Chapter-9 Planning and Capital Works Management
Telecom
Strategic Business Planning
1.
Strategic Planning
Strategic
Planning can be thought of as having three 's' constituent parts:
ii)
Strategic Direction and
iii)
Strategic Implementation
E
- (Economy)
M
- (Market forces competitions)
P
- (Political Decisions)
L
- (Law & Regulatory Systems) viz. TRAI etc.)
E
- (Environment & Human Resources); and
S
- (Social obligation (viz.) USO)
The Corporate Office of BSNL, will consider
all the above before framing its "long term" and "short
term" planning proposals along with varied techno-economic choices keeping
in view technological developments that are taking place and that would take
place in long term.
2. Business Plans: Main Areas
The main areas that influence any Business
planning generally are mainly:
Market, Technology and Finance: Business
plans of Telecom are being formulated with judicious admixture of these three
elements. The factors that influence in business plans of Telecom are
b) Assessment of needed "Technology' and
identification of suitable vendors for supplies / products.
Basics for Formulation of Business Plan
Telecom Corporate Office communicates targets
thus fixed against each territorial circle with suggested technological
options, giving certain flexibilities to Heads of Circle. Accordingly Business plan documents in
Telecom wings will depend mainly, on Targets, Objectives, Social obligations as
well as Capital Funds as follows:
(i)
Targets as fixed by BSNL for the planning period for (a) Basic Services
(b) Rural & VPTs under Universal Service Obligation.
(ii)
Meeting bandwidth requirements as targeted.
(iii) Choice/Availability of appropriate
technology keeping view future market demands and availability of suitable
vendors/ production units.
(iv)
To meet 'On demand' Accessibility and to maintain Reliability of
services
(v)
And, availability of Resources / Capital funds
3.
Planning Guidelines for New Telephone Exchange:
During 98-99, two major policy changes in
respect of rural telecom has taken place. These are, Declaration of SDCA as
multi exchange area w.e.f. 15.8.1998 and announcement of New Telecom Policy
1999 in March 1999. Objective of Universal service has been included in the New
Telecom Policy. This objective is to be achieved by providing village public
telephones in the remaining villages and telephones on demand.
In
view of the above changes, planning guidelines for new telephone exchanges in rural areas have been reviewed.
New guidelines as stated hereunder are given for planning new telephone
exchanges in the rural areas.
Pre Corporatisation Period
To accommodate the changes inspired by
declaration of the SDCAs as multi exchange local areas and to meet universal
service obligation as stated in NTP1999, the planning guidelines for new
telephone exchanges in rural areas have been revised as under:
(i) The switching network should be planned
for the whole area covered by the SDCA in such a way that the telephone can be
provided on demand anywhere within the SDCA and the balance uncovered villages
within the SDCA are provided with VPTs.
(ii) The local area of each of the multi
exchanges should be defined and demarcated in such a way that entire area of the
SDCA is covered by the existing exchange(s) within the SDCA.
(iii) A telephone from an exchange within its
local area shall be treated as local telephone irrespective of its distance
from the exchange. However, if a telephone is provided form an exchange at a
place outside its local area (in the local area of another exchange) on the
request of an applicant, the same shall be treated as a long distance
telephone.
(iv) The fresh demand for telephones at a
place or in an area should be met either from an existing telephone exchange by
underground cables / overhead lines or by opening of a new telephone exchange
or by using TDMA/PMP equipment depending on techno-economic considerations. A
new telephone exchange should be planned and opened only if its is techno-economically
not feasible to meet the demand for telephone from an existing telephone
exchange within the SDCA.
(v) When a new telephone exchange is opened
in a SDCA, its local area and that of the already existing adjoining exchanges
should be re-demarcated and notified.
(vi) Provision of reliable transmission media
to all telephone exchanges by the year 2002 is another objectives stated in the
NTP 1999. Accordingly all new exchanges should be planned along with reliable
transmission media.
Post Corporatisation Scenario:
After the Corporatisation of DTS / DTO on
1.10.2000 careful strategy is being adopted for opening of new exchanges in the
rural areas. This is to ensure the economic viability of BSNL. SDCA has been
declared as multi exchange area w.e.f. 15.8.1998 and New Telecom Policy 1999
announced in March 1999. Objective of Universal Service is to be achieved by
providing village public telephones in the remaining villages and telephone on
demand by year 2003.
In view of the above changes, planning
guidelines for new telephone exchanges in rural areas have been reviewed. The
norms for planning of Small Exchanges in the rural areas have been revised. New
guidelines stated hereunder (Para 4) be followed while planning new telephone
exchanges in the rural areas.
4. Planning
of Small Exchanges in Rural Areas
With effect from 27.9.2002, norms for
planning of small exchanges are as follows:
i) The planning of rural area should first be
with WLL solution.
ii) If WLL solution is not workable due to technical
reasons, a new exchange would be planned with minimum registration of 75 within
the local area of exchange.
iii) New exchange would be
commissioned on optical fiber media. However, radio / satellite media could be
used wherever optical fiber media is not techno-economically feasible.
Providing Telecom Services in Rural Areas:
General Instructions
i) The opening / shifting of telephone
exchanges in rural areas should only be in exceptional circumstances. No new
site (departmental or rented building) be acquired for opening new telephone
exchange or shifting an existing telephone exchange of up to 500 lines capacity
in
rural areas. Any unusual proposal of opening
new telephone exchange in rural area
should be personally approved by the Head of
the Circle with the concurrence of the IFA.
ii) Guidelines have already been issued for
providing telephone connection on copper cable up to a radial distance of 3
Kms. from the exchange and any demand beyond is to be met by providing connections
on WLL. The area to be covered for providing new telephone connections on
copper cable is reduced from 3 Kms to 2.5 Kms radial to further cut down the
cost of cable required for providing a landline connection.
iii) As telephone exchange capacity up to 496
lines (2 AN racks) can be achieved in the existing C2 exchanges, we may not
open any RSU of 500 line capacity. The next stage of increasing the capacity by
installing 1K RSU should be resorted to in cases where the revenue per line is
reasonably high (about Rs.400/- per line per month and above) and the area is
important because of the location of industries, agriculture products and agro
based industries and customers like NRIs etc. All proposals of installing 1K
RSU should be profitable proposals and for this cost saving may have to be
resorted to by having buildings of the reasonable size and cutting down the
cost of infrastructure wherever possible.
iv) Where the revenue per line is relatively
low (less than Rs.300 per month), it is not expected that a capacity of more
than 2 numbers of AN racks will be required. Additional demand in such cases
may be met by providing connections on WLL. Only in cases where the demand
rises to about 600 to 700, the proposal of increasing the exchange capacity to
1K may be initiated ensuring that it is not a loss
making proposal.
v) The choice of new telephone connection on
wire-line or WLL should be based on techno-economic considerations and not on
the option of the customer.
vi) External Plant of the existing telephone
exchanges in rural area should be developed to provide more connections as per
demand and existing infrastructure be utilized to the maximum extent.
vii) While providing new telephone
connections to meet the targets, priority should be given to exchanges of 1000
line capacity or more as this will ensure a minimum rental of rs.110/- per
month per connection.
