11.2015 Bharat Sanchar Bhawan, H.C.Mathur Lane, Janpath, New Delhi–110 001.

MEANS OF COMMUNICATIONS Annual financial statements, New releases, etc., are put in the company’s website as well as in the intranet portal of the company. Website:– The company’s website www.bsnl.co.in is a user friendly site, containing all the latest developments.

71 Annual Report Annual Report of the Company containing inter–alia, Audited Accounts, Directors Report, Auditors Report and replies of management thereto, Comments and Review of the C & AG of India are circulated amongst all the Members and others entitled thereto. As enunciated in the Companies Act and also laid before the Houses of the Parliament. TRAINING OF DIRECTORS The Company is managed by the Sectoral Experts/Specialists having domain knowledge and expertise of the core sector, which is “Telecom Services Management”. Being a Telecom Service Provider, BSNL is also Member of various National and International level Telecom / Technology related forums. In order to update the knowledge and skill of BSNL officers and to have first hand information on latest developments taking place in telecommunications, 40 officers including Board level officers were deputed abroad for various events. Non-official Part-Time Directors, being men of public eminence and proven expertise, bring their own value addition to the management of the company. Still, they are also nominated for various national level seminars, workshops, training programmes as per their convenience. VIGIL MECHANISM In compliance of CVC / DPE Guidelines, BSNL already has a full fledged Vigilance Mechanism, headed by an independent CVO. Pursuant to the mandate of the DPE’s MoU Task Force mandating for establishing a Whistle Blower mechanism; and, in compliance with the provisions of the Companies Act 2013, the Company has also put in place in place a Whistle Blower Policy. Same has been circulated widely and posted in the intranet portal of the Company and is also being posted in the corporate website of the company. Under this mechanism, protected disclosure can be made by the whistle blower to the Chairman of the Audit Committee. Particulars of the Vigilance mechanism under CVC compliance are posted in the company’s website at www.bsnl.co.in at ‘contact us’. Further, BSNL has also entered into an agreement with the Transparency International to ensure transparency in tendering process. Further, apart from the Audit by the C&AG of India, Statutory and Branch Audits, Amenability to the Writ Jurisdiction of the Court, GoI’s Rules and Regulations, BSNL has its own Conduct, Disciplinary and Appeal Rules covering all the classes of employees including the Functional Directors. The Members of the Board and Sr. Management Personnel are also governed by the Code of Conduct laid down in accordance with the CG Norms. RISK MANAGEMENT BSNL, by virtue of being the successor of erstwhile Central Government Departments of the Telecom Services (DTO) and Telecom Operations (DTO) already had a codified set up with inbuilt mechanism to foresee the potential risks and methods to arrest, control, ignore and/or respond to the risks. However, as mandated by the Department of Public Enterprises through Guidelines on Corporate Governance Norms for the Un-Listed CPSEs – further revised and made mandatory for the CPSEs vide No.18(8)/2005-GM, dated the 14th May 2010 –Company has laid down a Enterprise Risk Management Policy.

72 Annual Report 2014-15

For managing the affairs of the Company, the Board of Directors of the Company has delegated its powers to the Management Committee of the Board (MCB), the CMD and the Functional Directors and Below Board Functionaries, viz., the Executive Directors/CGMs/PGMs/GMs/TDMs/DGMs etc., as the case be. Considering the size and geographical spread of the organization vis-à-vis the delegation of powers made to the business heads and unit heads – who carry out the task of undertaking the risk management as a part of the normal business practice by integrating and aligning the same with corporate and operational objectives –the Business Heads in the Corporate Office; CGMs/PGMs/GMs and Other Unit Heads of the field units were designated as the Risk Management Administrators [RMAs]. With a view to continuously train and develop the employees in the risk management techniques segment, Risk Management Training Courses specially designed for the Senior Management Personnel who function as the Risk Management Administrators are being organized at the Training Centres of the Company. Establishing Risk Monitoring Centresbeing one of the Dynamic Parameters, for “Overseeing the mechanism of Enterprise Risk Management Mechanism”, inter-alia, the periodical review of risk assessment and minimization procedures, submission of recommendations / reports to the Executive Management and the Audit Committee of the Board, a ERM Committee comprising of all the Executive Directors has been constituted with Executive Director(Corporate Affairs) as Convenor. In addition to already existing Risk Management Policy which mandates the Risk Management Administrators for ensuring efficient litigation management and compliance of all applicable provisions of the laws, as directed by the Administrative Ministry, detailed instructions have been issued to all concerned to ensure and comply with the provisions of the NLP-2010. Accordingly, the Unit Heads of the Corporate Office and GM/DGM in-charge of Administration in the field units are the Nodal Officers for respective unit for overall policy implementation, who will be assisted by the “Officer-in-charge of litigation”, who shall be responsible for litigation administration and management of respective unit. Pursuant to the provisions contained in Section 204 of the Companies Act 2013 and Rules thereunder, your Board appointed M/s VAP & Associates, Company Secretaries [CoP No.13901] the Secretarial Auditor of the Company for conducting the Secretarial Audit for the year 2014-15. The Secretarial Audit Report in Form MR-3 forms part of this Report. CERTIFICATE OF COMPLIANCE OF CORPORATE GOVERNANCE NORMS Your Company has obtained certificate from the Secretarial Auditor M/s VAP & Associates Company Secretaries, regarding compliance of conditions of corporate governance as stipulated in the Guidelines on Corporate Governance for Central Public Sector Enterprises 2007 and revised further vide No. 18(8)/2005–GM, dated 14.5.2010 issued by the Department of Public Enterprises, which forms part of this Report. FEE TO STATUTORY AUDITORS Remuneration paid to the Statutory Auditors during the year 2014-15was Rs. 3.46 crore (exclusive of service tax and cess wherever applicable). It includes Statutory Audit Fee, Certification Charges, Reimbursement of Expenses and Other services.

73 VAP & ASSOCIATES 387, First Floor, Shakti Khand-3 Company Secretaries Indirapuram, Ghaziabad-201010, U.P. Tel. 91-0120-4272409 M:+91-9910091070, 9711670085 E-mail: [email protected]

THE CERTIFICATE ON COMPLIANCE OF CORPORATE GOVERNANCE NORMS

To The Members, M/s Bharat Sanchar Nigam Limited, New Delhi We have examined the relevant books, records and statements in connection with compliance of the conditions of Corporate Governance by M/s Bharat Sanchar Nigam Limited for the financial year ended 31st March, 2015, as stipulated in the Guidelines on Corporate Governance Norms for the Central Public Sector Enterprises 2007, issued by Government of India, Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises(DPE), and revised further vide Office Memorandum No. 18(8)/2005-GM, dated May 14, 2010. The compliance of the conditions of the Corporate Governance norms is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of corporate governance as laid down in the above said guidelines. Our Certification is neither an audit nor an expression of the opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has substantially complied with the conditions of Corporate Governance Norms as stipulated in the above mentioned DPE Guidelines. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency of the effectiveness with which the management has conducted the affairs of the Company.

For VAP & Associates, Company Secretaries

Sd/- Parul Jain Proprietor CP No. 13901 M.No.22726 Place: Ghaziabad Date: 26.08.2015

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VAP & ASSOCIATES 387, First Floor, Shakti Khand-3 Company Secretaries Indirapuram, Ghaziabad-201010, U.P. Tel. 91-0120-4272409 M:+91-9910091070, 9711670085 E-mail: [email protected]

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2015 [Pursuant to Section 204(1) of the Companies Act 2013 and rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 ] To The Members, Bharat Sanchar Nigam Limited, Bharat Sanchar Bhawan, Harish Chandra Mathur Lane, Janpath, New Delhi-110001.

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adhereance to good corporate practices by Bharat Sanchar Nigam Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon. We report that; a) Maintenance of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these records based on our audit. b) We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that the correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. We have not verified the correctness and appropriateness of the financial records and Books of the Company. c) Where ever required, we have obtained the Management representation about the compliances of laws, rules and regulations and happening of events etc. The compliance of the provisions of the Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31st March 2015 (‘Audit Period’)complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance-mechanism in place to the extent, in the manner and subject to the report made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended 31st March 2015 according to the provisions

75 VAP & ASSOCIATES 387, First Floor, Shakti Khand-3 Company Secretaries Indirapuram, Ghaziabad-201010, U.P. Tel. 91-0120-4272409 M:+91-9910091070, 9711670085 E-mail: [email protected] of :- (i) The Companies Act, 2013 (the Act) and the rules made thereunder; (ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA ‘) and the rules made thereunder; (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment. Overseas Direct Investment and External Commercial Borrowings (Not Applicable to the Company during the Audit Period as there were no Foreign Direct Investments, Overseas Direct Investments in the Company and no External Commercial Borrowings were made by the Company); (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act ‘):- (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Not applicable to the Company during the Audit Period) (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992(Not applicable to the Company during the Audit Period) (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (Not applicable to the Company during the Audit Period) (d) The Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, notified on 28th October 2014; (Not applicable to the Company during the Audit Period) (e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not applicable to the Company during the Audit Period) (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act dealing with client; (Not applicable to the Company during the Audit Period) (g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not applicable to the Company during the Audit Period) (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998(Not applicable to the Company during the Audit Period) (vi) The other laws as may be applicable specifically to the Company are:- Having regard to the compliance system prevailing in the Company, on the basis of presentation/certificates made by the heads of Departments, and the compliance certificates made by the heads of the Departments submitted to the Secretariat and Legal Department of the Company, we report that the Company has substantially complied with the provisions of those Acts that are applicable to company including Department of Public Enterprises (DPE) Guidelines on Corporate Governance. The Indian Telegraph Act, 1885, The Indian Wireless Telegraphy Act 1933, The Telecom Regulatory Authority of India Act 1997, The Information Technology Act 2000, other laws related to maintenance of Factories, Laws related to Human resources including Employees Provident Fund Act, Employees State Insurance Act.

76 Annual Report 2014-15

VAP & ASSOCIATES 387, First Floor, Shakti Khand-3 Company Secretaries Indirapuram, Ghaziabad-201010, U.P. Tel. 91-0120-4272409 M:+91-9910091070, 9711670085 E-mail: [email protected]

We have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards issued by the Institute of Company Secretaries of India (not applicable to the Company during the audit period). (j) (ii) Listing Agreements entered into by the Company with Stock Exchange(s) (not applicable to the Company during the audit period). During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. mentioned above, except the appointment of Chief Financial Officer of the Company, as the Company is having position of Director(Finance), a Whole Time Director on the Board of the Company. The Company, being a Government of India owned enterprise, all the Director level appointments are made by the Government of India. Appointment against position of Director(Finance) and Director(HR) is awaited from Government of India. We further report that The Board of Directors of the Company is duly constituted with proper balance of Excutive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all directors to schedule the Board meetings, agenda and detailed notes on agenda were generally sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. All decision at Board meetings and Committee Meetings are carried out by majority as reorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be. We further report that based on the information received and records maintained there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

For VAP & Associates, Company Secretaries

Sd/- Parul Jain Proprietor CP No. 13901 M.No.22726 Place: Ghaziabad Date: 01.07.2015

77 BHARAT SANCHAR NIGAM LIMITED Balance sheet (All amounts in ` lacs, unless otherwise stated)

Note As at As at 31st March 2015 31st March 2014 EQUITY AND LIABILITIES Shareholder’s funds Share capital 3 1,250,000 1,250,000 Reserves and surplus 4 3,506,443 4,470,295 Deferred government grant 5 28,497 33,037 4,784,940 5,753,332 Non-current liabilities Long-term borrowings 6 5,619 72,000 Other long-term liabilities 7 344,477 330,074 Long-term provisions 8 28,438 85,532 378,534 487,606 Current liabilities Short-term borrowings 9 632,871 373,853 Trade payables 10 828,914 870,657 Other current liabilities 11 734,591 682,363 Short term provisions 12 63,980 67,459 2,260,356 1,994,332 Total 7,423,830 8,235,270 ASSETS Non-current assets Fixed assets 13 – Tangible assets 3,522,316 4,144,428 – Intangible assets 863,184 917,677 – Capital work-in-progress 327,914 386,917 – Intangible assets under development - 923 4,713,414 5,449,945 Non-current investments 14 20,000 20,000 Deferred tax assets (net) 15 84,706 23,773 Long-term loans and advances 16 843,152 532,684 5,661,272 6,026,402 Current assets Inventories 17 369,688 354,728 Trade receivables 18 232,660 276,258 Cash and bank balances 19 122,477 93,195 Short-term loans and advances 20 69,135 76,344 Other current assets 21 911,286 1,321,806 1,705,246 2,122,331 Intra/inter circle remittances 33 57,312 86,537 Total 7,423,830 8,235,270 Notes 1 to 49 form an integral part of the financial statements. This is the balance sheet referred to in our report of even date “for Walker Chandiok & Co LLP For and on behalf of Bharat Sanchar Nigam Limited (formerly Walker, Chandiok & Co)” Chartered Accountants Sd/- Anupam Shrivastava Chairman and Managing Director

Sd/- Sd/- per Anamitra Das Sujata Ray Partner Director (HR)

Sd/- M.N.Punde General Manager (Corporate Accounts)

Sd/- Place : New Delhi H.C.Pant Date : 18 September 2015 Company Secretary and Sr. General Manager (Legal)

78 Annual Report 2014-15

BHARAT SANCHAR NIGAM LIMITED Statement of profit and loss (All amounts in ` lacs, unless otherwise stated )

Note For the year ended For the year ended 31st March 2015 31st March 2014 REVENUE Revenue from operations 22 2,724,223 2,615,326 Other income 23 140,297 184,309 Total revenue 2,864,520 2,799,635 EXPENSES Employee benefits expense 24 1,496,350 1,543,584 Finance costs 25 50,189 21,799 Depreciation and amortisation expense 13 & 43 881,680 602,317 Other expenses – Administrative, operating and other expenses 26 1,083,959 1,100,930 – License and spectrum fee 29 217,032 224,330 Total expenses 3,729,210 3,492,960 Loss before prior period items and tax (864,690) (693,325) Prior period items (net) 27 (19,652) (19,094) Loss before tax (884,342) (712,419) Tax benefit : – Deferred tax benefit 15 60,933 10,443 Loss for the year (823,409) (701,976) Earnings per equity share Basic and diluted (nominal value of shares ` 10) 34 (16.47) (14.04) Notes 1 to 49 form an integral part of the financial statements.

This is the statement of profit and loss referred to in our report of even date.

“for Walker Chandiok & Co LLP For and on behalf of Bharat Sanchar Nigam Limited (formerly Walker, Chandiok & Co)” Chartered Accountants Sd/- Anupam Shrivastava Chairman and Managing Director

Sd/- Sd/- per Anamitra Das Sujata Ray Partner Director (HR)

Sd/- M.N.Punde General Manager (Corporate Accounts)

Sd/- H.C.Pant Company Secretary and Sr. General Manager (Legal)

Place : New Delhi Date : 18 September 2015

79 BHARAT SANCHAR NIGAM LIMITED Cash flow statement for the year ended 31 March 2015 (All amounts in ` lacs, unless otherwise stated )

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 A. Cash flow from operating activities Loss before tax (884,342) (712,419) Adjustments for : Depreciation and amortisation-Current year 881,680 602,317 Depreciation and amortisation-Prior period 6,859 9,063 Finance costs 50,189 21,799 Wealth tax 78 84 Interest income (7,413) (6,888) Profit on sale of fixed assets (net) (3,234) (3,817) Capitalisation of overheads (37,020) (43,421) Write off and losses other than bad debts 30,046 22,534 Bad-debt provision other than services 735 832 Write off of unrecovered service tax 3,774 1,286 Bad-debt written off 22,941 25,684 Provision for doubtful debts and disputed bills 26,966 53,953 Excess provision written back (67,692) (91,985) Write back of long-term borrowings (72,000) - Adjustment of grant in aid (4,540) (4,596) Operating profit/loss before working capital changes (52,973) (125,574) Adjustment for : (Increase)/ decrease in inventories (19,735) 18,951 Decrease/(increase) in trade receivables 10,450 (86,517) Decrease in other receivables (current and non-current) 137,405 127,296 Decrease/(increase) in other payables (current and non- 51,508 (45,322) current) Decrease/(increase) in provisions (60,573) 50,311 Decrease in remittances 29,225 15,921 Cash generated from operating activities 95,307 (44,934) Wealth tax paid (82) (85) Direct tax (paid)/refunded (35,202) 149,601 Net cash generated from operating activities 60,023 104,582 B. Cash flow from investing activities Purchase of fixed assets (410,660) (479,357) Proceeds from sale of fixed assets 158,243 248,789 Interest received 7,429 7,058

80 Annual Report 2014-15

Proceeds from/(investment in) earmarked deposits with 123 (750) bank Net cash used in investing activities (244,865) (224,260) C. Cash flow from financing activities Proceeds from term loan 5,619 – Increase in short term borrowing (net) 259,018 117,739 Interest paid (50,391) (21,741) Net cash generated from financing activities 214,246 95,998 Net increase/(decrease) in cash and cash equivalents 29,405 (23,680) (A+B+C) Cash and cash equivalents at the beginning of the year 92,073 115,753 Cash and cash equivalents at the end of the year 121,478 92,073 Components of cash and cash equivalents Balance with bank 109,514 85,256 Cheques on hand 8,266 4,473 Cash on hand 3,698 2,344 Total cash and cash equivalents (note 19) 121,478 92,073

Notes: a) In the absence of adequate data regarding assets appearing in the deletions/adjustments column of note no. 13 of fixed assets, all deletions (except amount transferred as decommissioned assets) have been assumed to be cash sales. b) In the absence of adequate details regarding unreconciled inter circle remittances with the subsidiary records, all the inter circle remittance have been treated as part of working capital changes. c) The above cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard -3 on ‘Cash Flow Statement’ specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). d) Figures in bracket show outflows. Notes 1 to 49 form an integral part of the financial statements. This is the cash flow statement referred to in our report of even date.

“for Walker Chandiok & Co LLP For and on behalf of Bharat Sanchar Nigam Limited (formerly Walker, Chandiok & Co)” Chartered Accountants Sd/- Anupam Shrivastava Chairman and Managing Director

Sd/- Sd/- per Anamitra Das Sujata Ray Partner Director (HR)

Sd/- M.N.Punde General Manager (Corporate Accounts)

Sd/- H.C.Pant Place : New Delhi Company Secretary and Sr. General Manager (Legal) Date : 18th September 2015

81 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

1. CORPORATE INFORMATION Bharat Sanchar Nigam Limited(the “Company” or “BSNL”) is a Public Sector Company fully owned by the Government of India and was formed on 15th September 2000 in pursuance of Telecom Policy 1999, to take over the ongoing business of the Department of Telecom Services (DTS) and Department of Telecom Operations (DTO) from 1st October 2000. The Company has been incorporated under the erstwhile Companies Act, 1956 with its registered corporate office in New Delhi. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1 BASIS OF PREPARATION The financial statements have been prepared to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014 (as amended). The financial statements have been prepared on a going concern basis under the historical cost convention on accrual basis. The accounting policies have been consistently applied by the Company. 2.2 USE OF ESTIMATES The preparation of financial statements in conformity with the principles generally accepted in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in the current and future periods. 2.3 REVENUE RECOGNITION Income from services is accounted for on accrual basis and in conformity with the notified Accounting Standard- 9 on ‘Revenue recognition’. Accordingly, a) Revenue for all services is recognised when earned and are realisable at the time of billing. Un-billed revenues from the billing date to the end of the year are recorded as accrued revenue during the period in which the services are provided. Provisions are made for debts outstanding for more than two years and for debts less than two years which are considered doubtful (based on management decision), to the extent considered necessary by the management. b) Installation charges received from subscribers at the time of new telephone connections are recognised 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 billed nor accounted 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 Subscriber Identity Modules (SIMs) recharge coupons of mobile, prepaid

82 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) calling cards, and prepaid internet connection cards are treated as income of the year in which the payment is received since the extent of use of these cards within the financial year cannot be ascertained. f) Wherever there is uncertainty in realisation of income, such as liquidated damages, claims on Government departments and local authorities etc., these are recognised on realisation basis. g) The claims receivable on account of provision of infrastructure, operation and maintenance of Village Public Telephones (VPTs) and Rural Household Connections (RDELs) etc. and operational sustainability of rural wire line network from Universal Service Obligation (USO) fund are accounted for as other operating income. h) The interest on surplus fund which are placed generally in fixed deposits with banks is recognised on accrual basis. i) Other income by way of interest on loans to employees, security deposit with Government departments and local authorities, being not material, are accounted for on collection basis. 2.4 FIXED ASSETS 2.4.1 TANGIBLE 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 capitalised if, in the opinion of the management, it results in enhancement of revenue generating capacity. c) Assets are capitalised 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 capital work in progress (CWIP). e) Apparatus and plants principally consisting of telephone exchanges, transmission equipments and air conditioning plants etc. are capitalised as and when an exchange is commissioned and put to use. f) Cables are capitalised as and when ready for connection to the main system. 2.4.2 INTANGIBLE ASSETS a) Intangible assets are stated at cost of acquiring the same less accumulated amortisation. Intangible assets are recognised if it is probable that the future economic benefits attributable to the assets will flow to the enterprise and cost of the asset can be measured reliably in accordance with the notified Accounting Standard – 26 on ‘Intangible Assets’.

83 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) 2.5 DEPRECIATION AND AMORTISATION 2.5.1 TANGIBLE ASSETS a) Till the year ended 31st March 2014, depreciation on fixed assets was provided on written down value method at rates which are either greater than or equal to the corresponding rates in Schedule XIV of the erstwhile Companies Act, 1956, based on management estimate of the useful life of the assets. Pursuant to the notification of Schedule II of the Companies Act, 2013, by the Ministry of Corporate Affairs effective 1st April 2014, the management has reassessed and changed, wherever necessary the useful lives to compute depreciation to conform to the requirements of the Companies Act, 2013 and have been provided on written down value method as per the rates prescribed under Schedule II of the Companies Act, 2013 except in respect of the assets mentioned in b) and c) below. b) Assets costing up to ` 5,000 are depreciated fully in the year of purchase. Similarly, partition works and paintings costing up to ` 200,000 are depreciated fully in the year of construction/ acquisition. c) The depreciation on machinery and tools used both for project and maintenance work is charged to statement of profit and loss instead of capitalization. d) All telephone exchange buildings, administrative offices and captive consumption assembling premises/workshops are considered as building (other than factory building). Accordingly, depreciation is charged uniformly. 2.5.2 INTANGIBLE ASSETS a) Intangible assets such as entry license fee, onetime Spectrum fee for telecom service operations are amortised over the license period (i.e. 20 years) and standalone computer software applications are amortised over the license period (subject to maximum of 10 years) on straight line method. 2.6 IMPAIRMENT OF ASSETS Assets, which are impaired by disuse, damage or obsolescence, are segregated from the concerned assets category and shown as ‘Decommissioned Assets’ and provision is made for the loss, if any, due to the difference between their net carrying cost and the net realisable value. 2.7 INVESTMENTS Long-term investments are carried at cost, after providing for any diminution in value, if such diminution is other than temporary. 2.8 INVENTORIES Inventories are valued at cost or net realisable value, wherever available, as the case may be: – The cost is ascertained generally on weighted average method, – Obsolete and/ or non-moving inventories are valued at net realisable value.

