Acknowledgement

Executive Summary

Chapter-1 Introduction 1.1. 1.2. 1.3. 1.4. 1.5. Overview of the BSNL Objectives of the study Profile of the Organisation o Overv iew of BSNL Gwalior Circle o Vision, Mission & objectives o Fact Sheet o Revenue s Strategies o Management Profile o Products o Policy of Accounting and finance Comparative Study SWOT Analysis 1 2 3 6 7 8 9 10 11 13 19 21 Chapter-2 Research Methodology 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. 2.7. 2.8. Statement of the Problem Research Design Methodology Sampling Techniques used Se lection of Sample Size Data Collection Statistical Tools Used Limitations of the Study Introduction Comparative statement of BSNL Trend Analysis of Profit Commo n Size Balance Sheet Cash flow Statement Finding Analysis Conclusion Suggestions 23 23 24 25 25 25 25 26 27 32 35 36 Chapter-3 Data Analysis and Findings 3.1. 3.2. 3.3. 3.4. 3.5. Chapter-4 Conclusion and Suggestions 4.1. 4.2. 4.3. 4.4. 44 44 45 46 47-50 Appendix 1

Bibliography 51 2

Type Availability Owner Key people Founded Website 1.1 Overview Communication Service Provider Countrywide except Delhi & Mumbai The Government of India S.D. Saxena (CFO); A.K. Sinha (CEO) 19th century, incorporated 2000 www .bsnl.in of the BSNL: BSNL is India's oldest and largest Communication Service Provider (CSP). Current ly BSNL has a customer base of 64.8 million (Basic & Mobile telephony). It has f ootprints throughout India except for the metropolitan cities of Mumbai and New Delhi which are managed by MTNL . As on March 31, 2007 BSNL commanded a customer base of 33.7 million Wireline, 3.6 million CDMAWLL and 27.5 million GSM Mobile subscribers. BSNL's earnings for the Financial Year ending March 31, 2006 stood at INR 401.8b (US$ 9.09 b) with net profit of INR 89.4b (US$ 2.02 billion). Toda y, BSNL is India's largest Telco and one of the largest Public Sector Undertakin g of the country with authorized share capital of US$ 3.95 billion (INR 17,500 C rores) and networth of US$ 14.32 billion. 3

1.2 Objective of Study: The main objective of this study is to carry on brief study on Analysis of Financ ial Statement through this I am able to get the difference of various assets and liabilities of the BSNL. Other objectives of this project are as follows: To ide ntify the various assets amount of the BSNL with respect to Annual Repots of the BSNL. Comparative study of Two year Annual reports. To study the various depart ments for the needs of assets and use-less assets amount of BSNL Gwalior city ce nter. 4

1.3 Profile of Organisation: Over views of Organisation History The foundation of Telecom Network in India was laid by the British sometime in 1 9th century. The history of BSNL is linked with the beginning of Telecom in Indi a. In 19th century and for almost entire 20th century, the Telecom in India was operated as a Government of India wing. Earlier it was part of erstwhile Post & Telegraph Department (P&T). In 1975 the Department of Telecom (DoT) was separate d from P&T. DoT was responsible for running of Telecom services in entire countr y until 1985 when Mahanagar Telephone Nigam Limited (MTNL) was carved out of DoT to run the telecom services of Delhi and Mumbai. It is a well known fact that B SNL was carved out of Department of Telecom to provide level playing field to pr ivate telecoms.Subsequently in 1990s the telecom sector was opened up by the Gov ernment for Private investment, therefore it became necessary to separate the Go vernment's policy wing from Operations wing. The Government of India corporatise d the operations wing of DoT on October 01, 2000 and named it as Bharat Sanchar Nigam Limited (BSNL).BSNL operates as a public sector. Main Services being provided by BSNL BSNL provides almost every telecom service, however following are the main Telec om Services being provided by BSNL in India:1. Universal Telecom Sevices : Fixed wireline services & Wireless in Local loop (WLL) using CDMA Technology called b fone and Tarang respectively. BSNL is dominant operator in fixed line. As on Mar ch 31, 2007 (end of financial year) BSNL had 76% share of fixed and WLL phones. BSNL Mobile Pre-paid Mobile 5

2. Cellular Mobile Telephone Services: BSNL is major provider of Cellular Mobile Telephone services using GSM platform under brandname Cellone. Pre-paid Cellula r services of BSNL are know as Excel. As on March 31, 2007 BSNL had 17% share of mobile telephony in the country. BSNL Broadband 3. Internet: BSNL is providing internet as dial-up connection (Sa ncharnet ) and ADSL-Broadband Dataone. BSNL has around 50% marketshare in broadb and in India. BSNL has planned aggressive rollout in broadband for current finan cial year. 4. Intelligent Network (IN): BSNL is providing IN services like telev oting, toll free calling, premium calling etc. BSNL Present & Future Since its corporatisation in October 2000, BSNL has been actively providing conn ections in both Urban and Rural areas and the efficiency of the company has dras tically improved from the days when one had to wait for years to get a phone con nection to now when one can get a connection in even hours. Pre-activated Mobile connections are available at many places across India. BSNL has also unveiled v ery cost-effective Broadband internet access plans (DataOne) targeted at homes a nd small businesses. At present BSNL enjoy's 47% of market share of ISP services . Year of Broadband 2007 Former Indian Communications Minister Thiru Dayanidhi Maran had declared year 20 07 as "Year of Broadband" in India and BSNL is gearing up to provide 5 6

million Broadband connectivity by the end of 2007. BSNL has upgraded existing Da taone (Broadband) connections for a speed of up to 2 Mbit/s without any extra co st. This 2 Mbit/s broadband service is being provided by BSNL at a cost of just US$ 5.5 per month. Further, BSNL is planning to upgrade its broadband services t o Triple play (telecommunications) in 2007. BSNL has been asked to add 108 milli on customers by 2010 by Former Indian Communications Minister Thiru Dayanidhi Ma ran. With the frantic activity in the communication sector in India, the target appears achievable, however due to intense competition in Indian Telecom sector in recent past BSNL's growth has slowed down. BSNL is pioneer of Rural Telephony in India. BSNL has recently bagged 80% of US$ 580 m (INR 2,500 crores) Rural Te lephony project of Government of India. Challenges During Financial Year 2007-2008 (From April 01, 2006 to March 31, 2007) BSNL has added 9.6 million new customers in various telephone services taking its custom er base to 64.8 million. BSNL's nearest competitor Bharti Airtel is standing at a customer base of 39 million. However, despite impressive growth shown by BSNL in recent times, the Fixed line customer base of BSNL is declining. In order to woo back its fixed-line customers BSNL has brought down long distance calling ra te under OneIndia plan, however, the success of the scheme is not known. However , BSNL faces bleak fiscal 2006-2007 as users flee, which has been accepted by th e CMD BSNL. Presently there is an intense competition in Indian Telecom sector a nd various Telcos are rolling out attractive schemes and are providing good cust omer services. However, BSNL being legacy operator and its conversion from a Gov ernment Department, earns lot of criticism for its poor customer service. Althou gh in recent past there have been tremendous improvement in working of BSNL but still it is much below the Industry's Expectations. A large aging (average age 4 9 years(appx)) workforce (300,000 strong), which is mostly semiilletrate or ille terate is the main reason for the poor customer service. Further, the Top manage ment of BSNL is still working in BSNL on deputation basis 7

