PLANNING AND CAPITAL WORKS MANAGEMENTtraining.bsnl.co.in/digital_library_source... · 21-03-2011 2...

21-03-20111

E3-E4 (FINANCE)

PLANNING AND CAPITAL WORKS

MANAGEMENT

For Internal Circulation of BSNL Only

21-03-20112

WELCOME

• This is a presentation for the E3-E4 Core Module for the

Topic: . PLANNING AND CAPITAL WORKS MANAGEMENT

• Eligibility: Those who have got the Up-gradation from E3 to

E4.

• This presentation is last updated on 22-3-2011.

• You can also visit the Digital library of BSNL to see this

topic.


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BHARAT SANCHAR NIGAM LIMITED

Vision:

To become the largest Telecom Service provider in Asia

Mission :

To provide World class Telecom services on demand using

State of Art technology for our valued customers at

affordable price


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Changes in Telecom Sector

• In line with International trends, India also launched its

telecom reforms

• Two Public sector Corporations formed in 1986 under

DOT i.e MTNL and VSNL

• MTNL a sort of fund raising vehicle to the DOT in terms

of bonds for the expansion of DOT in rest of the country

• VSNL to provide impetus to International telecom

services


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• 1992- Private operators were allowed to provide value

added services in particular paging and cellular mobile

• 1994-National Telecom Policy 1994

• Objectives

>Telephone on demand

>Achievement of Universal Service obligation

>Provisioning of World Class services to customers


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NTP 1994-Paved way for private sector participation in

telecom services

* Further reforms in NTP 1999


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NTP 1999- Objectives

Availability of affordable and effective communications for the

citizens is the core of the vision and goal of the telecom policy

1. Strive to provide a balance between the provision of

universal service to all uncovered areas, including rural

areas

2. Encourage development of telecommunication facilities in

remote, hilly and tribal areas of the country

3. Create a modern and efficient telecommunications

infrastructure taking into account the convergence of IT,

media.


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4. Convert PCOs Public teleinfo Centers with multi

media capability like ISDN services, remote database

access, Gov. and community information systems

5. Transform in a time bound manner, the

telecommunications sector to a greater competitive

environment in both urban and rural areas.

6. Strengthen R&D efforts in the country


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7. Achieve efficiency and transparency in spectrum

management

8. Protect the defence and security interests of the

country

9. Enable Indian Telecom Companies to become truly

global players


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Targets of NTP-1999

• Make available telephone on demand by the year 2002 and

sustain it thereafter so as to achieve a teledensity of 7 by the

year 2005 and 15 by 2010.

• Encourage development of telecom in rural areas making it

more affordable through a suitable tariff structure and making

rural communication mandatory for all fixed service providers.

• Increase rural teledensity from the current level of 0.4 to 4 by

2010 and provide reliable transmission media in all rural areas.


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Targets of NTP-1999

• Achieve telecom coverage of all villages in the country

and provide reliable media to all exchanges by 2002.

• Provide internet access to all district HQ by 2000

• Provide high-speed data and multimedia capability

using technology including ISDN, to all towns with a

population greater than two lakhs by the year 2002


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VisionVision--20102010

10 Point charter titled ‘vision 2010’ for entire telecom sector:

• Net work expansion • Connecting the unconnected• Broad band coverage• Infrastructure sharing• 3 G Mobile services• Introduction & Spread of IPTV & WiMAX• Manufacturing• R&D• International Bandwidth• Competition


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Capital Expenditure

• Land• Bldg• A&P• Elecl. Installations• L&W• Cables• Subs.Installation• computers


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a) Landb) Buildingsc) A&Pd) Lines and wirese) Cables

(b to e , a Management Certificate is to be obtained andin case of l (a) title deed is to be provided, and madeavailable to Auditor)

f) Vehiclesg) Other Assetsh) Tools

Capitalization Policy of BSNL


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Capitalization Policy of BSNL

I) PartitionJ) Temporary shedsK) Software

Asset accounting : the cost of an item of fixedasset comprises its purchase price plus importduties and taxes and directly attributable cost ofbringing the asset to its working conditionAsset formation: an asset is deemed to formfrom the date of its commissioning.


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Capital works on closure of Accounts

Fixed Assets:

• Lease hold and free hold land

• Updation of Fixed Asset Register

• Physical verification of Fixed Assets at the close of Financial

year

• Impairment of Assets

• Assets decommissioned and declared obsolete

• Addition of assets during the financial year

• Capitalization of W.I.P.