Opening of New Rural Exchanges: Revised Policy
Management Committee of BSNL while
considering the item related to revision of policy for opening of new rural
exchanges in circles having large waiting list has decided as follows:
The earlier decision on the subject for
opening of new rural exchanges for A&N, Assam, Bihar, Chhattisgarh,
J&K, Jharkhand, NE-I, NE-II, Orissa, UP (East) and Rajasthan Circles
conveyed vide this office letter no.2-1/98-RDTF, dated 14-06-04 will remain in
force with the modification that new rural exchange may be opened in above
circles having net waiting list of more than 50000, with 5 Kms radius instead
of 3.5 Kms if a minimum demand of 150 subscribers exist. CGM has to ensure the
manning of such exchanges prior to approval of proposal for opening such
exchange. As regards other remaining circles all such proposal shall continue
to be sent to Corporate Office for prior approval.
The exchange should be opened on reliable
media. The proposal for new exchange be studied and approval case by CGMs in
concurrence with IFA.
5. Telecom Strategic Business Planning:
Concepts
The overall objective of SBP is to give
business direction to the entire Telecom Corporate sector. Te process starts
with a 5 year vision of the planning wing prepared for the Planning Commission
and then it takes a slice out of the 5 year plan for a 3 year outlook. This
three year slice will be called SBP and then out of the 3 year outlook, a one
year slice is taken, which is other wise called as AOP. It will have general
strategic direction from the top at the Corporate Headquarters with detailed
planning work at the bottom at Secondary
Switching Area (SSA) level. In the process of SBP, rather than planning in bits
and pieces based on small projects, the Strategic Business Plan looks at the
entire network at the SSA level in terms of a number of parameters like
profitability, future growth, man power development, budget, financial
constraints and ultimately, combining all these together at Circle level and
then at the Corporate level.
Shelf of Projects
The concept of Strategic Business Planning
and Annual Operating Plan is greater importance in determining the plans for
consecutive years at a time, on Roll on basis. In this process, initially,
Shelf of projects will be prepared by the concerned SSAs. For inclusion in
Shelf of Projects, various project sheets will be prepared as SSA level in the
prescribed forms. These project sheets are simplified and rationalized version
of the existing project estimate formats. After having the project sheets got
approved by the concerned financial wing of the SSAs, the same will be kept in
Data Base called "Shelf of Projects" as proposed by the SSA.
The Shelf of Projects indicates the relative
national remunerativeness of local Switching projects. Telex, Telegraph and
Public Telephones only. The project sheets are normally be maintained by SSA
for all the projects. For schemes beyond the powers of SSA, copies of PEs be
sent up to level of office where authority to sanction the PEs lies.
A detailed examination of the project sheets
will be done by the competent
authority concerned before AOP is finalized.
For example, individual project costing more
than five crore but less than fifteen crores shall be examined in detail by
CGMs before finalizing the AOP. The individual projects costing more than
fifteen crores, will be examined by Corporate Office before approval of AOP.
This Strategic Business Plan is meant to be a group of on-going projects and
new projects in the time span of 3 years and Annual Operating is essential for
the first year's programme of SBP.
Notes:
1. Categorization of Projects for SBP
Purpose:
a. Projects costing "Less than five
crores" (Category B)
b. Projects costing "More than 5 crores
and less than 25 crores" (Category A-II)
c. Projects costing "More than 25
crores" (Category A-1)
2. Budgeting of works:
Works costing below 5 crores will be treated
as 'B' works & to be shown in lump sum Budget provision. For projects
costing Rs.5 Crores and above, details are to be sent project wise in Statement
'A' as usual.
Accordingly the categories of projects will be
as follows:
Category Financial
Limit
A
Rs.5 crores and above
B Less than 5 crores
Instructions on Capital Works: Budget
Estimates
a. Fund should be demanded
under the services as per the modified Head of Accounts effective from 1.4.2003
b. Funds should not be asked for under
components, which have not been included in the Project Estimate. Funds
demanded under such components will not be allotted.
c. The proposals should be framed indicating
the requirement separately for General Area, Rural Area in respect of Revised
Estimates and Budget Estimates in accordance with the “FORMAT” specification of
which has already been furnished bide BSNL letter No. 9-1/2003-CB Dated
28.8.2004
d.
Funds required for the payment of equated quarterly installments under
Deferred payment system during the year are also be demanded against the
respective projects and consolidated statements should be
submitted separately.
Conditions in Allotment of Funds
Allotment thus made at the commencement of
Financial Year subject to following conditions.
a. That no appropriation of funds is made by
any circle or Division against any unsanctioned detailed estimates.
b. That no appropriation of funds is made
beyond 10% of the sanctioned cost of detailed estimate.
c. That no appropriation of funds is made
which has the effect of exceeding the sanctioned cost of the project beyond
10%.
Allotment of Funds – Utilization instructions
Instructions issued by Corporate Office, BSNL
in allotment of funds under Capital vide Lr. No. 8-1/200-EB dated 24.5.2002 are
as follows.
The detailed allotments will be made under
each component, e.g. Land, Building, A&P etc. against sanctioned project
costing Rs. 5 Crores and above under Statement-
A. Expenditure is to be incurred against the
projects for which allotments of funds is made under B.E. Funds allotted for a
particular project should not be diverted to any other project for which no
allotment in B.E is made. So far as New works costing Rs.5 crores and more are
concerned allotment is made in respect of work for which copies of sanctions
are available with the Capital Budget Section. Allotment of funds shall be
considered for the rest of the New works after particulars of sanctioned estimates
etc. are received. Issue of sanctions for such projects does not automatically
carry with it the authority to incur expenditure without prior allotment of
funds. The Circles are advised to send a statement giving full details of the
New works sanctioned (with sanction particulars etc. ) along with the copies of
sanctions to BSNL Corporate Office, immediately to facilitate issue of
authorization for incurring expenditure.