84 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) 2.9 FOREIGN CURRENCY TRANSACTIONS a) Transactions in foreign currency are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate prevailing on the date of the transaction i.e. on the date of payment or the billing as the case may be. b) All monetary items are stated at the exchange rate prevailing as at reporting date and the difference taken to statement of profit and loss as exchange fluctuation loss or gain. 2.10 EMPLOYEES BENEFITS a) SHORT TERM EMPLOYEE BENEFITS: Short term employee benefits are recognized in the statement of profit and loss in the period during which the services have been rendered. b) LONG TERM EMPLOYEE BENEFITS: DEFINED CONTRIBUTION PLAN: i) Pension Contribution (including gratuity) The employees of DoT who have opted for absorption / absorbed in the Company and the employees on deemed deputation from Government are eligible for pension, which is a defined contribution plan. The Company makes monthly contribution (including liability on account of gratuity) at the applicable rates as per Government Pension Rules, 1972 and Fundamental Rules and Supplementary Rules (FR & SR), to the Government who administers the same. ii) Employees’ Provident Fund All directly recruited employees of the Company are entitled to receive benefits under the provident fund, a defined contribution plan. Both employee and employer make monthly contribution to the plan at a predetermined rate of employee’s basic salary and dearness allowance. These contributions to provident fund are administered by the provident fund commissioner. Employer’s Contribution to provident fund is expensed in the Statement of Profit and Loss. iii) Contribution for Leave Salary For employees on deemed deputation from Government, leave salary contribution is paid by the Company to DoT for the deputation period in accordance with FR 115 (b) of FR&SR Part I. Consequently, the leave salary payable for those on deputation during the period of leave rests with the Government. Further, any leave encashment after quitting service is the responsibility of the Government. DEFINED BENEFIT PLAN: i) Leave Encashment The liability on account of un-availed leave in respect of absorbed employees and directly recruited employees at the year-end is provided for based on actuarial valuation. ii) Gratuity The Company provides for gratuity, a defined benefit plan (the Gratuity Plan) covering

85 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) all directly recruited eligible employees. In accordance with the payment of Gratuity Act, 1972, the Gratuity plan provides a lump sum payment to vested employees on retirement, death, incapacitation or termination of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on Balance Sheet date and are expensed in the Statement of Profit and Loss. iii) Other benefits including post-employment medical care Medical reimbursements and other personal claim bills of existing / retired employees are accounted for on actual basis in respect of bills received till the cut off period in the accounts at the concerned primary units as per the prescribed limits. 2.11 MANUFACTURING EXPENSES Expenses incurred at factory units are allocated to the cost of the manufactured products and manufactured items are transferred to other units on standard rates determined by the Company. 2.12 PRIOR PERIOD ITEMS Items of income or expenditure, exceeding ` 5 lacs, are considered for being treated as ‘prior period items’. 2.13 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 notified Accounting Standard-22, Accounting for taxes on income, Deferred Tax is recognised on the timing differences between accounting income and the taxable income for the period and quantified using the tax rates in force or substantively enacted as on the reporting date. Deferred Tax Assets are recognised and carried forward to the extent there is a virtual certainty that such deferred tax assets can be realised. 2.14 PROVISIONS Provisions are recognised when the Company has a present obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated. 2.15 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. 2.16 EARNINGS PER SHARE Earnings Per Share (“EPS”) is calculated by dividing net profit or loss for the year attributable to shareholders by the weighted average of shares outstanding during the year. The number of shares used in computing Basic and Diluted EPS is the weighted average number of shares

86 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) outstanding during the year. 2.17 SEGMENT REPORTING The primary segment consists of ‘Basic’, ‘Cellular’ and ‘Broad Band’ services provided. The manufacturing activities have not been treated as a separate segment since such activities are essentially carried on as support service to other segments mainly for captive consumption. The following specific accounting policies have been followed for segment reporting: a) Segment revenue includes service income and other income directly identifiable with/ allocable to the segment. b) Income/expense, which relates to the Company, as a whole and not allocable to individual business segment is included in “Un-allocable income/expense respectively”. c) Expenses that are directly identifiable with/allocable to segments are considered for determining segment results. d) Segment assets and liabilities include those directly identifiable with the respective segments. Un-allocable corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and not allocable to any segment. 2.18 EXTRAORDINARY ITEMS Extra-ordinary items of income and expenditure, as covered by Accounting Standard-5, Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies are disclosed separately. 3. SHARE CAPITAL

As at 31st March 2015 As at 31st March 2014 Authorised 10,000,000,000 (previous year: 10,000,000,000) 1,000,000 1,000,000 equity shares of ` 10/- each 7,500,000,000 (previous year: 7,500,000,000) 750,000 750,000 9% non-cumulative preference shares of ` 10/- each 1,750,000 1,750,000 Issued, subscribed and fully paid up 5,000,000,000 (previous year : 5,000,000,000) 500,000 500,000 equity shares of ` 10/- each 7,500,000,000 (previous year: 7,500,000,000) 750,000 750,000 9% non-cumulative preference shares of ` 10/- each 1,250,000 1,250,000

87 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) a) There is no movement in equity shares and preference shares during the current year and previous year. b) Details of shares held by shareholders having more than 5% shares in the Company* As at 31st March 2015 As at 31st March 2014 Equity shares The Central Government of India (number of 4,999,998,400 4,999,998,400 shares) Holding (%) 99.99 99.99 Preference shares The Central Government of India (number of 7,500,000,000 7,500,000,000 shares) Holding (%) 100 100

* The above information is furnished as per the shareholder’s register as at the year end Notes : a) No shares have been issued for consideration other than cash or as bonus shares in the current reporting year and in the last five years immediately preceeding the current reporting year. Further there are no buy backs of any class of shares during the current reporting year and in the last five years immediately preceeding the current reporting year. b) “Vote of members : Every member present on person and being a holder of equity share shall have one vote and every person either as a general proxy on behalf of a holder of equity share, shall have one vote or upon a poll, every member shall have one vote for every share held by him. On poll, the voting rights of holder of equity share shall be as specified in Section 47 of the Companies Act, 2013. The holder of preference share have a right to vote on resolution placed before the Company which directly affects the rights attached to their preference shares and subject to aforesaid, the holders of preference shares shall in respect of such capital be entitled to vote on every resolution placed before the Company at a meeting if the dividend due on such capital or any part of such dividend remains unpaid in respect of an aggregate period of not less than two years preceding the date of commencement of the meeting and where the holders of any preference shares have a right to vote as aforesaid on any resolution every such member personally present shall have one vote and on a poll his voting right in respect of such preference share bears to the total paid up equity capital of the Company.” c) Division of profit : The profit of the Company, subject to any special rights relating thereto created or authorised to be created by the articles subject to the provisions of the articles and also subject to the provisions of section 123 of the Companies Act, 2013 and, regarding transfer of the amount to reserve of the Company, shall be divisible among the members with the approval of the President of India, in the proportion of the amount of capital paid or credited as paid-up on the shares held by them respectively.

88 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) 4. RESERVES AND SURPLUS

As at As at 31st March 2015 31st March 2014 Capital reserves [refer note 28] Balance at the beginning of the year 4,119,870 4,023,839 Add: Waiver of loan from the Government of India – 98,318 [refer note (a) below] Less: Assets identified and accounted for (433) (2,340) Add: Liabilities identified and accounted for (1) 53 Balance at the end of the year 4,119,436 4,119,870 General reserves Balance at the beginning of the year 430,084 430,084 Less: Depreciation charged directly to reserves as per (140,009) – Companies Act, 2013 [refer note (b) below] Balance at the end of the year 290,075 430,084 Contingency reserves [refer note (c) below] 200,000 200,000 Deficit in statement of profit and loss Balance at the beginning of the year (279,659) 422,317 Add: Loss for the year (823,409) (701,976) Balance at the end of the year (1,103,068) (279,659) 3,506,443 4,470,295 Notes : (a) During the previous year, the loan from the Government of India amounting to ` 98,318 lacs was waived off vide letter no.1-43/2008-B, dated 11 April 2014 and the same was taken to the capital reserve created at the time of formation of the Company. (b) Pursuant to notification of Schedule II of the Companies Act 2013, by the Ministry of Corporate Affairs effective 1st April 2014, the management has reassesed and changed, wherever necessary the useful life of the assets to compute depreciation to conform to the requirements of the Companies Act 2013. The written down value of the assets over residual value (5% of the original cost) where the remaining useful life is nil is adjusted with opening balance of general reserves. (c) The contingency reserve was created in the financial year 2003-04 by appropriation of profits to meet various contingencies that may arise in future, based on the decision made by the board of directors.

89 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) 5. DEFERRED GOVERNMENT GRANT

As at 31st March 2015 As at 31st March 2014 Grant in aid [refer note (a) below] 28,497 33,037 28,497 33,037 Note : (a) Since 2005-06, an amount of ` 61,332 lacs (` 17,000 lacs for wireline and ` 44,332 lacs for wireless services) has been received from Department of Information Technology (DIT) for providing wireline and wireless connectivity to 41,500 common service centres. Since this grant cannot be linked to creation of any particular asset; as telecom network is a seamless entity, the same is being disclosed under ‘Grant in aid’ as a Deferred Grant in accordance with the notified Accounting Standard-12 on ‘Accounting for Government Grants’ and is being written back in the statement of profit and loss in a systematic and rational basis. 6. LONG-TERM BORROWINGS

As at 31st March 2015 As at 31s March 2014 Secured loans 5,619 Term loans from banks [refer note (a) – below) Unsecured loans Government of India (non refundable – 72,000 and non interest bearing ) [refer note (b) below] 5,619 72,000

Notes : (a) Long term loans secured against Pari-Passu charge on the movable fixed assets of Company, both present and future except excluded assets, comprises of the following: (i) The term loan of ` 2,810 lacs from Union Bank of India carries an interest @ bank base rate (‘BBR’) plus 0.50% per annum with monthly rests, is repayable in quarterly installments which would commence after 2 years from the date of receipt of the first disbursement. The aforementioned term loans is secured by pari-passu charge on all fixed assets of the Company other than land and building (both present and future). (ii) The term loan of ` 2,809 lacs from Syndicate Bank carries an interest @ BBR plus 0.25% per annum with monthly rests, is repayable in quarterly installments which would commence after 2 years from the date of receipt of the first disbursement. The aforementioned term loans is secured by pari-passu charge on all fixed assets of the Company other than land and building (both present and future). (b) Non-refundable and non-interest bearing loan from Government of India

90 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) The Government of India had sanctioned a non-refundable and non-interest bearing advance of ` 72,000 lacs as budgetary support for the ongoing Village Panchayat Telephones (VPT) program of the Company vide letter no. 25-1/2001-SAT/pp(pt) dated 13 January 2003. The amount has already been expensed off in the previous year for the purpose for which it was sanctioned. During the current year, on receipt of the approval from DoT vide letter no. 1-43/ 2001-B (pt.)/569, the same has been transferred to other operating income. 7. OTHER LONG-TERM LIABILITIES

As at 31st March 2015 As at 31st March 2014 Deposits from customers and others Security deposits 62,272 38,289 After connection deposits 282,205 291,785 344,477 330,074

8. LONG-TERM PROVISIONS

As at 31st March 2015 As at 31st March 2014 Provision for employee benefits Post retirement benefit of serving 28,438 85,532 employees [refer note 30.2] (net of planned investments) 28,438 85,532

9. SHORT TERM BORROWINGS

As at 31st March 2015 As at 31st March 2014 Loan repayable on demand Unsecured loan Loan from banks [refer note below] 632,871 373,853 632,871 373,853

Note: Short term borrowings comprise of the following : (i) ` 155,448 lacs (previous year ` 173,853 lacs) from Union Bank of India carries an interest @ BBR per annum with monthly rests. (ii) ` 273,594 lacs (previous year nil) from State Bank of India carries an interest @ BBR plus 0.10% per annum with monthly rests

91 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) (iii) ` 183,829 lacs (previous year nil) from State Bank of India carries an interest @ BBR per annum with monthly rests. (iv) ` 20,000 lacs (previous year nil) from Union Bank of India carries an interest @ BBR per annum with monthly rests. (v) Nil (previous year Rs. 50,000 lacs) from Canara Bank carries an interest @ BBR per annum with monthly rests. (vi) Nil (previous year Rs. 150,000 lacs) from Bank of India carries an interest @ BBR per annum with monthly rests. 10. TRADE PAYABLES

As at As at 31st March 2015 31st March 2014 Due to: Micro small and medium enterprises [refer note (a) 41 131 below] Others 710,758 744,617 Claims payable to Mahanagar Telephone Nigam 101,659 99,602 Limited (MTNL) [refer note (b) below] Claims payable on interconnection usage charges (IUC) 16,064 24,715 Claims payable against Satellite Based Broadband 1 1,115 (SBB) and access network services Claims payable on Universal Service Obligation 365 477 (USO) towers Claims payable against Internet data center (IDC) 26 – 828,914 870,657

Notes : (a) Thirty two circles (previous year thirty one) of the Company has identified Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). The required information in terms of section 22 of MSMED Act to the extent available in respect of thirty two circles (previous year thirty one circles) are given below :

Particulars As at As at 31st March 2015 31st March 2014 The principal amount due to suppliers 41 131 The amount of interest paid by the buyer in terms of Nil Nil section 16 of the MSMED Act, 2006

92 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

Particulars As at As at 31st March 2015 31st March 2014 The amount of interest due and payable for the period 1 Nil of delay in making payment The amount of interest accrued and remaining unpaid Nil Nil at the end of each accounting year The amount of further interest remaining due and Nil Nil payable even in the succeeding years as per Section 23 of MSMED Act, 2006 (b) The net claim receivable/payable as on 31 March 2015 from MTNL is subject to confirmation and reconciliation. 11. OTHER CURRENT LIABILITIES

As at As at 31st March 2015 31st March 2014 Interest accrued but not due on bank loan 299 353 Advances received from – Customers and others 144,784 32,659 – Defense telecom network project (net) 7,702 12,394 – Bharat Broadband Nigam Limited (net) – 22,568 Deposits from customers and others 99,186 101,395 Income received in advance against service 150,417 204,827 Claims payable to – DoT [refer note 32] 50,865 39,109 – Other Government departments 9,909 9,553 Statutory dues – Tax deducted at source 14,833 16,010 – Service tax (net) 40,365 44,044 – Employees’ provident fund 4,355 2,275 License fee, spectrum charges and transponder 48,390 33,614 charges payable Payable for revised wages 9 30 Other payables towards

93 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

As at As at 31st March 2015 31st March 2014 – Employees 13,128 22,642 – Subscribers 24,622 19,222 – Construction account 38,152 34,780 – Services and others 87,575 86,888 734,591 682,363

12. SHORT-TERM PROVISIONS

As at As at 31st March 2015 31st March 2014 Provision for employee benefits : Leave encashment of retired employees 3,495 2,742 Gratuity [refer note 30.2] 1,497 6,435 Post retirement benefit of serving employees [refer 58,603 57,893 note 30.2] Provision for others : Wealth tax 385 389 63,980 67,459

94 Annual Report 2014-15

825 1,353 2,707 8,623 7,489 91,194 13,881 50,338 74,469 16,923 95,279 March 429,853 220,599 846,261 114,535 863,184 2015 st Closing 1,074,085 1,486,022 3,596,785 3,522,316 31 11 = (5–10) balance as at

– – 4,263 11,859 17,330 20,899 28,437 35,823 March 362,340 463,235 389,177 333,826 393,789 362,263 137,284 2015 st + 8)–9 Closing 5,414,735 4,910,277 March 2015 31 12,161,011 st 10 = (6+7 balance as at – – – – 0 31 233 414 (684) (684) 5,882 1,410 3,262 3,591 9 46,617 93,203 (5,849) 148,794 adjustments Deductions / – – – – – 3 50 531 371 438 154 1,095 2,528 2,387 8 16,235 94,858 21,360 with 140,008 opening reserves Adjusted

– – 206 343 8,050 1,721 3,979 1,455 6,661 3,715 Depreciation and amortisation 7 23,559 41,038 59,361 59,004 62,983 208,204 471,983 826,295 below) (e) and (f) (refer note For the year

– – 4,054 6 11,880 14,491 23,774 19,037 31,954 April 338,483 460,696 341,195 316,330 274,822 298,596 131,827 2014 st 1 5,236,913 4,436,639 Opening 11,343,498 balance as at

18,144 91,194 12,684 18,684 45,359 23,606 43,312 95,279 March 792,194 513,573 609,776 508,324 145,907 2015 st Closing 6,488,820 6,396,299 1,180,087 1,225,446 15,757,796 31 balance as at 5 = (2+3)–4 – – (2) 584 871 293 871 4 2,049 7,353 8,233 1,420 69,631 10,563 14,634 32,031 31,116 160,279 338,184 Deletions – 533 194 398 599 Gross Block 3 during the year 1,593 5,498 83,101 13,404 13,133 39,662 29,928 10,044 10,044 32,881 35,935 277,721 534,580 Additions

91,650 17,609 13,074 19,706 36,186 23,300 10,431 90,460 2 786,143 511,003 578,347 493,030 172,440 6,278,857 6,475,350 1,180,087 1,216,273 Opening April 2014 15,561,400 st balance as at 1

Particulars FIXED ASSETS [also refer note 31 and 43] Summary of significant accounting policies and other explanatory information for the year ended 31 (All amounts in Rs. lacs, unless otherwise stated) TANGIBLES Free hold land Lease hold land Buildings Apparatus and plants Cables and Lines & wires– Telecom Ducts, Cables and Optical fibre General Plant & Machinery– other than continuos process plant Motor vehicle and launches Towers and Satellites Office machinery and equipments Electrical fittings Computer softwares Furniture and fixtures INTANGIBLES Entry license fees Computer–Enduser Computer–Enduser Devices Less : Diminution in the value of decommissioned assets Total Total Computer–Servers and Networks Decommissioned assets 13. A. Current year

95

– 3,813 1,194 5,215 4,263 91,650 13,555 87,304 32,650 17,658 March 331,727 327,914 447,660 237,152 176,700 2014 2015 st Closing Closing 4,713,414 1,842,217 1,151,134 10=(5-9) 31 March 31 balance as at 11 = (5–10) balance as at

–

– – 4,054 11,880 34,757 14,491 19,037 March 338,483 422,220 425,939 341,195 316,330 2014 March st 2015 st Closing 4,436,639 4,814,692 + 8)–9 Closing 31 12,523,274 31 10 = (6+7 balance as at balance as at 9=( 6+7) – 8 balance as at – – – (4) 412 565 233 400 242 (420) 8,304 9,367 7,217 2,810 9 63,256 148,110 adjustments Deductions / 8 – – 8 with 140,008 opening reserves Adjusted Deductions / adjustments

– – – 263 347 823 2,738 1,022 Depreciation and amortisation 7 Depreciation and amortisation 23,202 14,037 13,459 38,320 28,765 7 331,922 206,498 889,278 below) below) (e) and (f ) (e) and (f) ( refer note (refer note For the year For the year

– – – 3,787 6 12,098 32,252 14,068 18,257 6 April 315,693 417,550 419,697 302,455 290,375 2014 st 4,167,973 4,616,498 1 Opening April 2013 Opening st 11,642,094 balance as at 1 balance as at

– 91,650 17,609 13,074 52,415 19,706 23,300 March 786,143 509,524 458,589 578,347 493,030 March 331,727 2014 2015 st st Closing 6,278,856 5,965,826 Closing 17,314,970 31 31 balance as at 5 = (2+3)–4 balance as at 5 = (2+3)–4 297 667 691 690 461 923 4 4 2,602 9,132 14,310 13,041 11,927 21,172 19,144 255,266 358,078 698,056 Deletions Deletions – 79 573 237 454 391 Gross Block Gross Block 3 3 during the year during the year 2,162 9,393 2,323 27,766 72,362 32,783 33,407 333,189 298,301 842,925 Additions Additions

923 93,679 17,669 13,662 50,783 19,942 23,370 2 2 772,687 519,289 458,328 566,736 478,767 391,504 6,200,933 5,906,505 Opening Opening April 2013 April 2014 17,170,100 st st balance as at balance as at 1 1 Particulars Particulars CAPITAL WORK IN PROGRESS Capital work in progress Less :Impairment in pending projects etc. Total INTANGIBLE ASSET UNDER DEVELOPMENT Intangible assets under development TANGIBLES Free hold land Lease hold land Buildings Apparatus and plants Motor vehicle and launches Cables Lines and wires Subscriber installations Installation test equipments Masts and aerials Office machinery and equipments Electrical fittings Furniture and fixtures B. Previous Year

96 Annual Report 2014-15

923 4,587 12,412 19,090 90,460 73,474 917,677 391,504 386,917 905,265 2014 Closing 5,449,945 4,217,902 4,144,428 10=(5-9) 31 March balance as at

– – – 23,774 298,596 274,822 March 163,781 2014 st Closing 11,642,094 11,343,498 31 balance as at balance as at 9=( 6+7) – 8 – – – – (153) (153) 3,661 95,890 96,043 8 Deductions / adjustments

– – – 3,042 ` 773 lacs) which has been capitalised into the cost of assets under Depreciation and amortisation 7 11,226 (60,469) (63,511) 672,622 612,153 below) (e) and (f ) ( refer note For the year

– – – 20,579 6 358,912 338,333 156,216 Opening April 2013 11,125,831 10,766,919 st balance as at 1 ` 9,063 lacs) relating to prior period.

