PROJECT REPORT

ON

DATABASE MANAGEMENT AND

PAYMENT PROCESSING
IN

BHARTI AIRTEL LIMITED

1
 INDEX

S. No. Topic Page No.

1. Preface 4

2. Industry Profile 5

3. Organization Profile 14
Structures 19
Competitive Analysis 25

4. Company Profile 27
Financial Statement 44

5. Account Payable 45
Process 55
Cash Flow in Bharti 95
Cash Forecasting 98
Bank Reconciliation 100
Financial Auditing 102

6. Problems and Solutions 109

7. Conclusion 114

8. Bibliography 115

2
 PREFACE

It is essential for every student pursuing master of business administration programmed

to undergo a summer training for a stipulated time period so that he/she gets a first hand
experience of the industrial environment and the existing prevalent work culture.

To the same I present my summer training report completed in AIRTEL. The training has
exceptionally helped me to learn the financial and account management besides learning
office behaviour and culture. It includes the whole procedure right from the collection
and entry of various types of data, their processing and finally analyzing and preparing
reports based on them therein. The work culture was of exceptionally high standard as
such I could understand why AIRTEL is the leading brand in communications world
wide.

3
Industry
Profile

4
 Mobile Industry Profile

It is somewhat ironical that commercial Internet and mobile services were launched in
India at the same time? August 15, 1995. Today, the mobile industry is way ahead of the
Internet. With calling rates amongst the lowest in the world, Indian mobile operators have
been forced to adapt their business models to make money. The result: a user base of 75+
million users growing at nearly 5 million a month. The mobile industry is the big success
story in India. In other words, it has been a win-win situation: for consumers and for the
service providers.

The mobile industry started off with a killer already available: the desire of people to
communicate. Compounded with the fact that for various reasons, the phone was seen as
a luxury in India, the mobile gave people in India independence and freedom that that
they had hitherto not experienced when it came to interactions with others. The entry of
Reliance Infocomm helped spark off a price war which has led to rocketing growth in the
industry.

In India, ring tones, ring back tones, wallpapers, games, voice-based services and SMS
info services have done very well so far. But they still address a very small segment of
the market. There is an opportunity to grow the usage of mobile data (or mobile value
added services) beyond the 2G to the 2.5G domain (WAP, MMS and Java) and 3G
(streaming services). In India, the mobile has the potential to become a credible
alternative for accessing the Internet given the slow growth of connected computers. But
for that to happen, a number of things will have to change. With regards to content and
value added services, there are three challenges facing mobile businesses: closed
publishing systems (? walled gardens?), operator revenue shares for content providers
and mobile data pricing.

The walled gardens that mobile operators run limit the options for publishers. They have
to go the operators directly or work through intermediaries who have the operator
relationships. While the walled gardens are good for operators who can maximize their
revenues through the services, it limits the options that users have and, over time, it will
also limit the revenue-generation potential.
5
In India, the content providers get a much smaller fraction of the transaction and
subscription fees paid by users compared to that in other markets such as China and
Japan. While the operators have a great advantage with their billing relationship and
platform, they tend to keep a very high percentage of the revenue thus limiting what
content providers keep. In Japan, NTT Document i-mode pays out 91% to the content
provider. In China, the mobile operators pay out 80-85%. In India, the content providers
tend to get 10-30% of the revenue only.

Mobile data pricing in India also needs to be reduced dramatically. For example, one of
the leading operators charges a fee of Rs 49 ($1.10) per month with an additional charge
of 10 paise/10 KB. This works out to about Rs 10 (22 cents) per megabyte of download.
This encourages more one-time download applications rather than online usage. In
addition, in the GSM world, activating mobile data (GPRS) is also not easy. (By
comparison, most CDMA handsets come pre-configured for data access, even though
they are limited to the operator walled garden.)

With its high population and development potential is having one of the fastest growing
telecom networks in the world. India's public sector telecom company BSNL is the 7th
largest telecom company in world. Reliance, Bharti Telecom, Tata Indicom, Hutch,
MTNL, and BPL are other major operators in India. However, rural India still lacks
strong infrastructure.

India introduced telephony in 1882

The total number of telephones in the country crossed the 100 million mark in

April 2005 and was 202.74 million in February 2007. This includes 156.31 million
mobile phones. However, teledensity (telephones per 100 persons) in the country was
18.26 per cent in February 2007.
6
History

Telecom in the real sense means transfer of information between two distant points in
space. The popular meaning of telecom always involves electrical signals and nowadays
people exclude postal or any other raw telecommunication methods from its meaning.
Therefore, the history of Indian telecom can be started with the introduction of telegraph.

Introduction of Telegraph

The postal and telecom sectors had a slow and uneasy start in India. In 1850, the first
experimental electric telegraph Line was started between Kolkata and Diamond Harbour.
In 1851, it was opened for the British East India Company. The Posts and Telegraphs
department occupied a small corner of the Public Works Department, at that time.
Construction of 4,000 miles of telegraph lines connecting Kolkata and Peshawar in the
north via Agra, Mumbai through Sindwa Ghats, and Chennai in the south, as well as
Ootacamund and Bangalore was started in November 1853. Dr. William O'Shaughnessy,
who pioneered telegraph and telephone in India, belonged to the Public Works
Department. He tried his level best for the development of telecom through out this
period. A separate department was opened in 1854 when telegraph facilities were opened
to the public.

Introduction of the Telephone

In 1880, two telephone companies namely The Oriental Telephone Company Ltd. and
The Anglo-Indian Telephone Company Ltd. approached the Government of India to
establish telephone exchanges in India. The permission was refused on the grounds that
the establishment of telephones was a Government monopoly and that the Government
itself would undertake the work. By 1881, the Government changed its earlier decision
and licence was granted to the Oriental Telephone Company Limited of England for
opening telephone exchanges at Kolkata, Mumbai, Chennai and Ahmedabad. January 28,
1882, is a Red Letter Day in the history of telephone in India. On this day Major E.
Baring, Member of the Governor General of India's Council declared open the Telephone
Exchange in Kolkata, Chennai and Mumbai. The exchange at Kolkata named "Central
Exchange" was opened at third floor of the building at 7, Council House Street. The
7
Central Telephone Exchange had 93 number of subscribers. Bombay also witnessed the
opening of Telephone Exchange in 1882 itself.

Further developments

In 1902 first wireless telegraph station established between Saugor Islands and
Sandheads. In 1907, first Central Battery working of telephones introduced in Kanpur.
Between 1913 and 1914 first Automatic Exchange was installed in Simla. On July 23,
1927 Radio Telegraph started working between UK and India. The beam station at Kirkee
and Dhond opened by Lord Irwin and greetings exchanged with the King of England. In
1933 Radio-Telephone also started between India and UK. 12 channel carrier system was
introduced in 1953. First subscriber trunk dialing route commissioned between Kanpur
and Lucknow in 1960. First PCM system between city and Andheri telephone exchanges
commissioned in Mumbai in 1975. First digital microwave junction was introduced in
1976. First optical fibre system for local junction commissioned at Pune in 1979. First
satellite earth station for domestic communications was established at
Secunderabad(U.P.). First analog Stored Program Control exchange for trunk lines was
commissioned at Bombay. In 1984 C-DOT was established for indigenous production
and development of digital exchanges. In 1985 mobile telephone service started (not
commercially) in Delhi.

While all the major cities and towns in the country were linked with telephones during
the British period, the total number of telephones in 1948 was only around 80,000. Even
after independence, growth was extremely slow. The telephone was a status symbol
rather than being an instrument of utility. The number of telephones grew leisurely to
980,000 in 1971, 2.15 million in 1981 and 5.07 million in 1991, the year economic
reforms were initiated in the country.

While certain innovative steps were taken from time to time, as for example introduction
of the telex service in Mumbai in 1953 and commissioning of the first [subscriber trunk
dialing] route between Delhi and Kanpur in 1960, the first waves of change were set
going by Sam Pitroda in the eighties. He brought in a whiff of fresh air. The real
transformation in scenario came with the announcement of the National Telecom Policy
in 1994.
8
India, emerging as a major player

In 1975, the Department of Telecom (DoT) was separated from P&T. DoT was
responsible for telecom services in entire country until 1985 when Mahanagar Telephone
Nigam Limited (MTNL) was carved out of DoT to run the telecom services of Delhi and
Mumbai. In 1990s the telecom sector was opened up by the Government for private
investment as a part of Liberalisation-Privatization-Globalization policy. Therefore, it
became necessary to separate the Government's policy wing from its operations wing.
The Government of India corporatised the operations wing of DoT on October 01, 2000
and named it as Bharat Sanchar Nigam Limited (BSNL). Many private operators, such as
Reliance India Mobile, Tata Telecom, Hutch, BPL, Bharti, Idea etc., successfully entered
the high potential Indian telecom market.

Growth of mobile technology

India has become one of the fastest growing mobile markets in the world. The mobile
services were commercially launched in August 1995 in India. In the initial 5-6 years the
average monthly subscribers additions were around 0.05 to 0.1 million only and the total
mobile subscribers base in December 2002 stood at 10.5 millions. However, after the
number of proactive initiatives taken by regulator and licensor, the monthly mobile
subscriber additions increased to around 2 million per month in the year 2003-04 and
2004-05.

Although mobile telephones followed the New Telecom Policy 1994, growth was tardy in
the early years because of the high price of hand sets as well as the high tariff structure of
mobile telephones. The New Telecom Policy in 1999, the industry heralded several pro
consumer initiatives. Mobile subscriber additions started picking up. The number of
mobile phones added throughout the country in 2003 was 16 million, followed by 22
millions in 2004, 32 million in 2005 and 65 million in 2006. The only countries with
more mobile phones than India with 156.31 million mobile phones are China 408
million and USA 170 million.

9
India has opted for the use of both the GSM (global system for mobile communications)
and CDMA (code-division multiple access) technologies in the mobile sector. In addition
to landline and mobile phones, some of the companies also provide the WLL service.