Lumpsum allotment is made in respect of works
costing less than Rs. 5 Crores separately under Statement-B. It includes
provision for New Works costing below Rs. 5 crores. Project-wise allotment in
respect of these works is to be made by the circle concerned.
No expenditure is to be incurred by the
circles or its Divisions against unsanctioned projects. No allotment of funds
should be made beyond the sanctioned cost of the project. In case funds are
required for such continuing projects costing Rs. 5 crores and above revised
sanction may please be sent for consideration.
Overhead and escalation charges are also to
be met from within the allotment given. No separate allotment will be conveyed
for meeting these charges and no reserve is held centrally to cover the
adjustment of these charges separately. It is proposed to modify the practice
of allocating overheads to capital in keeping with Accounting Standard-10 and
separate instructions are being issued regarding this.
ATDs received during the current year should
not be held up till the closing part of the year. Available funds should be
utilized for the adjustment on month to month basis.
Heads of Circles/IFAs are to closely monitor
the expenditure monthly and ensure that the actual expenditure is within the
scheme wise/area wise allotment. Diversion of funds from one scheme to another
should not be resort. They are also requested to closely monitor the
expenditure
Instructions
by Corporate Office in respect of Capital Works on Closure of Accounts
Fixed Assets:
a. Lease hold and free hold land: Bifurcation
of Land into leasehold and freehold must be done and reflected in the Asset
Register and financial statements separately. Lease value of leasehold must be
amortized over the lease period. Lease rent if any, in respect of leasehold
land must be charged to P&L A/C.
b. Updation of Fixed Asset Register : Fixed
Asset Register must depict the full details along with quantity and
situation/location of the assets and the same is duly tallied with
component-wise booked figure as reflected in the Audited Trial Balance.
Addition/deletion of assets shall be posted in the Fixed Assets
register as and when the same are taking
place.
c. Physical Verification of Fixed Assets at
the close of financial year : The physical verification of fixed assets must be
carried out at the close of financial year and authenticated records of
physical verification are submitted to the Audit. The difference between the
book value of the assets and value of the assets as physically available must
be reconciled and neutralized before finalization of annual accounts..
d. Impairment of Assets : As per decision of
BSNL Board all the analogue exchanges like MILT-64, ESAX-200, ILT-512, ILT-2048
and NEAX-61S etc. (as per Circular 19) should be discarded/declared obsolete
and disposed off. If any such assets are still reflecting in the accounts of
BSNL under Fixed Asset Schedule, the details of the said shall be furnished. If
no such assets is available a certificate should be furnished “Certified that
no asses as detailed in Circular No.19 are working and reflected in the Fixed
Asset Schedule and in the Trial Balance under Schedule 105,106,108 and 109.
Assets decommissioned and declared obsolete by
the competent authority
• Depreciation in respect of such assets is
charged up to the date of decommission/ declaring the same as obsolete.
• The gross block & accumulated
depreciation of such assets are neutralized.
• Net depreciated value of such assets of Basic
Service is transferred to decommissioned asset accode 1171500.
• Provision is made for difference in value
between the NRV and net depreciated value of obsolete asset, provided the NRV
is less than the net depreciated value.
• Such obsolete asset is disposed off promptly
as per rules. The provisions made earlier for such assets either by concerned
Circle or by Corporate Office are to be utilized and excess provision is to be
written back.
Addition of assets during the financial year
• Depreciation is charged strictly from the
date of commission / put to use.
• Correct information about assets acquired
during the financial year and put to use for a period of (i) less than 180
days, and (ii) 180 days and above, shall be furnished at the time of Tax Audit.
This will help to calculate the depreciation under Section 32 of IT Act
Capital-Work-In-Progress
Huge pendency, abnormal delay in
capitalization of CWIP & numerous audit qualifications are the main concern
of BSNL Management.
Capitalization of CWIP
• All the Circles must ensure that:
o CWIP is capitalized from the date of its
commissioning / put to use.
o Necessary accounting entries are passed in
the books of accounts, and Fixed Assets Register is updated immediately on
commissioning of assets.
o In case of non-receipt of claim bills from
the contractors/suppliers in respect of completed CWIP, necessary
liability/provision is created and CWIP is capitalized.
o Head of Circles must ensure that the
executing authority of the project issues commissioning certificate without
delay so that no delay occurs in capitalization of CWIP.
o Project Circles / NETF Guwahati must ensure
prompt issuance of ATD supported by complete documents of completed work and
ATDs so raised, are accounted immediately in Trial Balance.
o It is to be ensured that capitalization is
done within 1st half of the financial year so that 100% depreciation can be
availed.
• Pendency at the close of financial year under
head CWIP must not be more than the average expenditure of 3 to 4 months in
respect of CWIP.
• The status of all the CWIP particularly more
than one year old shall be reviewed by the Heads of Circles and action taken
for prompt completion.
• Targets for capitalization during the current
financial year as fixed by the Management of BSNL and communicated through
letter no: 600-19/2005-06/CA-1/BSNL dated 02.03.2007 are to be achieved. The
circles must ensure the same.
Charging of Overheads
• Overhead will be charged strictly on actual
basis.
• Pay & allowance of the staffs who are
actually engaged and have contributed for the execution of works, will be
charged to CWIP.
• Administration and other general expenses,
which are actually related and specifically attributable to the construction of
a project/capital works or to the acquisition of a fixed asset, are allocated
to that project/asset.
• Depreciation of fixed assets like
departmental vehicle & testing instruments, which are actually utilized in
project works, shall be charged to CWIP.
• Circles particularly Project & NETF
Circles must ensure that no excess overhead is charged.
Writing back of unutilized inventory remaining
at site
• At the close of each financial year physical
verification shall be carried out to identify the stores remained unutilized at
work site.
• The value of such un-utilized stores shall be
transferred to inventory schedule by passing necessary JV.
Physical verification of Capital - Work - In -
Progress
• At the end of each financial year physical
verification of CWIP shall be carried out.
• The difference between booked figure of CWIP
(as reflected in trial balance) & value of CWIP physically available shall
be reconciled and neutralized.
• The physical verification report of CWIP
shall be submitted to the Auditor.
Adjustment of provision made in previous
financial years for old CWIP
• As per Branch auditor's report provisions
were made for certain old CWIP in previous financial years.
• If such old CWIP is abandoned as per sanction
of the competent authority, the corresponding provision shall be utilized and
excess provision written back.
• If old CWIP, for which provision had already
made, is not abandoned but revived and either work is going in respect of such
CWIP or such CWIP is completed & put to use, concerned provision shall be
written back.