` 739 lacs (previous year 923 36,186 90,460 March 391,504 182,871 2014 st 1,216,273 1,180,087 Closing 17,170,100 15,561,400 31 balance as at 5 = (2+3)–4 588 ` 43,421 lacs) of employee remuneration and administrative expenses capitalised during the year. 4 5,208 1,047 19,469 673,039 468,137 672,451 374,077 1,516,300 ` 6,859 lacs (previous year Deletions – 508 Gross Block 1,515 1,515 3 during the year 4,672 16,602 485,784 536,393 Additions 1,024,200 ` (2,232) lacs]

1,462 35,259 ` 37,020 lacs (previous year 93,327 2 373,857 183,407 1,887,797 1,852,538 Opening 17,662,200 April 2013 15,399,084 st balance as at 1 ` (417) lacs [previous year Particulars construction. Additions in gross block include The current year depreciation charged to statement of profit and loss excludes The depreciation and amortisation for the year includes In some cases, the title deeds of land purchased/acquired on leasehold/freehold from various authorities, are in process being executed. Leasehold land disclosed is based on the identification by thirty three circles (previous year one circles). Addition to fixed assets include assets identified and taken over/(written back) by the Company in the current year, pertaining to the assets being taken over from DoT as on 1 October 2000 CAPITAL WORK IN PROGRESS Capital work in progress Computers Computer softwares Total Less :Impairment in pending projects etc. Total INTANGIBLE ASSET UNDER DEVELOPMENT Intangible assets under development Decommissioned assets Less : Diminution in the value of decommissioned assets Total INTANGIBLES Entry license fees d) f) e) Notes : a) b) c)

97 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

14. NON-CURRENT INVESTMENTS

As at As at 31st March 2015 31st March 2014 (At cost, unquoted, non-trade) 20,000,000 (previous year 20,000,000) 7% 20,000 20,000 redeemable cumulative preference shares of ` 100/- each fully paid in Indian Telephone Industries (ITI) Limited (A Government of India owned Company) [refer note (a) below] 20,000 20,000 Aggregated value of unquoted investments 20,000 20,000 Note : (a) All the five installments of ` 4,000 lacs each are overdue for redemption of 7% redeemable cumulative preference shares in respect of investment in ITI Limited at the end of the year and no dividend has been received till date. ITI Limited will redeem preference shares to the Company immediately on release of financial assistance by the Government of India to ITI Limited as a part of revival package. Hence, no provision for the aforesaid investment is made in the books of accounts of the Company. 15. DEFERRED TAX ASSETS (NET)

As at As at 31st March 2015 31st March 2014 Deferred tax assets on – Provision for bad and doubtful debts 109,595 123,698 – Unabsorbed depreciation and amortisation 259,055 259,055 – Provision for leave encashment 79,503 98,412 – Provision for decommissioned assets, wage 2,580 6,606 revision, etc. – Others 14,951 15,076 A 465,684 502,847 Deferred tax liabilities on – Depreciation and amortisation 363,610 461,706 – Others 17,368 17,368 B 380,978 479,074 A-B 84,706 23,773 Notes : (a) The deferred tax has been dealt with in accordance with the contention of the Company

98 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) before the tax authorities. The depreciation has been calculated on the book value of assets taken over from DoT, contrary to the Income Tax Department’s contention of treating capital reserve as relief/ grant/ subsidy deductable from book value of assets.The Company contends that the capital reserve arising out of the capital structure at the time of incorporation of the Company is not in the nature of financial relief and hence not to be reduced from the value of fixed assets. According to the Company’s contention, the depreciation provided in the books on the value of assets without deducting the amount involved in capital reserve is admissible in income-tax. The stand of Company was upheld by the Hon’ble High Court of Delhi and the Income Tax Department has not contested against this in the higher court as at the balance sheet date. The Company is recognising deferred tax assets/liabilities accordingly. (b) The Company, being a Company providing telecommunication services is eligible to claim deduction under Section 80 IA of the Income Tax Act, 1961 with respect to 100 % of the profits and gains derived from this business for the first five years and thereafter at 30% of the profits for the second five years (referred to as the Tax Holiday Period). The Company has opted for tax holiday period from financial year 2003-04 and the period ends in the previous financial year 2012-13 (c) In accordance with Accounting Standard Interpretation (ASI)-3 issued by the Institute of Chartered Accountants of India, the deferred tax provision in respect of timing differences which originates and gets reversed during the tax holiday period have not been recognised. Deferred tax in respect of timing differences which originate during the tax holiday period but gets reversed after the tax holiday period, have been recognized in the year in which the timing differences have originated. For this purpose, as a conservative measure, deferred tax provision has been made in respect of the period when only 30% of the profits would be tax free assuming that only 70% of the timing differences would reverse. (d) The Company has not recognised any deferred tax asset during the year following the notified Accounting Standard 22 “Accounting for taxes on income’, only reversal relating to deferred tax assets and deferred tax liability created during the earlier years have been made. 16. LONG-TERM LOANS AND ADVANCES As at As at 31st March 2015 31st March 2014 Advances recoverable in cash or in kind or for value to be received Secured and considered good Security deposits 10,527 10,077 Loans and advances to staff 2,964 4,581 Unsecured but considered good Security deposits 18,880 19,290 Loans and advances to staff 562 1,372 Other loans and advances, unsecured

99 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

As at As at 31st March 2015 31st March 2014 Amount recoverable from DoT for other recoverables 259,085 - [refer note 32] Capital advance, unsecured but considered good 42,684 24,116 Advance income-tax 502,552 467,350 [Net of provision for tax ` 717,196 lacs (previous year ` 717,196 lacs)] Advance fringe benefit tax 5,898 5,898 [Net of provision for tax ` 15,300 lacs (previous year ` 15,300 lacs)] 843,152 532,684 17. INVENTORIES (Valued at lower of cost or net realisable value)

As at As at 31st March 2015 31st March 2014 Building materials 150 183 Lines and wires 9,911 8,332 Cables 85,610 90,889 Apparatus and plants 186,131 200,559 Telephone instruments 19,491 17,801 Telegraph and telex instruments 151 81 Broad band equipments 23,107 27,498 Raw material and scrap (at factory) 17,354 8,376 Finished goods and work in progress (at factory) 1,302 7,536

Finished stock(at various circles) 7,124 3,233 Other stores 16,519 18,275 Shortage in inventory 1,141 493 Inventory for construction works 35,000 – 402,991 383,256 Less: Provision for obsolete inventory/short inventory 33,303 28,528 369,688 354,728 Notes (a) Physical verification of stock has been conducted by the management [except nine circles

100 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) (pervious year seven circles)] during the year and is reconciled with the detailed inventory records. Wherever the difference is found the same is provided for. Further, in eleven circles (previous year seven circles) difference between the subsidiary ledger and the general ledger is identified and provided for in the current financial year. (b) The Company is in the process of identification of non-moving, slow moving and obsolete inventories in twenty circles (previous year eleven circles). Pending finalisation of the process, no provision if any, that may be required, has been made. (c) The Company is in the process of reconciling the shortage in inventory. Pending finalisation of the process, no provision if any, is made. 18. TRADE RECEIVABLES

As at As at 31st March 2015 31st March 2014 Trade receivables (As per General Ledger) 750,618 752,958 Less : Advance income booked but not collected 78,347 20,330 672,271 732,628 Less : Provision for doubtful receivables 439,611 456,370 232,660 276,258 Notes : a) In twenty two circles (previous year twenty four circles), there is difference in the closing balance of trade receivables between the subsidiary ledger and the general ledger. To the extent identified, the net difference between general ledger and subsidiary ledger balances is ` 22,393 lacs (previous year ` 22,590 lacs). The management is in the process of reconciling these differences. However a further amount of ` 9,678 lacs (previous year ` 23,561 lacs) has been provided during the year in respect of circles where general ledger balances are more than subsidiary ledger balances. b) The age-wise analysis of the trade receivables as per subsidiary ledger is given below: Particulars As at As at 31st March 2015 31st March 2014 Trade receivable exceeding six months from the date 534,545 551,767 they are due for payment Other trade receivables 193,680 178,601 728,225 730,368 c) The classification of the trade receivables as secured (to the extent of the security deposits held by the Company), unsecured/considered good and considered doubtful, to the extent available as per subsidiary ledger is as follows:

101 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

Particulars As at As at 31st March 2015 31st March 2014 Secured receivables, considered good 163,640 140,460 Unsecured receivables, considered good 148,061 158,075 Unsecured receivables, considered doubtful 416,524 431,833 728,225 730,368 19. CASH AND BANK BALANCES

As at As at 31st March 2015 31st March 2014 Cash and cash equivalents Balances with bank – In current account including sweep-in-deposit 109,514 83,315 – In fixed deposits accounts with original maturity – 1,941 less than three months Cheques on hand 8,266 4,473 Cash on hand 3,698 2,344 121,478 92,073 Other bank balances “Earmarked deposits with bank [refer note (d) below] 999 1,122 (including bank guarantee, margin money, etc)” 122,477 93,195 Notes : (a) In seven circles (previous year eight circles), it has been noticed that cheques deposited with the bank and Telegraphic Transfer (TT) sent, have not been credited in the relevant bank accounts of the Company amounting to ` 2,902 lacs (previous year ` 2,704 lacs) as on 31st March 2015. The management has already taken up the case with the concerned banks for timely crediting the amount in the respective account. (b) In seven circles (previous year nine circles), unlinked credit items amounting to ` 404 lacs (previous year ` 470 lacs) and in six circles (previous year ten circles) unlinked debit items amounting to ` 76 lacs (previous year ` 223 lacs) are appearing in the bank reconciliation statement as at 31st March 2015. The management is in the process of reconciling all such items in due course. (c) Bank balances in two circles (previous year one circle) includes cheques in hand pending to be deposited in bank as on 31st March 2015. (d) These earmarked deposits are for the purpose of securing various bank gurantee given by the bank.

102 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) 20. SHORT TERM LOANS AND ADVANCES

As at As at 31st March 2015 31st March 2014 Advances recoverable in cash or in kind or for value to be received Secured, considered good Security deposits 2,960 1,224 Unsecured, considered good Advances to contractors 45,524 63,916 Purchase advances 16,726 6,467 Loans and advances to staff 3,775 4,234 Security deposits 54 367 Other advances 96 136 69,135 76,344 Note : (a) In two circles (previous year one circles), it has been noticed that there are differences in the subsidiary ledger of loans and advances with those appearing in general ledger. The management is in the process of reconciling the differences of current assets. 21. OTHER CURRENT ASSETS

As at As at 31st March 2015 31st March 2014 Amount recoverable in cash or in kind or for value 34,988 23,461 to be received Accrued revenue 121,578 130,568 Amount recoverable from DoT – For employees on deputation 2,518 1,745 – For NOFN project 18,699 – – Other recoverables [refer note 32] 409,279 846,120 Amount recoverable from - Government departments 3,705 3,979 - Government companies 363,423 356,466 Claims recoverable from others 20,870 21,576 Operating lease charges recoverable 1,084 1,189 Sales tax recoverable from customers 6 24 Service tax recoverable from customers 82,692 82,294

103 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

As at As at 31st March 2015 31st March 2014 Balances with excise and other tax authorities 62,025 54,257 Interest accrued – on bank deposits 155 158 – on loans and advances 15 27 Call detail record based claims recoverable 7,688 12,337 1,128,725 1,534,201 Less: Provision for doubtful assets 217,439 212,395 911,286 1,321,806 Notes : (a) Cenvat on account of service tax, excise duty and custom duty on capital goods and inputs is under reconciliation in some circles. 22. REVENUE FROM OPERATIONS

For the year ended For the year ended 31st March 2015 31st March 2014 Revenue from sale of services Telephones (other than Wireless in Local Loop 493,381 501,326 (WLL)) Cellular 1,105,273 1,066,237 WLL 17,021 18,150 Broad band services 499,681 465,969 Leased lines 207,868 208,239 Other services 2,371 2,604 Telegraphs and telex – 399 Income from passive infrastructure 19,106 11,574 Interconnection usage charges (IUC) from 273,189 302,809 other service providers 2,617,890 2,577,307 Other operating revenue Other operating income [refer note (a) below and note 96,568 20,942 6 (b)] Other 9,765 17,077 106,333 38,019 2,724,223 2,615,326

104 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

Notes : (a) (i) Other operating income represents subsidies from Universal Service Obligation Fund and DoT. (ii) During the year, The Company has booked income of ` 26,442 lacs (previous year nil) on certain projects namely, LWE project, NOFN project and Defence Project. b) Telephones disconnected due to non-payment are considered to be working for a period of 30 days from the date of disconnection of outgoing facility. During this period, the incoming facility is provided and fixed monthly charges are billed. c) Indo-Nepal telecom traffic account (i) Revenue receivable amounting to ` 652 lacs (previous year ` 267 lacs) and payable ` 298 lacs (previous year ` 494 lacs) in respect of Indo-Nepal traffic account has been considered on accrual basis. (ii) Nepal Telecom has disputed outstanding dues of ` 43 lacs pertaining to period from May 2003 to December 2004. A provision of ` 43 lacs which has been made by the corporate office on behalf of the circle in the year 2009-10 in this regard. The disputed amount of dues payable to Nepal telecom from January 2010 to March 2011 is ` 45 lacs. d) Indo-Bangladesh telecom traffic account Revenue receivable amounting to ` 24 lacs (previous year ` 10 lacs) and payable ` 26 lacs (previous year ` 7 lacs) in respect of Indo-Bangladesh traffic account has been considered on accrual basis. e) ` 28 lacs (previous year ` 28) outstanding on account of transit charges as disputed by Limited is pending and ` 285 lacs (previous year ` 285) is outstanding against other IUC operator against which necessary provisions has been made upto financial year 2011-12. 23. OTHER INCOME

For the year ended For the year ended 31st March 2015 31st March 2014 Interest income on: – Deposits with banks 3,983 3,679 – Loans and advances 3,430 3,209 – Income tax refund 791 17,928 8,204 24,816 Other non-operating income Profit on sale of assets (net) 3,234 3,817 Liquidated damages 23,328 31,965 Excess provision written back 67,692 91,985 Rent of staff quarters 3,106 2,438

105 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

For the year ended For the year ended 31st March 2015 31st March 2014 Sale of scrap 3,636 3,038 Reimbursement from USO Administrator for – 3,988 USO Towers Income from Network Operating and Control 3,070 3,324 Center (NOCC) Others including sale of publications, forms, 28,027 18,938 waste paper, etc. 132,093 159,493 140,297 184,309 24. EMPLOYEE BENEFITS EXPENSE

For the year ended For the year ended 31st March 2015 31st March 2014 Salaries, wages, allowance and other benefits 1,359,470 1,321,286 Leave encashment (including provision) [refer 10,611 110,367 note (a) below] Pension contribution 97,265 88,914 Employer’s contribution towards employees 21,316 18,735 provident fund Gratuity (including provision) 1,500 6,440 Leave salary contribution 107 818 Medical expenditure 34,819 32,634 Staff welfare expenses [refer note (b) below] 1,922 1,714 1,527,010 1,580,908 Less : Allocated to capital work-in-progress and 30,660 37,324 others 1,496,350 1,543,584 Notes : a) Leave encashment of ` 66,737 lacs (previous year ` 59,418 lacs) has been paid by the Company considering the unfunded position of the related fund out of which 56,384 lacs has been adjusted in the fund. b) During the year, the Company has paid ` 750 lacs (previous year ` 400 lacs) to Staff Welfare Board and ` 200 lacs (previous year ` 100 lacs) to Sports and Cultural Board for promoting welfare activities at various circles.

106 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) 25. FINANCE COSTS

For the year ended For the year ended 31st March 2015 31st March 2014 Interest expense on: – Subscribers’ deposit 8 7 – Bank loan 49,536 21,639 – Others 346 153 Other borrowing costs 299 – 50,189 21,799 26. ADMINISTRATIVE, OPERATING AND OTHER EXPENSES For the year ended For the year ended 31st March 2015 31st March 2014 Rent 31,397 32,141 Lease charges 366 489 Rates and taxes 5,207 4,962 Power and fuel 263,193 262,451 Insurance 184 281 Bank charges 194 165 Repairs and maintenance on: – Buildings 34,620 31,170 – Plant and machinery 105,352 92,418 – Cables 40,737 42,905 – Others 11,644 10,869 Professional and consultancy charges 2,363 2,412 Payment to auditors [refer note 37] 346 301 Printing and stationery 6,010 6,660 Commission on franchise services 49,992 52,366 Advertisement 1,059 992 Business promotion and marketing expenses 7,612 5,385 Travelling expenses 7,034 7,907 Postage and courier charges 6,284 6,959 Security services 29,737 28,612 Vehicle running expenses (including hired 23,056 21,839 vehicles) Interconnection usage charges (IUC) to other 229,351 238,835 service providers Expenditure on passive infrastructure hired 75,960 64,719

107 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

For the year ended For the year ended 31st March 2015 31st March 2014 Expenditure on services and other expenses 72,296 77,906 [refer note (c)] Penalty for customer application form (CAF) 320 1,885 verification Wealth tax 78 84 Write off and losses (other than bad debts) 30,046 22,534 Bad-debt provision other than services 735 832 Bad-debt written off 22,941 25,684 Provision for doubtful debts and disputed bills 26,966 53,953 Write off of unrecovered service tax 3,774 1,286 Foreign exchange fluctuation loss (net) 461 1,069 Loss from manufacturing activities of factories 1,222 8,321 [refer note (a) and (b)] Profit from construction/telecom services (479) (1,365) projects Hiring charges of machinery lines 257 – Payment of financial disincentive to Telecom 4 – Regulatory Authority of India 1,090,319 1,107,027 Less: Allocated to capital project works and 6,360 6,097 others 1,083,959 1,100,930 Notes : a) Telecom factories manufacturing account : Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Opening stock - raw material and scraps 8,376 8,379 Purchases 18,878 10,878 Direct expenses 12,384 13,123 Change in inventory (662) 2,079 Closing stock - raw material and scraps (10,836) (8,376) Total (A) 28,140 26,083 Internal transfer (B) 26,918 17,762 Loss from manufacturing activities 1,222 8,321

108 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) b) Production of goods by the Company is for captive consumption. Prices for the transfer of stock from telecom factories to circles for self-consumption are predetermined. The predetermined rates include direct cost including overhead allocation at a fixed rate. This practice has resulted in internal loss of ` 1,223 lacs (previous year ` 8,321 lacs) for the year ended 31st March 2015 arising out of such transfer. The said amount has been netted off against the administrative expenses in the statement of profit and loss for the year since it is not possible to identify the individual items of stores, which have been capitalised or expensed off. c) Consumption of stores and spare parts for the year ended 31st March 2015 is ` 5,363 lacs (previous year ` 2,367) lacs included in expenditure on services and other expenses. 27. PRIOR PERIOD ITEMS

For the year ended For the year ended 31st March 2015 31st March 2014 Prior period income Income from WIMAX – 3 Value added service 8,992 48 Broadband services 1,056 77 Liquidated damages and other miscellaneous (731) 1,212 income Telegraphs – 0 Subsidy from DIT for Rural Broad Band (wireline) 41 90 [refer note 5] Interconnection usage charges (IUC) from other (2,026) 98 service providers Income from real estate – 5 7,332 1,533 Expenditure booked earlier now reversed Salaries and staff expenses (4,262) 47 License fee – 281 Interest 129 4,132 (4,133) 4,460 Total A 3,199 5,993 Income booked earlier now reversed Cellular mobile service 535 356

109 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

For the year ended For the year ended 31st March 2015 31st March 2014 Income from – telephones (other than WLL) 1,657 130 – telephone circuits (2,746) 449 – telegraph circuits 19 149 USO subsidy 3,660 558 Telephones (WLL) 29 22 3,154 1,664 Prior period expenses Rent, rate and taxes 470 141 Repairs 1,899 864 Depreciation and amortisation [refer note 13] 6,859 9,063 Power and fuel 125 263 Interconnection usage charges (IUC) to other 929 3,954 service providers USO towers maintenance 5,220 46 Other services 4,195 9,092 19,697 23,423 Total B 22,851 25,087 Net amount of prior period items (A-B) (19,652) (19,094)

28. ASSETS AND LIABILITIES TAKEN OVER FROM DoT 28.1 In pursuance of the Memorandum of Understanding (MOU),dated 30 September 2000 executed between Government of India and the Company, all assets and liabilities in respect of business carried on by Department of Telecom Services (DTS) and Department of Telecom Operations (DTO) were transferred to the Company with effect from 1st October 2000 at a provisional value of ` 6,300,000 lacs and up to the current financial year the Company has identified net assets of ` 6,326,718 lacs (previous year ` 6,327,152 lacs) against it. During the current financial year, based on physical verification of fixed assets and inventory and reconciliation of various heads of assets and liabilities in the subsidiary and general ledgers, the management has found some facts which has resulted in increase/ decrease in the following assets and liabilities taken over as on 1st October 2000 amounting to net reduction in the assets of ` 434 lacs [previous year ` 2,287 lacs]:

110 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

Particulars Up to Additions/ Up to 31st March 2014 (Deletions) during 31st March 2015 the year Assets Fixed assets 5,406,839 (417) 5,406,422 Capital work-in-progress 502,519 (16) 502,503 Inventory 187,850 - 187,850 Trade receivables 683,196 - 683,196 Advance to contractors 39,448 - 39,448 Deposit with electricity boards /others 2,184 – 2,184 Total-A 6,822,036 (433) 6,821,603 Liabilities Customer deposits 393,704 – 393,704 Earnest money deposits 12,116 – 12,116 Security deposits from contractors / 28,999 – 28,999 suppliers Working expense liability as on 01 43,472 1 43,473 October 2000 Contractors bills payable as on 01 16,593 - 16,593 October 2000 Total-B 494,884 1 494,885 Net assets taken over by the Company 6,327,152 (434) 6,326,718 (A-B) Previous year 6,329,439 (2,287) 6,327,152

Note 1: The net assets and the contingent liabilities transferred to the Company as on 1st October 2000 are subject to confirmation by DoT as regard to their ownership and the value. Note 2: Trade receivables as on 31st March 2015 includes an amount of ` 21,138 lacs pertaining to period prior to 1st October 2000, which have been fully provided for and included in net current assets referred above. 28.2 The capital structure for the Company concurred by the Ministry of Finance and conveyed by the Department of Telecommunications vide their U.O. No. 1-2/2000-B (Pt.) dated 13th December 2001 has been treated as consideration for transferring the above stated assets and liabilities is as follows:

111 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

Particulars As at 1st October Additions/ Total structure 2000 (as on 31st (Deletions) during as at 1st October March 2014) the year ended 2000 (as on 31st March 2015 31st March2015) Equity 500,000 - 500,000 9% Non-cumulative preference shares 750,000 - 750,000 15 year Government loan (Interest at 750,000 - 750,000 prevalent Government lending rate Loan from MTNL [note 1] 305,600 - 305,600 Capital reserves – DoT [note 2] 4,021,552 (434) 4,021,118 Total 6,327,152 (434) 6,326,718

Notes: 1. The entire amount has been repaid in the previous years. 2. Represents the difference between the total value of the assets taken over and the long term identified liabilities and the capital structure, as on 1st October 2000 as communicated by DoT. Further, the additional government loan amounting to ` 98,318 lacs had been written back to capital reserve during previous year which did not form part of capital structure. 28.3 In pursuance of clause 13 of agreement of transfer executed between the Government of India and the Company dated 30th September 2000 all costs, charges and expenses including stamp duties, registration charges, transfer duties, any other taxes, levies, duties or charges relating to or in connection with completion of transfer of assets and liabilities shall be borne by the Government of India. 29. LICENSE FEE AND SPECTRUM CHARGES 29.1 License and spectrum fee for the year ended 31st March 2015 is ` 217,032 lacs (previous year ` 224,330 lacs). 29.2 During the current year, the formula for distribution of the revenue between various components for CMTS Services has been changed. The formula adopted during financial year 2014-15 is as per the following percentage:

Service Basic CMTS NLD ILD ISP Leased circuits 30% - 70% - - Basic services 70.72% - 17.58% 11.70% - CMTS services - 69.99% 23.64% 1.72% 4.65% (previous year (previous year (previous year (previous year 75.50%) 21.26%) 3.24%) nil)

The NLD/ILD portion of Point of Interconnection (POI) revenue has been taken on actual basis.

112 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) 30. EMPLOYEE COST 30.1 The Company has made pension contribution as per applicable rates to DoT on the basis of pay scales for absorbed employees and for other employees working on deemed deputation as per the Central Government pay scales in accordance with financial rule 116 of the Government of India. The liability on account of pension payable to all such employees will be that of the Government of India as communicated by the Secretary, DoT vide their DO No. 1-45/2003-B dated 15 March 2005. However, in the year 2006-07 DoT vide their letter No. 1-45/2003-B dated 15th June 2006 has intimated that annual pension liability of the Government in respect of employees of DoT / DTS / DTO who retired prior to 1st October 2000, those who have worked / are working in the Company on deemed deputation and for those who are absorbed in the Company shall not exceed 60% of the annual receipts to the Government from the item (a) Dividend income from MTNL/BSNL, (b) License fee from MTNL/BSNL, (c) Corporate Tax/Excise Duty/Service Tax paid by BSNL. Any amount exceeding the receipts on account of 3 items mentioned above shall be borne by MTNL/BSNL. The Company has taken up the matter with the Government stating that its liability is restricted to pension contribution as per the rates prescribed in financial rules. 30.2 During the year, the Company has recognised following amounts in the statement of profit and loss : a) Defined contribution plans Contribution to defined contribution plan i.e. employer’s contribution to provident fund and pension contribution to the Government of India for the year is charged to statement profit and loss. These amounts are shown as under:

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Employer’s contribution to provident fund 21,316 18,735 Pension contribution to the Government of India 97,265 88,914 b) Defined Benefit Plans A. Gratuity The employees’ gratuity fund scheme administered by the Company employees gratuity fund trust through two fund managers namely Life Insurance Corporation (LIC) of India and SBI Life Insurance Company Limited, is a defined benefit plan. The entire fund has been withdrawn from SBI Life Insurance Company Limited during the current financial year. The amount shown as fund invested with the SBI as on 31st March 2014 is the amount of interest for the financial year 2013-14 till the date of withdrawal. The present value of obligation is determined on actuarial valuation done by LIC using projected unit credit method to arrive the final obligation.