The mobile tariffs in India have also become lowest in the world. A new mobile
connection can be activated with a monthly commitment of US$ 5 only. In 2005 alone 32
million handsets were sold in India. The data reveals the real potential for growth of the
Indian mobile market. (Ref:TRAI)

Present scenerio

In the fixed line arena, BSNL and MTNL are the incumbents in their respective areas of
operation and continue to enjoy the dominant service provider status in the domain of
fixed line services. For example BSNL controls 79% of fixed line share in the country.
On the other hand, in the mobile telephony space, Airtel controls 21.4% subscriber base
followed by Reliance with 20.3%, BSNL with 18.6%, Hutch with 14.7% subscriber base
(as per June 2005 data).(Ref: TRAI Report and Press Release)

Next generation networks

In the Next Generation Networks, multiple access networks can connect customers to a
core network based on IP technology. These access networks include fibre optics or
coaxial cable networks connected to fixed locations or customers connected through wi-fi
as well as to 3G networks connected to mobile users. As a result, in the future, it would
be impossible to identify whether the next generation network is a fixed or mobile
network and the broadband wirelessaccess would be used both for fixed and mobile
services. It would then be futile to differentiate between fixed and mobile networks
both fixed and mobile users will access services through a single core network.
Indian telecom networks are not so intensive as developed countrys telecom networks
and India's teledensity is low only in rural areas. 670,000 route kilometers of optical
fibres has been laid in India by the major operators, even in remote areas and the process
continues. BSNL alone, has laid optical fibre to 30,000 Telephone Exchanges out of their
35,000 Exchanges. Keeping in mind the viability of providing services in rural areas, an
attractive solution appears to be one which offers multiple service facility at low costs. A

10
rural network based on the extensive optical fibre network, using Internet Protocol and
offering a variety of services and the availability of open platforms for service
development, viz. the Next Generation Network, appears to be an attractive proposition.
Fibre network can be easily converted to Next Generation network and then used for
delivering multiple services at cheap cost.

Revenue and growth

The total revenue in the telecom service sector was Rs. 86,720 crore in 2005-06

as against Rs. 71, 674 crore in 2004-2005, registering a growth of 21%. The total
investment in the telecom services sector reached Rs. 200,660 crore in 2005-06, up from
Rs. 178,831 crore in the previous fiscal.

Telecommunication is the lifeline of the rapidly growing Information Technology

industry. Internet subscriber base has risen to 6.94 million in 2005- 2006. Out of this 1.35
million were broadband connections. More than a billion people use the internet globally.

Under the Bharat Nirman Programme, the Government of India will ensure that 66,822
revenue villages in the country, which have not yet been provided with a Village Public
Telephone (VPT), will be connected. However doubts have been raised about what it
would mean for the poor in the country.

It is difficult to ascertain fully the employment potential of the telecom sector but the
enormity of the opportunities can be gauged from the fact that there were 3.7 million
Public Call Offices in December 2005 up from 2.3 million in December 2004.

The value added services (VAS) market within the mobile industry in India has the
potential to grow from $500 million in 2006 to a whopping $10 billion by 2009(Music,
games to drive mobile VAS growth).

11
Service providers in India

Basic service licencees

Only the PSU's BSNL and MTNL are allowed to provide Basic Phone Service through
copper wires in India. MTNL is operating in Delhi and Mumbai only and all other parts
are covered by BSNL.

Cellular mobile service licencees

1. BSNL
2. MTNL
3. Bharti Airtel Ltd
4. Idea Cellular Ltd
5. Reliance Telecom Ltd
6. BPL Mobile Communications Ltd
7. Escorts Telecommunications Ltd
8. Fascel Ltd
9. BTA Cellcom Ltd

12
 Bharti Enterprises

Bharti enterprises has been at the forefront of the tecnology and has revolutionized
telecommunications with its world-class products and servies. Establised in 1985, bharti
has been a pioneering force in the telecome sector with many frists and innovations to its
credit, ranging from being the frist moblie service in Delhi, frist private basic telephone
services provider in the country, frist Indian company to provide comprehensive telecom
services outside India in Seychelles and the frist private sector service to launch National
Long Distance Service in India.

Jersey Telenet Ltd., a subsidiary a of Bharti Global has been granted a license to run
comprehensive telecom services in jersey. Services for which license has been granted
include 2G and 3G mobile services and international long distance services. This is the
second international telecom venture of Bharti Global. Telecom Seychelles, asubsidiary
of Bharti Global, has been offering mobile and basic telephone service in Seychelles
since 1998 under the Airtel brand. Over the years Airtel has continuously led the market
in Seychelles with new product and has played a crucial role in marketing mobile and
landline services more affordable for its customers in Seychelles.

The company has successflly focused its strategy on telecom while straddling diverse
fields of business. From the creation of AIRTEL, one of a india finest brands, to
becoming the largest manufacturer and exporter of world class telecom terminals under
its Beetel brand, Bharti has created a significant position for itself in the global
telecommunication sector. Bharti Airtel Ltd. is today acknowledged as on of India. While
a joint venture with TeleTech Inc., USA market Bhartis successful foray into the
customer management services business, Bharti Enterprises dynamic diversification has
continued with the compay venturing into telecom software development. Recently,
Bharti has successfully launched an international venture with EL Rothschild Group
owned ELRO Holdings India Limited, to export fresh Agri products exclusively to
markets in Europe and USA.

13
 Our Companies

A brief introduction to each of our companies is given below:

Bharti Airtel Ltd:

Bharti Airtel Ltd is India's leading provider of telecommunications

services. The company has 4 distinct Business divisions - Mobile & telephone services,
broadband services, long distance services and enterprise services.

Bharti TeleTech Ltd

Bharti TeleTech Ltd manufactures and exports world-class telecom

equipment under the brand 'Beetel'

Telecom Seychelles Ltd

Telecom Seychelles Ltd provides telecom services in Seychelles, under

the brand 'Airtel'

14
Bharti Telesoft Ltd

Bharti Telesoft Ltd delivers best-in-class, revenue-critical VAS products

and services to telecom carriers.

TeleTech Services (India) Ltd

TeleTech Services (India) Ltd is joint venture with TeleTech Inc., USA. It
offers a range of Customer Management Services.

FieldFresh Foods Pvt Ltd

FieldFresh Foods Pvt Ltd is Bharti's venture with EL Rothschild Group

owned ELRO Holdings India Ltd., to export fresh Agri products exclusively to markets in
Europe and USA.

Bharti Retail Pvt Ltd

Bharti Retail Pvt Ltd. is a 100% subsidiary of Bharti Enterprises. Bharti

Retail will serve all regular shopping requirements of an average Indian household
offering affordable prices, great quality & wider choice. Bharti Retail is looking at

15
launching its retail outlets in multiple consumer friendly formats in several cities across
India.

Sunil Bharti Mittal

Chairman & Managing Director since October 2001

Board director since: July 1995

Sunil Bharti Mittal is the Chairman and Managing Director of Bharti Airtel Limited
(Bharti), Indias largest private integrated telecom player. The company has nearly 20
million customers on its well-respected brand AIRTEL.

Sunil was one of the first entrepreneurs to identify the mobile telecom business as a
major growth area and launched services in the city of Delhi and the National Capital
Region in the year 1995. Under his inspiring leadership the company grew organically
and inorganically, covering the entire country by providing integrated telecom services.

In his personal capacity, Sunil has received several awards such as:

Best Asian Telecom CEO, Telecom Asia Awards 2005

Best CEO, India, Institutional Investor, 2005

Business Leader Of The Year, Economic Times, 2005

Ernst & Young Entrepreneur Of The Year 2004, Ernst & Young

Sunil has always been a pioneer. A first generation entrepreneur, he started his first
business in 1976 with a capital investment of Rs 20,000. He initially founded a number of
trading concerns, and established the first company to manufacture push button
telephones in India. This company is now one of the largest manufacturers of telephones
in the world.

16
Apart from his role at Bharti, Sunil holds the position of the Honorary Consul General of
the Republic of Seychelles in New Delhi, India. Some of his other roles include being a
member of the Prime Ministers Council on Trade and Industry; Co-Chairman of the
Indo-British Partnership and a Board Member of the Global GSM Association.

Sunil is an alumnus of Punjab University and has completed the Owner/President

Management Program from Harvard Business School.

17
 Structures

As an outcome of a restructuring exercise conducted within the company; a

new integrated organizational structure has emerged; with realigned roles, responsibilities
and reporting relationships of Bhartis key team players. With effect from March 01,
2006, this unified management structure of 'One Airtel' will enable continued
improvement in the delivery of the Groups strategic vision.

Fig : Companies

18
 GROUP STRUCTURE

BHARTI ENTERPRISES

Bharti Teletech Bharti Airtel Ltd Bharti Global

Bharti Infotrac
Mobile Leader Infotel Leader

Cellular Fixed Line Long Distance Broadband

Services Services Services

Bharti Healthcare Bharti Foundation

19
Bharti Enterprises - Organization Internal Structure

20
 ORGANISATION STRUCTURE

CMD
JMD
President
Bharti Airtel
Director-
Finance & Head Corp
Presidents office Business Communication
Strategy & Integration
monitoring
Corp. Dir. Bus
Dev.
Director-IT
and
Innovation
JMD & CFO

Jt Jt President Jt President
President Broadband & Enterprise
Mobility Telephone Services Director- CTO
Service Network

Corp. Dir
Chairman Off.
Director-
Mktg &
Ex Dir. Ex Dir Dir Dir Comm
(North) (South) (West) (East)
Corp. Dir.
Alliance &
CSR
Director-
CSD (open)
Corp. Dir.
Alliance
CEO & Dir. Ex Director
Corporation Carners
Director-HR
(open)
Corp. Dir. HR

Director Corp Dir. Gen.

Legal & Counsel &
Regulatory Com Secy.

Director
Supply Chief of
Chain Compliance &
(open) FA

21
 KEY CUSTOMERS

Bharti Telesoft's software deployments span over 35 countries are employed on over 100
networks and enable service provision to over 150 million global subscribers.