Inventory
Valuation of Inventory
• Inventory to be valued taking into account
the
o Purchase price including taxes & duties
(except Cenvat credit) and freight inwards.
o Other expenditure directly attributable to
the purchase.
o Administrative expenses that don't contribute
to bring the inventories to their present location shall not be included.
o No under/excess valuation is done
Weighted average rate
• Inventory to be issued to capital &
revenue works at weighted average rate.
• Weighted average rate shall be calculated on
receipt of each new shipment.
Maintenance of Bin Cards & Priced Store
Ledger
• Bin cards & priced store ledger must be
maintained by each Depot/Store Dump.
• All details including quantity, unit of code,
total value, and weighted average rate must reflect in Stores ledger.
Accounting of receipt of Inventory
• Immediately on receipt of inventory the
consignee must account for the same in the Trial balance through its accounting
unit.
• In case of receipt of inventory from
supplier/contractor if the accounting unit of the consignee is the paying
authority the credit shall be given to accodes for 'Sundry Creditors' and
payment made for the inventory be adjusted against sundry creditors; otherwise
the credit shall be given to 19903xx / 19904xx and corresponding ATD received
subsequently, shall be adjusted accordingly.
• For receipt of inventory from the other
Circles/units of BSNL the credit shall be given to 19903xx / 19904xx and
corresponding ATD received subsequently, shall be adjusted accordingly.
Accounting of issue of Inventory
• Issue of inventory from Stock to project
& maintenance works shall be accounted in Trial balance as and when the
inventory is issued.
• Store Depots, which are functioning as a
separate accounting unit, must send the ATD immediately on issue of stores to
the accounting unit of concerned consignee and account for the ATD in its Trial
Balance.
• Transfer/diversion of stock from one
accounting unit to another accounting unit shall be settled by ATD and issuing
accounting unit must raise ATD and account for the same in Trial Balance immediately
on transfer / diversion of stock.
Identification of obsolete / unserviceable /
non-moving inventory
• Technical survey shall be carried out from
time to time to identify obsolete/unserviceable / non-moving inventory as per
existing procedure.
• If obsolete / unserviceable inventory is
found, the same shall be declared as obsolete/ unserviceable as per existing
rules & orders.
• The book value of obsolete / unserviceable
inventory shall be transferred from the respective inventory accode to obsolete
inventory accode 1171700 / 4171700 by passing JV.
• Provision shall be made for difference
between NRV & book value of inventory, provided the NRV is less than book
value.
• Obsolete / unserviceable inventory shall be
disposed off promptly as per existing order and corresponding provision
utilized / adjusted accordingly.
• Provision for obsolete / unserviceable
inventory made up to 2005-06 must be utilized / adjusted / written back in the
current financial year.
Physical verification of Inventory
• Physical verification of inventory must be
carried out at the close of the financial year
• Records for physical verification shall be
kept in the following format:
|
Name of invent tory |
Weighted Average rate
as on 31.3.2007 |
Quantity as
per Stock Ledger as
on 31st March 2007 |
Value
of Stock
as per Stock Ledger as
on 31.3.07 |
Value
of stock
as reflected
in the
Trial Balance
as on 31.3.2007 |
Quantity
as per physical verification as
on 31.3.2007 |
Value
of stock physically available as
per Weighted average rate
as 31.3.2007 |
Difference between the quantity
as per
books and
as per physical verification (3-6) |
Difference between the
value as
per books
and as
per physical verification (4-7) |
Action taken
to reconcile the difference detected during physical verification |
|
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
|
|
|
|
|
|
|
|
|
|
|
• Reconciliation between the quantity as per
physical verification and as per priced stock ledger shall be done.
• Reconciliation between the value as per
priced stock ledger and as per Trial balance shall be done.
• Proper action shall be taken for the
difference (shortage/excess) between the stock as per books of accounts and
stock physically available.
• In case of shortage of inventory, provision
shall be made for the full book value of inventory found short, necessary
investigation shall be done and ultimately provision shall be utilized /
adjusted under the orders of the competent authority having power to write off
loss.
• Records of physical verification shall be
submitted to Auditor.
Project Analysis and Implementation
Projects & Estimates:
1. Plan Schemes:
The Department of Telecom letter
No.5-8/90-EB, dated 20-06-1991, the New Schemes and New Services have been
defined as under:
“New Service” is that for which expenditure
arising out of new form of investment and/or new policy decision.
“New Schemes” signifies the projects which
may be new for sanctioning authority but not for the department (Organization),
and as such not new form of investment. In the case of a major project,
consisting of several component parts, a statement showing the probable cost of
each component part of the project, should be prepared in the office of the
authority next below the authority competent to sanction the project.This
statement is the basis on which the sanction of the competent authority is
accorded. The amount of each component
estimate as it is sanctioned should then be entered against each item in the
statement so as to keep a watch over the progressive cost of the project. This
procedure will also apply to projects requiring the sanction of the Corporate
Office.
2.
Projection of Demand:
While preparing project estimates, it is to
be ensured that the scheme is justified on the basis of the growth in demand.
For working out justification,the projection of demand as projected by
“Economic Study Cell” in its report for various places is generally considered.
The projected demand on proposed date of commissioning of the exchange should
be 94% of existing capacity + 90% of the already planned capacity of the
station or the zone in which the exchange falls. The projection would,
generally, be worked out on the basis of the past average growth of 8 years,
where the demand has not been projected by Economic Study Cell. To this average
rate of growth so arrived, 10% will be added for working out further
projection. In multi exchange areas, where more than one zone is existing, the
scheme should be justified considering the projection of demands of entire zone
in which the exchange falls. Under the concept of Strategic Business Plan (SBP),
the recommended equipments under Techno economic choices (with more or less
mandatory) mainly depend on the demand on the date of commissioning or demand
within 6 months of commissioning.
If the demand projected on higher side by
over-ambitious forecasting, the same will lead to ‘under utilization’ of the
system for a long period which will affect the Rate of return of the SSA.
Likewise, if the demand forecasted is on a very restricted line, there would be
possibility of immediate replacement of existing equipment higher capacity one.
This will lead to avoidable capital expenditure and idle stock for long
periods. As such, judicious forecasting of demand is essential at the initial
stages of planning itself.