holding Government employee status thus having little commitment to the organisa tion. Although in coming years the retirement profile of the workforce is very f ast and around 25% of existing workforce will retire by 2010, however, still the workforce will be quite large by the industry standards. Quality of the workfor ce will also remain an issue. Access Deficit Charges (ADC, a levy being paid by the private operators to BSNL for provide service in non-lucarative areas especi ally rural areas) has been slashed by 37% by TRAI, w.e.f. April 01, 2007. The re duction in ADC may hit the bottomlines of BSNL. BSNL at Gwalior Circle BSNL Gwalior Circle office is situated in City Center area. This office is under taking of Bhopal office. This office are works various areas like Marketing, Pla nning, Administrative, Operation & Management and Finance. Each department works under GM telecom district. GM delegates our some duties to DGM. DGM is the head of the department. These posts are highly responsible because DGM is the main p erson of the department and DGM gives various approvals of works. This approval leaves various effect of the department like financial, working efficiency, func tions of departments and field officer works. Basically BSNL city center works i n departmental approaches or functions. This office provides a support to other departments or employees of BSNL. In this office calculated various function of employees like salary of employees, departmental information, various tenders, p ayment of vendors, departmental expenditure of general provident funds etc. But this office run a collection center this collection center collect various telep hones/mobiles/broadband bills. 8

Vision To become the largest telecom Service Provider. Mission To provide world class State-of-art technology telecom services to its customers on demand at competitive prices. To Provide world class telecom infrastructure in its area of operation and to contribute to the growth. Objective MP Telecom looks over the management, control and operation of the telecom netwo rk with the following aims and objective To build a high degree of idence by sustaining quality and reliability in service. To upgrade the quality of telecom service to international level. Provision of telephone connections on demand in all the villages of M.P. Expansion of new services like Internet, Int elligent Network, ISDN, Internet Telephony, Video Conferencing, Broadband etc. P opularize Broadband Services and to be on-demand in the whole State. Expansion o f Cellular Mobile Telephone to all towns. To open Internet Kiosks (Cafe's) at al l Block Head Quarters. To improve the quality of present services being given to the subscribers. To open more Customer Service Centers and upgrade the existing Customer Service Centers for better and friendly Customer care. Modernize PSTN network by making RSUs & AN-RAX. Plantation of Trees to make environment Clean & Green. To raise necessary financial resources for its developmental needs. To i ncrease accessibility of services, by providing a large number of Local and NSD/ ISD Public Call Offices (PCOs) so as to reach out to the masses. 9

Fact sheets The Company Bharat Sanchar Nigam Limited (known as BSNL) is a public sector communications c ompany in India. It is the largest telecommunication company in India and the si xth largest in the world. Its headquarters are at Statesman House, Barakhamba Ro ad, New Delhi. It has the status of Mini-ratana - a status assigned to reputed P ublic Sector companies in India. During the current financial year, the manageme nt based on physical verification of fixed assets and inventory and reconciliati on of various heads of assets and liabilities in the subsidiary and general ledg ers which has resulted into increase/decrease in the following assets and liabil ities taken over as on 01st October 2000 amounting to net reduction in the asset s of Rs. 5,910 lakh (P.Y. - Rs. 25,452 lakh): In pursuance of the Memorandum of Understanding dated 30th September 2000 executed between Government of India and BSNL, all assets and liabilities in respect of business carried on by DTS and D TO were transferred to the Company with effect from 01st October 2000 at a provi sional value of Rs. 6,300,000 lakh and up to previous financial year BSNL has id entified net assets of Rs. 6,352,028 lakh against it. General Information No. of Revenue District Population No. of Tehsil Block H.Q. Total Villages No. o f Villages(Inhabited) 2 1,629,881 6 7 1221 1108 10

Revenues Strategies The telecom sector is the most competitive sector post liberalization. This has resulted in a movement from growth based business model that emphasized growth i n numbers to profit-based model where the success is measured by margins. BSNL a s part of the transition has to adopt both cost reduction and revenue enhancemen t measures, which would directly impact profitability. It is evident that there is a declining trend in basic services and there is stagnation in cellular reven ues. Revenue maximization strategies will have two components, one internal to t he organization and the other external. The internal aspect would involve an ini tiative for change of process, technology, organizational structure etc. In this context, revenue assurance is the key to improving the bottom line for BSNL. Th is is proactive strategy to capture all revenues due for the services provided. Presently, BSNL generates bills through different softwares across the zones of operation, which are disintegrated and provide only basic solutions. The industr y standard for revenue leakage is about 3 to 7% percent of revenue, which in mon ey terms translates to about Rs.2100 crores for BSNL. Therefore plugging revenue leakages is just the first and most obvious part of a Revenue Assurance initiat ive. The key concerns for BSNL for effective revenue realization are The delay i n customer billing after activation Time lag between calls generated and billed Scope of fraud Non-availability of uniform database. Therefore the focus should be on immediate implementation of CDR based billing. This would require huge investment but the return would more than commensurate. The software should be scalable and be able to incorporate all the next generati on value added services. The implementation of CDR based system will also genera te the following benefits: Plugging of leakage of revenue. Formulation of approp riate marketing strategies 11

Management Profile Chief General Manager (CGM) Mr. Hinduja GM Telecom District Mr. Prashant Trivedi Deputy General Manager (DGM) (Marketing, Planning & Admin) DGM (Operation & Management) DGM (Finance) Mr. Prashant Trivedi Mr. Vijay Dixit Mr. S. D. Tyagi Chief Accounting Officer TR (COTR) Account officer TR 1st Mr. S.S. Bahdoriya AO Mob. Mr. Manoj Yadav AO Telecom Revenue 2nd Mr. SC Jain CO Strategic Business Plans (COSBP) AO SBP Mr. Ram Sadal AO Pay Mr. Naagar AO Cash Mr. Ram Avatar Jr. Account Officer Mr. R.S. Yogik Section Supervisor Mr. Chandrshekhar Sr. Trunk Supervisor Mr. K.N. Duwedi Peon Mr. Gyasi Ram Organisation Functional Structure of BSNL Gwalior Circle SBP Department 12