Accenture Goodlass Nerolac

Asian Paints Heidelberg
Aviva Heinz
Bank of Panjab Hexaware
Best & Co. Hughes Escorts
Bharat Electronics HSBC
BPCL Huawei
Cable & wireless Ibm
Cadburys ICICI Bank
Centre for Science & Development Infosys
Colgate-Palmolive Iserv
Compaq ITC
Comverse I2 Technology
ESPN Equant
Fortis Securities Jet Airways
Glaxo Microsoft
GE Microland
Hathway Mindtree
HCL Perot Motilal Oswal Securities
CRISIL Karvy Stock Broking

22
 Dabur LG Electronics
Daksh Mahindra BT
Delphi Mangal Keshav Securities
Digital Globalsoft Mascot Systems
HCL BPO NCR Corporation
HCL Technology Nestle
HDFC Bank Nicholas Piramal
NIC Nortel networks
NIIT P&G
Oracle Polaris
Peoplesoft Ranbaxy
PWC SAP Labs
Sahara India Seven Cs
Satyam Computers Socrates
Siemens Information System TCS
Star TV TI Cycles
SpiceJet Thomas Cook
TV Wipro
Xerox

23
Competitive Analysis

Telecom Companies Exit May07 % Share

BSNL 1705639 16
Idea 411815 3.9
Airtel 3026441 28.4
Reliance 2827767 26.5
Hutch 1951046 18.3
Tata 730073 6.9
Total 10652781

24
Company Profile
25
Bharti airtel limited, (formerly none as Bharti Tele-Ventures Ltd.) is a part of Bharti
Enterprises, and is Indias leading provider of telecommunications services. The company
was incorporated in July 07, 1995, as a Public Limited Company, and has since then been
at the forefront of Indian telecom industry.

Bharti Airtel is one of India's leading private sector providers of telecommunications

services based on an aggregate of 42,685,530 customers as on May 31, 2007, consisting
of 40,743,725 GSM mobile and 1,941,805 broadband & telephone customers.

The businesses at Bharti Airtel have been structured into three individual strategic
business units (SBUs) - mobile services, broadband & telephone services (B&T) &
enterprise services. The mobile services group provides GSM mobile services across
India in 23 telecom circles, while the B&T business group provides broadband &
telephone services in 94 cities. The enterprise services group has two sub-units - carriers
(long distance services) and services to corporates. All these services are provided under
the Airtel brand.

Company shares are listed on The Stock Exchange, Mumbai (BSE) and The National
Stock Exchange of India Limited (NSE)

.
The current businesses of the Group include:

Mobile services
Broadband and telephone services
Enterprise services carriers
Enterprise services corporate

FACTSHEET
26
Name : Bharti AIRTEL Limited

Business description : provides mobile, broadband & telephone

(Fixed line) and carriers and services
to corporate.

Established : July 07, 1995, as a public limited company.

Proportionate revenue: Rs. 184,202 million (year ended

March 31, 2007- UN -audited)

Rs.117, 255 million (year ended

March 31, 2006- UN -audited)

Rs.81, 558 million (year ended

March 31, 2005 audited)

As per Indian GAAP accounts

Proportionate EBITDA: Rs. 74,407 million (year ended

March 31, 2007-un-audited)

Rs. 42,250 million (year ended

March 31, 2006-un-audited)

Rs.30, 658 million (year ended

March 31, 2005-audited)

27
 As per Indian GAAP accounts

Shares in issue : 1,895,934,157 as at March 31, 2007

1,893,879,304 as at March 31, 2006

Listings : The Stock Exchange, Mumbai (BSE)

The National Stock Exchange of India Limited
(NSE)

Market capitalization: (as on june25, 2007)

Approximately Rs. 1,541 billion

Closing BSE share price = Rs. 812.75

Customer base : 40,743,725 GSM mobile and

1,941,805 broadband and Tele
Customers (status as at month ended
May 31, 2006)

Operational networks : Provides GSM mobile services in all the

23 telecom circles; the only telecom operator
having an all India presence.

Provides broadband (DSL) and

Telephone services (fixed) in India.

Registered office : Bharti Airtel Limited

28
 (A Bharti Enterprise)
Qutab Ambience (at Qutab Minar),
Mehrauli Road,
New Delhi- 110 030

Tel. No.: +91 11 4166 6000

Fax No. : +91 11 4166 6011/12

Building Telecom Building Relationships.

29
AS we spread wings to expand our capabilities and explore new horizons, the
fundamental focus remains unchanged: seek out the best technology in the world and put
it at the service of our ultimate user: our customer.

: Sunil Bharti Mittal (group chairman and managing director)

Vision

By 2010 Airtel will be the most admired brand in India:

Loved by more customers
Targeted by top talent
Benchmarked by more business

MISSION

We will meet the mobile communication needs of our customers through:

Error- free service delivery

Innovative products and services

Cost efficiency

Unified Messaging Solutions

Promise

We at Airtel always think in fresh and innovative ways about the needs of our
customers and how we want them to feel. We deliver what we promise and go out of our
way to delight the customer with a little bit more

Path to Success

30
AIRTEL has year on year, created new benchmarks in the Indian corporate scenario. As
on March 31, 2006 Bharti had over 2.09 crore customers, reflecting an increase in the
total customer base of 77%, over the corresponding period last year. Airtel has also
maintained its leadership position with a market share of all India wireless subscribers at
21.8% as on March 31, 2006. The revenues and net profit for the full year ended March
31, 2006 was Rs. 11663 crore and Rs. 2,258 crore, a growth of 46% & 51% over the
corresponding period last year respectively. Bharti Airtel Q4 net up 58%, Africa dents
revenue growth. Bharti Airtel'sconsolidated revenue grew 1.3 percent sequentially (up
13.5 percent Y-o-Y) to Rs 22,219 crore in the quarter ended March 2014, impacted by
lower revenue from Africa division.Apr 30, 2014

31
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32
 BHARTI AIRTEL VALUES

INNOVENTURING

We will generate and implement entrepreneurial and innovative ideas which will
continuously create new growth engines.

CUSTOMER FIRST

We are committed to delivering service beyond the expectations of the customer.

Our quality of customer responsiveness clearly differentiates us from others.

PERFORMANCE CULTURE

We benchmark our processes and performance against world-class standards. We

distinguish between performers and non performers by valuing achievement at
the individual as well as the team level. Ours is a culture of inclusively where
feedback, learning and ideas are actively encouraged, sought and acted upon.

VALUING PARTNERSHIP

We are committed to building exemplary relationship with our partners, which

stand on the principles of mutual trust and mutual growth.

VALUING PEOPLE

We nurture an environment where people are respected and their uniqueness is

valued. We believe that people are our key differentiators.

RESPONSIBLE CORPORATE CITIZENSHIP

We are committed to making a positive and proactive contribution to the

community. As a responsible corporate citizen we will contribute to and abide by
environmental and legal norms.

33
 INVESTOR RELATIONS

Shareholding Structure :

Details on the latest shareholding structure and major shareholders, as on March 31,

Category No. of Shares Held %

Indian Holding:

Promoters* 861,286,728 45.4

Banks/Mutual Funds/ Indian Financial

Institutions/Insurance Companies 72,974,654 3 .85

Indian Residents/Bodies Corporate/Others 49,692,454 2.62

Total- Indian 983,953,836 51.9

Foreign Holding:

Foreign companies 409,254,605 21.6

FIIs 485,119,934 25.6

NRIs and OCBs 15,550,929 0.82

Total- Foreign 909,925,468 48.0

Total 1,893,879,304 100

Notes:
1. FIIs - Foreign Institutional Investors
2. NRIs Non Resident Indians ;
3. OCBs Overseas Corporate Bodies

34
 MANAGEMENT STRUCTURE

The group has been structured to create functional and operational specialization with a
linear vision of business lines and functional areas.

The Company is headed by Chairman and Group Managing Director- Sunil Bharti Mittal
who is assisted by two Joint Managing Directors. The Company also has two Presidents-
President Mobile Services and President Infotel Services, this responsibility includes
Fixed-line, Long Distance and Broadband Services. The Presidents report to the Group
Chairman and Managing Director. The head of units and SBUs report to the respective
business's President. An apex team of Corporate Directors has been constituted. The
corporate directors have supervisory and strategic responsibilities for functional areas
across business lines. The directors oversee functional areas including Business
Development, Human Resources, Marketing, Corporate Communication, IT &
35
Technology, Finance, Legal, Corporate Affairs, Corporate Strategy & Planning and
Supervisory Director cum Chief Mentor - mobility.

The organization structure is designed to ensure that identical businesses are run along
similar lines and best resources in any functional field, be tapped to serve the best
interests of the entire group. The structure also defines the role of the Head of the units
who are totally empowered to manage their respective companies and are fully
responsible for business operations to build world-class organizations with a high degree
of customer Satisfaction.

36
 TECHNOLOGY PARTNERS

Optical Fibre : Corning, Lucent

Voice Switches : Siemens

SDH : Nortel Networks

ATM/FR Platform : Alcatel

Submarine Network : Alcatel

Digital Cross Connection : Nortel, Tellabs

VoIP : VocalTek/Cisco

Layer 3 network : Cisco/Juniper

MPLS Platform : Cisco

VSAT network : GILAT, Viasat

GSM/GPRS/EDGE : Ericsson, Motorola

37
 Products / services

Mobile Post Paid Connections

Airtel offers you a range of tariff plans to choose from to allow you the
advantage of staying connected at fantastic rates, while on the move!

Activation charge- SR.250

Rental (Per Month) - SR. 99
Incoming (SR. /min) - Free

Airtime Rates Outgoing

Local Peak Time (SR. /min) - SR1.20

Local Off-Peak Time (SR. /min) - SR0.99
International Call rates weekdays (SR/min) - SR6.75
International Call rates weekends (SR/min) - SR5.00

Corporate Tariff Package

Airtel also caters for your specific needs or business requirements.

For more information on our tailor-made packages, contact the
GSM Sales Department through the Hotline on 600600.

Airtel Prepaid

Convenient, affordable, and easily available - Airtel Prepaid

offers you the best rates and coverage on the islands along
with a wide variety of value-added services and 24-hour
Customer Care.

Total cost control:

No rentals, no bills, no hassle!

