Annual Report2016-17

Annual Report 2016-17

17th AnnuAl REpoRtFor the Financial Year ended 31.3.2017

bhARAt sAnchAR nigAm limitEd

Annual Report 2016-17

CONTENTS

DETAILS PAGE NO

CMD and the Board of Directors 04 06

Vision and Mission 07 08

Chairman and Managing Directors Message 09 12

Boards Report 13 53

Management Discussion and Analysis Report 54 56

Report on Corporate Governance 57 86

Financial Statements [Balance Sheet, P & L Account, Cash Flow Statement, Notes forming part of the Financial Statements]

87 206

Auditors Report 207 333

Addendum to Directors Report 334 353

Comments of the Comptroller and Auditor General of India on the Accounts 354 356

Replies of the Management to the Comments of the Comptroller and Auditor General of India on the Accounts

357 364

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Smt. Padma Iyer KaulGovernment Director

Ms. K. Sujatha RaoDirector

[WEF 30.01.2017]

Dr. Santosh R. DastaneDirector

[WEF 30.01.2017]

BOARD OF DIRECTORS

Shri Anupam ShrivastavaChairman and Managing Director

Shri N.K. GuptaDirector (CFA)

[Upto 31.05.2017]

Smt. Sujata RayDirector (HRD)

Shri N.K. MehtaDirector(E)

Shri R.K. MittalDirector (CM)

Shri N. SivasailamGovernment Director

Prof. Jasbir SinghDirector

[WEF 08.09.2017]

Shri V.V. BhatDirector

[WEF 08.09.2017]

Annual Report 2016-17

5

H.C.Pant

Company Secretary & CGM(Legal)

Corporate Identity Number: U74899DL2000GOI107739

Registered and Corporate OfficeBharat Sanchar Bhawan, H.C.Mathur Lane, Janpath, New Delhi-110 001

Website: www.bsnl.co.in

Statutory Auditors

M/s ANDROSS & CO., A-101, GIA, Wazirpur, New Delhi-110 052.

Cost Auditors

Balwinder & Assocites, Cost Accountants, F-125 Phase VIIIB Indl Area Mohali, Punjab-160071

Secretarial Auditors

M/s VAP & Associates, Company Secretaries, 387, First Floor, Shakti Khand-3, Indirapuram, Ghaziabad-201010, U.P.

Bankers

State Bank of India, Punjab National Bank, Corporation Bank, ICICI Bank, Union Bank of India, Canara Bank, INDUSIND Bank, YES Bank, Central Bank of India, Allahabad Bank, United Bank of India, Syndicate Bank, Oriental Bank of Commerce, Bank of India, J&K

Bank, Bank of Maharashtra

Depository

National Securities Depository Limited, 4th Floor A Wing, Trade World, Kamla Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai-400013.

Registrar and Transfer Agent:

Indus Portfolio Private Limited, G-65 Bali Nagar, New Delhi-110015. Phone: 011-47671214/ Fax 011-25449863

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OUR BUSINESS

Mobile Services

GSM : 2G, GSM 3G

CDMA : Mobile, CDMA Fixed and CDMA Data Card Services

Broadband Services

Landline Broadband

3G Mobile Broadband

GSM WiFi

WiMAX Broadband

Dial up Internet (DIAS)

Fiber Broadband(FTTH)

CDMA Broadband : EVDO Prepaid, EVDO Postpaid, EVDO Router.

Enterprise Business

Enterprise Voice and Mobility: EPABX, Voice VPN, ISDN/PRI/BRI, Centrex, 2G/3G Mobile, Blackberry services

Internet Data Centre Services: IDC Overview, Managed Colocation services, Managed/Hosting Services, Managed IT Services, Cloud Services(PCaas)

Enterprise Data Services: Leased Circuit(DLC), MPLS VPN, Internet Leased Line, VSAT, VPN Services (Over BB, CDMA/3G)

Enterprise Broadband: WiMax, WiFi, EVDO, DSL Broadband/FTTH Broadband

Managed Services: Managed Network Services(MNS), Managed Global Audio Conferencing, Managed SaaS(Mail), Internet Data Centre

Other Enterprise Services: Web Colocation, Fleet Tracking, Video Conferencing(VC), Video Surveillance, Web Hosting, USOF Project and host of other innovative Enterprise Business Solution Services

Landline Services

Telephone Lines, FLPP Bfone, Phone plus services

Intelligent Network Services: Universal ITC, UAN service, Toll free numbers/services, VPN service, Televoting services

BSNL PCO: FLPPPCO

PRI/BRI/Dialup Internet: Dial up internet, ISDN PRI, ISDN BRI

Annual Report 2016-17

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VISION AND MISSION

VISION:

Be the leading telecom service provider.