Products BSNL LANDLINE PHONE PLUS SERVICE NEW TELEPHONE CONNECTION PERMANENT CONNECTION C ONCESSION IN RENTALS SHIFT OF TELEPHONE TRANSFER OF TELEPHONE TELEPHONE TARIFF BSNL MOBILE BSNL WLL POSTPAID PREPAID UNIFIED MESSAGING GPRS/WAP/MMS DEMOs TARIFF SMS & BULK SMS INTERNET SERVICES BSNL BROADBAND NETWORK BROADBAND TYPES OF ACCESS WI-FI CO-LOCATION SERVICE BSNL WEB HOSTING INT ERNET TARIFF DIAL UP INTERNET SMS& BULK SMS REGISTER ONLINE TARIFF USO FUNDED RURAL BROADBAND FAQ CHECK USAGE BSNL MANAGED NETWORK SERVICES BSNL MPLS-VPN ISDN

ISDN TARIFF 13

 LEASED LINE

LEASED LINE TARIFF 14

 INTELLIGENT NETWORK FREE PHONE SERVICE PREMIUM RATE SERVICE INDIA TELEPHONE CARD VIRTUAL PRIVATE NET WORK (VPN) VOICE VPN UNIVERSAL NUMBER UNIVERSAL PERSONAL NUMBER TELE VOTING VIDEO CONFERENCING OVERVIEW TARIFF FAQ AUDIO CONFERENCING I NET OVERVIEW TARIFF FAQ OVERVIEW SERVICES ON I NET USING ON I NET I NET CONNECTIONS TARIFF TELEX/ TELEGRAPH EPABX TELEX/ TELEGRAPH TARIFF EPABX FREE EPABX TARIFF CENTREX CENTREX TARIFF HVNET RABMN INMARSAT KU-BAND TRANSPONDER 15

Accounting Policies Basis of Preparation of Financial Statements The financial statements of Bharat Sanchar Nigam Limited (the Company or BSNL) are p repared under the historical cost convention adopting the accrual method of acco unting in accordance with Indian Generally Accepted Accounting Principles Compan ies Act, 1956 (the Act). and in accordance with the provisions of the Revenue Recognition Income from services is accounted for on accrual basis and in conformity with Ac counting Standard 9 of ICAI. Accordingly, a) Revenue for all services is recogni zed when earned and are realizable at the time of billing. Unbilled revenues fro m the billing date to the end of the year are recorded as accrued revenue during the period in which the services are provided. Provision is made in respect of bills considered to be disputed (by the management), debts outstanding for more than two years and for debts due for less than 2 years, to the extent considered necessary by the management. b) Installation Charges recovered from subscribers at the time of new telephone connections are recognized as income in the first year of the billing. c) In terms of the arrangement between Department of Teleco mmunications (DoT) and the Company, the charges for telecommunication services and other infrastructural services provided by BSNL to DoT are neither being billed nor provided for. d) Sale proceeds of scrap arising from maintenance and projec t works are taken into miscellaneous income in the year of sale. e) Income from SIMs, recharge coupons of Mobile, Prepaid Calling Cards, and Prepaid internet co nnection cards are treated as income of the year in which the payment is receive d since the extent of use of these cards within the financial year could not be ascertained. f) Wherever there is uncertainty in realization of income, such as liquidated damages, claims on Government Departments & local authorities etc., t hese are recognized on collection basis. 16

g) The claims on account of reimbursement for provision of infrastructure, opera tion and maintenance of Village Public Telephones (VPTs) and Rural Household Con nections (RDELs) receivable from U.S.O. fund are accounted for as revenue on acc ount of the fact that the claim for infrastructure cannot be credited to the con cerned asset account since the claim amount could not be segregated asset wise. h) Other income by way of interest on loans to employees, security deposit with Government Departments and local authorities, being not material, are accounted for on collection. Fixed Assets a) Fixed assets are carried at cost less depreciation. Cost includes directly re lated establishment and other expenses including employee remuneration and benef its, directly identifiable to the construction or creation of the assets. b) Exp enditure on replacement of assets, equipments, instruments and rehabilitation wo rks is capitalized if, in the opinion of the management, it results in enhanceme nt of revenue generating capacity. c) Assets are capitalized to the extent compl etion certificates have been obtained, wherever applicable. d) The cost of store s and materials at the time of issue to a project, is debited to CWIP. e) Appara tus and plants principally consisting of telephone exchanges, transmission equip ments and air conditioning plants etc. are capitalized as and when an exchange i s commissioned and put to use. f) Cables are capitalized as and when ready for c onnection to the main system. g) Intangible assets are stated at cost of acquiri ng the same less accumulated depreciation / amortization. Depreciation/Amortization Depreciation is provided based on the Written Down Value method at the rates pre scribed in Schedule XIV to the Companies Act, 1956 except for Subscriber Install ation. The Subscriber Installation is depreciated over the useful life of 5 year s on Written Down Value method. 17

Assets costing up to Rs. 5,000 are depreciated fully in the year of purchase. Similarly, partition works costing up to Rs. 2,00,000 are depreciated fully in the year of construction. The depreciation on machinery & tools used bo th for project and maintenance work is charged to profit and loss account instea d of capitalization. All telephone exchange buildings, administrative offices an d captive consumption assembling premises/workshops are considered as normal bui lding and not as factory building. Accordingly depreciation is charged uniformly . Intangible assets such as Entry License Fee for Telecom Service operations are amortized over the license period (i.e. 20 years) and standalone computer softw are applications are amortized over the license period subject to maximum of 10 years as per straight line method. Impairment of Assets Assets, which are impaired by disuse or obsolescence, are segregated from the co ncerned assets category and shown as Decommissioned Assets and provision made for the loss, if any, due to the difference between their net carrying cost and the net realizable value. Investments Long-term investments are carried at cost, after providing for any diminution in value, if such diminution is of a permanent nature. Inventories Inventories are valued at cost or net realizable value as the case may be - cost ascertained generally on weighted average method; obsolete/non moving inventori es are valued at net realizable value. Foreign Currency Transactions a) Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction i.e. on the date of payment or receipt as the ca se may be. b) All Foreign Currency Liabilities and monetary assets are stated at the 18

exchange rate prevailing as at the date of Balance Sheet and the difference take n to Profit and Loss Accounts as Exchange Fluctuation Loss or Gain. Extraordinary Items Extra-ordinary items of income and expenditure, as covered by AS 5, are disclose d separately. Manufacturing Expenses Expenses incurred at Factory units are allocated to the cost of the manufactured products. Prior Period Items Items of Income/expenditure exceeding Rs. 5 lakh are only considered for being t reated as 'prior period items'. Taxes on Income Taxes on Income for the current period are determined on the basis of taxable in come and tax credits computed in accordance with the provisions of the Income Ta x Act, 1961. In accordance with the AS-22, Deferred Tax Liability is recognized on the timing differences between accounting income and the taxable income for t he period taking into consideration the contents of Accounting Standard Interpre tations 3 and quantified using the tax rates in force or substantively enacted a s on the Balance Sheet date. Deferred Tax Assets are recognized and carried forw ard to the extent there is a virtual certainty that such deferred tax assets can be realized. Provisions Provisions are recognized when the Company has a present obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. 19