Simple and instant re-charge process

Balance inquiry online

Affordable rates

Available everywhere in Seychelles

38
 Tariffs:

Peak Hours
Off-Peak Hours
International weekdays
International - weekends & public holidays (full days)

International Roaming

Airtel covers the latitude and longitude of Seychelles. Wherever you go,
whatever you do, our new age network will follow you. Letting you stay in
touch always. So land in Seychelles and go roaming on Airtel!
Airtel is currently connected with as many as 164 operators in 70 countries
allowing Airtel subscribers the unmatched advantage of using their existing
GSM mobile connection, wherever they go. They can make outgoing calls
using their Airtel phone and SIM card; they can also receive all incoming calls
while they are roaming.

Roaming with Airtel also allows subscribers of Airtel's partner networks to use
their GSM phone in Seychelles.

National Airtime:

Duration Based Tariffs (SCR per Min) All Day:

Incoming Calls (Incl. Vat) - 3.53

Outgoing Calls (Incl. Vat) - 3.53
Emergency Calls (Incl. Vat) - FOC
Call forwarding (Incl. Vat) -3.53
Calls to Outer Islands (Incl. Vat) -5.88

International Charges:

Duration Based Tariffs (SCR per Min) All Day:

All countries - 60 Seconds (Incl.Vat) - 11.77

Inmarsat
Iridium/Thuraya 60 Seconds Incl.Vat - 41.18

SMS Charges:

SMS MO Including VAT - 1.59

39
 Value Added Services

Airtel offers you a host of Value Added Services. These services are
subdivided into five major categories that are mentioned below:

Voice Based Services:

Voice Mail
Fax Mail

Text Based Services (SMS)

Text Messaging

Data Services
Fax And Data Services

Call Management Services

Call Line Identification Presentation
Call Line Identification Restriction
Call Waiting
Call Hold
Call Divert

Others
Roaming

Coverage
Airtel's GSM network provides the three main islands of Mahe, Praslin and La
Digue with a complete, superior quality, indoor and outdoor coverage. A total
of 73 cells spread across the islands, with three sector directional antennae,
provide maximum distribution of signals, thereby ensuring a 99%
geographical coverage on the islands.

Such comprehensive coverage is made possible thanks to excellent network

planning by Ericsson, the world leaders, who are credited with connecting
over 35 million cellular customers in as many as 79 countries - an
achievement that accounts for over 40% of the worlds cellular base.
40
 All of which means that you can be reached anywhere, anytime on your GSM
mobile phone while you are on the move.

Fixed Line Services

Besides providing world-class GSM services in the Seychelles, Airtel also
offers Fixed Line (also called Land line) Telephone services in selected parts
of Mahe. Airtel has so far covered Victoria, Providence, Mont Fleuri, Roche
Caimen, Union Vale, Beau Vallon and Beau Belle and also started expanding
in the Barbarons area, which is in the southern part of the island. There are
plans for further expansion of this service around Mahe and the other main
islands of the Seychelles.

Airtel introduced huge cuts in fixed line rates in August 2005 of up to 42%.
Customers calling from an Airtel landline to any other local landline can now
talk for as little as 50 cents for 3 minutes at nighttime, which is the lowest
local landline rate in Seychelles. Airtel's off-peak period is from 7pm to 7am
and also includes full 24-hours on Public Holidays and weekends. The peak
rate, from 7am to 7pm, was also reduced by 10% to 70 cents for 3 minutes.

Airtel Fixed Line Services offers a range of products from standard direct
lines and CLI (Caller Line Identity Phones) as an option, Fax and Data and
BGS - Business Group Services offering virtual PABX services.

VPN Solutions for offering subscribers superior Voice, Data and Fax services.

DSL High speed Leased lines offer dedicated Leased Circuits to subscribers,
with benefits like permanent connectivity and superior, faster transmission of
Data.

Fixed Cellular Telephones Airtel offers subscribers Fixed Line Services

through the use of its GSM network in areas that are not equipped with
its Fixed Line infrastructure. The call rates are exactly the same as Fixed Line
rates.

EPABX Systems from Ericsson The best in technology. From Siemens for
GSM to Ericsson for GSM and EPABX systems - Airtel does it again.
Technology to suit individual needs, from large organizations to smaller
companies, you can be sure of solutions that anticipate the future.

Ericsson is the largest supplier of mobile systems in the world. The worlds 10
largest mobile operators are among Ericssons customers and some 40% of all
mobile calls are made through Ericsson systems. Ericsson provides network
infrastructure, access equipment and terminals, application enablers and
global services to support both business and private communications. Ericsson

41
is present in more that 140 countries with the objective of making their
customers successful.

Airtel also offers Value Added Services on Fixed Lines such as Call Barring,
Call Forwarding, Call Waiting and Itemized Billing.

42
Financial

Statement

43
Account

Payable

44
 FRC STRUCTURE
HEAD-
FRC
Regional
Accounting

Sales &
Customer
Asstt. Accounting
Manager-FRC

Revenue
Accounting

Financial
Reporting
Asstt.
Manager-FRC

Controls &
Compliance

Payables
Accounting

Asstt.
Manager-FRC
Statutory
Compliances

Fixed Asset
Accounting
Executive-
FRC
Operator
Accounting

45
 FRC FUNCTIONS:

The functions of Finance Reporting and Compliance (FRC) Department in Bharti

AIRTEL Ltd. are:

1. Sales Accounting

2. Revenue Accounting

3. Regional Accounting

4. Financial Reporting

5. Control and Compliance

6. Payables Accounting

7. Statutory Compliances

8. Operator Accounting

9. Fixed Asset Accounting

FRC SEGMENTATIONS

AP

Definition:

In accounting, accounts payable are debts resulting from purchasing assets or receiving
services on credit or on an open account. You have accounts payable when you have not
yet paid for the assets or services you have received.

46
Example: Money that you owe to your suppliers and other creditors will be recorded as
transactions in the account payable ledger.

Accounts payable are the unpaid bills of the business; the money you owe to your suppliers and
other creditors. The sum of the amounts you owe to your suppliers is listed as a current liability
on your balance sheet.

AR
Definition:

Accounts receivable are unpaid customer invoices, and any other money owed to you by
your customers. The sum of all your customer accounts receivable is listed as a current
asset on your balance sheet.

Fixed asset:

Definition:

A long-term, tangible asset held for business use and not expected to be converted to cash
in the current or upcoming fiscal year, such as manufacturing equipment, real estate, and
furniture. Also called as plant.

A long-term tangible piece of property that a firm owns and uses in the production of its
income and is not expected to be consumed or converted into cash any sooner than at
least one year's time.

Example: Buildings, real estate, equipment and furniture are good examples of fixed
assets. Fixed assets are sometimes collectively referred to as 'plant'.

47
Generally intangible long-term assets, such as trademarks and patents, are not categorized
as fixed assets but more specifically referred to as 'fixed intangible assets'.

Reporting:

Definition:

Reporting Deals with following issues:

Responsibility for accurate and timely Tax / Statutory reporting as per FRC
calendar
Responsibility for Statutory compliance certificate and report
Responsibility for FA accounting.
Responsibility for insurance compliance.
Preparation and circulation of Dashboard as per time lines.

48
 ACCOUNT PAYABLE

GOAL:

AP Is Important As It Controls The Total Payable Functions Related To Vendors,

Employees & Other Associates & Ensure The Smooth Functioning Of All The Activities
As Far As The Monetary Aspects Of Them Is Concern. It Also Ensures The Accurate
Accounting Of AP Transactions Other Activities Required For Financial Reporting &
Compliances.

MAIN FOCUS OF AP:

The Main Responsibilities of Accounts Payable Are as Following:

A. Responsible for Accurate Accounting of transactions.

B. Responsible For Timely Monthly Closing and Reporting.

C. Responsible For Vendor Payouts and Satisfaction.

D. Daily Preparation of Bank Reco.

E. Responsible For Database Preparation and Concurrent Updating Of Database for -

Diesel, Electricity Connections and Usage Bills.

F. Responsible For Preparation and Circulation of Dashboards as Per Timelines.

49
 ROLE DESCRIPTION OF ACCOUNTS PAYABLE:

CONTEXT AND ENVIRONMENT:

a. EXTERNAL ENVIRONMENT:

It Defines the Phase and Environment In, Which the Company Is Operating and
the Main Focus Of The organisition.The Company Is in Growth, Customer
Explosion, And Multi Operator Scenario That Is Still Closely Regulated. The
Entry Barrier Is Going Down And Gross Additions Are All Time High. The
Economy Is Showing Sign Of Improvements. The Company Is Focusing on
Retaining Market Leadership by Way of its Beachhead Strategy. The Five
Business Goals Remain U1changed. The Focus Is On Cost And Processes.Multi-
Scoring As Focus And Customer Service At All Touch Points The Rule Of The
Game.

b. INTERNAL ENVIRONMENT:

It Defines the Main Focus /Purpose of the Function/Department in Achieving

Organization Goals as Per the Functional Strategy Matrix

Functions of Accounts Payable in Bharti

Accounts payable is an accounting entry that represents an entitys obligation to pay off a
short term debt to its creditors. The accounts payable entry is found under the heading
current liabilities.

50
Accounts payable are the debts that must be paid off within a given period of time in
order to avoid default. Thus at the corporate level, AP refers to short term debt payments
to suppliers and banks.

The Accounts Payable Department in Bharti AIRTEL Ltd. covers various functions.
These are:

1. Cash Flow Preparation

2. Document and Payment Processing

3. Reconciliations Bank , Vendor , and Inter Unit

4. Compliance with COA ( Chart of Accounts )

5. Audit Schedules

6. Reconciliations of Control Accounts

7. Financial Accounting and ensuring compliances with DOA

(Delegation of Authority)

8. Import Accounting

9. Monthly Expense Provisioning

10. Monthly Closing Activities

11. Reconciling vendor statement of accounts.

12. Clarifying the queries of vendor.

These functions are taken into account individually along with the processes, formats and
details regarding the same in the rest of the project.

Take complete control of your Accounts Payable function and reduce your costs, improve
internal customer service tend ultimately increase your bottom line.
We transform manual and paper intensive accounts payable operations into a fully
automated efficient process. Our proven ability to eliminate

51
the paper and streamline the process of accounts payable will help you in generating a
cost saving of 40% excess per invoice, without capital investment.

Transactions in Account Payable

All Tile Transactions Relating to Airtel Is Carried with help Of the Following four
BANKS:
1. HDFC BANK PRIVATE LIMITED.