113 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) i) Defined benefits / expenses for gratuity recognised for the year Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Current service cost 3,400 3,601 Interest cost 3,516 2,811 Expected return on plan assets ( 3,870) ( 2,890) Total actuarial (gain)/loss (1,549) 2,913 Net cost 1,497 6,435 ii) The assumptions used to determine the benefit obligations are as follows:

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Discount rate 8% 8% Expected rate of increase in compensation levels 7% 7% Expected average remaining working lives of 23.27 23.17 employees (years) Mortality table LIC (1994-96) LIC (1994-96) Ultimate Ultimate iii) Reconciliation of opening and closing balances of defined benefit obligations for gratuity

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Present value of obligations as at beginning of year 43,950 35,128 Interest cost 3,516 2,811 Current service cost 3,400 3,601 Benefits paid (385) ( 503) Actuarial (gain)/loss on obligations (1,549) 2,913 Present value of obligations as at end of year 48,932 43,950 iv) Reconciliation of opening and closing balances of fair value of plan assets for gratuity

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Fair value of plan assets at beginning of year 37,515 27,941 Contributions during the year 6,435 7,187 Expected return on plan assets 3,870 2,890 Benefits paid (385) ( 503)

114 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Fair value of plan assets at the end of year 47,435 37,515 v) Reconciliation of fair value of assets and obligations for gratuity

Particulars For the year ended For the year 31st March 2015 ended 31st March 2014 Fair value of plan assets at the end of year 47,435 37,515 Present value of obligations as at end of year 48,932 43,950 Net liability recognised in balance sheet 1,497 6,435 vi) Gratuity fund investment details (Fund manager wise, to the extent funded)

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Life Insurance Corporation of India 47,435 37,496 SBI Life Insurance – 19 Total 47,435 37,515 vii) Amounts recognised in current year and previous four years Particulars For the year For the year For the year For the year For the year ended 31st ended 31st ended 31st ended 31st ended 31st March 2015 March 2014 March 2013 March 2012 March 2011 Defined benefit 48,932 43,950 35,128 28,617 24,408 obligation Plan Asset 47,435 37,515 27,941 19,543 18,379 Deficit 1,497 6,435 7,187 9,074 6,029 Net actuarial loss/ (gain) (1,549) 2,913 908 2,655 2,577 recognized in the year

 Leave encashment: Leave encashment is also a defined benefit plan. The liability towards leave encashment has been determined through actuarial valuation as per the notified Accounting Standard 15 (Revised 2005) ‘Employee Benefits’ using projected unit credit method.

115 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) i) Defined benefits / expenses for leave encashment recognised for the year

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Current service cost 8,399 10,184 Interest cost 67,320 58,407 Expected return on plan assets (66,666) (60,563) Total actuarial (gain)/loss (65,437) 42,818 Net cost (56,384) 50,846 ii) The assumptions used to determine the benefit obligations are as follows:

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Discount rate 8% 8% Expected rate of increase in compensation levels 7% 7% Expected average remaining working lives of 9 10 employees (years) Withdrawal rate 1% to 3% depending 1% to 3% on age depending on age Mortality table LIC (1994-96) LIC (1994-96) Ultimate Ultimate iii) Reconciliation of opening and closing balances of defined benefit obligations for leave encashment.

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Present value of obligations as at beginning of year 841,499 730,090 Interest cost 67,320 58,407 Current service cost 8,399 10,184 Actuarial (gain)/loss on obligations (65,437) 42,818 Present value of obligations as at end of year 851,781 841,499

116 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) iv) Reconciliation of opening and closing balances of fair value of plan assets for leave encashment.

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Fair value of plan assets at beginning of year 698,074 637,511 Expected return on plan assets 66,666 60,563 Fair value of plan assets at the end of year 764,740 698,074 v) Reconciliation of fair value of assets and obligations for leave encashment

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Fair value of plan assets at the end of year 764,740 698,074 Present value of obligations as at end of year 851,781 841,499 Unfunded amount recognised in balance sheet 87,041 143,425 vi) Leave encashment fund investment details (fund manager wise, to the extent funded) Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Life Insurance Corporation of India (100%) 764,740 698,074 vii) Amounts recognised in current year and previous four years

Particulars For the year For the year For the year For the year For the year ended 31 ended 31 ended 31 ended 31 ended 31 March 2015 March 2014 March 2013 March 2012 March 2011 Defined benefit 851,781 841,499 730,090 664,741 629,574 obligation Plan Asset 764,740 698,074 637,511 581,352 530,141 Deficit 87,041 143,425 92,579 83,389 99,433 Net actuarial loss/ (gain) (65,437) 42,818 2,151 14,576 38,250 recognized in the year

31. FIXED ASSETS / DEPRECIATION AND AMORTIZATION/ CAPITAL WORK-IN- PROGRESS 31.1 Fixed assets taken over from DoT as on 1st October 2000 are based on physical verification conducted by the management. The value of fixed assets taken over including capital work- in-progress has been determined by the management using the original cost of the asset (wherever available) or alternatively the value arrived at by applying Strategic Business Plan

117 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) (“SBP”) rates, which is based on technical assessment, as reduced by the depreciation up to 30th September 2000 on straight line basis at the rates prescribed by DoT. Capital assets acquired by the Company after 1st October 2000 are valued at the cost including all direct charges incurred up to the time of installation or put to use. The transfer values, as indicated above, in respect of assets transferred from DoT on 1st October 2000 have been treated as its original cost and depreciation has been provided on written down value method at the rates prescribed in Schedule XIV of the Companies Act, 1956 till financial year 2013-14 without reassessing the remaining useful life of such assets as on that date. Depreciation has been provided at the rates as stated above for all the assets acquired after 1st October 2000 except in the case of Subscribers Installations which are depreciated over the useful life of 5 years on written down value method. However, with the enactment of Companies Act, 2013 the depreciation has been provided as per the provisions of schedule II of the Companies Act, 2013 for financial year 2014-15 for all assets including Subscribers Installations. Depreciation has been calculated by the circles, as per the policies of the Company. Further, necessary adjustment has been made to General Reserve to the extent of excess of written down value of assets over residual value (5% of the original cost) for the assets where the remaining useful life is nil as on 31st March 2014 and the assets are not decommissioned. 31.2 Land at several locations has been taken over at a nominal value say ` 1, wherever original cost is not available. As at 31st March 2015, thirty three circles (previous year thirty one circles) have identified the leasehold land. In the absence of the information relating to such acquisition in other cases, no adjustment has been made for amortizing the cost of such unidentified lease hold land over the lease period. The lease period of a few leasehold lands on which buildings are constructed, have not been renewed / or the renewals are under dispute. Since expected terms, conditions and rentals for renewal/ surrender are not ascertainable, no provision has been made for the ‘surrender value / written down value of the buildings’. 31.3 Pending transfer of the immovable property in the name of the Company, documents in respect of certain land and buildings acquired during the period are under legal process/ execution. Further in respect of assets taken over from DoT, formalities for vesting the assets in favour of the Company wherever necessary/applicable are under process. 31.4 The Company, as per instructions issued by the Ministry of Communications and Information Technology through letters having number P-11014/13/2008-PP and number P-11014/13/2008-PP dated 12th June 2010, had provided ` 1,018,658 lacs and ` 831,380 lacs as one time charge for 3G spectrum and BWA spectrum respectively in the financial year 2009-10, which was earmarked for the Company on 8th August 2008. Above-mentioned amount has been paid to the Government of India during the financial year 2010-11. As per terms and conditions of NIA (Notice Inviting Application) the right to use above-mentioned spectrum was for 20 years from the date of awards of right to commercially use the allocated spectrum block. Accordingly, the Company had been amortising the one time spectrum fee over the period of twenty years as per straight-line method. During the previous year, the Company received approval of the cabinet vide Department of

118 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) Telecommunication letter no. 10-20/2012-SU.I(vol. II) dated 15th January 2014, for surrender of BWA Spectrum by the Company and refund of upfront charges paid by the Company for six (6) LSAs amounting to ` 672,451 lacs. Accordingly, the intangible assets of BWA spectrum amounting to ` 672,451 lacs has been decapitalised and claims recoverable from DoT for BWA spectrum refund has been raised in the books of accounts by the corresponding amount. 31.5 Certain assets that have been completed and put to use, have not been capitalised in twelve circles (previous year fourteen circles) pursuant to the policy of capitalising only after completion certificates have been obtained and till then these are still shown as capital work- in-progress. The amount ascertained in respect of seven circles (previous year ten circles) is ` 54,234 lacs (previous year ` 45,808 lacs). Consequently, depreciation has also not been charged on the same. 31.6 Establishment and administration expenses incurred in units where project work is also undertaken are allocated to capital and revenue mainly on actual man-month basis and only where such actual allocation is not possible then on proportionate basis. 31.7 In one circle (previous year two circles), there is difference between the CWIP subsidiary ledger and general control ledger. 32. DoT BALANCES Other recoverable from DoT, after netting off the claim payables to them, ` 617,499 lacs (previous year ` 807,011 lacs), included in long-term loans and advances and other current assets, recoverable towards refund of BWA spectrum surrendered by BSNL in the previous year, confirmed by DoT vide letter no. 10-20/2012-SU.I (vol. II) dated 15th January 2014. Further during the year, the Company has set off the payable towards license and spectrum charges payable to DoT with the aforementioned recoverable on account of the BWA spectrum surrender. The management does not believe this set off to have any other significant impact on the financial statement. This balance is subject to confirmation, reconciliation and consequential adjustment. There is no practice of getting confirmation of such balances with Government department due to huge number of transactions. Further, there is no agreement between the Company and DoT for interest recoverable/payable on outstanding amounts of DoT. Hence, no accrual for interest has been made on the amount payable to/recoverable from DoT. 33. INTER/INTRA CIRCLE REMITTANCE There are certain expenses (both capital and revenue) which are incurred by one circle on behalf of other. These expenses are parked in Inter/ Intra-Circle Remittances account. As on 31st March 2015, there was a balance of ` 57,312 lacs (previous year ` 86,537 lacs) in Inter/Intra-Circle Remittances account. This amount pertains mainly to assets and liabilities, and marginally to expenditure and revenue. The depreciation is not claimed in case of assets and expenses are not taken to statement of profit and loss pending reconciliation. The reconciliation is done on continuous basis throughout the year and proper effect is taken in the books of accounts for reconciled amounts.

119 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) 34. EARNINGS PER SHARE

Description Unit For the year For the year 31st March 2015 31st March 2014 Loss after tax (` in lacs) (823,409) (701,976) Number of equity shares outstanding (in number) 5,000,000,000 5,000,000,000 Face value of shares ( ` ) 10 10 Basic and Diluted earnings per share ( ` ) (16.47) (14.04)

35. SEGMENT REPORTING A. Current year Particulars For the year ended 31st March 2015 Business Segments Un- Total allocable Basic Cellular Broadband Revenue Revenue from operations 873,040 1,340,151 502,633 8,399 2,724, 223 Inter segment revenue 96,696 19,438 – – 116,134 (eliminated) Other income 100,499 29,917 934 743 132,093 Net segment revenue 1,070,235 1,389,506 503,567 9,142 2,972,450 Segment results Operating profit/(loss) (1,494,546) 241,874 448,545 (18,578) (822,706) before interest, prior period items and taxes Interest income 6,747 303 – 1,154 8,204 Interest expenses (301) (48) – (49,840) (50,189) Profit/(Loss) before prior (1,488,100) 242,129 448,545 (67,264) (864,690) period items and taxes Prior period items (15,861) (5,997) 1,097 1,109 (19,652) Profit/(Loss) before tax (1,503,961) 236,132 449,642 (66,155) (884,342) Deferred tax - – – 60,933 60,933 Profit/(Loss) after tax (1,503,961) 236,132 449,642 (5,222) (823,409) Other information

120 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

Particulars For the year ended 31st March 2015 Business Segments Un- Total allocable Basic Cellular Broadband Segment assets 2,814,367 2,864,943 242,415 1,502,105 7,423,830 Segment liabilities 360,559 519,573 41,419 1,717,339 2,638,890 Increase/(decrease) in (118,215) 276,781 (18,503) (13) 140,050 gross block of fixed assets Depreciation and 466,821 385,172 29,210 477 881,680 amortisation Non cash expense other 66,896 17,106 216 244 84,462 than depreciation B. Previous year Particulars For the year ended 31 March 2014 Business Segments Un- Total Basic Cellular Broadband allocable Revenue Revenue from operations 848,713 1,292,179 472,237 2,197 2,615,326 Inter segment revenue 116,492 43,664 – – 160,156 (eliminated) Other income 121,477 33,447 2,375 2,194 159,493 Net segment revenue 1,086,682 1,369,290 474,612 4,391 2,934,975 Segment results Operating profit/(loss) before (1,509,741) 400,829 429,937 (17,202) (696,177) interest, prior period items and taxes Interest income 5,735 243 – 18,838 24,816 Interest expenses (234) (85) – (21,645) (21,964) Profit/(Loss) before prior (1,504,240) 400,987 429,937 (20,009) (693,325) period items and taxes Prior period items (20,825) (2,520) 248 4,003 (19,094) Profit/(Loss) before tax (1,525,065) 398,467 430,185 (16,006) (712,419) Deferred tax – – – 10,443 10,443 Profit/(Loss) after tax (1,525,065) 398,467 430,185 (5,563) (701,976)

121 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

Particulars For the year ended 31 March 2014 Business Segments Un- Total Basic Cellular Broadband allocable Other information Segment assets 3,977,317 3,314,703 274,017 1,367,307 8,933,344 Segment liabilities 1,153,219 530,102 47,025 7,202,998 8,933,344 Increase/(decrease) in gross (18,740) (482,200) 12,056 (330) (489,214) block of fixed assets Depreciation and amortisation 418,926 157,684 25,423 284 602,317 Non cash expense other than 88,586 15,566 129 8 104,289 depreciation

Note : 1 a) Primary Segment: Basic, Cellular and Broad Band services have been considered as primary business segments for reporting under the notified AS-17 “Segment Reporting” issued by CA Rules 2006. b) Secondary Segment: The Company caters only to the Indian market representing a singular economic environment with similar risks and returns and further there are no reportable geographical segments. 2 In the current year segment liabilities are shown net of shareholders fund while in the the previous year same were shown including shareholders fund. 36. RELATED PARTY DISCLOSURE a. Key Management Personnel

Designation Name of incumbent Remarks Chairman and Managing Shri R K Upadhyay Upto 30th June 2014 Director Shri A.N Rai From 1st July 2014 to 15th January 2015 Shri Anupam Shrivasatava From 16th January 2015 onwards Director (Finance) Shri Anupam Shrivastava Upto 15th January 2015 Dir (CM) Director (Enterprise) Shri A.N. Rai – Director (Consumer Fixed Shri N.K.Gupta – Access)

122 Annual Report 2014-15

Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

Designation Name of incumbent Remarks Director (Consumer Mobility) Shri Anupam Shrivastava Upto 15th January 2015 Shri N.K. Gupta From 16th January 2015 onwards Director (Human Resource) Shri A.N. Rai – Government Director Shri Shahbaz Ali Upto 26th August 2014 Ms. Rita Amitabh Teaotia – Smt. Darshana Momaya From 19th September 2014 onwards Dabral Non-official part-time Prof. N. Balakrishnan – Director Shri Ajai Vikram Singh – b. Disclosure of transactions between the Company and related parties and the status of outstanding balances. Name of the Party Description of transactions Year ended Year ended 31st March 2015 31st March 2014 Key management Remuneration paid personnel Payment of salary and allowances 78 120 Perquisites 3 4 Sitting fees 2 2 Total 83 126 Advance given: Opening balance 4 1 Extended during the year 12 15 Total 16 16 Repayment of advance 13 12 Outstanding advance 3 4 Note: These advances are in the normal course of business. c. The Company being a wholly State owned enterprise, disclosure as regards related party relationship with other State controlled enterprises and transactions with such enterprises has not been made in accordance with the notified “Accounting Standard-18 Related party disclosures”.

123 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) 37. AUDITOR’S REMUNERATION (STATUTORY/BRANCH AUDITORS)

Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Statutory auditor Branch auditor Statutory auditor Branch auditor Statutory audit fee 15 271 13 227 Certification 2 26 2 36 charges Reimbursement of 11 21 2 21 expenses Total 28 318 17 284 Other services – – – – Tax audit fee – 26 – 24

Note: Fees are exclusive of service tax and cess wherever applicable. 38. ACCOUNTING STANDARD-29, DISCLOSURE REQUIREMENT The disclosure relating to provisions in terms of AS-29, to the extent available, are as under:

Name of Opening Fresh Provision Provision Closing Provisions balance as at provision utilized written back balance as at 1st April 2014 made during during the during the 31st March the year year year 2015 Wealth tax 389 78 82 – 385 (390) (84) (85) – (389) Contingencies 1,544 86 55 3 1,572 (1,256) (435) (1) (146) (1,544) Total 1,646 519 86 146 1,933 (1,589) (205) (148) – (1,646)

Note: Figures in bracket denotes previous year figures. 39. OTHER SCHEDULE-III REQUIREMENTS Information required as per Note 5(viii) of General Instructions for preparation of statement of profit and loss, Part II of Schedule III of Companies Act, 2013, to the extent available, is as under:

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Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

a. Value of Imports on CIF Basis: Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Components and spares parts 597 957 Capital goods 1,101 15,721 Total 1,698 16,678 Note: One circle (previous year one circle) has not ascertained the value of import on CIF basis. b. The expenditure in foreign currency: Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Expenditure on services 5881 937 Travelling 41 23 Others 5,700 8,685 Total 11,622 9,645 Note: One circle (previous year one circle) has not ascertained the value of expenditure in foreign currency. c. Consumption of imported and indigenous stores and spares parts (to the extent identified): Particulars For the year ended 31st For the year ended 31st March 2015 March 2014 (` in lacs) % (` in lacs) % Imported 6,480 15 21,908 56 Indigenous 37,542 85 17,325 44 Total 44,022 100 39,233 100

Note: Three circles (previous year one circle) has not ascertained the consumption of imported and indigenous stores and spares parts. d. Earnings in foreign currency: Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Training fee 94 56 Income from services 12,646 2,548 Others 813 685 Total 13,553 3,289

125 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) Note: One circle (previous year one circle) has not ascertained the value of earnings in foreign currency. 40. LEASE The Company has taken vehicles for senior executives under operating leases, which expire between the period ranging from April 2015 to November 2019 (previous year April 2014 to May 2018). The gross rental expenses, excluding service tax, for such vehicles are ` 83 lacs (previous year ` 92 lacs). The committed lease rentals in the future are: Particulars For the year ended For the year ended 31st March 2015 31st March 2014 Not later than one year (excluding service tax) 66 90 Later than one year and not later than five years 153 110 (excluding service tax) Total 219 200 41. Vide an Memorandum of Understanding entered between the Company and MTNL, rentals are calculated at mutually agreed rates after review of space occupied by both the aforementioned Public Sector Undertakings (PSUs)in each others’ buildings. 42. CONTINGENT LIABILITIES AND COMMITMENTS: a. Contingent liabilities (i) Claims against the company not acknowledged as debts are as follows: Particulars As at 31st March 2015 As at 31st March 2014 No. of cases Amount No. of cases Amount TR Billing 114 56 36 133 Enhanced sales tax in lieu of C/D Forms 21 2,395 11 1,372 On account of service tax disputed 94 33,292 120 22,152 Sales tax disputed 63 12,925 57 14,354 Central excise claims 18 1,820 20 3,536 License fee and spectrum charges [note 1] 2 925,917 2 1,136,678 Foreign exchange fluctuation loss [note 2] 1 2,465 1 2,465 Others [note 3] 392 194,513 43,184 154,565 Total 705 1,173,383 43,431 1,335,255

Note 1: Demand raised by DoT amounting to: i) ` 691,186 lacs on account of one time spectrum charges for Global System for Mobile (GSM) spectrum held by the Company, the matter is sub-judice by other operators and

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Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) the amount is not finally crystallized. ii) ` 234,731 lacs on account of provisional assessment of license fee for the years 2007- 08 to 2012-13, the matter has been taken up with DoT for revision. Note 2: The net amount payable to Pakistan Telecom Company Limited for settlement of telecom dues amounting to ` 17,671 lacs payable in Gold Franc currency have been accounted for in the book of Telecom circle in the year 2012-13 pertaining to the period upto June 2003. No claim has been received from Pakistan Telecom Company Limited on account of telecom traffic. In the absence of relevant details of traffic data, no recognition of income and provisioning for expenditure related to it has been accounted for, for the above period. The Management has decided not to recognise the foreign exchange fluctuation for the claims recoverable/payable from/to PTCL in the books of accounts and disclose the same will be shown as contingent liabilities. Note 3: The contingent liability in connection to nine cases included under the head ‘Others’ in the above table is not ascertainable. (ii) Claims pending in court related to Land acquisition, TR billing, Service tax, Central Excise andSales tax, Arbitration cases and others. Particulars As at 31st March 2015 As at 31st March 2014 No. of cases 13,757 14,438 Amount 1,105,158 848,092 (iii) Demands raised by the Income Tax Departments not acknowledged as debt are as follows: The Income Tax Assessments u/s 143(3) of Income Tax Act 1961 have been completed up to Assessment Year 2012-13 i.e. Financial Year 2011-12 and the disputed demand outstanding up to Assessment Year 2012-13 is of ` 707,995 lacs which has not been acknowledged as confirmed liability as the Company has been legally advised that this demand will either be quashed or substantially reduced. (iv) Liability on account of bank guarantees given by the Company. Particulars As at 31st March 2015 As at 31st March 2014 With cash Without cash With cash margin Without cash margin margin margin No. of cases 37 437 33 395 Amount 1,264 8,221 1,169 6,250 (v) As per Office Memorandum (OM) dated 19th November 2009, pension contribution was payable on the actual pay drawn as on 1st January 2007 (being the date of implementation of second pay commission for IDA). Whereas the Company was paying pension contribution on maximum of the scale as advised by DoT, from 1st

127 Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated) December 2011 the management had decided to change the method of payment of pension contribution from maximum pay scale to actual pay drawn as per the office memorandum dated 19th November 2009. Although the matter is still under pursuance with DoT, meanwhile, the management has once again decided to pay the pension contribution on maximum of the pay scale from 1st October 2014 onwards. The actual difference between these two methods of pension contribution payment upto 31st March 2015 is ` 77,571 lacs (previous year ` 70,703 lacs). b. Commitments a) Capital commitments (i) The estimated amounts of contracts remaining to be executed on capital account and not provided for in relation to execution of works and purchase of equipment are ` 83,403 lacs (previous year ` 121,749 lacs). (ii) In seven circles (previous year six circles) the estimated amount of contract remaining to be executed on capital account has not been ascertained. b) Other commitments (i) The amount of other commitments amounting to ` 5,640 lacs (previous year ` 8,333 lacs) is ascertained in one circle (previous year two circles). 43. CHANGE IN DEPRECIATION Pursuant to enactment of Schedule II of the Companies Act, 2013, effective 1st April 2014, the management has reassessed and changed, wherever necessary the useful lives to compute depreciation, to conform to the requirements of the Companies Act, 2013. Due to the aforementioned, the depreciation and amortisation charge and loss for the year ended 31st March 2015 is higher by ` 286,423 lacs and fixed assets are lower by a corresponding amount. Further, based on the transitional provisions provided in Schedule II of the Act, an amount of ` 140,009 lacs has been adjusted with the opening reserves as at 1st April 2014.