3. Project Estimates - General:
a. Once a project has been sanctioned by the
competent authority (AOP approved)_, the powers as given in the Schedule of
Financial Powers apply to the sanction of component estimates, including the
ordinary
powers of officers to sanction excesses not
exceeding 10% and to sanction revised and supplementary estimates. The powers
are, however, limited in the case of estimates forming component parts of
projects by the fact that net effect of sanction of component estimates to
excesses thereon and to revised and supplementary estimates thereto must not cause
the total cost of the whole project as sanctioned to be exceeded by more than
10%. In order to keep a watch over the
progressive expenditure on the project,
a register of project estimates is to be
maintained, opening separate sheet for each project. The respective detailed
estimates sanctioned against each component will be noted down therein to watch
10% excess as
indicated above.
b. No application for funds to execute a
specific project will be considered unless it is accompanied by a properly
completed project estimate giving full details of all the works comprising the
project, the anticipated annual recurring expenditure, with the countervailing
receipts and savings expected and the resulting profit or loss.
c. No project should be put forward without
having the idea of its financial implications and in order that this point
shall not be lost sight off it is laid down that no Head of Circle or SSA Head
shall accord his sanction for execution for any work (even if the funds are
available from his lump allotment) unless a project estimate has been prepared.
This applies even if the project includes only one work. However, such project estimate may not be
necessary for projects relating to contribution of works or for schemes
relating to ‘supply of assets’ for which rental is calculated on a fixed
formula basis (Para – 157 of P&T Manual Vol.X).
Estimates in BSNL system: Unlike
the single account head for capital works as prevailed in DoT system (appendix
V), two separate distinct account heads are being operated i.e., ‘fixed assets’
and ‘works in progress’ in BSNL. As and when any work is taken up, the works
expenditure is to be booked under works in progress Schedules 114, 115 &
116). After the work is completed and completion certificate
(say Management certificate) is issued by the
GM/TDM, where required, the expenditure till then booked as ‘works in
progress’, will be transferred to fixed assets of relevant accounting schedule.
4. Justification of Projects:
Previously, project estimates were being
prepared in Proforma Engg.110, to which justification and specification sheets
are invariably got attached.With the introduction of Project sheets (in form
SSA-PE) in place of Project estimates, the justification and specifications
could not be presented in detail though salient points regarding existing status,
short fall of capacity, etc., are provided for in the new prescribed forms. In
order to ensure that the general/specific requirements are fulfilled in
formulating projects and also to decide the relative priority in Shelf of
Projects, existing guidelines on justification as detailed in Rule – 159 (a) of
P&T Manual Volume – X are reproduced below with specific attention that
these may be kept in view along with specific additional instructions issued by
the Corporate Office, BSNL from time to time.
a. Full reasons for the necessity of the
project should be detailed in the justification attaching separate sheet to the
project sheet.
b. In the case of new projects, a brief
description of the area to be developed, the populations according to the
latest census, particulars of staple trades etc., and the financial
potentialities of the project are to be
given.
c. In the case of telephone projects, while
giving details of pending and potential demand for the service the exact
particulars of waiting list are given. Particulars of the volume of telegraph
traffic in ward and outward for the previous two years should be recorded in
cases where telephone facilities do not exist already.
d. In the case of new telephone exchanges,
particulars should always be given for the number of connections which are
anticipated to be taken immediately and also for the number of trunk calls in
the outward direction only will be taken into account and they will be
calculated for 300 working days in a year, at a rate equal to twice the rate
for a call from the new exchange to the nearest important point on the general network.
e. An opinion should be expressed as to the
latent traffic which might be expected to offer, where a more speedy telephone
service available, and full particulars should be given of any complaints which
have been received from the big commercial firms and chambers of commerce in regard
to the inadequacy of the trunk service (may be regarded as “STD routes”).
f. In calculating the revenue receipts from
STD/trunk calls anticipated, the proportion of full rate/ concessional rate
etc., should be adopted on the basis of review conducted from time to time.
g. It should be observed that anticipated
receipts should represent the increase over existing receipts and if the
project includes as a component any work involving the removal of an existing
revenue earning asset,
care should be taken to see that the revenue
anticipated from any asset erected to replace the old asset based on an
estimate of the increased revenue which the new asset will earn.
5. Profitability of Projects:
Profitability will be determined with
reference to “Annual recurring expenditure” and“Annual recurring savings” of a
project. As enumerated in Para – 157 of P&T Manual Volume – X, the ARE with
the countervailing receipts and savings expected is worked out for each project
for knowing the resulting profit or loss. This was done for each project
falling under three spheres viz., transmission, trunk exchange installation and
local exchange installation under the concept of SBP.
Remunerativeness – Concept under SBP
Under the concept of SBP or AoP, all proposed
projects will be included in “Shelf of Projects” and this will indicate
relative “Notional Remunerativeness of Local switching projects, telex,
telegraph and Public telephone” only. For all other schemes viz., network
transmission, net work switching, computer aided
system etc., no remunerativeness need be
indicated since most of these other schemes will be in form of support to the
above mentioned projects or as a measure of plan objectives (and the existing
revenue per DEL is adopted for as ARS of the proposed project).
Note:
Per Del Revenue:
Revenue is to be calculated as per the guidelines given in instructions against
item 14 (ARS for SSA-SOP-01, Vol. I of Business Plan document). A good check is
to be exercised to have the per DEL revenue projections over the past couple of
years for the concerned area and keep a track of the trend. However, in case of
major deviation is foreseen, the basis for the deviation should be discussed
with IFA and also clearly enumerated.
PROFITABILITY (ARS – ARE):
a. Annual recurring savings or Annual revenue
profit / Loss amount
b. Annual recurring expenditure (ARE) as per
Para – 157 of P&T Manual Vol.X.
c. Profit/loss expressed as a percentage of
investment (estimated cost of PE)
NOTE: In accordance with DoT Lr.No.6-11/97-EB,
dated 29-09-1997, CGMs can sanction new schemes in Rural areas on loss basis
not exceeding 15% in respect of estimates for exchanges less than 1000 lines.
Assessment of loss making projects: No
project, as a rule, should be considered beyond 15%. While preparing AOP for
the year, shelf of proposed projects is prepared. While doing so, the loss
making projects, if any proposed, can be segregated separately and segmented as
under and forwarded to the next higher authority.
a. Loss making projects other than Rural
& hilly areas.
b. Loss making projects for Rural areas (less
than 1000 lines)
c. Loss making projects for hilly areas.
Necessary budget allotment separately for
such projects, which are approved after prioritizing among the proposed, will
be obtained before proceeding with execution of those loss making projects.