2. DEUTSCHE BANK.

3. ICICI BANK.

4. SBI BANK

A. HDFC BANK:
HDFC Bank Is The Main Bank Of Airtel, And Most Of The Transaction Is Done Through
This Bank. It Is Mainly Used For The Distribution Of Salaries, Direct Recharge From
Phone, and Paper Recharge Etc.

B, DEIJTSCHE BANK:
Db Bank Is Mainly Used For Collection Of Monthly Rentals From The Customers I.E.
Prepaid Bills, Postpaid Bills And Activation Charges.

C. ICICI BANK:

This Bank Is Used For The Payment Of Credit Balance, Salaries, And Payment To
Vendors Etc.

D. SBI BANK:

This bank mainly deals with site rents.

52
 Compliance with chart of accounts in Airtel

The accounting in Bharti is done as per the principles of chart of accounts principle.

The various inflows and outflows with which the organization deals find their place in the
profit and loss account according to their respective codes mentioned therein. Some of
the heads of which the chart of accounts in Bharti covers are:

1. Share Capital
2. Reserves and Surplus
3. Advance Revenue Billing
4. Goodwill
5. Net Fixed Asset
6. Vehicles
7. CWIP Clearing Accounts
8. Investments
9. Current Assets
10. Cash- in- Hand
11. Bank Account
12. Fixed Deposit
13. Sundry Debtors
14. Activation Fees
15. Roaming
16. Sales of Goods
17. Superannuation
18. Staff Recruitment
19. Network Repairs
20. Finance Expenses
21. Trade Discount
22. Others- salaries and wages payable

53
A general format regarding the chart of accounts is presented below.

Chart of accounts

Code Description
1010000 Share capital
1020000 Reserves and surplus
1211000 Advance revenue- billing
1212000 Advance revenue postpaid
1213000 Advance revenue prepaid
1214000 Advance revenue- others
1215000 Advance received from customers
1216000 Earnest money deposit
1217000 Inter company creditors
1218000 Interest accrued and not due
1219000 Statutory dues payable professional tax
1220000 Statutory dues payable cess
1221000 Statutory dues payable service tax
payable
1222000 Statutory dues payable sales tax payable
1224000 Statutory dues payable TDS payable
1225000 Statutory dues payable contribution
payable
1226000 Statutory dues payable custom duty
payable
1227000 Statutory dues payable others
1228000 Others-salaries and wages payable
1229000 Sundry creditors
2100000 Goodwill
2200000 Net fixed assets
2211000 Land
2212000 Leasehold improvement
2213000 Building
2214000 Plant and machinery
2215000 Office equipment
2216000 Computers
2217000 Furniture and fixtures
2219000 Entry fee
2220000 Accumulated depreciation
2222000 Leasehold improvement
2223000 Building
2224000 Plant and machinery
2225000 Office equipment- accumulated
depreciation
2226000 Computers- accumulated depreciation
2227000 Furniture and fixtures- accumulated
depreciation
54
 Process of Account Payable:

We receive your documents (Vendor/Account Payable bills).

Our professionals will record the receipts
and then enter the information about the bill in the
format requested by you.

Then quality checks are performed by validating the entries individually to assure that the
Accounts Payable records send by us are defect free .We
then send the completed and updated Account

We understand clients specific accounts payable process and design a superior and
efficient accounts payable process with real-time access to original documents, document
retention, and security options as the key components. The enhancements involve
backend imaging for the purpose of storage and retrieval, front-end solutions for cost
effective data entry. This provides an automated, secured, and more efficient model to the
clients.

NonED Invoices:
We process your invoices electronically by converting paper based invoices and loading
that into your ERP system. This process commences by managing incoming mails of your
Accounts Payable department. Then inbound Accounts
Payable invoices are retrieved, scanned, and digital images, data is returned to the client
within particular turnaround times.

Accounts Payable Is Mainly Responsible For Three Main Functions:

1) Receiving of Bills.
2) Processing Of Bills.
3) Payment of Bills.

55
In Telecom Industry Accounts Payable Is Responsible For The Payment Of All The Bills
Relating To The:

1, Towers.
2. Shelters.
3. Generators.
4. Diesel Filling.
5. Electricity Bills.

1. Intent of process

To Facilitate Document processing and Payment Processing as per Policy and

Timelines.

2. Scope

This process will be applicable to all the payments related to employees and
vendors (capex / opex). The scope of this process document is:

To record receipts of documents

Processing of documents
Processing of payments

3. Commonly Used Terms

DEO : Data Entry Operator

AP : Accounts Payable
PO : Purchase Order

56
 AP Owner : Respective In-charge of
particular segment (i.e. Marketing,
Sales & Distribution, Admin. etc.)

4. Process Flow

4.1 Receipt of Bills From user department by AP team:

4.1.1 Attach bill cover and fill up the mandatory

Fields
4.1.2 Record the receipt of bills in the bill
Register and give perforated part of the
Bill covers containing bill details as
An acknowledgement to user department.
4.1.3 Forward the bills with bill cover to AP Owner

Time Line: day 1

4.2 AP owner to check the bills

4.2.1 AP owner to check the bills for

- DOA Approval
- Documentation and
- PO / contract / agreement terms

4.2.2 mention account codes and TDS deductions in

the respective part of bill cover and forward
for data entry.
57
 4.2.3 send back the defective / incomplete bills to
user department after recording the reasons on
the bill cover.
4.2.4 the details of returned bills to be recorded in
the bill register.

Time Line: day 1

4.3 AP owner to process batches

4.3.1 AP owner will prepare invoice batches

after making entries as entered in bill cover
and forward to AP supervisor.

Time Line: day 2

4.4 AP supervisor to check batches and approve

4.4.1 AP supervisor to check the batches.

4.4.2 In case of any rectification, send back the batches to the
AP owner.
4.4.3 Approve batches through the system.

Time Line: day 2

4.5 AP owner to print cheques and forward for signatures

4.5.1 AP owner to print cheques and attach with

Invoice batches for checking by AP supervisor.

58
 4.5.2 AP supervisor to return batches to AP owner
After checking.
4.5.3 AP owner to forward cheques with the batches
To the first signatory who would be
Finance incumbent and then to second signatory.
4.5.4 after getting it signed by both signatories, note
The cheque details in the bill register and
Intimate the user department to collect
The cheques.

Time Line: day 3

4.6 processing of bills received after 28th of the month

4.6.1 All bills received after 28th of the month will

Be entered in next month and post-dated
Cheques would accordingly be generated
Without affecting the SLA timelines.

5. Process flow for Standard Payments

Payments for rent, etc.

For standard payments like rent,

Fixed outsourcing payments, etc. AP owner
Will provide the schedule of payment to DEO.
AP supervisor to note cheque series issued
In the cheque register.

59
salary and car hire charges

details of salary and car hire charges to

be received by 28th of the month from HR.
salary and car hire charges to be processed
and payment to be made by 30th of the month.

6. Network Expenses
( HR + Admin )

Admin-Office Maintenance , Taxi / hire

Site , Electricity Payments , Diesel Payments , poi charges
Enter Connect / WAN / Post charges / Signaling Charges
SACFA Payments
Outsource Agencency
AP/GL Reconciliation
Advance to Vendors
Prepaid Schedules
Billing cost-payment , Verification

7. Capex Payments + Marketing Expenses + Staff Rent , Site Rent

All capex payments (both domestic and foreign)

60
Glow signs , banners , merchandise
Advertisements
Channel Commissions
Site Reconciliation
Vendor Reconciliation
Security Deposits
Advance Rent

8. Employee payments

Payroll Processing
Employee Reimbursements
Travel Expenses
Imp Rest Settlement
Cash Payments
Bank Reconciliations
Inter Unit Reconciliation
Staff Welfare Payments
Funds Request / Funds Scheduling
Zonal Accounting
Salary Payable
PF Payable
Employee / Loans / Advance / Imp Rest

9. Taxation

TDS Payable / Payments

61
Service Tax / Sales Tax
TDS Returns / Certificate
Exp Ownership / TB Review / Processing

62
DOCUMENT MANAGEMENT AND PAYMENT PROCESSING

The payment process followed in Bharti AIRTEL Ltd. related to various expenses is
overviewed below. The various expenses can be broadly classified into:

1. Capex (Capital Expenditure)

2. Opex (Operating Expenditure)

These expenses are concerned with employees and vendors.

Several other expenses involved are network expenses

(HR + admin), Capex Payments, Marketing Expenses, staff rent, site rent, employee
payments and taxation .

KEY RESPONSIBILITY AREA (KRA):

These Are Most Important Quantitative And Measurable Deliverables That Define The
Success Of Department.

A: FINANCIAL

I. Accurate Accounting of AP Transactions as an Ongoing Activity. Accurate Accounting

of AP Transactions as Per Mocoa with Appropriate Account-Sub Account Zone - Cost
Centre. Monthly

2. AP Closing - Timemely and Accurate Completion. Completion: On or Before 27th of

the Month.

3. Critical Reco, Timely and Accurate Completion with Nil Pending.

63
 AP/Gl Reco. Timely and Accurate Completion with Nil Pending.
Completion: 2nd Calendar Day of Next Month.

Bank Reco. Daily Reco Of Bank Accou1ts By End Of Next Day And
Maintaining The Hygiene Of Reconciliation By Keeping The
Cheques Issued But Not Presented To Less Than 500 At Given
Point Of Time.

4. Audit Issues Resolution. Timely and Accurate Preparation Of Audit Schedules

Las Per Mo Timelines And Maintaining The Hygiene Of The Schedules On 2nd of Every
Next Month

5. Opex Saving Projects

Reduction in Bank Charges

Zero Disconnections Of Electricity For Nonpayment

CUSTOMER
A. Timely Vendor Payouts. Timely and Accurate Payouts to All Vendors as Per P0 Terms.

B. Vendor Reconciliations. Monthly Reco of A Category Vendors 100% on 20t11 of

Next Month. B Category Vendors 50% on 20t1 Of Next Month .Employees - 100% on
20t1 Next Month & Retention Payment.