Particulars For the year ended 31st March 2015 Loss for the year (823,409) Add: Depreciation charged as per Companies Act, 2013 881,680 Less: Depreciation as per erstwhile Companies Act, 1956 (595,257) Adjusted loss for the year (536,986)

44. CURRENT TAX

The provision for income-tax for the current year has not been made since the Company is not having any taxable income either under normal provision of Income-Tax Act, 1961 or special provision under section 115JB (Minimum Alternate Tax) of the Income-Tax Act, 1961.

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Summary of significant accounting policies and other explanatory information for the year ended 31st March 2015 (All amounts in ` lacs, unless otherwise stated)

45. The Company is executing various projects for various Government departments on reimbursement basis.

46. An agreement dated 30th September 2014 has been entered into between the Company and Government of India through DoT with regard to provide mobile services in areas identified by Ministry of Home Affairs (GOI) in left wing extremists affected areas on agreed terms and conditions.

47. During the current year employees of the Company have contributed an amount of ` 1,284 lacs the Prime Minister National Relief Fund for disaster relief measures and rehabilitation of the victims of flood in Jammu & Kashmir.

48. A climatic catastrophe in the state of Jammu & Kashmir has caused damage to certain assets of the Jammu & Kashmir Telecom Circle of the company. The management is in the process of identifying the damaged assets for ascertaining the loss arising on this account, but does not expect the same to have a significant on the financial statements.

49. Figures of the previous year have been regrouped or reclassified wherever necessary to conform to the current years grouping and classification. This is the summary of significant accounting policies and other explanatory information referred to in our report of even date. for Walker Chandiok& Co LLP For and on behalf of Bharat Sanchar Nigam Limited (formerly Walker, Chandiok& Co) Chartered Accountants Sd/- Anupam Shrivastava Chairman and Managing Director Sd/- per Anamitra Das Partner Sd/- Sujata Ray Director (HR)

Sd/- M.N.Punde General Manager (Corporate Accounts)

Sd/- H.C. Pant Company Secretary and Sr. General Manager (Legal) Place : New Delhi Date : 18 September 2015

129 Independent Auditor’s Report Tothe Members of Bharat Sanchar Nigam Limited Report on the Financial Statements 1. We have audited the accompanying financial statements of Bharat Sanchar Nigam Limited (the ‘Company’), which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss,the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information. These financial statements comprise of 47 circles, out of which 1 circle is audited by us and remaining 46 circles are audited by the respective circle auditors appointed under Section 139 of the Companies Act, 2013 (the ‘Act’) by the Comptroller and Auditor General of India. Management’s Responsibility for the Financial Statements 2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these financial statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility 3. Our responsibility is to express an opinion on these financial statements based on our audit. 4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. 5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the

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accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements. 7. We believe that the audit evidence obtained by us and the audit evidence obtained by the other circle auditors in terms of their reports referred to in sub-paragraph 38 of the Other Matter paragraph below is sufficient and appropriate to provide a basis for our qualified audit opinion on the financial statements. Basis for Qualified Opinion Assets and liabilities taken over from Department of Telecommunication (‘DoT’) and the amounts receivable and payable to DoT 8. As detailed in note 28, 31.1 and 31.3 to the financial statements, assets and liabilities (including contingent liabilities) taken over from DoT have been verified and valued by the management based on internal calculations. Further, subsequent adjustments made on account of identification and recognition of net assets is adjusted to capital reserve. These are subject to reconciliations and confirmation from DoT as regards to ownership, value and classification. The consequential impact on the financial statements, if any, as a result of the same is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 9. As detailed in note 32 to the financial statements, amounts due from and to DoT included in current assets and current liabilities aggregating to Rs. 27,130 lacs (previous year Rs. 173,669 lacs) and Rs. 50,865 lacs (previous year Rs. 39,109 lacs) respectively are subject to confirmations and reconciliation. Consequently, the impact of the adjustments, if any, on the financial statements is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Fixed Assets 10. As reported by auditors of 19 circles, Capital work-in-progress, inter alia, includes balances pending capitalisation for long-periods of time owing to pending analysis of status, value and obtaining of commissioning certificates. The consequential impact on the capital work-in- progress, fixed assets, depreciation and amortisation and loss for the year, if any, is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 11. As reported by auditors of 8 circles, in the absence of information in respect of certain items of fixed assets capitalised, particularly batteries, it could not be established whether assets capitalised were on account of replacement/extension of an existing asset or additional acquisition of a new asset and hence the consequential impact of the same on the classification/ value of the respective asset, depreciation and amortisation, expenses and loss for the year, if any, is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 12. As reported by auditors of 12 circles, the leasehold land as identified and valued by the respective circles have been incorporated in the books of accounts and amortised with effect from the date of formation of the Company. Hence, in respect of the lands still not identified and/or duly incorporated in the books of accounts of the respective circles, the consequential impact on value of fixed assets, depreciation and amortisation and loss for the year, if any, is presently not ascertainable. Our audit report on the financial statements for the previous year

131 ended 31st March 2014 was also qualified in respect of this matter. 13. As detailed in note 31.2 to the financial statements, auditors of 6 circles have reported on the expired/non-renewal of leases on lands on which the Company had constructed buildings and the fact that management has not made any provision for the surrender value/written down value of the aforementioned buildings in the anticipation of the ultimate renewal of the leases. The consequential impact of adjustment on fixed assets, depreciation and amortisation and loss for the year, if any, is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 14. As stated in note 13(a) and 31.3 to the financial statements, fixed assets, inter alia, includes land pertaining to 23 circles, purchased/acquired on leasehold/ freehold basis through various authorities, the title deeds of which are yet to be executed in the name of the Company. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 15. The accounting policy of the Company as stated in note 2.6 to the financial statements with respect to the decommissioned assets has not been uniformly applied across all circles. In 17 circles, the decommissioned assets are not recorded at lower of the cost or net realisable value. While,in 6 circles, the decommissioned assets have not been appropriately adjusted from the block of fixed assets and depreciation and amortisation is still being charged on such decommissioned assets. In the absence of sufficient details, we are unable to comment upon the impact of adjustment on the fixed assets, current assets, depreciation and amortisation and loss for the year, if any, arising out of the same. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 16. The following accounting treatments by the Company in respect of fixed assets and capital works-in-progress are not in accordance with the provisions of the Accounting Standard-6, Depreciation Accounting; Accounting Standard-10, Accounting for fixed assets, and Accounting Standard-26, Intangible Assets notified under section 133 of the Act read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (as amended): 1. As detailed in note 31.6 to the financial statements and as reported by auditors of 23 circles, the Company has not consistently adhered to capitalizing the overheads expenses specifically attributable to the capital work-in-progress but has recorded the same on estimated/fixed percentage/proportionate/payment basis; 2. As reported by auditors of certain circles, the Company capitalises the assetson periodic basis instead of at the ready to use date; and 3. Accounting policies regarding capitalization, disposal, depreciation and amortization of fixed assets are not uniformly applied in case of 24 circles. The resultant impact of the above non compliances with the standards on the value of fixed assets, capital work-in-progress, depreciation and amortization and loss for the year, if any,are presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Current Assets and Current Liabilities 17. The Company does not follow a system of obtaining confirmation and performing reconciliation of balances in respect of trade receivables, deposits with departments/companies (inter alia, including Mahanagar Telecom Nigam Limited and Bharat Broadband Network Limited),

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claims recoverable from/payable to DoT (including license fees payable as detailed in note 42(a)(i) of the financial statements) or to/from other government departments/authorities, subscriber/customer deposit accounts, trade payable and claims payable. Due to non- availability of confirmations and reconciliations of the aforementioned account balances, we are unable to quantify the impact of the adjustments, if any, arising from reconciliation and settlement of account balances on the financial statements. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 18. As reported by auditors of certain circles, there are unquantifiable differences between the general ledger/trial balance and accounting records pertaining to loans and advances, current assets and current liabilities. The impact on the financial statements, if any, owing to the aforementioned non-reconciliations is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 19. As reported by auditor of 11 circles, there are differences in the inventory records between stores ledger and general ledger/trial balance, the impact of the same is currently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 20. As reported by auditors of 20 circles, in absence of adequate information, details and records of old, non-moving, damaged and unserviceable inventories could not be identified. Further, as reported by auditors of 6 circles, old, non-moving, damaged and unserviceable inventories identified are shown at historical cost. This is not in accordance with the Accounting Standard 2 on Valuation of Inventories and adjustment, if any, amount of lower of net realizable value and the cost is currently not ascertainable. The adjustment, if any, on inventories, consumption and loss for the year is presently not ascertainable. The aforementioned non- identification of old, non-moving, damaged and unserviceable inventories was also a subject matter of qualification in our previous year’s audit report on the audited financial statements for the year ended 31st March 2014. 21. As reported by auditors of 2 circles, certain units have not applied the Company’s policy of valuation of inventory on weighted average method as stated in note 2.8 to the financial statements. The impact of the adjustment, if any, on inventory, consumption and loss for the year is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Inter/ Intra Circle Remittance Account 22. As detailed in note 33 to the financial statements, the Inter-Circle/Unit remittance balances amounting to Rs. 57,312 lacs (previous year Rs. 86,537 lacs) are yet to be reconciled. Pending such reconciliations, the possible cumulative impact of the adjustments, if any, on assets and liabilities and the current and prior year(s) income and expenditure is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. License Fee, Spectrum Charges, Inter Connect Usage Charges 23. As detailed in note 29 to the financial statements, the Company segregates revenue from NLD (National long distance)/ILD (International long distance) on an estimated basis instead of actual usage of pulse which consequently results in recognition of the license fees on an estimated basis. The impact of adjustment, if any, on the license fees expense, recoverable/

133 payable from DoT and loss for the year is presently not ascertainable for the year. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Revenue 24. As reported by auditors of 4 circles, the income from recharge coupons, prepaid calling cards, internet connection cards, sanchar net cards and stock of recharge coupons and prepaid calling cards are subject to reconciliations. In the absence of specific details, the impact of adjustment, if any, on financial statements is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 25. The revenue and expenditure for the current year, inter alia, includes amounts pertaining to prior period(s) as reported by auditors of 4 circles and 6 circles respectively. This has not been separately disclosed in the financial statements in a manner that their impact on the current year’s loss can be perceived, which is not in accordance with the Accounting Standard-5, Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies. The consequential impact of adjustments, if any, on the financial statements is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 26. As stated in note 2.3-(e), (f) and (i) to the significant accounting policies, certain items of revenue are accounted for on cash basis instead of the accrual basis of recognition of revenue which is not in accordance with the generally accepted accounting principles in India. The impact of the adjustment, if any, in respect thereof on revenue, license fee, trade receivables and loss for the year is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Provisions and contingent liabilities 27. The provisions and the disclosures with regard to matters under litigations have been made based upon the management estimates. Based upon the report of auditors of 14 circles, sufficient and appropriate audit evidence for examining and verifying the quantum of contingent liabilities disclosed in note 42(a) to the financial statements has not been obtained. In the absence of the adequate details and documents and pending the responses to our confirmation requests in respect of the litigations at the corporate level, the impact of adjustments/disclosures, if any, on the financial statements is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Miscellaneous 28. The Company has not complied in respect of the following Accounting Standards notified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended): i) As detailed in note 35 to the financial statements, the expenses, incomes, assets and liabilities are not properly disclosed under the reportable segment as per the Accounting Standard 17 on Segment Reporting. In our opinion, the same does not give true and fair disclosure of the segment-wise operations of the Company as required by the aforementioned accounting standard. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter.

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ii) As stated in note 15 to the financial statement, the Company as at 31st March 2015 has deferred tax assets (net) amounting to Rs. 84,706 lacs (previous year Rs. 23,773 lacs). Since the Company has a recent history of losses and owing to lack of virtual certainty and convincing evidence that sufficient future taxable income will be available against such deferred tax asset and as stipulated by Accounting Standard-22, Accounting for taxes on income, the amount of such deferred tax asset should be written off. Consequent to the above, loss for the year in the statement of profit and loss is under-stated by Rs. 84,706 lacs and the balance of deferred tax asset included under Non-Current Assets, has been overstated by the corresponding amount. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. iii) The Company has not carried out any Techno-economic assessment during the year ended 31st March 2015 and hence identification of impairment loss and provision thereof, if any, has not been made. The same is not in accordance with the notified Accounting Standard 28 on Impairment of asset. The consequential impact of adjustment, if any, on the financial statements is currently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. iv) The accounting for capital and revenue grant in accordance with the notified Accounting Standard 12 on Accounting for grants is not followed consistently as reported by auditors of 5 circles. In the absence of specific details, the consequential impact of adjustment, if any, on the financial statements is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. v) The accounting policy as referred to in note 2.10(b) to the financial statements with respect to the liability on account of post-retirement medical benefits of employees including retired employees, a defined benefit plan, is recognized on actual basis in respect of bills received by the Company instead of recognizing the liability for the same as the present value of the defined benefit obligation at the balance sheet date calculated on the basis of actuarial valuation in accordance with the notified Accounting Standard-5 on Employee Benefits. The consequential impact of adjustment, if any, owing to this non-compliance on the financial statements is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. vi) As reported by 3 circles, the Company has not amounted for the contract revenue and contract costs pertaining to construction contracts in accordance with the notified Accounting Standard 7, Construction Contracts. In the absence of specific details, the consequential impact of adjustment, if any, on the financial statements is presently not ascertainable. 29. As stated in the note 2.12 of the financial statements, only individual transactions of income/ expenditure exceeding Rs. 5 lacs, are considered for evaluation as prior-period items. In our opinion, the said accounting policy is not in accordance with the generally accepted accounting principles in India and the same should be evaluated on aggregation of all prior period transactions of similar nature irrespective of individual transaction values, for possible adjustment/disclosure in the financial statements. The consequential impact of the adjustment, if any, on the income, expense and loss for the year is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter.

135 30. As reported by 15 circles and detailed in note 10(a) to the financial statements, these circles have not identified units covered under Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED Act, 2006’) and hence disclosures as required under the MSMED Act, 2006 is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 31. The disclosure requirements of the Schedule III of the Acthas not been properly adhered to in the presentation and disclosure of financial statements of the Company in respect of classification of assets/liabilities into current and non-current and secured and unsecured, wherever applicable; categorisation of assets/liabilities into appropriate accounting captions; changes in inventory; non-disclosure of consumption of stores and spares; consumption of imported and indigenous stores and spares parts; capital and other commitments and expenditure and earnings in foreign currency. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 32. As reported by Jammu & Kashmir Telecom circle, all the vouchers, documents and records pertaining to the SSA Srinagar for the period from 1st April 2014 to 7th September 2014, are not available as the same have been lost/destroyed in floods. In the absence of such records, we are unable to comment upon the correctness and completeness of all the transactions for that period. 33. As reported by auditors of 20 circles, compliances with regard to deposition, deduction, reconciliation of service tax, tax deducted at source and value added tax are pending to be made. In the absence of specific details, we are unable to comment on its consequential impact, if any, on the financial statements. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 34. As detailed in notes (a) and (b) of the Cash Flow Statement, certain assumptions have been made for the purpose of preparation of the Cash Flow Statement. In the absence of the appropriate details, we are presently unable to ascertain the impact, if any, on the adjustments/ disclosures in the Cash Flow Statement. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 35. Certain subsequent events or circumstances may have occurred between the auditors’ report date of the respective circles of the Company and that of this audit report. Such events or circumstances could significantly affect the accompanying financial statements or the related disclosures forming part of these financial statements of the Company. In the absence of sufficient appropriate audit evidence in respect of the other circles, the impact of adjustments, if any, or disclosures to be included in these financial statements of the Company cannot be ascertained. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Qualified Opinion 36. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other circle auditors on the financial statements of the circles as noted below, except for the effects/ possible effects of the matters described in the Basis for Qualified Opinion paragraph above, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2015, its loss and its cash flows for the year ended on that date.

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Emphasis of Matter 37. We draw attention to note 14 to the financial statements of the Company regarding investments in ITI Limited aggregating to Rs. 20,000 lacs as at 31st March 2015. The management, based on the factors mentioned in the said note, believes that the diminution in the value of investments is temporary in nature and hence no provision in respect of aforementioned amount has been made in the accompanying financial statement. Our opinion is not qualified in respect of this matter. Other Matter 38. We did not audit the financial statements of 46 circles and balances pertaining to the corporate office, which reflect total assets (including intra/inter circle remittances) of Rs. 6,423,403 lacs as at 31st March 2015; total revenues of Rs. 2,760,607 lacs and net cash inflows aggregating to Rs. 40,758 lacs for the year then ended. The financial statements of the aforementioned 46 circles have been audited by other auditors whose reports have been furnished to us by the management, and our opinion on the financial statements of the Company for the year then ended to the extent they relate to the financial statements not audited by us as stated in this paragraph is based solely on the audit reports of the other auditors. 39. Our opinion on the financial statements and our report on other Legal and Regulatory Requirements below is not modified in respect of the above matters with respect to our reliance on the work done by and reports of the other circle auditors. Report on Other Legal and Regulatory Requirements 40. As required by the Companies (Auditor’s Report) Order, 2015 (the ‘Order’) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order. 41. As required by Section 143(3) of the Act and based on the auditor’s report of the circles, we report that: a. We have sought and except for the possible effects of the matters described in the Basis of Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; b. Except for the effects/ possible effects of the matters described in the Basis of Qualified Opinion paragraph,in our opinion, proper books of account as required by law relating to the preparation of the aforementioned financial statements have been kept by the Company so far as it appears from our examination of those books and the reports of other auditors; c. The reports on the accounts of the circles of the Company audited under Section 143(8) of the Act by the circle auditors have been sent to us and have been properly dealt with by us in preparing this report; d. Except for the effects/ possible effects of the matters described in the Basis of Qualified Opinion paragraph, the financial statements dealt with by this report are in agreement with the relevant books of account maintained for the purpose of preparation of these financial statements; e. Except for the effects/ possible effects of the matters described in the Basis of Qualified Opinion paragraph,in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the

137 Companies (Accounts) Rules, 2014 (as amended); f. Since, the Company is a Government Company, section 164(2) of the Companies Act, 2013 regarding obtaining written representations from the directors of the Company, is not applicable to the Company in terms of notification no. GSR-463(E) issued by Ministry of Corporate Affairs; g. the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph; and h. with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. Except for the possible effects of the matter described in para 27 of the Basis of Qualified Opinion above, as detailed in Note 42(a) to the financial statements, the Company has disclosed the impact of pending litigations on its financial position; ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For Walker Chandiok & Co LLP (Formerly Walker, Chandiok & Co) Chartered Accountants Firm’s Registration No.: 001076N/N500013

Sd/- perAnamitra Das Partner Membership No.:062191

Place: Delhi Date: 18 September 2015

138 Annual Report 2014-15

Annexure to the Independent Auditor’s Report of even date to the members of Bharat Sanchar Nigam Limited on the financial statements for the year ended 31st March 2015 Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit and based on the comments in the auditors’ reports of the circles, we report that: (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets except in case of 23 circles, where such records have not been appropriately maintained (b) In case of 17 circles, the fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets. However, in case of 1 circle, the fixed assets have been physically verified by the management during the year but, in our opinion, the frequency of verification of the fixed assets is not reasonable having regard to the size of the Company and the nature of its assets. Further, in case of 11 circles, the fixed assets have not been physically verified by the management during the year and in case of 18 circles though the management has conducted physical verification of fixed assets but no documentary evidence was provided. Hence, in respect of the aforementioned 29 circles, we are unable to comment on the discrepancies, if any, which could have arisen on such verification. In our opinion, the frequency of verification of the fixed assets is also not reasonable having regard to the size of the Company and nature of its assets in respect of these circles. (ii) (a) In case of 6 circles, there is no inventory and accordingly the provisions of clause 3(ii) of the order are not applicable in respect of these circles. In case of 21 circles, the management has conducted physical verification of inventory at reasonable intervals during the year. Further,in case of 9 circles, the inventory has not been verified by the management during the year and in case of 11 circles though the management has conducted physical verification of inventory but no documentary evidence was provided, therefore, we are unable to comment on the provisions of clause 3(ii)(a) of the order in respect of these circles. (b) In case of 15 circles, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. In case of 6 circles, the procedures of physical verification of inventory followed by the management are not reasonable and adequate in relation to the size of the Company and the nature of its business. Further, the inventory of 9 circles, have not been verified by the management during the year and owing to lack of adequate documentation provided in case of 11 circles, we are, therefore, unable to comment on the procedures of physical verification and reasonableness thereof. (c) In case of 18 circles, there are proper records of inventory and no material discrepancies between physical inventory and book records were noticed on physical verification.

139 In case of 3 circles, proper records of inventory are being maintained. However, adequate documentation of physical verification of inventory was not provided. Further, in case of 16 circles, proper records of inventory are not maintained and in case of 4 circles physical verification of inventory was not conducted. We are, therefore, unable to comment on the discrepancies which could have arisen between physical inventory and book records in these 23 circles. (iii) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a) and 3(iii)(b) of the Order are not applicable.

iv) In our opinion, in case of 19 circles, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. Further, in our opinion, in case of 28 circles, the internal control system is not commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, in case of 12 circles, we noticed continuing failures to correct major weaknesses in the internal control system. (v) 42 circles have not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable to the aforementioned circles. Further, in case of 5 circles,in the absence of adequate information, the auditor has not been able to comment upon this clause.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Company’s services and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. (vii) (a) 29 circles are regular in depositing undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities. Further, 18 circles have generally been regular in depositing such dues, though there has been a slight delay in few cases. Except for our comments in para 27 in the basis of qualified opinion paragraph of the audit report,in case of 40 circles, no undisputed amounts payable in respect thereof were outstanding at the year- end for a period of more than six months from the date they became payable. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they became payable in respect of 4 circles are set out in appendix I to our report and incase of 3 circles, the same are not ascertainable in the absence of adequate information. (b) Except for the possible effects of the matter described in paragraph 27 under

140 Annual Report 2014-15

the Basis of Qualified Opinion paragraph, the impact of which is currently not ascertainable, in case of 14 circles, there are no dues in respect of income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess that have not been deposited with the appropriate authorities on account of any dispute. Further, incase of 33 circles, the dues outstanding in respect of income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, the said information has been detailed in appendix II to our report. (c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder. Accordingly, the provisions of clause 3(vii)(c) of the Order are not applicable. (viii) In our opinion, the Company’s accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses in the current and the immediately preceding financial year. (ix) In our opinion, the Company has not defaulted in repayment of dues to banks during the year. The Company has no dues payable to a financial institution or debenture-holders during the year. (x) The Company has not given any guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 3(x) of the Order are not applicable. (xi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained. (xii) No fraud on or by the Company has been noticed or reported during the period covered by our audit except in the case of 7 circles. Out of which, 1 circle has reported inventory embezzlements aggregating to Rs. 5.67 lacs, 4 circles have reported on frauds being done by the employees of the Company aggregating to Rs. 94.29 lacs and incase of 2 circles owing to lack of information available, the same cannot be quantified.

For Walker Chandiok & Co LLP (formerly Walker, Chandiok & Co) Chartered Accountants Firm Registration No.: 001076N/N500013

Sd/- per Anamitra Das Partner Membership No.:062191

Place: New Delhi Date:18 September 2015

141

0.06 25.55 188.05 167.90 Amount (Rs. in lacs) Work Contract Tax Employee Provident Fund dues Sales Tax Employee Provident Fund dues Nature of dues Work Contract Tax Act Employee Provident Fund Act Jammu and Kashmir general sales tax act, 1962 Employee Provident Fund Act Name of Statue UP West J & K Telecom NE 1 Circle Name 4 3 1 2 S. No.