Contingent Liabilities Liabilities, though contingent, are provided for if there are reasonable chances of maturing such liabilities as per management. Other contingent liabilities, b arring frivolous claims, not acknowledged as debts, are disclosed by way of note s. Earning Per Share Earning Per Share ("EPS") comprises the Net Profit after tax (excluding extraord inary income net of tax). The number of shares used in computing Basic & Diluted EPS is the weighted average number of shares outstanding during the year. Segment Reporting The primary segment consists of basic and cellular services provided. The manufactur ing activities have not been treated as a separate segment since such activities are essentially carried on as support service to other segments. The following specific accounting policies have been followed for segment reporting: Segment R evenue includes service income and other income directly identifiable with/alloc able to the segment. Income/expense, which relates to the Company, as a whole an d not allocable to individual business segment is included in Un-allocable Corpor ate Income/expense respectively. Expenses that are directly identifiable with/all ocable to segments are considered for determining Segment Results. Segment Asset s and Liabilities include those directly identifiable with the respective segmen ts. Un-allocable corporate assets and liabilities represent the assets and liabi lities that relate to the Company as a whole and not allocable to any segment 20

Policy of Finance Standards of Financial Proprieties Ever officer incurring or authorizing expendi ture from public funds should be guided by high standards of financial propriety . Every officer should also enforce financial order and strict economy at every step and see that all relevant financial rules and regulations are observed, by his own officer and by subordinates disbursing officers. Among the principles on which emphasis is generally laid are the following: 1. Every officer is expecte d to exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own money. 2. The expenditure should be prima-facie more that the occasi on demands. 3. No authority should exercise its powers of sanctioning expenditur e to pass an order which be directly or indirectly to its own advantages. 4. Exp enditure from pubic moneys should not be incurred for benefit of a person or sec tion of the people unlessa. a claim for the amount could be enforce in a Court o f Law, or b. the expenditure is in pursuance of a recognised policy or custom. 5 . The amount of allowances granted to meet expenditure of a particular type shou ld be so regulated that the allowances are not on the whole a source of profit t o the recipients. 6. The responsibility and accountability of every authority de legated with financial powers to procure any item or service on Government accou nt is total and indivisible. Government expects that the authority a concerned w ill have the public interest uppermost in its mind while making a procurement de cision. The responsibility is not discharged merely by the selection of the chea pest offer. 7. Whenever called for, the concerned authority must place on record in precise terms, the considerations which weighed with it while talking the pr ocurement decision. 21

1.4 Comparative study between years 008-2007: During the current financial year, the management based on physical verification of fixed assets and inventory and reconciliation of various heads of assets and liabilities in the subsidiary and general ledgers which has resulted into incre ase/decrease in the following assets and liabilities taken over as on 01st Octob er 2000 amounting to net reduction in the assets of Rs.5,910 lakh (P.Y. - Rs. 25 ,452 lakh): Figures in Lakhs of Rupees Percentage Change (%) Particulars Assets Fixed Assets Capital WIP Inventory Sundry Debtors Advance to contactors Deposit with Electricity Board/other Total A Liabilities Customer Dep osits Earnest Money Deposits Security Deposit from Contractors/ Suppliers Workin g Expense Liability as on 1st October 2000 Contractors Bills payable as on 1st O ctober 2000 Net Assets taken over by the Company Total B up to march 31, 2007 5,417, 921 503, 112 188, 647 682, 740 39, 448 2, 086 6,833, 9 54 391, 656 12, 525 29, 454 38, 283 10, 008 6,352, 028 6,833,9 54 up to march 31, 2008 5,416,6 97 502,6 31 188,6 81 684,4 30 39,4 48 2,1 38 6,834, 02 5 393,7 04 12,1 58 29,0 99 42,6 66 10,2 80 6,346,1 18 6,834,02 5 Absolute change Rs. (1,224) (481) 34 1,690 52 71 -0.02 -0.10 0.02 0.25 0.00 2.49 0.001 2,048 (367) (355) 4,383 272 (5,910) 71 0.52 -2.93 -1.21 11.45 2.72 -0.09 0.001 22

Interpretation of Comparative Balance Sheet The comparative balance sheet of the company reveals that during 2008 there has been on increase in final assets of Rs. 1224 lakh i.e. 0.02% while long term lia bilities to other side have relative increase by Rs. 4383 lakh and contractor bi ll pay has increased by Rs 272 lakh. This fact depicts the policy of the company is to purchase fixed assets from the long-term sources of finance there by not affect the working capital. Current assets have increased by Rs. 1261 lakh and a dvance of contractor not increased on the other hand there has been an increase in inventories amount Rs. 34 lakh. The current liabilities have increased by Rs. 4582 lakh i.e. 0.06%. This further confirms that the company has revised long t erm finances. The overall financial position of the company is satisfactory. 23

1.5 SWOT Analysis: Strengths: Pan-India reach Experienced telecom service provider Total telecom service provi der Huge Resources (financial & technical pool) Huge customer base Most trusted telecom brand Transparency in billing Easy deployment of new services Copper in last mile can be used for easy broadband deployment Huge Optical Fibre network a nd associated bandwidth Weaknesses: Non-optimization of network capabilities Poor marketing strategy Bureaucratic or ganizational set up Inflexibility in mindset (DOT period legacies) Limited numbe r of value added services Poor franchisee network Legacy of poor service image H uge and aged manpower Procedural delays Lack of strategic alliances Problems ass ociated with incumbency like outdated technologies, unproductive rural assets, s ocial obligations, political interference, Poor IT penetration within organization Poor knowledge Management 24

Opportunities Tremendous market growing at 20 lac customers per month Untapped broadband servi ces Untouched international market Can capitalize on public sector image to grab governments ICT initiatives ITEB service markets Diversification of business to turn-key projects Leveraging the brand image to source funds Almost un-invaded V SAT market Fuller utilization of slack resources Can make a kill through deep pe netration and low cost advantage Broaden market expected from convergence of bro adcasting, telecom and entertainment industry Threats Competition from private operators Keeping pace with fast technological changes Market maturity in basic telephone segment Manpower churning Multinational eyein g Indian telecom market Private operators demand for sharing last mile Decreasin g per line revenues due to competitive pricing Private operators demand to do aw ay with ADC can seriously effect revenues Populist policies of government like On eIndia rates 25