C. Vendor Query Resolution. Query Resolution of All Queries Received As Per Tat

64
PROCESS:

DASHBOARDS:

Preparation and Circulation Of:

1. Pending Payment Dashboards.

2. Vendor Query Dashboards.

3. Cheque Mis Dashboards

4. Invoice Summary Dashboards.

5. Pending Invoices Summary Internal

6. Cash Flow, Cash Forecast & Fund Transport Report. As Per Timelines

Capital Expenditure CAPEX

Capital expenditures (CAPEX) are expenditures used by a company to acquire or

upgrade physical assets such as equipment, property, industrial buildings. In accounting,
a capital expenditure is added to an asset account (i.e. capitalized), thus increasing the
assets basis. An ongoing question of the accounting of any company is whether certain
expenses should be capitalized or expensed. Costs that are expensed in a particular month
simply appear on the financial statement as a cost that was incurred that month. Costs that
are capitalized, however, are amortized. Over multiple years. Most ordinary business
expenses are clearly either expansible or capitalizable, but some expenses could be
treated either way.

The amount of capital expenditures a company is likely to have depends on the industry it

65
occupies. Some of the most capital-intensive industries include oil, telecom and utilities.
In terms of accounting, an expense is considered to be as capital expenditure when the
asset is a newly purchased as capital asset or an investment that improves the useful life
of an existing capital asset. If an expense is a capital expenditure, it needs to be
capitalized; this requires the company to spread the cost of the expenditure over the
useful life of the asset. If, however, the expense is one that maintains the asset at its
current condition, the cost is deducted fully in the year of the expense.

The amount of capital expenditures a company is likely to have depends on the industry it
occupies. Some of the most capital intensive industries include oil, telecom and utilities.

In terms of accounting, an expense is considered to be a capital expenditure when the

asset is a newly purchased capital asset or an investment that improves the useful life of
an existing capital asset. If an expense is a capital expenditure, it needs to be capitalized;
this requires the company to spread the cost of the expenditure over the useful life of the
asset. If, however, the expense is one that maintains the asset at its current condition, the
cost is deducted fully in the year of the expense.

Operating Expenditure OPEX:

Operating Expenditure Comprises Day- To-Day Running Costs. It Does L Not Include
Capital Investment Or Financing Costs. Operating Expenditure Therefore Includes
Employment Cost, Electricity, Materials, Hired And Contracted Costs, Local Authority
Rates, Insurance, Software Licensees, Vehicle Running Costs, And Etc. Baf Dept Is Also
Regarded As A Running Cost. The Definition Of
Operating Expenditure Is Narrower Than That Employed In Statutory Accounts. We
Exclude.

The Following Items from Our Analysis of Operating Expenditure:

66
 Maintenance of the Asset Base Such Expenditure Is Classed As Capital Maintenance
and Is Regarded As In Vestment;

Depreciation-This Is An Accounting Charge Reflecting The Use Of Non-Infrastructure

(Above-Ground) Assets. The Amount Of This Charge Depends on the Application
Policies. It Does Not Necessarily Reflect the Organizations spending on Replacing Non
infrastructure Assets;

Infrastructure Renewals Charge - This Is An Accounting Charge Reflecting The Use Of

Infrastructure (Below-Ground) Assets. As With Depreciation, The Size Of This Charge
Depends On The Application Of Accounting Policies. It Does Not Necessarily Reflect the
Organizations Spending On Maintaining Infrastructure Assets;

Costs Of Public Private Partnership (Ppp) Schemes- Such Costs are Determined by
Contracts.

Interests Payments-Such Expenditure Is Regarded As A Financing Cost; And

Taxation-The Amou1t Of Taxation Paid Is Determined By Inland Revenue.

In depth process of payments processing in Bharti

Entry of bills :

67
On receiving the bills from user department a covering letter is attached on it. It is only
then that the bills are considered to be received by the company.
Importance of bill cover:

i. For entry purpose

ii. It is system oriented and bills are not received directly by the vendors but it is
through the process of company
iii. Codes for various expenses are printed on the bill cover which helps in further
accounting process.

Data base entry :

It is after assigning the respective code to a particular bill that it is entered on the
companys access sheet. The expense amount along with the date of issue of bill, date
of receipt of bill, expense head under which a particular bill is assigned etc. is
entered.

Checking of the bills :

It has further to be checked that whether a particular bill is:

i. approved
ii. supported by proper documents
iii. pertains to purchase order / contract / or agreement terms
if a particular bill is found to be incomplete in any respect it is sent back to user
department.

Preparation of batches :

After checking the bills, invoice batches are prepared. Their entries

68
(i.e. as entered on the bill cover )are then done on the excel sheet and sent for
approval.

Printing of cheques :

After examining carefully all the documents, cheques are printed and are attached
with invoice batches for further final checking by the AP supervisor.
For printing of cheques,
Invoice validation is the first step to be completed.
User books invoice and payment entry also requires validation.

It is because without validation invoices are not shown on the payment tracker.

The cheques used are of both kinds i.e. system oriented and manually written.

System oriented cheques :

These are the cheques that are generally used by the company for making payments.

There are different AP owners that look after various different types of expenses and
issues cheques. However, at the time of issuing cheques, it is only a single user
issuing the same so as to:

Considerably minimizes chances of errors

Maintains a uniformity in serial orders printed on the cheques
Increases accountability
Easily track any fraud, if found present.

Manually written cheques :

These are the cheques which are presentable hand written also.

69
However a particular series of cheques are issued by a particular AP user. These
cheques are issued only in case of Demand Draft (DD) and Transfer of Funds.

While issuing manual cheques,

These are either an Order or Bearer cheque. However they become valid only when
signed by at least two signatories. The signatures are done at the front as well as on
the back of the cheque. This is practiced in order to avoid any chances of manual
error or fraud.

Cancelled cheques :

A cancellation report is attached along with the bank statement in the process of bank
reconciliation. This helps to track the status of the cancelled cheques and shows the
number of cheques that became void.

The cheque details are then entered in the bill register and intimate the user
department to collect the cheques.

Mostly A Bill Requires the Following Few Attachments as Following:

Invoice Number
Invoice Amount
Pan Number of the Vendor.
Service Tax Number.
Purchase Order (P0) Number.
Bill Number
Letter Head

Business Scenario:

70
 Processing Invoices without Purchase Order

Start Supplier submits Bill

Is Payment
Manual Approval of
Tracking System No
Supplier Bill.
Available?

Yes
Enter Bill details in
Pyament Tracking
System
Enter Standard Invoice in
Oracle
Forwards to Commercial
team for Approval

Adjust
No
Approve Invoice Prepayments?

Yes
Rectify Data entered in
Payment Tracking No Approved Adjust Advance(s) Validate Invoice
System

Forwards to User Group

for Approval Validated? No Release Hold

Yes
Notification Send to
Approve Invoice AP User
Pay Balance Due
No

Approved Yes
Stop

Description

Step 1: Navigate to the Invoice Batches Entry screen.

Screen Navigation: Invoices Entry Invoice Batches

71
Step 2: Navigate to the invoices screen.

Click on the Invoices button to navigate to the Invoices Entry screen

72
73
Step 3: Navigate to the distributions screen.

Click on the Distributions button to navigate to the Distributions screen

74
Matching of Invoices to PO

Start Supplier submits Bill

Is Payment
Manual Approval of
Tracking System No
Supplier Bill
.
Available?

Yes
Enter Bill details in
Pyament Tracking Enter Standard Invoice in
System Oracle

Forwards to Commercial
team for Approval
Match Invoice to A
Purchase Order
Approve Invoice

Rectify Data entered in

Payment Tracking No Approved
System

Yes

Forwards to User Group

for Approval Invoice Header created in
Oracle

Approve Invoice
Run Interface Program
No
Yes
Approved

75
 A

Ensure Distribution
/c isaAsset
Attach TDS Codes at the
Need to Clearing/C.
A (Track as Asset
?
Yes Invoice Distribution where
capitalize checkbox will be automatically
applicabe
checked)

Ensure Distribution
/c isaan Attach TDS Codes at the
No Expense/cA(User can modify the Invoice Distribution where
Distribution/c)a applicabe

Adjust
Prepayments
?

Yes No

Adjust Advance
(s)

Validate Invoice

Release Hold
No

Validated
?

Yes

Pay Balance Due

Stop

Matching of Invoices to Purchase Order

Screen Navigation: Invoices Entry Invoice Batches

Enter the Invoice Batch Name. Click on Invoices Button.

Select Invoice Type as PO Default

Enter PO Number in the pop up window
Press OK Button

76
 Supplier Name, Supplier Site and Supplier Number Defaults
Enter Invoice Number, Invoice Date and Invoice Amount

Select Match Potion to Purchase Order

Press Match Button

PO Number will default
Press on Find Button

77
 The Items ordered in this PO will default

Check Match Flag

78
 Enter Quantity Invoiced
Press Match Button

If localization taxes are attached to the item, system will run a request - TO
INSERT TAX Distributions (TO INSERT TAX DISTRIBUTIONS)

79
 Query on Invoice distributions.
The item line and tax line will be visible. The distribution account in this case will
be the charge account attached to the item in PO.

80
 Business Process:
Recording Payments

Payment Method

Batch Quick Manual

Batch Payments

Description

Step 1: Navigate to the Payment Batches Screen.

Screen Navigation: Payments - Entry - Payment Batches

The following form will open up:

81
82
Step 3: View the Concurrent Program Status by clicking the Help-View My Requests
from the Menu Bar. You will navigate to the following screen. Wait till your requests
Auto Select and Build Payments get completed successfully.

Screen Navigation: View Requests All My Requests Submit

83
Step 4: Then navigate to the Payment Batches Form and requery your batch. The status
will be changed from New to Built. You can choose to print the Preliminary Payment
Register by checking the box in the Actions screen. To modify the batch, press the
Payments Button to view the invoices selected for payment by the batch.

84
Step 5: Press the Actions Button and check the box Format Payment and Print Now. The
press the button OK. Then requery your batch after some time. The status will be changed
to Printed. By this time, the physical cheques and remittance advice would have also
been printed on the printer specified.

85
Step 6: Remember to confirm the batch before ending the process of batch payment.
Press the Actions Button and check the box Confirm Payment Batch and Print Final
Register. The press the button OK. The following form will open:

86
87
 Quick Payments

Step 1: Navigate to the Payments Screen.