As per the report of the auditor’s of the Madhya Pradesh circle, value added tax (VAT) collected by some units on sale of tender forms has not been deposited with the Government and is payable for more than 6 months from sate they became payable. The statutory dues outstanding for a period of more than 6 months have not been ascertained, in the absence of details, in case of Maharashtra, WTR and . The Haryana circle has not deposited service tax recovered from vendors and contractors on liquidated damages and the same has not been ascertained by the circle auditors. 1) Notes : 2) 3)

142 Annual Report 2014-15 Forum where disputes are pending Commissioner appeal Commissioner of central excise and service tax, Bangalore Commissioner of central excise and service tax, Bangalore Commissioner of service tax Commissioner of income tax appeal High court of Chennai Commissioner of central excise and service tax Supreme court of India 2004 to 09 2006 to 07 2005 to 10 2005 to 06 2001 to 11 2005 to 12 2005 to 06 2003 to 08 2006 to 08 2008 to 10 2010 to 11 2011 to 12 2012 to 13 2013 to 14 2001 to 2015 September – 10 2002 to 03 2003 to 04 2004 to 05 2005 to 08 2008 to 09 2009 to 10 Period to which the amount relates

– – – – – – – – – – – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 1 69 95 76 20 303 531 270 263 304 283 127 218 256 438 753 913 803 753 1,127 1,076 4,279 4,269 4,265 4,167 37,473 15,144 Amount (Rs. in lacs) Nature of dues Adjustment ST–NLR Cenvat credit Exempted services Cenvat credit, CMTS Tax deducted at source Employee provident fund dues Service tax Service tax Sales tax Services Tax Act Name of statute Andhra Pradesh Goods and Finance Act, 1994 Income Tax Act, 1961 Provident Fund Act Finance Act, 1994 Finance Act, 1994 Circle name Total Andhra Pradesh Total Chennai Phones Total 3 2 1 S. No.

143 Forum where disputes are pending Commissioner of central excise and service tax Commissioner Commissioner of central excise and service tax Commissioner Commissioner of central excise and service tax Commissioner appeal 2004 to 2005 2008–09 to 2010–11 2002–03 to 2006–07 2006 to 2007 2002 to 2006 2007–08 to 2008–09 2001–01 to 2005–06 2006 to 2007 2008 2003–04 to 2006–07 2007–08 to 2009–10 2002–03 to 2005–06 2007–08 to 2008–09 2006–07 to 2007–08 2001–02 to 2005–06 2007–08 to 2008–09 2006–07 to 2007–08 2006–07 to 2010–11 2005–06 2008 to 2009 2002–03 to 2006–07 2005–06 to 2006–07 2002 to 2007 2001–01 to 2005–06 2008–09 2009 2002–03 to 2005–06 2002 to 2007 Period to which the amount relates

– 5 0 – 5 2 – – – – 5 – – 4 – 5 – – 0 – – – – – 32 76 13 paid 200 174 Amount (Rs. in Lacs) 5 2 5 57 67 27 26 61 27 23 47 14 19 15 32 134 263 130 363 588 391 171 110 112 697 202 354 1,010 2,593 Amount (Rs. in lacs) Nature of dues Service tax Name of statute Finance Act, 1994 Circle name Telephones 4 S. No.

144 Annual Report 2014-15 Forum where disputes are pending High Court Commissioner of central excise and service tax JCCT Appeal DCCT Commissioner Commissioner Appeal Commissioner of central excise and service tax JCCT Appeal High Court DCCT JCCT Appeal Tribunal High Court JCCT Appeal Tribunal APFC 2000 to 2004 2000 to 2003 Period to which the amount relates 2005–06 to 2007–08 2010 to 2011 2007 to 2008 2006 to 2007 2008 2001–02 to 2005–06 2008 to 2009 2006 2009 2010 to 2011 October 2002 to March 2007 2008 to 2009 2011 to 2012 2009 to 2010 2004 to 2005 2007 to 2008 2008 to 2009 2006 to 2007 2007 to 2008 2013 to 2014 March 02 to January 05 2005 to 2006 1996–2002 May 2002 to February 2004 2002 to 2013 1st April, 1996 to 31st March, 2010

– 2 1 – 2 – 4 2 4 3 – 5 5 20 33 15 32 40 27 10 17 12 paid 200 300 150 100 205 350 Amount (Rs. in Lacs) 2 4 2 5 3 3 48 63 60 22 45 27 83 27 15 19 12 17 464 250 243 596 170 787 253 490 1,256 1,241 Amount (Rs. in lacs) Nature of dues Entry tax Sales tax Provident fund Name of statute Sales Tax/Entry Tax Employee Provident Fund Act Circle name S. No.

145 Forum where disputes are pending Commissioner of central excise and service tax , New Delhi Commissioner of sales tax, Jammu High Court APFC High Court APFC Commissioner of central excise and service tax High Court Gujarat , High court Commissioner of central excise and service tax Ahmedabad Gujarat , High court Income tax appellate tribunal Rajkot 2005 to 2009 2002 to 2003 2003 to 2004 2004 to 2005 2005 to 2006 2006 to 2007 Period to which the amount relates 1st April, 1996 to 31st March, 2010 1st April, 2010 to 28th February, 2014 1st October, 2010 to 28th February, 2014 1st October, 2000 to 12th March, 2010 May 2010 to July 2013 October 2005 to March 2007 March 02 to January 05 2007 April 2004 to July 2009 2008 to 09 2009 to 10 August 2009 to March 2010 April 2010 to December 2010 1997 to 2001

– – – – – – – – 8 – 1 – – – – – – – 26 paid 107 118 118 2,202 Amount (Rs. in Lacs) 1 0* 12 67 0* 27 37 24 540 331 502 900 723 421 107 472 634 398 129 3,417 3,371 1,612 13,897 Amount (Rs. in lacs) Nature of dues Service tax dues Sales tax demand Cenvat disallowed & interest and penalty Stamp duty and penalty Cenvat disallowed & interest & penalty Tax deducted at source Service tax interest & penalty Name of statute Finance Act, 1994 Jammu and Kashmir General Sales Tax Act,1962 Finance Act, 1994 Bombay Stamp Act Finance Act, 1994 Income Tax Act, 1961 Circle name Total J & K (ASK) Total Total Gujarat 6 5 S. No.

146 Annual Report 2014-15 Forum where disputes are pending Karnataka Appellate Tribunal Bg EPF/At/New Delhi Commissioner Of Central Excise (Appeals), Mangalore. CESTAT, Bangalore High Court Of Karnataka , Bangalore Employees Provident Fund Administrative Tribunal Karnataka High Court Customs Excise And Service Tax Appellate Tribunal, Bangalore Cestat Bangalore Commissioner Central Excise Supreme Court Income Tax Appellate Tribunal Bangalore Bench 2004–06 2007–08 2009–10 2013–14 2008–09 2006–07 2014–15 2014–15 2009–10 2007–09 2013–14 2008–09 2008–09 2009–10 2006–07 2008–09 Period to which the amount relates 2011–12 2005–06 2006–07 2007–08

– – – – – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 1 5 7 3 3 34 12 15 22 25 12 16 21 25 106 150 504 132 440 659,600 Amount (Rs. in lacs) Nature of dues EPF and interest EPF –Interest EPF Damage Charges Cenvat Credit On Excise Duty Cenvat Credit On Excise Duty Cenvat Credit On Excise Duty Cenvat Credit On Excise Duty 1. Adjustment Of Excess Paid Service Tax In Subsequent Months. 2008–09 Service Tax Property Tax On Towers Cenvat Credit On Excise Duty Service Tax On Pco Commission Service Tax On Pco Commission Service Tax Service Tax Sales Tax and interest Acle Cases, Sales Tax Slp No. 27843 – 27961/ 2011 Acle For Light Transmission) Income Tax On Commission Ofpco Income Tax On Commission Ofpco Income Tax On Commission Ofpco Name of statute Finance Act, 1994 Finance Act, 1994 Local property tax act Cenvat Credit Rules, 2004 Finance Act, 1994 Income Tax Act, 1961 Circle name Karnataka 7 S. No.

147 Forum where disputes are pending Commr, Appeals. Kollam. CESTAT Banglore Commr, Appeals. Cochin CESTAT, Banglore Superintendent, Service Tax ‘A’ Range, Kochi Commissioner Of Service Tax Customs Excise And Service Tax Appellate Tribunal, Bangalore Commissioner Of Service Tax, Bangalore 2009–10 2005–06 2010–11 2011–12 2014–15 2014–15 2014–15 2013–14 2013–14 2000–05 2013–14 Period to which the amount relates 2010–11 2011–12 2010–12 2008–10 2007–11 2011–12 2012–13

– – – – – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 3 7 3 8 1 49 0* 0* 87 62 94 78 93 50 63 756 538 315 1,141 662,965 Amount (Rs. in lacs) Nature of dues Dispute regarding VAT on BB modem given on rental basis. Short levy Ineligible CENVAT Credit Non payment of amount under Rule 6(3) Non payment of ST on Legal Service ST on GTA Non payment of ST on Manpower Disallowance of CENVAT credit Cenvat Credit On Excise Duty Cenvat Credit On Excise Duty Cenvat On Vehicle Hiring Service Tax On Book Adjustment (Landline And Mobile) Service Tax On Book Adjustment (Landline And Mobile) Service Tax On Book Adjustment (Landline And Mobile) Service Tax On Book Adjustment (Landline And Mobile) Rounding Of Off Service Tax Name of statute Sales Tax Service Tax Finance Act, 1994 Circle name Total Kerala Total 8 S. No.

148 Annual Report 2014-15 Forum where disputes are pending Under appeal with CESTAT, Mumbai ITAT Mumbai CESTAT, Mumbai The High Court, New Delhi The Additional Commissioner of Service Tax, Mumbai CESTAT, Mumbai The Commissioner of Income Tax (Appeals) Commissioner of Excise & Service Tax, Ratnagiri. CBEC, New Delhi CESTAT, Mumbai CESTAT, Mumbai Sales Tax Appellate Tribunal Mumbai CESTAT, Mumbai The Mumbai High Court Aurangabad Bench The High Court Mumbai, Panjim Bench 1999–2006 December.2005 to March 2010 2006–07 to 2008–09 2009–2010 2009–2010 2009–2010 2004–2005 2002 2002 2000–01 to 0607 2002 – 2007 2002–2003 1998–1999 1998–99 to 2001 2005–2006 2007–2008 2005 2008–2009 2009–10 Period to which the amount relates 2000 – 2014

– – – – – – – – – – – – – – – – – – – paid 1,709 1,709 Amount (Rs. in Lacs) 9 1 8 2 50 15 47 25 25 38 22 48 54 346 127 145 394 219 126 4,122 4,122 Amount (Rs. in lacs) Nature of dues Short Deduction of TDS Wrong availment of CENVAT Short payment of Service Tax Non lavy of Service Tax on CCB/PCO Wrong availment of CENVAT Service Tax –Interest & Penalty EPF Dues on Contractors Service Tax on Tatkal Deposits Non deduction of TDS Interest on delay in payment of Service Tax Interest on Short Payment of Service Tax Sec.75 Short payment of S.Tas Sec.73 Interest on Short Payment of Service Tax Purchase Tax Interest on delay in payment of Service Tax TDS on STDPT Commission Service Tax Claim Pending court cases on account of service tax, central excise, sales tax and entry tax Name of statute Income Tax Act, 1961 Finance Act, 1994 Provident Fund Act Finance Act, 1994 Income Tax Act, 1961 Finance Act, 1994 Finance Act, 1994 MVAT Act, 2005 Finance Act, 1994 Income Tax 2009 –10 Act 1961 Finance Act, 1994 Circle name Madhya Pradesh Total Maharashtra 9 S. 10 No.

149 Forum where disputes are pending Commissioner (Service Tax) Commissioner of central excise and service tax, New Delhi Commissioner of central excise and service tax, TDS CPC The Assistant Commissioner, EPF Organisation, Sub Regional Office, Amritsar Punjab & Haryana High Court EPFAT New Delhi Punjab & Haryana High Court The Chief Engineer, Zonal Disputes settlement, PSPCL, Amritsar Punjab & Haryana High Court, Chandigarh. 2004–05 to 2008–09 2007–08 2004 to 2006 2008 2007 to 2015 June 2002 to February 2005 February 2002 to June 2004 2011–2012 2002–2004 January 2012 to September 2013 1998–99 to 2003–04 1991 to 1996 Period to which the amount relates 2010 to 2011 2011 to 2012 2012 to 2013

– – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 5 3 15 21 76 15 71 33 14 14 15 46 47 76 162 161 1,988 Amount (Rs. in lacs) Nature of dues Interest On Reversal Of Cenvat Credit On Modem Sale Service Tax Tripura SSA Service Tax, Duty and Penalty TDS Short Deduction & Interest Delayed Deposit Of EPF Epf Assessed On Contract Labour 7Q, 14B Of EPF Act Non–Payment Of Contribution In Respect Of Employees Employed By Or Through Three Contractors Demand Of Arrears Of Rs. 1478056 Verka T/E With A/C No. A43Gc430003H Raised By Aee(East) Verka, Pspcl, Asr Demand Of House Tax Rs. 282948/– With Interest Of Rs. 50940/– & Parcha Of Rs. 22 Totaling To 333910/– Of Tarntaran T/E. Sales Tax Name of statute Finance Act, 1994 Finance Act, 1994 Employees Provident Fund & Misc. Provisions Act, 1952 Indian Electricity Act, 1910 Punjab Municipal Act, 1911 Punjab General Sales Tax Act, 1948 Circle name NE–I Total Total Punjab S. 11 12 No.

150 Annual Report 2014-15 Forum where disputes are pending Deputy Commissioner of Central Excise, Chandigarh Supreme court Supreme court Commissioner of central excise and service tax High Court, Punjab & Haryana High Court Rajasthan High Court Jaipur ADJ–II ,Jaipur CESTAT New Delhi. Punjab & Haryana High Court Commissioner of central excise and service tax, New Delhi Additional Comm. Of Service Tax Joint Commissioner of Central Excise, Chandigarh Commissioner of Central Excise Appeals Chandigarh 1993 to 2015 1993 to 2015 1993 to 2015 2009–10 October, 2014 2007–08 2005–15 2008–13 2007–09 Period to which the amount relates 2004–05 & 2005–06 April 2006 to September 2006 October 2002 to September 2003 2005–06, 2006–07 and 2007–08 2006–07 to 2007–08 01–02–08 to 28.02.09 October 2005 to January 2008 2006–2010 2006–2008 April 2008 to September 2010

– – – – – – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 2 9 2 20 25 0* 30 20 32 26 31 87 10 15 592 149 2,228 5,532 1,108 17,100 17,145 Amount (Rs. in lacs) Nature of dues Sales Tax Sales Tax Service Tax VAT Sales Tax Vat On Broad Band Entry Tax Service Tax Service Tax Wrong Availment Of Cenvat Credit On Towers Short Payment Due To Variation In Rate Payment Of Service Tax To Dot Instead Of Tr–6 Challan Cenvat Denial On Tower Material Reg. Cenvat Cr. Utilization Service Tax Wrong Availment Of Cenvat Credit On Input Services Used For Providing Exempted Services Name of statute Service Tax OVAT Punjab Vat Act, 2005 Entry Tax Finance Act, 1994 Circle name Orissa Total Total Rajasthan S. 13 14 No.

151 Forum where disputes are pending Commissioner (Appeals)–l custom and central excise Jaipur Decision received from Excise Deptt. Jaipur against Audit Objection, Now Appeal is to be filed. Commissioner of central excise and service tax, New Delhi Commissioner, CE, Jaipur Rajasthan HIGH Court Jaipur Bench, Jaipur Assist. Registrar (Appeal Branch) CESTAT New Delhi CESTAT New Delhi Rajasthan HIGH Court Jaipur Bench, Jaipur Commissioner of central excise and service tax, New Delhi Joint Commissioner Central Excise Jaipur Additional Commissioner Central Excise Jaipur Commissioner of central excise and service tax, New Delhi Commissioner Appeals –II Jaipur. Commissioner of central excise and service tax, New Delhi 2011 2006 2005 –2008 2003–04 Period to which the amount relates 2010 2006 2001–06 2008–09 2005 to 2008 2009–10 2012–13 2005 2012–13 2012–13 2008 2010–11

– – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 8 1 5 1 6 1 23 0* 22 17 14 38 36 87 193 112 Amount (Rs. in lacs) Nature of dues CENVAT Credit wrongly availed on Capital Goods CENVAT Credit wrongly availed on Input Service Wrong availment Excess cenvat credit Short payment of Service Tax during April 2006 to March 2007.Amount adjusted in same financial year but not admitted by Central Excise Department Non payment of Service Tax on IUC charges during December 2003 to March 2005. Short Payment of Service Tax and interest penalty thereon Demand of Service tax on Infrastructure sharing charges from Feb 2007 to May 2007 Service Tax Service Tax Service tax Service Tax Service Tax Appeal for refund Service Tax Service Tax Service tax Name of statute Cenvat credit Rules, 2004 Circle name S. No.

152 Annual Report 2014-15 Forum where disputes are pending CESTAT SEZ CHENNAI CESTAT/CHENNA1 Commissioner of central excise and service tax, New Delhi Rajasthan High court Jodhpur. Commissioner of central excise and service tax, New Delhi EPF Appellate Tribunal New Delhi. Raj. TAX Board Jaipur Income tax Appellate tribunal Jaipur Commissioner Income Tax Appeals Jaipur Commissioner of central excise and service tax, New Delhi Commissioner, CE, Jaipur Commissioner of central excise and service tax, New Delhi Central Excise Commissioner Jaipur Commissioner of central excise and service tax, New Delhi Commissioner Central Excise , Jaipur Dy. Commissioner Jaipur Commissioner (Appeal–I) Jaipur Commissioner Central Excise Jaipur 2008 2011 2015 2014 2007–15 2005–08 2007–08 2011–12 2004–05 2004–05 2011–13 2011 2006–12 2009 2002–11 2006–07 2009–10 2013–14 2008–12 Period to which the amount relates 2008–09 2013 2009–10

– – – – – – – – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 7 2 8 1 2 4 4 4 11 47 13 13 17 14 13 28 16 387 319 202 321 2,166 8,975 Amount (Rs. in lacs) Nature of dues Disallowance of credit Excise Duty Short Deduction of TDS Service Tax short Payment Rate of service tax on outstanding amount recovered Service tax Recovery of excess interest credited in subscriber account Sale Tax Interest on TDS not deducted Disallowance of Service Tax CENVAT credit disallowed Excise Duty Disallowance of CENVAT credit taken on the basis of ATs CENVAT credit taken on the basis of ATs Wrong availment of CENVAT credit CENVAT disallowance CENVAT Credit CENVAT availed wrongly Name of statute Finance Act, 1994 Employees Provident Fund Act Sales tax Act Income Tax Act, 1961 Service Tax Act Circle name Total S. 15 No.

153 Forum where disputes are pending Supreme Court of India CESTAT SEZ CHENNAI CESTAT SE 2 Chennai CESTAT SEZ CHENNAI CCE&ST Trichy 1st Appeal Pending High Court.Allahabad Supreme Court of India Supreme Court of India Supreme Court of India Cantonment Board CESTAT, New Delhi High Court, Allahabad CESTAT, New Delhi Asstt.Commissioner Asstt Commissioner Asstt.Commissioner 2004–05 Period to which the amount relates 2014–15 2008 2014–15 2013–14 2013 2012 2011 2006 2013 2013–14 2006–07 2007–08 1999–00 2004–05 2012–14 2003–06 2005–09 2004–07 June 07–September 07 2000–01 2003–06 2006–2009

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 1 7 1 6 7 1 1 7 16 31 23 33 16 91 89 20 33 22 80 129 134 265 116 354 415 359 115 200 4,436 1,941 Amount (Rs. in lacs) Nature of dues Entry Tax On account of Service Tax Disputed On account of sales tax Disputed House tax Service Tax Name of statute UP Trade Tax 1948 Entry of Goods into Local Areas Act 2007 UP Trade Tax 1948 Entry of Goods into Local Areas Act 2007 Municipal Tax Finance Act, 1994 Circle name UP East Total S. 16 No.

154 Annual Report 2014-15 Forum where disputes are pending Commissioner Central excise Commissioner Central excise CESTAT , New Delhi CESTAT , New Delhi CESTAT , New Delhi CESTAT , New Delhi Commissioner Central excise , Lucknow Dy .Commissioner ,Trade Tax.Kanpur 1st Appeal 1 st Appeal Pending 1st Appeal Pending 2nd appeal pending 1st Appeal Pending Dy.Commissioner .Allahabad Appeal Trade Tax. Lucknow Additional Commissioner–II Jaunpur Dy .Commissioner .Trade Tax. Jhansi Trade Tax Tribunal High Court Lucknow High Court Lucknow High Court, Allahabad High Court, Allahabad High Court, Allahabad Dy.Commisioner,Trade Tax.Kanpur Commissioner Of Income Tax (Appeal) High Court Allahabad Cestat New Delhi District Judge Meerut Period to which the amount relates 2009 2009 2004–05 2002–03 2002–06 2008–2013 2005–08 April 08 – December 08 2006–07 2008–09 2005–06 2010–11 2007–08 2004–05 1998 to 2003 2003–05 2003–04 , 04–05 2002–05 2000–04 1995–96 , 2002–05 1987–88 1988–89 1989–90 2003–04 2000–2005 2002–03 2000–2001 2008–09 to 2011–12 2008–09 to 2011–12 2008–09 to 2011–12

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – 42 14 paid Amount (Rs. in Lacs) 4 3 4 6 1 1 2 3 5 8 8 11 44 38 62 27 53 41 97 60 35 14 16 662 731 307 231 8,800 1,067 1,380 14,426 Amount (Rs. in lacs) Nature of dues Trade Tax Income Tax Act, 1961 Entry Tax Act Employees Provident Fund Act Arbitration Act Name of statute UP Trade Tax 1948 UPVAT 2008 UP Trade Tax 1948 UP VAT ACT 2008 UP Trade Tax 1948 Income Tax Act, 1961 Entry Tax Act Employees Provident Fund Act Arbitration Act Circle name Total UP West S. 17 No.

155 Forum where disputes are pending Asstt. Commissioner Trade Tax Etawah Commissioner Of Income Tax Agra Allahabad High Court Income Tax Appelate Tribunal Ce(C) Bsnl New Delhi District Judge Rudrapur District Judge Moradabad District Judge Nainital District Judge Champawat High Court Allahabad Trade Tax Authority Saharanpur Cestat Commissioner Of Excise & Service Tax Commissioner Appeals Allahabad High Court Allahabad High Court Trade Tax Tribunal Joint Commissioner Appeal Cestat 2000–01/2001– 02/2002–03 2007–2008 2008–2009 2003–2004 2004–2005 2003–2004 2004–2005 2005–2006 2006–2007 2005–06 December 2013 2008 2008 2013 2013 2013 2011 2000 to 02 January 2003 to November 2003 August 2002 to January 2003 2009 to 12 2003–2005 1990–2005 Period to which the amount relates 2008–09 to 2011–12 2004–05 to 2011–12 2002–2003 2002–2003 June 2003– December 2003 October 2000 to September 2001

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 5 5 2 2 6 6 3 5 8 1 2 22 33 13 13 19 31 16 23 38 25 60 43 26 125 267 162 108 Amount (Rs. in lacs) Nature of dues Up Act 2007 Income Tax Act, 1961 Sales Tax Act Entry Tax Axt Income Tax Act, 1961 Arbitration Act Entry Tax Axt Finance Act, 1994 Sales Tax Act Sales Tax Act Finance Act, 1994 Name of statute UP ACT 2007 Income Tax Act, 1961 Sales Tax Act Entry Tax Axt Income Tax Act, 1961 Arbitration Act Entry Tax Axt Finance Act, 1994 Sales Tax Act Sales Tax Act Finance Act, 1994 Circle name S. No.