Be a customer focused organization with excellence in customer care and marketing.

Leverage technology to provide affordable and innovative telecom services/products across customer segments.

MISSION:

Be the leading telecom service provider.

Becoming the most trusted, preferred and admired telecom brand

Providing reliable telecom services that are value for money

Generating value for all stakeholders employees, shareholders, vendors & business associates

Excellence in customer service -friendly, reliable, time bound, convenient and courteous service

Offering differentiated products/services tailored to different service segments

Developing a marketing culture that is responsive to customer needs

Maximizing return on existing assets with sustained focus on profitability

OBJECTIVES:

To increase sales revenue with focus on subscriber retention & acquisition by way of strengthening marketing, quality of service and customer delivery

Accelerate the pace of expansion of mobile & data services with up-gradation of technology

Adopt policies and processes to enable transparent, quick and efficient decision making.

Developing marketing team with attitude towards customer care

To improve customer care by reducing fault rate, upgrading Customer service and introducing convergent billing

Providing a conducive work environment with strong focus on performance to enhance customer delight towards BSNL services

Leverage data services to increase BSNLs customers base & revenues by providing higher bandwidths capabilities for wire line and wireless broadband customers

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To strengthen companys finances by gainful utilization of its assets through sharing / monetization of existing infrastructure like land, building and sharing of passive infrastructure like towers etc.

Creating Wi-Fi Hot Spots and replacing Legacy wire line exchanges by Next Generation Network.

Expanding the reach of fiber network near to the customer premises particularly in apartment complexes through FTTH in order to meet the bandwidth requirement for both data & video applications

To leverage the existing infrastructure of BSNL thereby contributing towards nation building by facilitating the execution of government programmes and initiatives viz. National Optical Fiber Network (NOFN), Network for Spectrum (NFS), and Smart City concept

To improve productivity by training and skill development and rationalization of manpower

Developing knowledge pool exposed to latest technological advancements

To explore opportunities in international telecom in developing markets

To become preferred service provider to the Government for reliable and secure service Network and to serve National security interests

Honble MOS (Communications) Shri Manoj Sinha, inaugurating the BSNL Mobikwik Wallet

Annual Report 2016-17

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CHAIRMAN AND MANAGING DIRECTORS MESSAGE

Ladies and Gentlemen,

It gives me immense pleasure to welcome you all on behalf of the Board of Directors, in the 17th Annual General Meeting of Your Company. The Companys Annual Financial Statements for the year 2016-17, alongwith the Boards and Auditors Report have been circulated amongst the Members.

ECONOMY

The global economy was a mixed bag during FY 2016-17. The Indian economy is expected to grow upwards in comparison to the previous years. The biggest ever reform one nation one tax GST is expected to create a national level market and, had already started showing increased compliances and governance in all sectors.

PERFORMANCE HIGHLIGHTS 2016-17

Your Company sustained the momentum of growth registered in the year 2015-16, as a result, it registered a growth in the income under operations. While the Income from services is Rs. 28403.73 Crores [Previous year Rs. 28380.86 Crores], other income is Rs. 3129.71 Crores [Previous year Rs. 4030.46 Crores]. The company incurred a loss of Rs. 4793.21 Crores [Previous year Rs. 4859.16 Crores]. There was 0.08 % increase in Income from services in comparison to previous year. There was 2.71 % decrease in the total Income in comparison with the previous year. Previous

years figures have been recast due to Ind AS implementation.

The Employee benefit expenses and, Office & Administration expense remained major contributory to the expenses, which have shown an increase of 2.25% of and decrease of 0.02%, respectively.

MARKET SHARE

Telecommunications Services has emerged as one of the key drivers of the countrys economy. Though the customer driven competitive market resulted in low ARPU, Your Company was able to sustain its market share in terms of subscribers.

At all India level, Your Companys Landline Market Share stood at 56.15% and the Mobile Segment at 9.97%.

BSNL IN NATION BUILDING

Being the successor and assigns of erstwhile Central Government Departments of Telecom Services (DTS) and Telecom Operations (DTO), Your Company is actively partnering the Government in all its endeavors, be it assistance during natural calamities or building communication network at remote, inaccessible areas or in other specific areas.

DIGITAL INDIA INTIATIVES AND IMPLEMENTATION OF GOVT. PROJECTS

Your Company, being the largest pan-India Central Public Sector telecom service

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