6. Annual Recurring Expenditure:
Project estimate in Form Eng.110 provides for
detailed calculation of ARE, adopting different percentages on various
components, with hypothetical calculations relating to interest, technical
maintenance and depreciation etc. (Note to Para 157 of P&T Manual Vol.X)
With setting up of Bharat Sanchar Nigam
Limited, the following items are being considered for calculation of ARE for
major projects.
a. Interest on total estimate of capital
outlay.
b. i. Cost of operative establishment.
ii. Cost of maintenance and supervisory
establishment
c. Technical maintenance at prescribed
percentage
d. Depreciation at prescribed percentage
e. Rent of land and buildings, if any.
f. Control over item 2 (a&b) above @ 18%
g. Provision for tax.
7. Submission of Project Estimates:
The guidelines, as given below, have been
issued by the Department of Telecom previously vide Lr.No.36306/90-TPS (XP),
dated 17-06-1992 for sanction of project estimate. These guidelines are
applicable in BSNL for submission to Corporate Office.
a. All project estimates should be sent to
Telecom Directorate through CGM of respective circle as per DoT
Lr.No.1-16/82-TE1(Vol.II), dated 17-10-1989.
b. The specifications are to be explained
component wise.
c. Justification should be based on latest
ERU projection.
d. Detailed justification for provision of
Engine Alternator may be furnished in the PE if the new
exchange
is housed in the existing multistory building where some exchanges are already
installed,
details
of existing Engine Alternators and proposed new Engine Alternator may be given
along with
load
calculation etc., for justifying provision of new Engine Alternator.
e. The cost provision of Building/EA and AC
plant should be made in PE as per approved Schedule of
accommodation
and taking into account the latest norms issued by BT cell of DOT. Enclosure of
approved
SOA and PE is essential. In case of old building, utilization of building
should be indicated.
f. The norms per line are being revised
periodically almost every year. The latest norms of per-line cost may be taken
in the PE.
g. ARE and ARS are required to be calculated
as per latest rates and year to be indicated.
h. Where PCM equipments are provided, the
details showing the justification of the number of PCM systems, racks, etc.,
must be furnished. The actual project estimate may, however, be prepared depending
upon the local requirements.
Allocation of Expenditure:
The Expenditure is booked in the books of
account on accrual basis and is classified as “Capital or Revenue” for proper
accounting of transactions. The expenditure incurred on acquisition of fixed
assets i.e. assets not held for sale in the ordinary course or business but
meant for carrying on or conduct of business by producing/providing goods or
services, is treated as Capital Expenditure The Expenditure which is incurred
for carrying on the day-to-day activities of the enterprise and does not result
in the acquisition/creation of an asset or a benefit of an enduring nature is
treated as “Revenue Expenditure”.
Capitalization Policy of BSNL:
Allocation of Expenditure between capital and
working expenses (Revenue Expenditure) detailed in Chapter III of FHB Vol. III
Part-I is redefined in Accounting policy of BSNL as follows.
(a) Land: Land is capitalized as and when
possession of the land is taken and the final payment is made. In case title
deeds are not finalized the effect of the same is indicated. The nature of the
land such as freehold or leasehold is also indicated. Value of lease hold land
is amortized over the period of lease.
(b) Buildings: A building is said to have
been completed as and when it is ready for use. In other words it is
capitalized to the extent it is ready for use. In case of building which are
purchased, they are capitalized as and when the possession is handed over.
(c ) Apparatus & Plants : Apparatus and
Plants principally consisting of Telephone Exchanges. Transmission Equipments.,
Air Conditioning Plants and Subscribers Instruments etc. is capitalized on
commissioning of exchange/route/link. Remaining subscribers installations,
A&P can be capitalized as and when the exchanges are commissioned to its
full capacity utilization and are put to use either in full or part during the
accounting period. The remaining part which are commissioned in the subsequent
in the year should be capitalized in the period in which the exchange has been commissioned.
(d) Lines and Wires: Expenditure on Lines & Wires are capitalized as and
when there are erected or lines laid and a completion certificates is issued
thereof to the extent of completion.
(e) Cables: Capitalized as and when the
cables are laid and jointed and ready for connection to the main system.
Note: For
the above items from (b) to (e) a Management Certificate (MC) is to be obtained
and a copy provided to Auditors. In case of Land item (a) title deed copy may
be provided to auditors.
(f) Vehicles: Expenditure on purchase of
vehicles is capitalized as and when these are purchased.
(g) Other Assets: Expenditure on other assets
is capitalized as and when these are purchased.
(h) Tools: These are to be charged to the
P&L Account. The Expenditure involved may be for the activities of
Installation, Maintenance or for Operation. The expenditure may be charged
according to its nature. Full depreciation is to be charged on Capital
Expenditure upto Rs. 5,000/-
(i) Partition: Partitions are a common
expenditure which either occur due to new construction or replacement or
repair. All expenditure which is in the nature of replacement or repair is to
be charged to P&L A/C. New construction of partition should be debited to
Furniture and Fixture. However, partitions
valued upto Rs. 2 lakhs should be charged to
the P&L Account and a separate register for such asset is to be maintained.
(The expenditure should be debited to respective revenue head.)
(j) Temporary Sheds: Expenditure incurred for
the construction of Temporary Sheds is purely wasteful asset. Therefore, such
assets may be depreciated at 100%
(k) Soft Ware: (i) Where the Software come as
part and parcel of Hardware, it will be charged to the same head of account as
that of Hardware. (ii) Where Soft Ware is purchased separately – if it is used
for office and maintenance purposes the entire amount will be charged to
Revenue , if it is purchased separately for use for exchanges and other revenue
purposes, it will be charged to capital under relevant schedules against Fixed
Assets.
Note: If Software purchased separately for
Telephone Revenue, IMPCS etc. can be capitalized as the same is utilized for
“other revenue purposes”. This is to be amplified/clarified by BSNL, as the
cost of Software involves heavy expenditure and costly in some cases.
Works –in-Progress: Treatment as Fixed Assets:
There is imperative need to ensure that the
Works-in-Progress are completed well in time and converted into Fixed Assets.
Only when the Works-in-Progress is converted to Asset, the claim for benefit of
“depreciation” can be obtained for Income Tax purpose. While the
works-in-progress should be completed at the earliest in any case, it should
also be ensured that more than one year old item is not allowed to remain in works-in-progress
without valid reason. For capitalizing and taking into account as
Fixed Asset “Management Certificate” is to be
issued by the Management.