156 Annual Report 2014-15 Forum where disputes are pending Commissioner Appeals Ito (Tds & Survey) Aligarh Trade Tax Tribunal Bareilly & Joint Commissioner Trade Tax Bareilly Trade Tax Tribunal Agra Cit(Appeals) High Court Allahabad Joint Commissioner Appeal(Trade Tax) High Court Allahabad Joint Commissioner Appeal(Trade Tax) Allahabad High Court Commercial Tax Tribunal Gb Nagar Joint Commissioner Appeal Additional Commissioner Appeal Commercial Tax Deptt Merrut Income Tax Appelate Tribunal Allahabad High Court Itat New Delhi Itat Agra Member Tribunal Trade Tax Agra Dy. Commissioner Commercial Tax Mainpuri Additional Commissioner (Appeal) Grade 2 July–94 to March–98 2006–07 2003–2004 1977–78 to 2004–05 2009–2010 2005–06 & 2006–07 2005–06 & 2006–07 2003–04 2004–05 1998–99 to 2003–04 2005.06 to 2008–09 2007–08 2007–08 Period to which the amount relates 2008–2009 2009–2010 2009–10 2007–08 to 2009–10 2008–2009 2004–05 2003–04 1/1/2008 to 31/03/2008 1/04/2007 to 31/12/2007 2004–2005 2006–2007 1999–2000 2000–2001 2003–2004 2004–2005

– – – – – – – – – – 6 5 – – – – – – – – – – 15 28 55 20 paid 110 140 Amount (Rs. in Lacs) 1 1 9 1 2 1 1 15 48 50 55 17 60 17 11 0* 88 21 0* 0* 803 124 139 737 276 1,543 Amount (Rs. in lacs) Nature of dues Income Tax Act, 1961 Income Tax Act, 1961 Finance Act, 1994 Sales Tax Act Entry Tax Act Sales Tax Act Sales Tax Act Income Tax Act, 1961 Sales Tax Act Name of statute Income Tax Act, 1961 Income Tax Act, 1961 Finance Act, 1994 Sales Tax Act Entry Tax Act Sales Tax Act Sales Tax Act Income Tax Act, 1961 Sales Tax Act Circle name S. No.

157 Forum where disputes are pending High Court, Shimla Commissioner of central excise and service tax, New Delhi Commissioner of Central Excise and Custom, Shimla CEGAT, New Delhi Commissioner of sales tax Deputy Commissioner of sales tax Maharashtra sales tribunal Income tax department Appellate Authority (Commissioner) Commissioner of service tax Cestat New Delhi Allahabad High Court Cestat, New Delhi 2005–06 to 2007–08 2006–07 2014–15 2014–15 2014 to 15 1989–1990 1990–1991 1991–1992 1992–1993 1094–1995 2013 to 14 2013 to 14 & 2014 to 15 2009 to 2010 2010 to 2011 2007 to 2008 2008 to 2009 2009 to 2010 2003 to 2004 2011 to 2012 2003 to 2004 2006–07 & 2007–08 1999–2003 2004–2005 Oct–2009 to Mar–2011 Period to which the amount relates

– – – – – – – – – – – – – – – – – – – – – – – – – – paid 436 Amount (Rs. in Lacs) 4 5 2 93 14 24 40 16 27 25 31 49 38 14 27 190 132 167 302 112 867 153 444 750 396 1,372 6,971 Amount (Rs. in lacs) Nature of dues TDS Service Tax EPF Entry tax Tax, Penalty & Interest Entry tax Interest Interest Tax deducted at source Sales tax on telephone services Service tax Service Tax Department Sales Tax Act Finance Act, 1994 Name of statute Income Tax Act, 1961 Central Excise and Service Tax Employee Provident Fund Act Department of sales tax entry tax Income Tax Act, 1961 Local Sales tax act Finance Act, 1994 Service Tax Department Sales Tax Act Finance Act, 1994 Circle name Himachal Pradesh Total Total TF Mumbai West Bengal Total S. 19 20 18 No.

158 Annual Report 2014-15 Forum where disputes are pending Commissioner (Central Excise, Mumbai) Commissioner (Central Excise, Mumbai) Commissioner (Central Excise, Mumbai) Commissioner (Central Excise, Mumbai) Addl. Commissioner (Central Excise, Mumbai) Joint Commissioner (Central Excise, Mumbai) Commissioner (Central Excise, Mumbai) Commissioner (Central Excise, Mumbai) Joint Commissioner (Central Excise, Mumbai) Addl. Commissioner (Central Excise, Mumbai) CESTAT MUMBAI Deputy Commissioner of Sales Tax (Appeal) Deputy Commissioner of Sales Tax (Appeal) Joint Commissioner Appeal II Deputy Commissioner of Sales Tax (Appeal) Feb.2008 to July 2008 August 2008 to March 2009 April .2009 to December 2009 January 2010 to September 2010 October 2010 to July 2011 August 2011 to March 2012 October 2010 to August 2011 Sep 2011 to March 2012 2013–2014 April 2006 to September 2010 April 2007 to January 2008 2004–2005 2006–07 2007–2008 2004–2005 2005–2006 2006–2007 2007–2008 2010–2011 1995–1996 2000–2001 2001–2002 2005–2006 Period to which the amount relates

– – – – – – – – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 5 2 75 98 63 63 50 39 86 43 47 13 82 29 28 601 133 575 883 222 174 306 1,847 Amount (Rs. in lacs) Nature of dues Tax, penalty and interest Central sales tax Name of statute Central board of excise and customs Circle name S. No.

159 Forum where disputes are pending Appelate Authority Appelate Authority Appelate Authority Appelate Authority Appelate Authority Comm. Central Excise Comm. Central Excise Comm. Central Excise Comm. Central Excise Comm. Central Excise Comm. Central Excise Comm. Central Excise Appelate Authority Appelate Authority Appelate Authority Appelate Authority Appelate Authority Appelate Authority Appelate Authority CESTAT MUMBAI Joint Commissioner (Central Excise, Mumbai) Commissioner (Central Excise, Mumbai) Addl. Commissioner (Central Excise, Mumbai) Commissioner (Central Excise. Mumbai) Dy. Commissioner (Central Excise, Mumbai) Commissioner (Central Excise, Mumbai) Commissioner (Central Excise, Mumbai) 2008–09 2009–10 2010–11 2010–11 2013–14 2013–14 2013–14 2014–15 2014–15 2008–09 2009–10 2008–09 2008–09 2008–09 2008–09 2007–08 2012–13 2012–13 2008–09 October 2012 to September 2013 13th April 2015 22th September 2014 26th march 2015 2010–2011 April 2012 to January 2013 February 2013 to December 2013 January 2014 to September 2014 Period to which the amount relates

– – – – – – – – – – – – – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 6 3 4 3 17 0* 0* 10 0* 57 11 0* 22 0* 17 0* 13 0* 0* 396 181 107 142 131 150 135 106 6,202 Amount (Rs. in lacs) Nature of dues Excess Excise Duty Claimed By The Authority Name of statute Central excise act 1944 Circle name TF Kolkata Total S. 21 No.

160 Annual Report 2014-15 Forum where disputes are pending Appelate Authority Comm. Central Excise Supreme court Supreme court Commissioner of central excise and service tax,New Delhi Supreme court Add. Com., Bhopal Commissioner of central excise Deputy commissioner Bhopal Appellate Board , Bhopal Deputy commissioner Commissioner Asst. Commissioner Tribunal , Bhopal High Court , Jabalpur Deputy Appellate Commissioner Additional commissioner, Bhopal Tribunal , Bhopal Tribunal , Bhopal Deputy appellate commissioner Commissioner, Bhopal Tribunal , Bhopal Assistant commissioner ,Jabalpur 1996 to 1997,1998 to 1999,1999 2000 and to 2001 (DOT PERIOD) 1996 to 1997,1998 to 1999,1999 2000 and to 2001 (DOT PERIOD) 1996 to 2000 2008–09 to 2009–10 2009–10 to 2010–11 2012 to 13 2002–03 to 2007–08 2004–05 & 2008–09 2010–11 & 2011–12 2009–10 2007–08 2008–09 2011–12 2005 to 2006 2006 to 2007 2000–01, 2001–02 and 2004–05 to 2008–09 2011–12 2004–05 and 2009–10 2011–12 2012–13 2007–08 to 2010–11 2002–03 to 2003– 04, 2006–07 and 2011–12 2002–03 to 2008–09 Period to which the amount relates

– – – – – – – – – – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 1 2 2 6 1 41 26 88 99 75 29 19 30 39 23 47 156 178 197 404 124 1,309 1,054 1,413 3,718 Amount (Rs. in lacs) Nature of dues Excise VAT Entry tax Sales tax Name of statute Central Excise Act, 1944 Madhya Pradesh commercial tax act Central Sales tax act Circle name TF– Jabalpur Total Total S. 22 No.

161 Forum where disputes are pending Additional commissioner– II New Delhi Additional commissioner– II New Delhi Commissioner (appeal)– trade tax, Lakhnow Customs, excise and service tax appellate tribunal, Chennai Customs, excise and service tax appellate tribunal, Bengaluru Sales tax tribunal Commissioner of central excise (Appeals) u/s 85 A Finance act 1994 Commissioner of central excise and service tax Commissioner of central excise and service tax Commissioner of central excise and service tax Commissioner of central excise and service tax Commissioner of central excise and service tax, Delhi 2001–02 2001–02 2012–13 Period to which the amount relates 2006 to 07 2007 to 08 2010 to 11 2008–09 and 2009–10 June 2007 to September 2009 June 2007 to October 2009 2003 to 2007 2007 to 2011 2007 to 2008 2007 to 2008 2000–04 2004–05 2005–06 1994–2000

– – – – – – – – 2 – – – – – – – 2 – – – – – – – – paid Amount (Rs. in Lacs) 1 1 23 26 31 44 37 11 50 73 37 73 46 16 30 409 699 138 647 647 837 625 3,638 1,295 3,229 Amount (Rs. in lacs) Nature of dues Demand against the company Value added tax Service Tax Service tax Custom Duty Service tax Service tax penalty Service tax Service tax Name of statute Delhi sales tax act Central sales tax act Uttar Pradesh Sales tax act W.B.VAT act, 2003 Finance Act , 1994 Service Tax Act and Rules Service Tax Act and Rules; Cenvat Credit Rules, 2004 Penalty (Customs duty) Central Excise Act, 1994 Finance Act, 1994 Finance Act, 1994 Circle name NTP Total Total ETR ALTTC Total Total STR Total STP Total Total Andaman & Nicobar WTR Chhattisgarh S. 23 27 28 26 24 29 25 30 No.

162 Annual Report 2014-15 Forum where disputes are pending CESTAT Kolkata CESTAT Kolkata Commissioner (Appeal),Ranchi CESTAT, Kolkata. CESTAT Kolkata. Commissioner (Appeal),Ranchi CESTAT Kolkata. CESTAT Kolkata. CESTAT Kolkata. Range Officer Jamshedpur. Commissioner (Appeal),Ranchi CESTAT –Kolkata. 2001–2006 2005–06 1999–2000 October 2003 to March 2008 December, 2005 to August, 2009 2000–2005 April 2005 to November 2006 2006–07 2005–06 April,2006 to March,2010 October 2003 to December 2003 April, 2004 to March, 2006. Period to which the amount relates 2007–09 2009–10 2004–07

– – – – – – – – – – – – – – – – – – – – – – – – – – – paid Amount (Rs. in Lacs) 3 20 20 86 14 67 14 145 131 258 465 131 465 259 119 590 119 326 590 326 163 163 206 812 206 1,464 1,464 Amount (Rs. in lacs) Nature of dues Service Tax Penalty Service Tax Service Tax Penalty Service Tax Service Tax Penalty Service Tax Service Tax Service Tax Interest Service Tax Penalty Service Tax Service Tax Penalty Service Tax Service Tax Penalty Service Tax Penalty Service Tax Service Tax Service Tax Penalty Service Tax Service Tax Penalty Service Tax Service Tax Service Tax Penalty Service Tax Name of statute Finance act, 1994 Circle name Total S. 31 No.

163 Forum where disputes are pending Jharkhand High Court, Ranchi Commissioner of central excise and service tax, New Delhi Assistant commissioner, service tax, Meerut Commissioner of central excise and service tax, New Delhi DDG(TERM),DOT,UP(WEST) Commissioner (Appeal),Ranchi CESTAT Kolkata Commissioner, Ranchi. Joint Commissioner (appeal) tax, Dehradun Joint Commissioner (appeal) tax Assistant Commissioner, tax Rishikesh Assistant Commissioner, tax Haridwar 2007 to 2008 2004–05 to 2006–07 2007 to 2008 June 2002 to December 2011 2010 to 11 Period to which the amount relates April, 2003 to September 2003 October, 2003 to September, 2008 October, 2008 to March, 2010 2004 to 05 2006 to 07 2007 to 08 2004 to 05 2008 to 09 2000 to 01 2005 to 06 2006 to 07 2007 to 08 2008 to 09 2009 to 10 2010 to 11 2014 to 15

– – – – – – – – – – – – – – – – – – – – – – – – paid 100 Amount (Rs. in Lacs) 8 5 5 5 1 67 80 55 38 25 25 25 14 14 28 12 131 347 294 101 1,276 1,276 1,674 1,270 12,486 Amount (Rs. in lacs) Nature of dues Service tax EPF Liability Penalty for pre activated SIM Service Tax Service Tax Penalty Service Tax Service Tax Service Tax Penalty Service Tax Penalty Trade tax Name of statute Finance Act, 1994 EPF act 1952 Penalty for pre activated SIM Uttrakhand Trade tax Act, 1948 Circle name Total Uttaranchal Telecoms S. 32 No.

164 Annual Report 2014-15 Forum where disputes are pending Commissioner of central excise and service tax Commissioner of central excise and service tax DDG(TERM),DOT,UP(WEST) High Court Commissioner of income tax(A) Income tax appellate tribunal Commissioner of income tax(A) 2005 to 2006 2005 to 2006 2010 to 11 2003 to 2004 2004 to 2005 2004 to 2005 2005 to 2006 2005 to 2006 2006 to 2007 2007 to 2008 2008 to 2009 2010 to 2011 2009 to 2010 2011 to 2012 2009 to 2010 Period to which the amount relates

– – – – – – – – – – – – – – – – – paid 100 Amount (Rs. in Lacs) 68 122 190 2,370 4,379 9,684 3,071 36,110 31,667 92,606 97,095 70,891 29,749 22,916 197,943 115,316 623,422 Amount 1,330,470 (Rs. in lacs) Nature of dues Service Tax Income Tax Penalty for Non Compliance of EMF Radiation Norms Name of statute Finance Act, 1994 Income Tax Act, 1961 Penalty for Non Compliance of EMF Radiation Norms Circle name Total NE II Total Corporate Total S. 33 34 No. * Amount have been rounded off to zero The above information has been tabulated to the extent available from respective circle auditors report

165 Addendum to Director’s Report: The Management replies to Independent Auditor’s Report for the year 2014-15 are given below:

Audit Para Management Reply Assets and liabilities taken over from Department of Telecommunication (‘DoT’) and the amounts receivable and payable to DoT 8. As detailed in note 28, 31.1 and 31.3 to the Noted. The value of net additional assets financial statements, assets and liabilities identified till date of balance sheet is less (including contingent liabilities) taken over than 0.50% of the provisional amount from DoT have been verified and valued by the on which assets were transferred to the management based on internal calculations. Company as on 01.10.2000. Further, subsequent adjustments made on account of identification and recognition of net assets is adjusted to capital reserve. These are subject to reconciliations and confirmation from DoT as regards to ownership, value and classification. The consequential impact on the financial statements, if any, as a result of the same is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 9. As detailed in note 32 to the financial statements, Instructions has been issued to all BSNL amounts due from and to DoT included in current Circles to provide the details of balances assets and current liabilities aggregating to Rs. under account head related to claim 27,130 lacs (previous year Rs. 173,669 lacs) and recoverable from DOT to the Office of Rs. 50,865 lacs (previous year Rs. 39,109 lacs) concerned CCAs for confirmation. respectively are subject to confirmations and reconciliation. Consequently, the impact of the adjustments, if any, on the financial statements is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Fixed Assets 10. As reported by auditors of 19 circles, Capital The Circles are being instructed to work-in-progress, inter alia, includes balances capitalize the works as and when pending capitalisation for long-periods of time completed and put to use and depreciation owing to pending analysis of status, value and provided from that date. obtaining of commissioning certificates. The consequential impact on the capital work- in-progress, fixed assets, depreciation and amortisation and loss for the year, if any, is presently not ascertainable. Our audit report on the financial statements for the previous year

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ended 31st March 2014 was also qualified in respect of this matter. 11. As reported by auditors of 8 circles, in the absence The concerned circles are being instructed of information in respect of certain items of fixed to account for such types of transactions assets capitalised, particularly batteries, it could strictly as per accounting circulars/ not be established whether assets capitalised instructions issued in this regard. were on account of replacement/extension of an existing asset or additional acquisition of a new asset and hence the consequential impact of the same on the classification/value of the respective asset, depreciation and amortisation, expenses and loss for the year, if any, is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 12. As reported by auditors of 12 circles, the All leasehold/ freehold land which are leasehold land as identified and valued by the known/ identified have been accounted respective circles have been incorporated in the for. books of accounts and amortised with effect from the date of formation of the Company. Hence, in respect of the lands still not identified and/ or duly incorporated in the books of accounts of the respective circles, the consequential impact on value of fixed assets, depreciation and amortisation and loss for the year, if any, is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 13. As detailed in note 31.2 to the financial The concerned circles are being instructed statements, auditors of 6 circles have reported on to expedite the process of getting the lease the expired/non-renewal of leases on lands on of lands renewed. which the Company had constructed buildings and the fact that management has not made any provision for the surrender value/written down value of the aforementioned buildings in the anticipation of the ultimate renewal of the leases. The consequential impact of adjustment on fixed assets, depreciation and amortisation and loss for the year, if any, is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 14. As stated in note 13(a) and 31.3 to the financial The company is in the process of executing statements, fixed assets, inter alia, includes land the title deeds of the lands purchased / pertaining to 23 circles, purchased/acquired acquired, wherever required. on leasehold/ freehold basis through various

167 authorities, the title deeds of which are yet to be executed in the name of the Company. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 15. The accounting policy of the Company as stated The circles are being instructed to strictly in note 2.6 to the financial statements with respect adhere to the accounting instructions to the decommissioned assets has not been issued on the subject matter. uniformly applied across all circles. In 17 circles, the decommissioned assets are not recorded at lower of the cost or net realisable value. While, in 6 circles, the decommissioned assets have not been appropriately adjusted from the block of fixed assets and depreciation and amortisation is still being charged on such decommissioned assets. In the absence of sufficient details, we are unable to comment upon the impact of adjustment on the fixed assets, current assets, depreciation and amortisation and loss for the year, if any, arising out of the same. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 16. The following accounting treatments by the Company in respect of fixed assets and capital works-in-progress are not in accordance with the provisions of the Accounting Standard-6, Depreciation Accounting; Accounting Standard - 10, Accounting for fixed assets, and Accounting Standard – 26, Intangible Assets notified under section 133 of the Act read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (as amended): 1. As detailed in note 31.6 to the financial Accounting policy of BSNL in this regard statements and as reported by auditors of 23 states that the cost includes directly circles, the Company has not consistently related establishment and other expenses adhered to capitalizing the overheads including employee remuneration and expenses specifically attributable to the benefits, directly identifiable to the capital work-in-progress but has recorded construction or creation of assets. the same on estimated/fixed percentage/ As explained in note no. 31.6, the proportionate/ payment basis; administrative and establishment expenses incurred in units where project work is also undertaken are allocated to capital and revenue mainly on actual basis and on “actual man-month spent” basis respectively. In case, the costs are not

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directly attributable for e.g. administration and other associated costs where an asset is used for different projects or an employee is devoting his time to various jobs simultaneously during the month then such expenditure is divided among the different projects on the basis of ratio of actual use/actual time spent over different projects or if it is not practically possible to find such division then on an appropriate empirical ratio and accordingly decision regarding charging of the same towards CWIP or revenue heads is taken. The concerned circles are being instructed to capitalize the works as and when completed and put to use as per the instructions already issue d in this regard. 2. As reported by auditors of certain circles, the Company capitalises the assets on periodic The concerned circles are being instructed basis instead of at the ready to use date; and to strictly adhere on the accounting policies and instructions issued from time to time. 3. Accounting policies regarding capitalization, disposal, depreciation and amortization of fixed assets are not uniformly applied in case of 24 circles. The resultant impact of the above non compliances with the standards on the value of fixed assets, capital work-in-progress, depreciation and amortization and loss for the year, if any, are presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Current Assets and Current Liabilities 17. The Company does not follow a system of obtaining As per Industry practice, taking confirmation and performing reconciliation confirmation for trade receivables of balances in respect of trade receivables, and subscribers deposits from huge deposits with departments/companies (interalia, subscribers’ base is neither practical nor including Mahanagar Telecom Nigam Limited possible. and Bharat Broadband Network Limited), claims recoverable from/payable to DoT (including license fees payable as detailed in note 42(a)(i) of the financial statements) or to/ from other

169 government departments/authorities, For balances due to or due from other subscriber/ customer deposit accounts, trade parties i.e. DOT, DOP, other Govt. payable and claims payable. Due to non- departments/ companies etc., circles are availability of confirmations and reconciliations instructed again to carry out reconciliation of the aforementioned account balances, we are at regular intervals. unable to quantify the impact of the adjustments, if any, arising from reconciliation and settlement of account balances on the financial statements. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 18. As reported by auditors of certain circles, there are The concerned circles are being instructed unquantifiable differences between the general to carry out the reconciliation and take ledger /trial balance and accounting records necessary action to sort out the difference pertaining to loans and advances, current assets between the two sets of records. and current liabilities. The impact on the financial statements, if any, owing to the aforementioned non-reconciliations is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 19. As reported by auditor of 11 circles, there are Circles are being instructed to take differences in the inventory records between appropriate action immediately stores ledger and general ledger/trial balance, the impact of the same is currently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 20. As reported by auditors of 20 circles, in absence The Management has initiated detailed of adequate information, details and records of programme regarding verification and old, non-moving, damaged and unserviceable optimal utilization of inventory under the inventories could not be identified. Further, name “Operation Samudra Manthan’. as reported by auditors of 6 circles, old, non- moving, damaged and unserviceable inventories identified are shown at historical cost. This is not in accordance with the Accounting Standard 2 on Valuation of Inventories and adjustment, if any, amount of lower of net realizable value and the cost is currently not ascertainable. The adjustment, if any, on inventories, consumption and loss for the year is presently not ascertainable. The aforementioned non-identification of old, non-moving, damaged and unserviceable inventories was also a subject matter of qualification in our previous year’s audit report on the audited financial statements for the year ended 31st March 2014.