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Capital works on closure of Accounts

• Charging of Overheads• Writing back of unutilized inventory remaining at site• Physical verification of Capital WIP• Valuation of Inventory : Weighted average rate• Maintenance of Bin Cards & Priced Store Ledger• Accounting of receipt of Inventory• Accounting of issue of Inventory• Identification of obsolete (Unserviceable /non-moving

inventory)• Physical verification of Inventory at the close of Financial

year


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Budget in BSNL

• Revenue Budget

• Capital Budget

• Cash Budget


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CAPITAL BUDGET

• REVISED PROCEDURE WITH EFFECT FROM 2009-10


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CAPITAL BUDGET

• BUDGET- REENGINEERING


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CAPITAL BUDGET

• ASSESSMENT OF REQUIREMENT OF FUNDS AND

PREPARATION OF PROPOSALS

• CGMs/IFAs OF CIRCLES/DISTRICTS

• NO CHANGE


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ASSESSMENT

• Guide lines issued by corporate office regarding:

• (i) Budget process and allied matters.

• Approved plan for the capital works for the year

• Circle wise/Service wise/ Component wise physical

targets assigned for achievement


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GUIDELINES

• Estimates should be realistic.

• Take into account only the anticipated outflows.

• Include requirements for centralized as well as

decentralized stores also.


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SUBMISSION OF PROPOSALS

• To the respective planning branches in BSNL Corporate

office viz LTP, Switching, Core net work, Cellular Mobile,

Building works, Broad band etc.


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DIFFERENT PLG BRANCHES IN CORP OFFICE

• They will review the proposals received with reference to

physical targets assigned for the circles for the current

year;

• Verify their correctness and

• Then assess and recommend the allotment due and

forward the proposals to the CP&M branch for

consolidation.


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CONSOLIDATION OF PROPOSALS

• IT WILL CONSOLIDATE DETAILS OF FINANCIAL ASSESSMENT/

RECOMMENDATIONS IN CONSULTATION IF REQUIRED WITH

AND ON THE BASIS OF PROPOSALS FORWARDED BY THE

RESPECTIVE PLANNING BRANCHES IN BSNL CORPORATE

OFFICE.

• THEY SHOULD ALSO GET IT APPROVED BY THE COMPETENT

AUTHORITY BEFORE FORWARDING THEM TO B&FC BRANCH.


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CONSOLIDATION OF PROPOSALS

• The CP& M branch of corporate office will consolidate

and provide the information to the B&FC branch of

corporate office by 1st September.


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ALLOTMENT OF FUNDS

• B&FC branch of corporate office by 15th September.

• Allotment is conveyed lump sum service

wise/Component wise to the circles for all the projects

irrespective of the area (General/Rural/tribal)


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ALLOTMENT OF FUNDS

• Funds were allotted:• Service wise• Their component wise and• Area wise • (According to the revised account heads of BSNL effective from

1.4.2003 as modified from time to time.)


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ALLOTMENT OF FUNDS

• The Basis for allotment of funds is

• Requirement of funds for various activities projected by

the respective planning branches of BSNL Corporate

office as received through the CP&M branch.


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ALLOTMENT OF FUNDS

• The circles will in turn allot funds to their SSAs

accordingly keeping in view the physical targets fixed

under various parameters.


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ALLOTMENT OF FUNDS

• Circles shall forward a consolidated statement of

allotment showing account code-wise distribution of

funds allotted by corporate office


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RE/BE PROPOSALS

• Inview of new procedure, there is no need to submit

RE/BE proposals by Budget wings of Circles to BBF

Section of Corporate office.

• The same is dispensed with.


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CAPITAL WORKS PROGRAMME

• Capital works programme shall be compiled only for

works costing Rs.20 crores and above instead of Rs.5

crores and above.


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CAPITAL WORKS PROGRAMME

TO WHOM THE DETAILS OF CAPITAL WORKS PROGRAMME FOR WORKS COSTING MORE THAN Rs.20 CRORES ARE REQUIRED TO BE SUBMITTED BY THE CIRCLES ?

A. TO THE BBF DIVISION OF CORPORATE OFFICE IN THE PRESCRIBED FORMAT FOR MONITORING THE PROGRESS OF ONGOING AND NEW PROJECTS COSTING MORE THAN Rs. 20 CRORES.


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CONTROL

• BBF division will obtain from Corporate Accounts branch

every quarter the details of expenditure in respect of

circles.


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CONTROL

• It will furnish the details of expenditure to the concerned

circles and also

• To the respective planning branches of corporate office

on quarterly basis.