Screen Navigation: Payments - Entry - Payments (for accessing from the Payments
Workbench)
OR
Invoices - Entry - Invoices - Actions Button - Pay in Full Checkbox (for accessing from
the Invoices
Workbench)

Step 2: Click Enter/Adjust Invoices to select the invoices payable for this Supplier and Site. The following
screen opens up.

88
Step 3: If you wish to see the overview of the invoice selected, press the Invoice Overview Button

Step 4: Before saving, ensure that you have chosen the correct invoices for payment. If
any incorrect invoice is found, clear the record and choose the correct one.

Step 5: To format and print the cheque and remittance advice, click on Actions Button.
The following screen opens:

89
 Various types of expenses :

AP Is Responsible for the Complete Processing of Bills Received by It. Bills is received
by all the Departments of Organisation.The Bills Received by AP are Of Various Types.
The Description Of The Bills Received Is As Following:

Department:

1. Marketing:

A. Advertising & Marketing

Banner Hanging.

Glow Signs/Board Flexi Plans.

B. Printing - Posters & Other Material.

C. Hit & Run.
D. Tour Claim & Conveyance

E. Incentives (Telecallers Salary distributor Payouts).

F. Zonal Office Imprested Expenses (Office Expense).

2. Human Resource (HR):

A. Salary of MA FOI/Team Lease.

B. Candidates Travel Claim.
C. Relocation Expenses.
D. Training Expenses.
E. Reimbursements of Mo FOI/Team lease.
F. Salary of Employees.
G. Flexi.

90
H. Advance against Salary/Expense.
I. Car Hiring.
J.CLA
K. Marriage Anniversary

3. ADMIN:

Office Expenses (Circle Office), (Drinking Water, Tea/Coffee.)

Conference at Hotels.
Taxi Bills.
Courier Bills.
Zonal Office Tower Dg Exp.
House Keeping Services (Lion Services).
Flowers and Plants Monthly Bill (Horticulture Consultancy & Malikdeen Choudhary).
Pesticide Control Spray.
Printing.
Stationery.

4. TECH:

O&M:

Dg Maintenance (Supply Only Of Spares).

Dg (Servicing Overhauling).
Taxi Bills.
Electricity Bills.

CIVIL WORK & CAPEX

Supply of Towers.
Civil Work (Erection and Painting/Foundation).Structural Consultancy Charges.
Soil Testing.

91
ELECTRICAL:

New Electric Connection Actual Payment.

Supply of Cables/Spares/Poles Etc.

Lying of Cables.
Lionizing Charges.
Other Electrical Works.

INTER UNIT CONNECTIVITY (IUC) & POINT OF INTERCONNECTION (P01):

IUC Charges.
PO Charges.

INFORMATION TECHNOLOGY (IT):

Supply of Hardware.

QUALITY:

Only Employee Bills Have Been Received So For.

CM:

Supply of Dg Sets at Warehouse.

Warehouse Management & Rent.

Packing Of Sim Cards & Cds (Modern Mailing).
Packing of Sim Jackets & Folders (Niyogi Offset).
Transportation of Sims From Delhi to Warehouse (Allied Shipping).
Transportation Of Sims From Warehouse to Zones (Securatrans).

92
ICSD:

Collection Agency.
Welcome Visit/S Canning/Warehousing/Audit Of See/Pef (Off Shoot Agency).
Audit Agencies (Av/Cv).

Call Centre- Local (Ameritech).

Call Centre -Delhi (Teletech).
Courier for Bill Dispatch (Csd).

LEGAL:

Advocates Bill.

RM:

Local Vas Bills (Symbiotic & V&A Telecom).

Other Vas Bills.

FINANCE:

Auditors Bill.

Chartered Accountants.

Service Tax and Sales Tax.

Commission to Channels/Distributor Rs.

Refund to Customers.

93
 Cash Budget

A cash budget is a projection of a businesss cash inflows and outflows over a certain
period of times. a typical cash budget predict the anticipated cash receipts and
disbursements of a business on a month to month basis however a cash budget could
predict the cash inflow and outflows on a weekly or daily basis .Because of the
uncertainty involved in the cash budget trying to project too far into the future may prove
to be less than worthwhile. At the same time a cash budget that doesnt look far enough
into the future will not predict future events early enough to take corrective actions in
cash flow.

Purpose

The primary purpose of using a cash flow budget is to predict businesss ability to take in
more cash than it pays out this gives some indications of businesss ability to create the
resources necessary for expansion, or its ability to support the business owner.

The cash budget can also predict businesss cash flow gapsperiods when cash outflows
exceed cash inflows when combined with cash reserves. Cash flow management steps
should be taken to ensure that the gaps are closed, or at least narrowed , when they are
predict early these steps might include lowering investment in account receivable or
inventory , or looking to outside sources of cash , such as a short term loans to fill the
cash flow gaps. .

Cash Flow in Bharti

Cash flow refers to the amount of cash being received and spent by a business during a
defined period of time, sometimes tied to a specific project.
The cash flow in Bharti AIRTEL Ltd. (UP EAST) consists of:

Opening Balance

Operating Inflows

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 o Postpaid Collections
o Prepaid Collections
o Interconnect revenue
o Roaming collection
o Management fees

Operating Outflows
o Interconnect charges
o Network operating expenses
o Marketing expenses
o Personnel expenses
o Administration expenses

Capital Inflows
o Sale Of Assets
o Other Capital Receipts

Capital Outflows
o Capex Payments - Strategic Partners
o Capex Payments - Operational Partners
o Custom Duty

Net Capital Flow

Net Surplus ( net funded)

Funding Inflows

Funding Outflows

Net Funding Flow

Net Cash Flow

Closing Balance

Cash Credit Limit

The cash flow as prepared in Bharti has following characteristics:

1. Opening balance in cash flow refers to the book balance. It consists of cheques
issued but not presented for payment.

95
2. Capital inflows do not have any contribution in the total inflows. This is because
towers etc. which form a part of capital asset are not sold by the individual circles
as it is beyond their scope.

3. Operating inflows includes of prepaid and postpaid connections and new

activation .The prepaid connection includes recharge coupon and LAPU. It is this
prepaid connection which contributes to 70% of the total revenues generated and
earns approximately 2 crore daily.

4. The capital outflows regarding CAPEX payments consists of Strategic Partners

and Local.

5. The major payments of CAPEX forms 80% of total outflows and consists of
tower, DG, custom duty, shelter, and other supplies.

6. The network expenses form second largest source of outflows and consists of
diesel payments, security guard payment, site rent, and electricity payment. It
forms 10% of total expenses.

7. Other main outflows include personal (HR) and Admin.

8. Thus the order of outflows is :

Marketing

Admin

Personal

Others (Billing and Collection).

96
 Cash Forecast

Cash forecast is used to predict the amount of money a business may require in the future
to get through periods of low sales, or for expansion.

It can also be used to know how much money the business has generated in the past, how
the funds were used and the resulting balance at the end of a given period.

Cash forecast thus an attempt to predict the timing of a business income and expenditure.
This helps in preparation for any big outgoings that may occur. E.g. VAT, new plant and
machinery required etc.

From the cash flow it is possible to identify the main areas of cost relating
to the business which are called total capital requirement this figure shows the amount of
money needed in total to fund the business.
The next stage is to match the amount needed with various sources of funding which are
available to the company.

Preparation of Cash Forecast:

One of the methods of preparing cash forecast requires financial information from several
previous years and takes four basic steps:

Estimate sales for the forecast period

Breakdown the annual sales figure into monthly units to reflect any seasonal
factor.

Construct pro forma income statement from the monthly sales figure.

Translate the income statement information into cash forecast.

Forecast Period:

The forecast period is the time period in which the individual yearly cash flows are input
to the DCF (discounted cash flow) formula. Cash flow after the forecast period can only
be represented by a fixed number such a annual growth rate. There are no fixed rules for
determining the duration for the forecast period.

97
Following are the three types of projected forecast period:

No set maximum forecast period:

Determining the forecast period by choosing a number of years with excessive
return. In this period a company generates a return on new investment greater than
its cost of capital this can be based on factors such as comparing the companies
competitiveness with its competitors.

A predetermine maximum forecast period:

Determining a forecast period by choosing a number of years after which an exit
is plan. An exit can either be positive (merger, acquisition, initial public offering)
or negative (bankruptcy). This method is mostly used by investors, using venture
capital for e.g. planning on a positive exit.

A predetermine forecast period:

Determining the forecast period by choosing a number of years based on
characteristics of the market. Companies in established and well known market
are better suited towards longer forecasting period than companies opening up a
new market.
The number of used forecasting period is always limited by the availability of
individual yearly cash flow.

The Annual Forecast Budget

The annual forecast budget is sub-divided, according to revenue and expenditures.

Each unit corresponds to a single centre of administrative responsibility, and
management. The forecast units are determined with reference to homogeneous
actions in nature, and in which the institutional competencies of each ministry are
defined as a provisional units:

The estimated amount of residual assets and liabilities at the closing time.

The amount of revenue that it is estimated will be ascertained and

commitment will be made during the year to which the budget refers.

The amount of revenue during the year to which the budget refers, with
asset and liability accounts and operations in residual accounts; accrual treasury
each year and expenditure as the sums disburse from the treasury.

The sums included in each basic forecast unit are sub-divided into current
expenditure and investment expenditure (specifying investment expenditure
intended for less developed regulations).

98
 The following facts are specified in the general summary of the annual forecast
budget:

The differential result between the total of tributary and extra tributary revenue.
The differential result between all of the revenue and expenditure excluding
capital contributions, the concession and collection of debts.
The differential result of the final operations consisting of all revenues and taking
out of and repayment of loans (net balance to finance or to employ.
The differential result between the total final revenue and the total expenditure.

Thus budget management would include:

1. Approving expenditure charged to the budget.
2. Monitoring expenditure against the budget.
3. Liaising and negotiating with the donors.

BANK RECONCILIATION STATEMENT

A bank reconciliation statement is a statement reconciling the balance as shown by the

bank statement and the balance as shown by the bank book.