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21. As reported by auditors of 2 circles, certain Circles are being instructed to take units have not applied the Company’s policy appropriate action immediately. of valuation of inventory on weighted average method as stated in note 2.8 to the financial statements. The impact of the adjustment, if any, on inventory, consumption and loss for the year is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Inter/ Intra Circle Remittance Account 22. As detailed in note 33 to the financial statements, The reconciliation of remittance items the Inter-Circle/Unit remittance balances and accounting the same under final amounting to Rs. 57,312 lacs (previous year Rs. head are continuously being done by 86,537 lacs) are yet to be reconciled. Pending the circles which resulted in continuous such reconciliations, the possible cumulative decrease in the pending remittances for impact of the adjustments, if any, on assets and last five financial years. It has been further liabilities and the current and prior year(s) income reduced from Rs. 865.37 crores last year and expenditure is presently not ascertainable. to Rs.573.12 crores during current year. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. License Fee, Spectrum Charges, Inter Connect Usage Charges 23. As detailed in note 29 to the financial statements, The license fee is paid on revenue share the Company segregates revenue from NLD basis. The value of pulse is not constant (National long distance)/ILD (International long and may also be NIL for certain tariff plans. distance) on an estimated basis instead of actual Special tariff/ validity vouchers introduce usage of pulse which consequently results in another variable due to which pulse does recognition of the license fees on an estimated not remain right factor for measuring basis. The impact of adjustment, if any, on the revenue for purpose of calculating license license fees expense, recoverable/ payable fee. Further, license fee is now uniform from DoT and loss for the year is presently not across various services; hence the effect ascertainable for the year. Our audit report on is not material. However, the company the financial statements for the previous year is improving its technical capabilities to ended 31st March 2014 was also qualified in measure as accurately as possible. respect of this matter. Revenue 24. As reported by auditors of 4 circles, the income The concerned circles are being instructed from recharge coupons, prepaid calling cards, to take necessary action in the matter. internet connection cards, sancharnet cards and stock of recharge coupons and prepaid calling cards are subject to reconciliations. In the absence of specific details, the impact of adjustment, if any, on financial statements is presently not ascertainable. Our audit report on the financial statements for the previous year

171 ended 31st March 2014 was also qualified in respect of this matter. 25. The revenue and expenditure for the current Noted. The circles are being instructed year, inter alia, includes amounts pertaining to strictly adhere to the accounting to prior period(s) as reported by auditors of instructions issued in this regard. 4 circles and 6 circles respectively. This has not been separately disclosed in the financial statements in a manner that their impact on the current year’s loss can be perceived, which is not in accordance with the Accounting Standard – 5, Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies. The consequential impact of adjustments, if any, on the financial statements is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter 26. As stated in note 2.3-(e), (f) and (i) to the significant Noted. Adequate disclosures are already accounting policies, certain items of revenue given in the books of accounts of BSNL as are accounted for on cash basis instead of the required by AS-1 and AS-9 issued by ICAI. accrual basis of recognition of revenue which is not in accordance with the generally accepted accounting principles in India. The impact of the adjustment, if any, in respect thereof on revenue, license fee, trade receivables and loss for the year is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Provisions and Contigent Liabilities 27. The provisions and the disclosures with regard to Most of the circles had provided the details matters under litigations have been made based of litigation / claims lodged or defended upon the management estimates. Based upon and contacts of the Company’s counsels to the report of auditors of 14 circles, sufficient and the auditors. At Corporate level also, the appropriate audit evidence for examining and above mentioned details were given to verifying the quantum of contingent liabilities auditors. The auditors had written letters disclosed in note 42(a) to the financial statements to the Company’s counsels. It appears that has not been obtained. In the absence of the due to professional reasons some counsels adequate details and documents and pending the did not respond. It may also be noted responses to our confirmation requests in respect that many of the legal cases are on either of the litigations at the corporate level, the impact outstanding dues or on service/ personnel of adjustments/disclosures, if any, on the financial matters involving issues of employee’s statements is presently not ascertainable. Our career progression, inter-se seniority etc. audit report on the financial statements for the For the cases having major implications previous year ended 31st March 2014 was also known up to finalization of accounts, qualified in respect of this matter. the details and contingent liabilities have

172 Annual Report 2014-15

already been shown in note to accounts. Moreover, the concerned circles are further advised to provide the adequate details to auditors. Miscellaneous 28. The Company has not complied in respect of the following Accounting Standards notified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended): i) As detailed in note 35 to the financial statements, the expenses, incomes, assets The concerned circles are being instructed and liabilities are not properly disclosed to take necessary action in this regard. under the reportable segment as per the Accounting Standard 17 on Segment Reporting. In our opinion, the same does not give true and fair disclosure of the segment- wise operations of the Company as required by the aforementioned accounting standard. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. ii) As stated in note 15 to the financial statement, the Company as at 31st March As disclosed in the note no. 15(d), 2015 has deferred tax assets (net) amounting the company has not recognized any to Rs. 84,706 lacs (previous year Rs. 23,773 deferred tax assets following the notified lacs). Since the Company has a recent accounting standard ‘accounting for history of losses and owing to lack of virtual taxes on income’, only reversal relating certainty and convincing evidence that to deferred tax assets and deferred tax sufficient future taxable income will be liabilities created during the earlier years available against such deferred tax asset and have been made. Since the reversal of as stipulated by Accounting Standard-22, deferred tax liabilities are more than the Accounting for taxes on income, the amount newly identified deferred tax liabilities, it of such deferred tax asset should be written has resulted into increase in net deferred off. Consequent to the above, loss for the tax assets. year in the statement of profit and loss is under-stated by Rs. 84,706 lacs and the balance of deferred tax asset included under Non-Current Assets, has been overstated by the corresponding amount. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. iii) The Company has not carried out any The operations of BSNL are of such a Techno-economic assessment during nature where assets are in use 24x7. the year ended 31st March 2015 and As and when any asset is found non- hence identification of impairment loss and repairable or non-functional or obsolete,

173 . provision thereof, if any, has not been the same is decommissioned and necessary made. The same is not in accordance with provision is being created in books of the notified Accounting Standard 28 on accounts. The assets are impaired as and Impairment of asset. The consequential when the necessity arises. This process impact of adjustment, if any, on the financial is continuously followed throughout the statements is currently not ascertainable. year in each circle of BSNL. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. iv) The accounting for capital and revenue grant The concerned circles are being instructed in accordance with the notified Accounting to strictly adhere to the accounting policies Standard 12 on Accounting for grants is not and instructions issued in this regard. followed consistently as reported by auditors of 5 circles. In the absence of specific details, the consequential impact of adjustment, if any, on the financial statements is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. v) The accounting policy as referred to in note As per the accounting policy as disclosed, 2.10(b) to the financial statements with claims for medical facility received from respect to the liability on account of post- the employees of BSNL(including retirees) retirement medical benefits of employees up to the cutoff date of finalization of including retired employees, a defined annual accounts, are treated as liability of benefit plan, is recognized on actual basis the Company for the said financial year. in respect of bills received by the Company instead of recognizing the liability for the The post employment medical care same as the present value of the defined extended to its retired employees as per benefit obligation at the balance sheet date the present policy of BSNL is more like calculated on the basis of actuarial valuation facilities ,which may be revised by the in accordance with the notified Accounting Management any time , depending upon Standard-15 on Employee Benefits. The the relevant factors prevailing at that time. consequential impact of adjustment, if Further vide Letter No. BSNL/Admn.I/14- any, owing to this non-compliance on 15/09(pt.) dated 02/04/2014 option to the financial statements is presently not choose CGHS facilities has been extended ascertainable. Our audit report on the to retired employees of BSNL, who are in financial statements for the previous year receipt of Central Civil Pension . ended 31st March 2014 was also qualified in respect of this matter. vi) As reported by 3 circles, the Company has Noted. The Circles are being instructed not amounted for the contract revenue and to strictly adhere to the accounting contract costs pertaining to construction instructions issued in this regard. contracts in accordance with the notified Accounting Standard 7, Construction Contracts. In the absence of specific details,

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the consequential impact of adjustment, if any, on the financial statements is presently not ascertainable. 29. As stated in the note 2.12 of the financial Noted. Adequate disclosures are already statements, only individual transactions of given in the books of accounts of BSNL income/expenditure exceeding Rs. 5 lacs, as required by AS-1 and AS-9 issued are considered for evaluation as prior-period by ICAI. The accounting policy of the items. In our opinion, the said accounting company is made keeping in view the policy is not in accordance with the generally size of organization and volume of high accepted accounting principles in India and denomination transactions. It may also be the same should be evaluated on aggregation noted that many organization of such size of all prior period transactions of similar nature in infrastructure industry are following irrespective of individual transaction values, for similar policies. possible adjustment/disclosure in the financial statements. The consequential impact of the adjustment, if any, on the income, expense and loss for the year is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 30. As reported by 15 circles and detailed in note Noted. The concerned circles are being 10(a) to the financial statements, these circles instructed to take necessary action. have not identified units covered under Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED Act, 2006’) and hence disclosures as required under the MSMED Act, 2006 is presently not ascertainable. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 31. The disclosure requirements of the Schedule The circles are being instructed to strictly III of the Act has not been properly adhered to adhere to the accounting instructions in the presentation and disclosure of financial issued on the subject matter. statements of the Company in respect of classification of assets/liabilities into current and non-current and secured and unsecured, wherever applicable; categorisation of assets/ liabilities into appropriate accounting captions; changes in inventory; non-disclosure of consumption of stores and spares; consumption of imported and indigenous stores and spares parts; capital and other commitments and expenditure and earnings in foreign currency. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter.

175 32. As reported by Jammu & Kashmir Telecom Noted circle, all the vouchers, documents and records pertaining to the SSA Srinagar for the period from 1 April 2014 to 7 September 2014, are not available as the same have been lost/destroyed in floods. In the absence of such records, we are unable to comment upon the correctness and completeness of all the transactions for that period. 33. As reported by auditors of 20 circles, compliances The concerned circles are being instructed with regard to deposition, deduction, to make necessary compliances with reconciliation of service tax, tax deducted at regard to deposition, deduction, and source and value added tax are pending to be reconciliation of service tax and other made. In the absence of specific details, we statutory dues. are unable to comment on its consequential impact, if any, on the financial statements. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. 34. As detailed in notes (a) and (b) of the Cash Flow Noted. Statement, certain assumptions have been made for the purpose of preparation of the Cash Flow Statement. In the absence of the appropriate details, we are presently unable to ascertain the impact, if any, on the adjustments/disclosures in the Cash Flow Statement. Our audit report on the financial statements for the previous year ended 31st March 2014 was also qualified in respect of this matter. Emphasis of Matter 37. We draw attention to note 14 to the financial Due to substantive evidence on the statements of the Company regarding investments soundness of investment and recovery of in ITI Limited aggregating to Rs. 20,000 lacs as the amount, the management does not feel at 31st March 2015. The management, based on there are adequate reasons to decrease the the factors mentioned in the said note, believes value of investment in preference shares that the diminution in the value of investments is of M/s ITI Ltd. temporary in nature and hence no provision in respect of aforementioned amount has been made in the accompanying financial statement. Our opinion is not qualified in respect of this matter. For and on behalf of the Board of Directors

Sd/- (Anupam Shrivastava) Chairman & Managing Director Date: 13.10.2015 BHARAT SANCHAR NIGAM LIMITED

176 Annual Report 2014-15

Rep-PSU A/cs/F-103/Ann. Acts./BSNL/2014-15/Vol. II/67 Date - 06.11.2015 To

The Chairman and Managing Director, Bharat Sanchar Nigam Limited, Delhi.

Subject: Comments of the Comptroller & Auditor General of India under Section 143(6)(b) of the Companies Act 2013 on the accounts of BSNL for the year 31st March 2015

Sir,

I am to forward herewith the comments of Comptroller and Auditor General of India under Section 143(6)(b) of the Companies Act 2013 on the annual accounts of BSNL for the year ended 31st March 2015 for information and further necessary action.

Kindly acknowledge receipt.

Yours faithfully,

Sd/- (MeeraSwarup) Director General of Audit (P & T)

Encl(s): As above Telephone: E-mail: Fax: 23814747/4623/8625/4533 [email protected] 91-011-23813822

177 COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6) (b) OF THE COMPANIES ACT 2013 ON THE FINANCIAL STATEMENTS OF BHARAT SANCHAR NIGAM LIMITED FOR THE YEAR ENDED 31st MARCH 2015

The preparation of financial statements of Bharat Sanchar Nigam Limited for the year ended 31st March 2015 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the management of the Company. The statutory/Branch auditor/ auditors appointed by the Comptroller and Auditor General of India under section 139(5) of the Act is/are responsible for expressing opinion on the financial statements under section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated September 18, 2015. I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 143(6)(a) of the Act of the financial statements of Bharat Sanchar Nigam Limited for the year ended 31st March 2015. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. Based on my supplementary audit, I would like to highlight the following significant matters under section 143(6)(b) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the financial statements and the related audit report: Balance Sheet Equity and Liabilities Other Current Liabilities (Note 11) ` 734591 lakh A. DoT after completing provisional assessment of license fee for the year 2007-08 to 2012-13 raised an additional demand of 234731 lakh. The company did not provide for the same but disclosed it as a contingent liability. As demand was based on assessment, the same should have been provided for. Non provision has resulted in understatement of other current liabilities as well as accumulated losses by ` 234731 lakh. Current Assets (Note-21) Other Current Assets- ` 911286 lakh The above head does not include the amount of ` 1388 lakh recoverable from DoT. Further, an amount of ` 5725.7 lakh for various electrical work carried out under NTR Circle. Non-inclusion of the above amounts has resulted in the understatement of other Current Assets and overstatement of loss by ` 6237 lakh. STATEMENT OF PROFIT AND LOSS Revenue Revenue from Operations (Note 22) ` 2724223 lakh The above head includes an amount of ` 22666 lakh as Income from CMTS towards the income

178 Annual Report 2014-15 received for providing mobile services in areas identified by Ministry of Home Affairs (GOI) in Left Wing Extremists affected areas. However, as per the Fund Utilisation statement furnished to Administrator, USOF, an amount of ` 10407 lakh only was utilized upto 31-08-2015. Thus, accounting of unspent amount as income without showing the same as utilization to Administrator, USOF was not in order and resulted in overstatement of income from CMTS and understatement of loss for the year as well as liabilities by atleast ` 12259 lakh. Employee Benefit Expenses (Note No. 24) - Pension Contribution - ` 1496350 lakh The above head is understated by ` 77571 lakh due to charging of pension contribution of absorbed employees on the basis of actually drawn pay instead of on maximum pay. This has also resulted in understatement of provision as well as accumulated loss by ` 77571 lakh. Expenses - Other Expenses License and spectrum fee (Note 29)- ` 217032 lakh A penalty of ` 142862 lakh was imposed by TERM Cell of DoT for non compliance to EMF radiation norms during the year 2013-14 out of which an amount of ` 12.36 lakh has already been paid by the Company leaving a balance of ` 142849 lakh. This has resulted in understatement of above head as well as understatement of Current Liabilities by ` 142849 lakh. General A. Persistent Non-Reconciliation of balances with MTNL As per accounts of BSNL for the year 2014-15, the amount recoverable from and the amount payable to Mahanagar Telephone Nigam Limited (MTNL) on current account have been disclosed as ` 3586.57 crore and ` 1016.59 crore respectively resulting in net recoverable amount of ` 2569.98 crore from MTNL. However, as per approved annual accounts of MTNL for the year 2014-15, the amount recoverable from and the amount payable to the Company was ` 9005.10 crore and ` 4164.07 crore respectively resulting in a net recoverable amount of ` 4841.03 crore from BSNL. Thus, there was net difference of ` 7411.01 crore in the receivable/payable amounts between these two Government Companies under the same Ministry. This comment was raised on accounts of the Company for the year 2013-14 also. However, there is no change in the status of unreconciled balances between the Company and MTNL. B. BSNL has booked expenditure amounting to ` 9533 lakh on account of post-employment medical care to BSNL retired employees during the FY 2014-15 on actual basis instead of actuarial basis which was not in line with AS-15.

For and on the behalf of the Comptroller & Auditor General of India

Sd/- (Meera Swarup) Place: New Delhi Director General of Audit Date: 6.11.2015 Post and Telecommunication

179 Comments of the Comptroller a nd Auditor General of India under section 143(6) (b) of the Companies Act, 2013 on the Financial Statements of Bharat Sanchar Nigam Limited for the Year Ended 31st March 2015 and reply thereon by BSNL Management Para Comments by C&AG of India Reply of the Management No. BALANCE SHEET A. Equity and Liabilities Other Current Liabilities (Note 11) ` 734591 lakh DoT after completing provisional assessment As per disclosure made, such demands of license fee for the year 2007-08 to 2012-13 are on account of provisional assessment raised an additional demand of 234731 lakh. and the matter has been taken up with The company did not provide for the same DOT. but disclosed it as a contingent liability. As A Committee has been formed to look demand was based on assessement , the same into the issue and there are indications should have been provided for. Non provision that for 2007-08, some amount will be has resulted in understatement of other current recoverable from DOT liabilities as well as accumulated losses by ` Till final assessment of license fee is 234731 lakh. done by DOT, it is not a firm liability. Hence, these are disclosed as contingent liability.

B. Current Assets (Note-21) Other Current Assets- Rs. 911286 lakh The above head does not include the amount It has been intimated by NTR Circle that of ` 1388 lakh recoverable from DoT and an the details as given in this Para is under amount of ` 5725.7 lakh for various electrical reconciliation and after completion of work carried out under NTR Circle. Non- reconciliation , the necessary entry will inclusion of the above amounts has resulted be made in the books of account by the in the understatement of other Current Assets NTR Circle. and overstatement of loss by ` 6237 lakh. STATEMENT OF PROFIT AND LOSS A. Revenue Revenue from Operations (Note 22) Rs. The MOU for providing mobile services 2724223 lakh in areas affected by Left Wing Extremist The above head includes an amount of ` (LWE) was signed between BSNL and 22666 lakh as Income from CMTS towards the USOF Administrator. Under the agreement income received for providing mobile services total 2199 locations was identified , out of in areas identified by Ministry of Home Affairs which 363 locations BSNL have already (GOI) in Left Wing Extremists affected areas. been installed mobile towers. However, as per the Fund Utilisation statement The Income of ` 226.66 crore consists of furnished to Administrator, USOF, an amount two separate J.V. One being of ` 194.02 of ` 10407 lakh only was utilized upto crore pertaining to “Other charges” and 31-08-2015. Thus, accounting of unspent Second being ` 32.64 crore pertaining to amount as income without showing the same “Centage-LWE Project”.

180 Annual Report 2014-15

as utilization to Administrator, USOF was As per agreement signed with not in order and resulted in overstatement of Administrator, USOF dated 30/09/2014 income from CMTS and understatement of. loss for provisioning of mobile services in the for the year as well as liabilities by atleast ` areas affected by Left Wing Extremism 12259 lakh (LWE), core and other element of BSNL Network have been made ready to integrate 1836 BTS sites being installed under LWE Project. These equipments were commissioned and accepted tested as per exact provision by BSNL under Phase-V/VII. Survey has already been done by BSNL for 1836 sites and the survey report for 1836 sites has already been submitted to USOF & DOT.

Accordingly, as per para no. 6.11.3(i) of the agreement an amount of ` 171.66 crore is adjusted against advance received for LWE Project as apportioned cost of Core and other network elements for 1836 sites and for survey and documentation cost (NON TENDERED CAPEX). Similarly as per para no. 6.11.3(iii) of the agreement NON TENDERED OPEX for operation and maintenance charges for above said Core network and other elements for two quarters amounting ` 22.36 crore is adjusted. As BSNL core network is seamless and the assets which are being used for LWE Projects cannot be separately identified, above expenses has been accounted as Income. As per para no. 6.11.3(iv) of the agreement OPEX with respect to existing 363 BTS for 6 months amounting ` 32.64 crore has been accounted as “Centage” as the operation and maintenance expenditure has already been incurred for existing 363 BTS. B. Employee Benefit Expenses (Note No. 24) Pension Contribution ` 1496350 lakh The above head is understated by ` 77571 The absorbed employees of BSNL are lakh due to charging of pension contribution paid pension under Rule 37A of CCS

181 of absorbed employees on the basis of actually Pension Rules for whom pension drawn pay instead of on maximum pay. This contribution is payable as per the rates has also resulted in understatement of provision prescribed in FR. As per FR 116 the rate as well as accumulated loss by ` 77571 lakh of pension contribution shall be such as the President may by General Order prescribe. Accordingly vide Office memorandum dated 19/11/2009 issued by DOP&T, pension contribution shall be based on the existing basic pay of the post held by a Govt. Servant (BSNL employee are also Govt. Servant for the purpose of pension under Rule 37A) at the time of proceeding on foreign service or the upgraded pay during financial up- gradation. As the interpretation given by the administrative ministry does not conform to statutory provisions and hence the case was taken up once again with the DOT. The Secretary Telecom vide minutes dated 19/04/2012 permitted the BSNL Management to remit pension contribution on the maximum of the scale only for those employee who are due to retire within six months and for all others on actual basis. In this context, it is also mentioned that the stand of BSNL is confirmed by DOPT in its letter no. 6/1/2014-Estt.(Pay-II) dated 24th April 2014. The matter is under regular pursuance with DOT and management has once again decided to pay the pension contribution on maximum of the pay scale from 01.10.2014 onwards to avoid hardship faced by BSNL retirees on getting pension. The matter has been taken up by CMD, BSNL with DOT vide their Letters dated 23/02/15, 28/05/15 and 24/09/15 . Hence, the difference amount is shown as contingent liability.

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C. Expenses Other Expenses License and spectrum fee (Note 29) ` 217032 lakh A penalty of ` 142862 lakh was imposed by These penalties have been imposed for TERM Cell of DoT for non compliance to minor procedural discrepancies like EMF radiation norms during the year 2013-14 delay in submission of self certificate, out of which an amount of ` 12.36 lakh has improper signage/photograph etc. and already been paid by the Company leaving not because of exceeding the EMF a balance of `142849 lakh. This has resulted Radiation norms set by DOT.BSNL has in understatement of above head as well as taken up the matter with Term Cell, DOT understatement of Current Liabilities by ` to condone these minor discrepancies. 142849 lakh. The matter is under regular persuasion with DOT. As assured during last year, these penalties have been shown as contingent liability during current year. General A. Persistent Non-Reconciliation of balances with MTNL As per accounts of BSNL for the year 2014- A high Level Committee has been formed 15, the amount recoverable from and the by DOT vide Letter No. 10-14/2013- amount payable to Mahanagar Telephone SU-1 dated 25/06/2013 consisting Nigam Limited (MTNL) on current account representatives of DOT,MTNL to sort have been disclosed as ` 3586.57 crore and out the issues with MTNL. ` 1016.59 crore respectively resulting in net recoverable amount of ` 2569.98 crore from Upon recommendation of such High MTNL. However, as per approved annual Level Committee, a MOU dated accounts of MTNL for the year 2014-15, the 24/09/2013 has already been signed amount recoverable from and the amount between BSNL and MTNL to sort out payable to the Company was ` 9005.10 crore various issues. The pending issues and ` 4164.07 crore respectively resulting in with the MTNL are likely to be settled a net recoverable amount of ` 4841.03 crore accordingly. from BSNL. Thus, there was net difference of ` 7411.01 crore in the receivable/payable amounts between these two Government Companies under the same Ministry. This comment was raised on accounts of the Company for the year 2013-14 also. However, there is no change in the status of unreconciled balances between the Company and MTNL.

183 B. BSNL has booked expenditure amounting to As per the accounting policy as Rs. 9533 lakh on account of post-employment disclosed, claims for medical facility medical care to BSNL retired employees received from the employees of during the FY 2014-15 on actual basis instead BSNL(including retirees) up to the cutoff of actuarial basis which was not in line with date of finalization of annual accounts, AS-15. are treated as liability of the Company for the said financial year. The post employment medical care extended to its retired employees as per the present policy of BSNL is more like a facility, which may be reviewed by the Management any time, depending upon the relevant factors prevailing at that time. Further vide Letter No. BSNL/Admn.I/14- 15/09(pt.) dated 02/04/2014 option to choose CGHS facilities has been extended to retired employees of BSNL, who are in receipt of Central Civil Pension. For and on behalf of the For and on behalf of the Board of Comptroller and Auditor General of India Directors

Sd/- Sd/- (Meera Swarup) (Anupam Shrivastava) Director General of Audit CMD,BSNL Post and Telecommunication Date : 17.11.2015

184