Statement of Problem: The research is carried on in a proper planned and systematic manner. The resear ch was particularly based departmental research. We have to move to various depa rtment and meet people which include their names and contact numbers given by BS NL training and Planning department. During the department we have to know about to departmental works by explaining the working process of a particular departm ent. Our Team moved various departments like SBP, Pay and Cash and meet Accounti ng Officer of each department. This officer is provide a huge working knowledge of our department. Each department presences a section supervisor this SS will p rovide various data of relative department and give opportunity to handling the working process and resolve our doubts. Research Design: The research design of this project is exploratory. Though each research study h as its own specific purpose but the research design of this project on BSNL is e xploratory in nature as the objective is the development of the hypothesis rathe r than their testing. 26

Methodology Every project work is based on certain methodology, which is a way to systematic ally solve the problem or attain its objectives. It is a very important guidelin e and lead to completion of any project work through observation, data collectio n and data analysis. According to Clifford Woody, Research Methodology comprises of defining & redefining problems, collecting, org anizing & evaluating data, making deductions & researching to conclusions. Accord ingly, the methodology used in the project is as follows: Defining the objective s of the study Framing of questionnaire keeping objectives in mind (considering the objectives) Feedback from the employees Analysis of feedback Conclusion, fin dings and suggestions. 27

Sampling Technique Used: This research has used convenience sampling technique. Convenience sampling technique: Convenience sampling is used in exploratory research where the researcher is interested in getting an inexpensiv e approximation of the truth. As the name implies, the sample is selected becaus e they are convenient Selection of Sample Size: For the survey of departments. Sources of Data Collection: Research will be based on two sources: 1. Primary data 2. Secondary data 1) Primary Data: Survey: Primary data was collected by departmental survey for BSNL. 2) Secondary Data: Secondary data will consist of different literatures like books which are publis hed, articles, internet, the company manuals and websites of company- www.bsnl.c om. In order to reach relevant conclusion, research work needed to be designed i n a proper way. This research methodology also includes: Familiarization with the concept of finance and its various merits, demerits. Thorough study of the info rmation collected. Conclusions based on findings. Statistical Tools Used The main statistical tools used for the collection and analyses of data in this project are: Pie Charts Bar Diagrams Line Charts 28

Limitations of Study Financial analysis is a powerful mechanism of determining financial strengths an d weaknesses of a firm but, the analysis is based on the information available i n the financial statements. We has also careful about the impact of price level chances, windows-dressing of financial statements, changes in accounting policie s of BSNL, accounting concepts and conventions, and personal judgments etc. Due to the following unavoidable and uncontrollable factors the factors, the result might not be accurate. Some of the problems faced while conducting the survey ar e as follows: Time and cost constraints were also there. Chances of some biasness could not be eliminated. A majority of respondents show lack of cooperation and are biased towards their own opinions. Some of the important Limitations of fin ancial analysis are however, summed up as below: It is only a study of interim r eports. Financial analysis is based upon only monetary information and non-monet ary factors are ignored. It does not consider changes in price level. As the fin ancial statements are prepared on the basis of a going concern, it does not give exact position. Thus accounting concepts and conventions cause a serious limita tion to financials analysis. Changes in accounting procedure by a firm may often make financial analysis misleading. Analysis is only a means and not an end in itself. We interpretation and draw own conclusion Different people may interpret the same analysis in different ways. has to make 29

3.1 Introduction Financial statements are prepared primarily for decision making. They play a dominant role in setting the framework of managerial decisions. But the informat ion provided in the financial statement is not an end in itself as no managerial can be drawn from these statement alone. However, the information provided in t he financial statement is of immense use in making decision through analysis and interpretation of financial statements. Financial analysis is the process of ide ntifying the financial strengths and weaknesses of the firm by properly establis hing relationship between the item of the balance sheet and the profit and loss account. There are various methods used in analyzing financial statements, such a s comparative statements, trend analysis, common-size statement, schedule of cha nge in working capital, funds flow and cash flow analysis, cost-volume-profit an alysis and ratio analysis. The term financial analysis, also know as analysis and interpretation of financial statement, refers to the process of determining fin ancial strengths and weaknesses of the firm of the firm by establishing strategi c relationship between the item the balance sheet, profit and loss account and o ther operative data. Financial analysis is a process of evaluating the relationsh ip between component parts of a financial statement to obtain a better understan ding of a firms position and performances According to Matclf and Titard Financial statement analysis is largely a study of relationship among the various financia l factors in a business as disclosed by single set-of statements and a study of the trend of these factors as shown in a series of statement. According to Myers The term financial statement analysis include both analysis and interpretation. The an alysis and interpretation of financial analysis statements is essential to bring out the mystery behind the figure in financial statements. Financial statement is an attempt to determine the significance and meaning of the financial stateme nt data so the forecast may be made of the future earning, ability to pay intere st and maturities and profitability of a sound dividend policy. 30

Types of Financial Analysis I can classify various types of financial analysis into different categories dep ending upon (i) the material used, and (ii) the method of operation followed in the analysis or the modus operandi of analysis. (i) On the basis of material used: According to material used, financial analysis can be of two types (a) external analysis and (b) internal analysis. a. External Analysis: This analysis is done by outsiders who do not have access to the detailed internal accounting records of the business firm. These o utsiders include investors, potential investors, creditors, potential creditors, government agencies, credit agencies and the general public. For financial anal ysis, this external party to the firm depends almost entirely on the published f inancial statement. External analysis, thus serves only a limited purpose. Howev er, the changes in the government regulations requiring business firm makes avai lable more detailed information to the public through audited accounts have cons iderably improved the position of the external analysis. b. Internal Analysis: The analysis conducted by persons who have access to the internal accounting records of a business firm is known as interna l analysis. Such an analysis can, therefore, be performed by executive and emplo yees of the organization as well as government agencies which have statutory pow ers vested in them. Financial 31

analysis for managerial purpose is the internal type of analysis that can be eff ected depending upon the purpose to be achieved. (ii) On the basis of modus operandi: According to the method of operation followed in the analysis financial can also be of two types: (a) horizontal anal ysis (b) vertical analysis. a. Horizontal Analysis: Horizontal analysis refers to the comparison of financial data of a company for several years. Thus figure for this type of anal ysis are presented horizontally over a number of columns. The figures of the var ious years are compared with standard or base years. A base year chosen as begin ning point. This type of analysis is also called Dynamic Analysis as it is based o n the data from year to year rather than on data of any one year. The horizontal analysis makes it possible to focus attention on items that have changed signif icantly during the period under review. Comparison of an item over several perio ds with a base year may show a trend developing. Comparative statement and trend percentages are two tools employed in horizontal analysis. b. Vertical Analysis: Vertical analysis refers to the study of relationship of the various items in the financial statements of one accounting period. In th is types of analysis the figure from financial statement of a year are compared with a base selected from the same years statement. It is also knows as Static Ana lysis. Common-size financial analysis statement and financial ratio are the tools employed in vertical analysis. Since vertical analysis considers data for one t ime period only, it is not conducive to a proper analysis of financial statement s. However, it may be used along with horizontal analysis to make it more effect ive and meaningful. 32