Asset Accounting & Formation:
Components of cost of fixed asset:
The cost of an item of fixed asset comprises
its purchase price, including import duties and other non-refundable taxes or
levies and any directly attributable cost of brining the asset to its working
condition for its intended use directly examples of directly attributable costs
are:
(i) Site preparation
(ii) Initial delivery and handling costs
(iii) Installation cost, such as special
foundation for plant and
(iv) Professional fees (for ex. Fees of
architects and engineers)
Asset formation:
An Asset is deemed to have formed from the
date of its commissioning. A unit is considered to have been commissioned from
the date it is certified by the management that it has been commissioned in
accordance with specifications and is ready for offering service for commercial
use In case where a major scheme consists of one main project and some
auxiliary systems and the functioning of the main project depends on the
functioning of auxiliary units, the main plant cannot be considered for
capitalization unless the auxiliary systems are commissioned. In case an auxiliary
system is commissioned and put to use such unit concerned shall be capitalized.
However, where the functioning of the auxiliary unit depends on the
commissioning of the main unit, the auxiliary unit is capitalized along with
main plant.
Asset Accounting:
To have clear accounting and correct picture
of fixed assets, as and when an estimate is prepared allocation of expenditure
can be made initially under Account Head “Works-in-Progress” Account Head
Schedules (Schedule No. 14, 15 and 16)
Scrapping of Assets and Inventories
Scrapping & Replacements:
These replacements involve in two ways:
1. Replacing
existing electromechanical exchange where the replaced exchange is recommended
for scrapping, in accordance with instruction in DOT Lr., dated 01-04-1996.
2. Replacing
existing exchanges like 256 RAXs, 512 SBMs, E10B RLUs etc., by higher capacity
exchanges systems to meet the demand growth. In such of those cases, the
existing exchange will generally be diverted to some place where needed in both
cases; proper accounting of adjustments is to be ensured. In respect of
exchange dismantled as in (i) above the disposal of recovered materials would
be as follows:
(a) The scrapping committee would segregate
and indicate separately items that are found to be unserviceable or obsolete
for disposal by auction.
(b) The items/parts that can be recovered on
cannibalization for reusing in some other installation or for maintenance
purpose. The items under (a) above are to be brought in the "Register of
unserviceable and
obsolete Register" (Form ACE 73A) for
further disposal after obtaining sanction on ACE 9 from competent authority.
The items/parts found to be serviceable
should be brought on ACE 8 (Numerical account) in accordance with instructions
in PARA 338 of P&T Manual Vol.X.
Scrapping of exchange equipment: exercising
powers
(i) Switching Systems: As per revised
guidelines, Heads of Circles are now empowered to scrap Electro Mechanical
Exchanges, even though they have not outlived their lives. In such cases, the
Scrapping Committees are to be formed and the said Committee consisting of IFA
has to review economic criterion and other aspects and forward its report to
the Head of the Circle along with proper calculations of economic criterion for
his decision. In respect of those Exchange systems which had outlived their
prescribed lives, Scrapping Committee is not required and CGMs/GM of SSAs can
dispose them off within their delegated financial powers obtaining the report
from a Committee of experts who will examine the possibilities of utilizing
whether any portion of the exchange can be reutilized.
Scrapping of Transmission Equipments:
Procedure:
When the equipment is proposed to be replaced
by expensive type of equipment, the replacement cost of the new system with its
advantages over the old system may also be intimated through a statement to the
competent authority along with the recommendations of standing Scrapping
Committee so that the latter may also take into account the financial
implications involved therein while taking a decision to
scrap the existing equipment which have not
yet outlived the prescribed life. The financial powers of scrapping the
equipment will be the same as prescribed for disposal of unserviceable and
obsolete stores in the Schedule of Financial powers of the Department. The
cases which fall under category (which have not outlived their life but not
giving satisfactory services will be sent to the Directorate for approval. As
regards cases falling under category equipment not completed their prescribed
life but components have become obsolete and are not available will be scrapped
by Heads of Circles if within their powers, provided that the Directorate have
confirmed that the components have become obsolete and spares cannot be made
available. The Standing Scrapping Committee report should be counter signed by
the Head of the
Circle/Maintenance region before the same is
submitted to the Directorate for approval. (BSNL Lr.No.28-122/98-ML(PTI), dated
06-02-2001)
Scrapping of Computers:
The Computers required for higher level of
processing (such as TR billing & accounting, customer services, fault
repair services and directory enquiry etc.) may be scrapped after five years of
its effective life.
Computers and peripherals used for application
which can tolerate lower level of processing capability may be scrapped after
seven years. These are mainly used in administrative offices for office
automation purpose.
In both the above cases, the residual value
of the PC & its peripherals may be taken at 5% of the original Cost. (BSNL
Lr.No.6-15/2000-Computerisation, dated 11-01- 2001).
Disposal of old Unserviceable and Obsolete
Stores:-
Identification of unserviceable and obsolete
stores:
During physical verification of stores in
stock depots, some material may be found old and unserviceable. Such stores is
mainly the stores returned from the field units after recovery from dismantled
or replaced assets, or being surplus after completion of work. Instructions
regarding disposal of old and recovered stores are available in P&T Manual
X. Materials remaining surplus or recovered from a work should not be returned
to store depots in an unserviceable stores and should be scrapped and disposed
off locally. Detailed instructions regarding identification and disposal of all
types of unserviceable, obsolete and surplus stores of store depots are
available in P&T FHB-III Part-II. Both the instructions are similar and
discussed below:
The stores are designated unserviceable when
they are not useful for the department being beyond economic repairs or already
declared as non-standard.
Obsolete stores are that stores going to be
declared as non-standard shortly, generally new orders are not being placed for
receipt and no indents are being received or pending. Stores are called surplus
when they are in excess of requirement for a specific period, normally two
years.
Stores Scrapping: Unserviceable,
obsolete and surplus stores recovered from works or identified in store depots
are noted in a register of unserviceable and obsolete stores in Form ACE-73,
through which their disposal is watched. Before any stores is finally declared
unserviceable and sanction of the competent authority is obtained, they are
examined by a committee called Stores Scrapping Committee. The committee
consists of Dy.G.M. as chairman, DE in charge, representative of Finance, DE
from some other organisation (like T&D, Maintenance Region) as members and AE/SDE
concerned as secretary. The committee will examine the materials and decide whether
the materials should be declared as unserviceable or obsolete. The cost of
repairs, the actual period in use or stock, possibility of utilising the items
as substitute or for maintenance will be taken into account in arriving at the
decision. The committee will meet once in two months or whenever there is
substantial quantity of accumulated stores awaiting examination. The secretary
shall keep a record of proceedings of meetings and submit a copy of the same to
the authority competent for sanctioning the disposable of unserviceable stores in
form ACE-9. A copy should also be sent to the IFA of the competent authority
for verification.