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CONTROL

• This pro-active measure is expected to ensure quarterly

review of reasons for budgetary variance and a

periodical and centralized budgetary control.

• As such there is no need for the circles to submit the

variation statement to corporate office at the end of the

year


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CONTROL

• They should however review at their level in consultation

with their IFAs and take suitable remedial measures.

• Procedure for obtaining statements of physical

achievements/progress/review will continue to be dealt in

planning branches of corporate office as was done

hitherto.


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Execution of projects beyond sanctioned cost

• If it is anticipated that the cost is likely to go beyond

10% of the sanctioned estimate, immediate action to be

taken to prepare Revised estimate and have it

sanctioned well in advance


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DECOMMISSIONING OF ASSETS

• All the analogue exchanges like MILT- 64, ESAX- 200,

ILT-512, ILT-2048 and NEAX -61 S etc should be

discarded/declared obsolete and disposed off.

Depreciation should be charged up to the date of

decommissioning/declaring the same obsolete.

• The gross block value & accumulated depreciation of

such assets are neutralized.

• Net depreciated value of such assets is transferred to

decommissioned assets.


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DECOMMISSIONED & OBSOLETE

• Provision is made for difference for value between the

NRV and net depreciated value of obsolete asset

provided the NRV is less than the net depreciated value.

• Such obsolete is disposed off promptly. The provisions

made earlier are to be utilized and excess provision is to

be written back.


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SCRAPPING & REPLACEMENTS

• Replacements can fall under two(2) categories.

1. Existing exchange (electro mechanical) replaced and

replaced exchange is recommended for scrapping.

2. Existing exchange (256 RAXs,512 SBMs, E10 B RLUs

etc) is replaced by a higher capacity exchange system

and the existing exchange is diverted to needy place. –

Proper accounting adjustments is to be ensured.


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SCRAPPING & REPLACEMENTS

• In respect of replacement with scrapping of old

exchange, the following action would be taken:

(a) The scrapping committee would segregate and

indicate separately items that are unserviceable and

obsolete for disposal by auction. These should be

entered in the register of unserviceable or obsolete

stores (Form ACE 73 A) for further disposal after

obtaining sanction on ACE 9 from competent authority.

(b) Parts that are serviceable on cannibalization should be

brought on ACE 8 (numerical account)


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SCRAPPING -SWITCHING SYSTEMS

• Heads of Circles are now empowered to scrap Electro mechanical exchanges even if they have not outlived their lives.

• In such cases the scrapping should be on the basis of recommendations of a scrapping committee consisting of IFA based on economic criteria.

• For scrapping of exchanges which have outlived their lives, Scrapping committee is not required. A committee experts will their report based on which the scrapping can be approved by HOC under delegated financial powers. It will also examine the possibilities of utilizing any portion of the exchange and offer recommendations accordingly.


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SCRAPPING

TRANSMISSION EQUIPMENTS

• The financial powers of scrapping the transmission equipment will be the

same as prescribed for disposal of unserviceable and obsolete stores.

• Such scrapping has to be done on the basis of recommendations of the

scrapping committee which should bring out the financial implications.

• The case of scrapping where the equipment has outlived their prescribed

life can be considered by HOC

• Cases of scrapping which have not outlived their lives shall be remitted to

Corporate office. The standing committee report in such cases should be

countersigned by HOC


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OBSOLETE/SURPLUS UNSERVICEABLE STORES

• Obsolete: Stores that are going to be declared as non-

standard shortly. New orders should not be placed for

these items.

• Surplus: Excess in requirement for a specified period

and cannot be used else where. (Does not include

serviceable stores found excess to requirement for a

particular work owing to excess indenting etc)

• Unserviceable stores fall into two categories:

(i) Materials recovered from dismantlement and are found

to be unserviceable.

(ii) Materials which become unserviceable through lying in

stores.


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DISPOSAL OF OBSOLETE/SURPLUSUNSERVICEABLE STORES

• Should be entered in the register of unserviceable

stores in form ACE-73-A

• Report submitted to DE inform ACE-9

• Report should indicate

(i) Condition of stores

(ii) Period during which the articles have been in stock or

in use.

(iii) The cause of deterioration.

(iv) This procedure should be followed in case of normal

wear and tear and also in case abnormal wear and

tear.


21-03-201149For Internal Circulation of BSNL Only

PLANNING AND CAPITAL WORKS MANAGEMENTtraining.bsnl.co.in/digital_library_source... · 21-03-2011 2...

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