Procedure of Financial Statements There are three steps involved in the analysis of financial statements. These ar e: (i) selection (ii) classification (iii) interpretation, the first step involv es selection of information (data) relevant to the purpose of analysis of financ ial statements. The second step involved is the methodical classification of the data and the third step include drawing and conclusions. The following procedur e is adopted for the analysis and interpretation of financial statements: 1. The analysis should acquaint himself with the principal and postulates of accountin g. He should know the plans and policies of the management so that he may be abl e to find out whether these plans properly executed or not. 2. The extent of ana lysis should be determined so that the sphere of work may be decided. If the aim is to find out the earning capacity of the enterprise than analysis of income s tatement will be undertaken. On the other hand. If financial position is to be s tudied then balance sheet analysis will be necessary. 3. The financial data give n in the statement should be re-organized and rearranged. It will involve the gr ouping of similar data under same heads, breaking done of individuals components of statements according to nature. The data is reduced to a standard form. 4. A relationship is established among financial among financial statements with the help tools and techniques of analysis such as ratio, trends, common size, funds flow etc. 5. The information is interpreted in a simple and understandable way. The significance and utility of financial data is explained for helping decisio ntalking. 6. The conclusions drawn from interpretation are presented to the management in the form if reports. 33

Methods or Devices of Financial Analysis The analysis and interpretation of financial statements is used to determine the financial position and result of operation as well. A number of methods or devi ces are used to study the relationship between different statements. An effort i s made to use those devices which clearly analysis position of the enterprise. T he following methods of analysis are generally used: Comparative Statement Trend analysis Common Size Statement Cash Flow Analysis Ratio analysis Comparative Statement: Comparative balance sheet analysis is the study of the trend of the same items, group of item and computed item in two or more balance sheets of the same business enterprise on different data. Trend analysis: This method determines the direction upwards and involves the computation of the percentage relationship that each statement item bears to the same item in base year. Common size Statement: The common size statements balance sheet statements are shown in analytical percentages. The figures are shown as percentages of tot al assets, total liabilities and total sales. Total assets are taken as 100 and different assets are expressed as a percentage of the total, similarly various l iabilities are taken as a part of total liabilities. Cash flow Statement: Cash flow statement is a statement which describes the inflow (sources) and outflow (uses) of cash and cash equivalent in an enterprise during a specified period of time. 34

Ratio Analysis: Ratio is a simple arithmetical expression of the relationship of one number to another. It may be defined as the indicated quotient of two mathematic al expressions. 35

3.2 Comparative Statement of BSNL year 2007 & 2008 Table 3.1 Comparative Balance Sheet for the year ended 2007 and 2008 Particulars SOURCES OF FUNDS Shareholder's Funds Capital Reserves and Surplus Loans Funds Un secured Loans Deferred Tax liability TOTAL APPLICATION OF FUNDS Fixed Assets Gro ss block Less: Depreciation Net Block Capital Working-in-Progress Decommissioned Assets as at 31 March 2007 (Rs. In Lakh) as at 31 March 2008 (Rs. In Lakh) Increase/ Decrease (Rs. In Lakh) Increase/ Decrease (Percentages) 1,250,000 7,444,802 1,250,000 7,562,825 118,023 0 1.59 554,366 124,605 9,373,773 338,887 131,053 9,282,765 (215,479) 6,448 (91,008) -38.87 5.17 -0.97 11,864,901 6,071,511 5,793,390 256,860 6,444 6,056,694 20,000 242,847 558,066 3, 745,296 114,148 714,431 5,374,788 1,667,919 514,858 2,182,777 3,192,011 105,068 9,373,773 12,457,823 6,987,974 5,469,849 266,562 389 5,736,800 20,000 322,006 546,551 4,05 5,158 137,687 744,441 5,805,843 1,739,788 606,321 2,346,109 3,459,734 66,231 9,2 82,765 592,922 916,463 (323,541) 9,702 (6,055) (319,894) 79,159 (11,515) 309,862 23,539 30,010 431,055 71,869 91,463 163,332 267,723 (38,837) (91,008) 5.00 15.09 -5.58 3.78 -93.96 -5.28 0.00 32.60 -2.06 8.27 20.62 4.20 8.02 4.31 17 .76 7.48 8.39 -36.96 -0.97 Investments Current, Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank Balances Other Current assets -Accrued Interest Loans and Advances Less : Current Liabilities and Provisions Current Liabilities Provision Net Current A ssets Inter/Intra Circle Remittance TOTAL 36

Figure 3.1: Comparative Balance Sheet chart Figure 3.2 Comparative Balance Sheet in % Chart 37

Procedure of Comparative Balance Sheet 1. The Comparative balance sheet has two columns for the data of original balanc e sheet. 2. Third column is used to show increases in figures. 3. The Fourth col umn may be added for giving percentages of increase or decrease. Interpretation of Comparative Balance Sheet The comparative balance sheet of the company reveals that during 2008 there has been on decrease in fixed assets of Rs. 319894 lakh i.e. -5.28% while long term liabilities to outsiders have relatively decrease by Rs. 91008 lakh i.e. -0.97. This fact depicts the policy of the company is to not purchase fixed assets from the long-term sources of finance there by not affect the working capital. Curre nt assets have increased by Rs. 163,332 lakh and cash and bank balances also inc reased Rs. 309,862 i.e. 8.27%, investments not increased on the other hand there has been an increase in inventories amount Rs. 79,159 lakh i.e.32.60%. The curr ent liabilities have increased by Rs. 163,332 lakh i.e. 7.84 %. This further con firms that the company has revised long term finances. The overall financial pos ition of the company is satisfactory. 38

3.3 Trend Analysis (Profit of BSNL) Table 3.2 Years 2005 2006 2007 2008 Profit before Tax Amount (Rs.) in Percentages Lakh 792 ,008.00 100.00 844,698.00 815,381.00 445,155.00 106.65 102.95 56.21 2005 2006 2007 Figure 3.3: Trend Profit chart Procedure of Calculation Trends 4. One year is taken as a base: year 2005 taken as a base year 5. The figure of base year are taken 100 6. Trend percentages are calculated in relation to base year. Figure in other year is less than the figure in base year trend percentage will be less than 100 and it will be more than 100 if figure is more than base year figure. Each years figure is dived by the base years figure. Interpretation Profit before tax has substantially decreased. In four year period it has more t han doubled. The comparative decrease in profit is much lower in 2008 as compare d to 2006 and 2007. The expansion of the firm is not possible. The overall perfo rmance of the concern is not good on the basis of profit. 39