Disposal of Scrapped Stores:
After obtaining sanction of competent
authority, action should be taken for disposal of these unserviceable stores
under the rules prescribed in P&T Manual Vol.X FHB-III Part-II and the
orders issued from time to time. Generally the scrapped stores is disposed of
by local auction or through tender cum auction. When it is proposed to hold an
auction sale, a list of the stores to be sold will be prepared in quadruplicate
in Form ACE-74 from the list of unserviceable stores (ACE-9) and verified from
the register of unserviceable stores. The auction list should be prepared
separately for stores becoming unserviceable though lying in stock and for
stores returned from works etc. All the four copies of the auction list will be
sent by the head of the circle/ Telephone District to the respective IFA for
verification and signature. The particulars of monthly accounts in which the
amount of stores has been written off from the stock should be indicated in the
auction list. One copy of the list will be retained by the stores accounts
department. Of the remaining three copies, one copy will be returned to the
Head of the Circle/District and two copies to the store depot for arranging the
auction.
On receipt of the list of duly verified, the
depot or officer in charge of the stores will arrange for the sale by public
auction, which will be conducted in the presence of the head of the depot or a
gazetted officer subordinate to him who will personally record the final bids.
The officer who supervised the auction should invariably be present at the time
of release of the stores and supervise the removal to ensure that only the quantity
of stores which were paid for or released. Whenever the material to be
auctioned is of substantial value, Tendering cum Auctioning procedure may be
adopted. A reserve/base price may be fixed by a committee and normal tendering
procedure should be followed and bids invited. On the day of opening tender,
auctioning may also be arranged in which tenderers also can participate. The
highest bid received by tender or through auction, whichever is higher may be
accepted.
Auctioneers may also be engaged to conduct
the auction in a professional way to get the maximum price and the commission
up to 1% may be paid to the auctioneers. However gross sale proceeds should be
accounted for as receipt and the auctioneer’s commission- claimed in a separate
bill- should be debited to expense head.
Accounting Adjustments of Sale Proceeds of
Unserviceable or Obsolete Stores
Stores disposed of as unserviceable or
obsolete stores are two types. Stores lying in the stock depots as inventories
and declared as unserviceable or obsolete and disposed off by auction or
tender. In such cases when sale proceeds are received, the value of stores as
per stores ledgers registers of unserviceable stores and list of unserviceable stores
(ACE-9) is to be compared with the sale proceeds and the difference between sale
proceeds and book value of stores should be treated as loss on sale of assets (under
concerned office & administration head) or profit under other income (schedule
41).
If the sale proceeds relate to the unserviceable
stores of dismantled and replaced works, then sale proceeds have to compared
with the net value of the Asset (Asset value less accumulated depreciation) and
the difference will be treated as profit or loss on sale of assets.
The accounting entries in both the cases are
suggested below:
(a) When Inventories are disposed off:
(i) Suppose the book value of the Inventories
is Rs 1,000 and the sale proceeds received are Rs 900.
Rs 900 will be credited to Inventories (Sch.
17) head in collection cash book/ bank book and as journal slip will be issued
for Rs 100, crediting inventories head (Sch. 17) and debiting loss on sale of
asset under
concerned office and administration (Schedule
71 onwards).
(ii) Suppose Book Value is Rs 1,000 and sale
proceed received are 1,200. Rs 1,000 will be credited to Inventories (Sch. 17)
and Rs. 200 will be credited to profit on sale of asset (under Sch. 41 or 42)
in the collection Cash book/Bank book.
(b) When unserviceable stores of fixed assets
are disposed off:
Fixed assets are subjected to depreciation
and every year accumulated depreciation is created against each asset in every
year. In case of disposal, depreciation up to the date of effective life or
dismantlement/scrapping should be provided for in the accounts of the year.
At the time of disposal of the assets, a
journal slip has to be passed debiting depreciation account (under schedule
89/90/91) and crediting accumulate depreciation (Sch. 8/9/10).
The sale proceeds are accounted for as
follows:
(i) Depreciated value of asset is Rs 20,000
and sale proceeds are Rs 18,000, the sale proceeds will be credited to the
concerned asset head and for Rs 2,000 journal slip will be passed debiting loss
on sale of asset (Sch. 71 onwards) and crediting concerned asset head.
(ii) Depreciated value of the asset is Rs
20,000, but sale proceeds received are 25,000, in this case, Rs. 20,000 will be
credited to the concerned asset head and Rs 5,000 credited to profit on sale of
asset (Sch. 41/42) in the collection account.
Materials for Works: Accounting
Materials for Telecom Operations are being
obtained
a. From Circle Store Depot out of
Stores/Stock available at its end.
b. Directly by the consignee at site, as
indicated in the purchase order placed by Corporate Office/Circle/SSA
(i) If certain material is procured by BSNL
and kept at circle store depot (as ultimate consignee) for further distribution
at the time of installation by field unit, the same is booked initially under
“INVENTORY”
(ii) If the material is received by the
consignee at site as per purchase order, the same will also be booked under
“W-i-P of relevant Head of a/c, if put into use immediately. If not,
“INVENTORY” head.
Treatment of Materials/Stores
Materials issued to works as on 31st March
The materials issued to the various
installation (Works-in-Progress) but not consumed yet as on 31st March of the
accounting year shall be listed out and value ascertained and debited to
inventory under various heads and credited to respective works-in-progress as
the case may be. The entry will be reversed in the accounts of the subsequent
year.
Stores after completion of works: Treatment In
case of installation works which have been completed as per accounting policy
the store lying at site and which are no longer required for the works will be
listed out and value ascertained and debited to the Inventory under respective
head of accounts under Assets or under W-i-P as the case may be.
Questions on “Planning and Capital Works
Management”
1. What are the revised policy guidelines
from Corporate office on opening of new rural Exchanges?
2. What are the instructions of Corporate
Office in respect of Fixed Assets at the time of closure of Accounts?
3. What are the guidelines issued by
Corporate office in respect of charging of Overheads?
4. Write down the procedure for physical
verification of Inventory
5. Write briefly on capitalization policy of
BSNL in respect of Buildings, partitions and Software?
6. Write a brief on stores scrapping
7. Write a brief on charging of overheads
8. Briefly explain the physical verification
of Capital work in progress
9. Write a brief on scrapping of computers
10. How the adjustment of accounting of sale
proceeds of unserviceable or obsolete stores is made in accounts?
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