3.4 Common Size Balance Sheet of BSNL year 2007 and 2008 Table 3.3 Common Size Balance Sheet for the year ended 2007 and 2008 Particulars as at 31 March 2007 (Rs. In Lakh) % as at 31 March 2008 (Rs. In Lakh) % SOURCES OF FUNDS Shareholder's Funds Capital Reserves and Surplus Loans Funds Un secured Loans Deferred Tax liability TOTAL APPLICATION OF FUNDS Fixed Assets Gro ss block Less: Depreciation Net Block Capital Working-in-Progress Decommissioned Assets 1,250,000 7,444,802 13.34 79.42 1,250,000 7,562,825 13.47 81.47 554,366 124,605 9,373,773 5.91 1.33 100.00 338,887 131,053 9,282,765 3.65 1.41 100.00 11,864,901 6,071,511 5,793,390 256,860 6,444 6,056,694 20,000 242,847 558,066 3, 745,296 114,148 714,431 5,374,788 1,667,919 514,858 2,182,777 3,192,011 105,068 9,373,773 126.58 64.77 61.80 2.74 0.07 64.61 0.21 2.59 5.95 39.96 1.22 7.62 57.34 17.79 5. 49 23.29 34.05 1.12 100.00 12,457,823 6,987,974 5,469,849 266,562 389 5,736,800 20,000 322,006 546,551 4,05 5,158 137,687 744,441 5,805,843 1,739,788 606,321 2,346,109 3,459,734 66,231 9,2 82,765 134.20 75.28 58.92 2.87 0.00 61.80 0.22 3.47 5.89 43.68 1.48 8.02 62.54 18.74 6. 53 25.27 37.27 0.71 100.00 Investments Current, Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank Balances Other Current assets -Accrued Interest Loans and Advances Less : Current Liabilities and Provisions Current Liabilities Provision Net Current A ssets Inter/Intra Circle Remittance TOTAL 40

Figure 3.4 Common size Balance Sheet chart Procedure of Common-Size Balance Sheet 1. The total assets are taken as 100 and different assets are expressed as a per centages of the total 2. Similarly, various liabilities are taken as a part of t otal liabilities. 3. This statement is also known as component percentages or 10 0 percent statement because every individual item is stated as a percentage of t he total 100. The short comings in comparative statement and trend percentage wh ere changes in items could not be compared with the totals have been covered up. 41

Interpretation An analysis of patter of financing of both the years shows that year 2007 is mor e traditionally financed as compared to year 2008. The BSNL has depended more on its own reserves and surplus as is shown by balance sheet. Out of total reserve 81.47% of the funds are proprietors funds. In year 2007 funds are 79.42% which s hows that this company has depend more upon outsider funds. In the present day e conomic world generally, companies depend more on outsiders funds. In this contex t both years have good finical planning but year 2008 is more financed on tradit ional lines. Both years are suffering from adequacy of working capital. The perc entage of current assets is more than the percentage of current liabilities in b oth the year. In the year 2008 BSNL is suffering more form working capital posit ion than the second than the second year because current assets are more then cu rrent liabilities i.e. 25.27% and this percentage is 23.29% in the 2007. A close look at the balance sheet shows that investments in fixed asset have been not f inanced from working capital in both years. In 2007 fixed account for 64.61% of the total assets while long-term funds account for 5.91% of total funds. In year 2008 fixed account for 61.80 whereas long term funds account for 3.65% of total instead of using long-term funds. Both the year BSNL is not facing working capi tal problem. 42

3.5 Cash Flow Statement of BSNL Table 3.4 BHARAT SANCHAR NIGAM LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2 008 PARTICULARS A. Cash flow from operating activities: Net (loss)/profit before tax but after Prior period and Extraordinary items Adjustments for: Depreciation Pr ior period depreciation Interest/Finance charges Interest Income Loss/(Profit) o n Fixed Assets sold Debts / Advances Written off Provision for Bad and Doubtful Debts Excess provision written back Prior Period item other than depreciation Ot her Provision Operating profit before working capital changes Adjustments for ch anges in working capital : - Inter Circle Remittance - Sundry Debtors - Other Re ceivables - Trade and Other Payables Cash generated from operations -Taxes paid - Prior Period item other than depreciation Net cash from operating activities B . Cash flow from Investing activities: Inventories Purchased Purchase of fixed a ssets Capital Work in Progress Proceeds from Sale of fixed assets Interest Recei ved Net cash used in investing activities Year ended 31st March 2008 (Rs. in Lakh) Year ended 31st March 2007 (Rs. in Lakh) Year ended 31st March 2006 (Rs. in Lakh) Year ended 31st March 2005 (Rs. in Lakh) 445155 969610 5106 86254 (403324) (2002) 70926 47899 (80829) (8565) 147595 91493 1 8288 77941 (281123) (800) 35340 127875 (21676) 1276 102518 815381 937669 21231 108980 (173340) (851) 47059 159518 (19133) 19320 123646 844698 962486 54293 2929 (80052) (618) (73437) 26403 (39532) (855) 229227 792008 832670 1277825 964570 1779951 1224099 2068797 1080844 1872852 38837 (62838) (54335) 65923 (12413) 1265412 (12229) (131465) (67776) (685) (212155) 1567796 1663 (94637) (170397) 145474 (117897) 1950900 (4202) (77517) (59867) (44174) (185760) 1687092

(175793) 8565 (167228) 1098184 (152524) (1276) (153800) 1413996 (118971) 38976 (79995) 1870905 (117576) 177444 59868 1746960 (76049) (717309) (9231) 50319 379785 (372485) 24723 (815313) 125505 107795 230602 (326688) (54539) (882441) 78066 84750 124081 (650083) (572) (976301) 125689 133273 70094 (647817) 43

C. Cash flow from financing activities: Proceeds from long term borrowings Inter est Paid Interim Dividend Paid Dividend Paid Dividend Distribution Tax Paid Net cash used in financing activities Net Increase/(Decrease) in Cash and Cash Equiv alents Opening Cash and cash equivalents Cash and cash equivalents as at 31.03.2 008 Cash and cash equivalents comprise Cash, Cheques and Drafts (in hand) Balanc es with banks (300000) (1767) (30000) (67500) (16570) (415837) (174027) (77700) (50000) (80000) (18233) (399960) (93696) (108358) (42759) (111174) (3679) (3068) (22614) (31800) (355987) (61161) 309862 687348 864835 1037982 3745298 3057950 2193115 1155133 4055160 3745298 3057950 2193115 2569 4052589 4055158 2704 3742592 3745296 3094 3054854 3057948 179993 2013120 2193113 Figure 3.5 Net Increase/Decrease in cash and cash equivalents

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Figure 3.6 Cash flow from various heads Procedure of Cash Flow Statement Cash flow statement is not a substitute of income statement, i.e. a profit and l oss account, and a balance sheet. It provides additional information and explain the reasons for changes in cash and cash equivalent. The basic information requ ired for the preparation of cash flow statements is obtained from the following sources: i. ii. Comparative balance sheets as two points of time, i.e. in the be ginning and at the end of accounting period. Income statement of the current acc ounting period or the profit and loss account. iii. Some selected additional dat a to extract the hidden transaction. Step I. Step II. Step III. Step IV. Compute the net increase or decrease in cash and cash equivalents by making a compariso n of these accounting given in the comparative balance sheet. Calculate the net cash flow provided operating activities by analysis the profit and loss account balance sheet and additional information. Calculate the net cash flow from inves ting activities. Calculate the net cash floe from financing activities. 45

Step V. Step VI. Prepare a formal cash flow statement highlighting the net cash flow from operati ng. Make an aggregate of net cash flow the three activities and ensure that the total net cash flow is equal to the net increase or decrease in cash and cash eq uivalent as calculated in step I. Step VII. Repot significant non-cash flow statement e.g., purchase of machinery against is sue of share capital or redemption of debenture in exchanges fro share capital. Interpretation Cash Flow from Operating Activities Operating activities are the principal revenue-producing activities of the enter prise and other activities that are not investing or financing activities. The o perating activities are calculates 2005 to 2008. This activity is shown that the cash flow of operating activities. The year of 2005 net cash is Rs. 1746960 in lakh, year 2006 cash Rs. 1870905 lakh, year 2007 cash from operating Rs. 1413996 lakh and year 2008 cash from operating activities Rs. 1098184 laks. This operat ing shown cash shown is reduction of cash flow of operating activity. In 2008 op erating goes down because net profit is goes down in comparison year 2006 and ta x paid is goes high so net cash from operating activities goes down in compariso n year 2006. Cash Flow from Investing Activities This activity disclose of cash flows arising from investing activities is import ant because the cash flows represent the extent to which expenditures have been made for resources intend to generate future income and cash flow. This activity is shown that the cash flow of investing activities. The year of 2005 net cash is Rs. -647817 in lakh, year 2006 cash Rs. -650083 lakh, year 2007 cash from inv esting Rs. -326688 lakh and year 2008 cash from investing activities Rs. -372485 laks. This calculation shown investing payments. In 2008 investing activities g oes down because purchase of fixed assets is Rs. 717309 laks. In this year inves ting money is goes down in comparison year 2006 and interest receiving is goes h igh so net cash using in investing activities goes down in comparison year 2006. 46

Cash Flow from Financing Activities This activity disclose of cash flows arising from financing activities is import ant because the claim on future cash flows by providers of funds (both capital a nd borrowings) to the enterprises. This activity is shown that the cash flow of financing activities. The year of 2005 net cash is Rs. -61161 in lakh, year 2006 cash Rs. -355987 lakh, year 2007 cash from financing Rs. -399960 lakh and year 2008 cash from financing activities Rs. -415837 laks. This calculation shown inv esting payments. In 2008 financing activities goes upward because taking long te rm borrowing is Rs. 300000 laks comparison year 2006 because in this year borrow ing is Rs. 3676 lakh. Overall cash flow net cash and cash equivalent is decrease d in comparison previous year 47

Findings According to my survey and calculation the noteworthy points are: Mostly year NL suffers in losses. BSNL build fixed assets; these assets will give effect in profit of BSNL. Highly dues of intra/inter circle transfer of funds which is lea ve our effect in liabilities side in balance sheet. Coordinations of departments are not satisfactory. Qualification of employees is not match his posts. Revenue s policies of BSNL are not properly implied. Departmental process so long. Prope r computerizing of department are not satisfactory. Analysis: From the calculation it was found that amongst year 2006 to 2008. In year 2006 i s good for BSNL because in this year profit goes 106% on base of year 2005. In y ear 2007 is fine for BSNL because in this year profit goes approximately 103% on base of year 2005. In year 2008 is underprivileged for BSNL because in this yea r profit will be only 56.21% on base of year 2005. In this year BSNL suffer paym ents liabilities. The current liabilities will increase 25%. In year 2006 to 200 8 cash position is goes decrease. We saw the graph of cash I analysis the cash p osition are not satisfactory at this time. BSNL is a 6th largest telecom company in the world but at this time BSNL suffers cash, capital problems. 48

Conclusion After overhauling the all situation that boosted a number of Pvt. Companies asso ciated with multinational in the Telecom Sector to give be relevant competition to the other established company in private sector, we come at the conclusion th at There are very cut tough competitions among the private telecom companies on the level of new trend of advertising to silence a major part of Customers. BSNL is not left behind in the present race of advertisement. The entry of more Pvt. players in the telecom Sector have expanded the product segment to meet the dif ferent level of the requirement like 3G, Broadband, phone line, cable connection in on wire line to provide of the customers. It has brought about greater choic e to the customers. Over all in BSNL facing short of employees and present emplo yees are not working properly. Some employees working faith full for BSNL but re tirement of BSNL employees is too much. Each month large number of employees wil l retired by BSNL. BSNL facing of over capitalization problem. This problem gene rated by decommissioned assets. This organization paid large amount of taxes. Th is taxes leave over effect earning per shares (EPS). 49

Suggestions The study has provided with the useful data from the respondents. There has a lo t to be recommended. Following are the recommendations: There is a need f er promotion for the investment & services. More returns should be provided on r evenues policies. As the BSNL provides the telecom facility to its customers. It should provide this facility by tie up with the other organizations as well. Re cruit new qualified employees technical or non technical. Working hour will incr ease to employees. Create new accounting or finance policies. This policies will provide help generate revenues. Launch better plans for according to customers. Plans will be flexible nature Maintain Communication of each department. BSNL i s computerized but today some department work with papers. These employees are n ot handle computer because they cant that. Departmental processes so long I sugge st make a short process of work to departmental. 50

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Bibliography Management Accounting Shashi K. Gupta & R.K. Sharma Financial Management I.M. Pa ndey. Research Paper: Financial Analysis Hampton John J. Financial Decision Maki ng, Second Ed p.75 Web sites o www.bsnl.co.in o www.google.com o www.mpbsnl.com Annual Reports of BSNL 2006-2008. Departmental Records. 58