The objective of preparing such a statement is to know the causes of

difference between the two balances and pass necessary correcting or adjusting entries in
the books of the firm.

However, every variation or difference does not require an adjusting entry.

Some reasons for difference are automatically adjusted. For e.g., a cheque that has been
sent for collection, but not yet collected, causes a difference between the balance as
shown as shown by the bank statement and the bank book, but no adjusting entry is
required in the bank book for such a difference because, the bank will credit the firms
account as soon as the cheque is collected.

Advantages of keeping a Bank Account :

Avoidance of risk:
Keeping large cash balances in the office is risky. by depositing money
from time to time in the bank such risk can be avoided.

Prevention of risk and misappropriation:

99
 Deposits of money into the bank and disbursing them through the bank
reduce the chances of fraudulent activities and misappropriation of funds by
the employees of the firm. All receipts can immediately be deposited at the
end of the day in the bank. Similarly all payments can be made by means of
cheques. Thus, the quantum of cash to be handled by the employees of the
business is considerably reduced, resulting in lesser chances of fraud and
misappropriation.

Reduction in accounting work:

Depositing money into the bank and making Payments through a bank
considerably reduce the firms accounting work.

Concept of Reconciliation:
The rules of accounting as regards bank transaction are:

On deposits of money by the firm into the bank account, the firm debits the bank
account while the bank credits the firms account.

On withdrawal of money by the firm from the bank, the firm credits the banks
account while the bank debits the firms account.

Thus, the balance as shown by the firms books in the bank account should tally with the
balance shown by the banks books in the account of the firm. If the banks account in the
books of the firm shows a debit balance, the firms account in the books of the firm
shows a credit balance; the vice versa is the otherwise case.

Causes of difference:

The following are the causes of differences between the balance as shown by the bank
statement and the balance as shown by the bank book.

1. Cheques issued but not presented for payment :

The firm issues cheques from time to time for making payments. As soon as
a cheque is issued, the firm debits the partys account in whose favour the cheque
is issued and credits the banks account. However, the bank comes to know of
issue of such cheques only when they are presented for payment. It may be
possible that on a particular date when the bank is submitting the firms statement
of account, it may not include certain cheques which have been issued by the firm
because they may not have been yet presented. Thus, the balance shown by the
banks books in the firms account will be higher than the balance shown by the
firms books in the bank account.

100
 Financial Auditing

It encompasses all activities and responsibilities concerned with the rendering of the
opinion on the fairness of the finance statement.

The basic rules governing audit opinions indicate clearly that the scope of an audit covers
all equipment and procedures used in progressing and significant data.
Financial auditing, as carried out today by independent auditors, was spurred by
legislation in 1933 & 1934 that created the SEC .This legislation mandated that
companies whose securities were sold publicly be audited annually by CPAs. CPAs then
were charged with attesting to the fairness of finance statement issue by company that
reported to the SEC.

The AICPA issued in1993 a document called Reporting on an entitys internal

control structure & financial reporting to further define the importance of interest
control in the attestation engagement.

Within the CPA profession, two groups of statement have been developed that affect the
preparation of financial statement by publicly held Companies & the procedure for their
audit examination by CPA firms. GAAP (Generally Accepted Accounting principles) &
GAAS (General Accepted Accounting Standard).

GAAP:-

It established consistent guidelines for finance reporting by corporate managers. As part

of reporting requires standard are also established for keeping of financial records upon
which periodic statements are stated fairly, stipulated that the finance statement confirm
to GAAP. These according principles have been formulated and revised periodically by
the private sector organization established for this purpose. The present governing body is
FASB (Financial accounting standard boards) implemented of GAAP is responsibility of
management of reporting entity.

GAAS:-

The major national Professional organization of CPAs is the AICPA .In1999 AICPA
adopted standards for audit known as GAAS.

Audit Schedules:
The various audit schedules that are prepared by the Accounts Payable Department in
Bharti AIRTEL Ltd. are:

101
1. List of Requirements- Loans and Advances
i. Advance given to Suppliers
ii. Staff Loans and Advances
iii. Staff Imprest
iv. Security Deposits
v. Prepaid Expenses
vi. Service Tax Recoverable
vii. Service Tax Recoverable- movement
viii. Cenvat Credit Receivable
ix. TDS receivable
x. Advance Tax
xi. Balances of card collection agencies
xii. Advance rent- Sites
xiii. Advance rent- Others
xiv. Other Advances- Ericsson / Seimen / Nokia
xv. Advance to DOT and claims receivable

2. List of Requirements- Personnel Expenditure

i. Payroll Variation
ii. Payroll Analytical Data
iii. incentive Analytical Data
iv. PF Analytical Data
v. PF Deduction
vi. ESI Deduction
vii. Reconciliation Deduction
viii. PF Reconciliation

3. List of Requirements- Security Deposit

i. Security Deposit Summary
ii. Security Deposit Sites
iii. Security Deposit Office G House
iv. Security Deposit CLA
v. Security Deposit Connect Shop
vi. Security Deposit for Telephone Connection
vii. Security Deposit for Electricity Connection
viii. Security Deposit with Vendor
ix. Security Deposit for Interconnectivity

4. List of Requirements- Debtors

i. Kenan- GL Reco
ii. Book Subscriber Debtors
iii. Book IUC Debtors
iv. Book Site Sharing
v. Book Roaming Debtors
vi. Book Trading Debtors
vii. Aging- Roaming
viii. Aging- IUC

102
 ix. Aging- Site Sharing
x. Aging- Trading
xi. Provision for Bad and Doubtful Debts- Subscribers
xii. Movement in provision for bad and doubtful debts (Provision)
xiii. Movement in provision for bad and doubtful debts (expense)
xiv. Detail listing of the following as on a particular date for circularization
Roaming Parties
IUC Parties
Site Sharing Parties
Trading Parties
xv. Party wise Accelerating Movement Sheet
Roaming Parties
IUC Charges
Site Sharing Parties
Trading Parties

xvi. Bad Debts written off during the period

xvii. Foreign exchange reinstatement debtors

5. List of Requirements- Fixed Assets

i. capital commitments
ii. CWIP
iii. Capital advances
iv. FA GL global reconciliation
v. FA GL financial statement reconciliation
vi. Provisional capitalization- new sites
vii. Site wise analysis- explanation to old sites
viii. Carrying value of assets
ix. Depreciation calculation
x. Technical certificate for new sites and expansion on existing
sites.
xi. Inter unit transfer of assets
xii. Disposal of assets
xiii. CIF Value
xiv. ARO
xv. ARO Movement
xvi. Provision for CAPEX creditors
xvii. Site wise erlang
xviii. Erlang rationalization

6. License Fees
i. AGR / License fees calculation
ii. Amortization analysis + data required

7. Provisions
i. FBT payable movement
103
 ii. FBT expense
iii. Gratuity payable movement
iv. Leave encashment payable movement

8. Cost of Sales
i. cost of sales summary both prepaid and postpaid
ii. prepaid card movement- COS working
iii. postpaid card movement- COS working
iv. total purchase transaction booked
v. packing material working

9. Sales
i. postpaid sales
ii. prepaid sales
iii. quantity reconciliation
iv. handset sales
v. reconciliation with sales tax

10. VAS Cost Working

11. Processing Fees Total

i. processing fees- RC
ii. processing fees- LAPU

12. Secured Loans

i. vehicle loans
ii. secured loans

13. Creditors Aging

14. Bank Guarantee Prepaid Details

15. Bank Charges

These audit schedules are used in monthly, quarterly and annual audits. These
audits are performed both internally as well as externally. A brief introduction of
audits performed is discussed herein.

104
 Auditing

Audit Process:

An audit whether conducted by an internal or external auditor, will typically consist of

the following steps:

Planning:

The auditor will gather and review background information about the clients
activity, determine the audit scope and objectives and develop an audit program
identifying the issues to be examined, questions to be asked, and documents to be
reviewed.

Entrance Conference:

The auditor meets with departmental management on campus to discuss the audit
scope and objectives, approximate time schedules, types of auditing tests, and
how the audit results will be communicated.

Fieldwork:

The auditor visits the campus department(s) to interview key personnel and
evaluate whether good internal control processes are in place, documented and
being followed. This will usually include transaction testing to verify that
established policies and procedures are actually being followed.

Audit Findings:

As deficiencies or opportunities for improvement are identified, the auditor will

usually bring them to the clients attention to verify there is a problem.

Draft Report and Exit Conference:

The auditor then writes a draft audit report, identifying problems found and
making recommendations for improving operations, and forwards it to the client
for review.

Response:
The auditor issues a final draft report and asks the client to submit a written
response to each recommendation and provide a corrective action plan including
an estimated date to complete implementation.

Audit Report issued:

105
 After including the client responses to the recommendations the auditor issues the
final audit report.

Audit Report

Our principal product is the final report in which we express our opinions, prefindings,
and discuss recommendations for improvements. To facilitate reporting we ensure that
the recommendations presented in the final report are practical, thus a rough draft with
the client is discussed prior to issuing the final report

Discussion Draft:

At the conclusion of field work, the auditor drafts the report. Audit management reviews
the audit working papers and the discussion draft before it is presented for comment. This
discussion draft is submitted to the client for review.

Exit Meeting:

The internal audit meets with the units management team to discuss the findings,
recommendations and text of the discussion draft. At this meeting, the client draft and the
group work to reach an agreement on the audit findings.

Formal Draft:

The auditor then prepares a formal draft, space taking into account any revisions done by
the exit conference and other discussions.

Final Report:

Internal audit distributes the final report electronically to the units operating supervisor
and other respective authorities.

Client Comments:

Finally as part of internal audits, self evaluation program, we ask clients to comment on
internal audits performance. This feedback has proven to be very beneficial.

Types of Audits

While an audit can have multiple purposes, each audit can usually be described as one of
the following types:
106
Financial Audits:

These examine the accounting and reporting of financial transactions. The auditor
reviews controls over the receipt and disbursements of funds, the safeguarding of assets
and the recording of transactions in accordance with generally accepted accounting
principles, or GAAP. The audit report should provide assurance regarding the reliability
and integrity of the methods used to identify measure, classify and report financial
information.

Compliance Audits:

These review whether all applicable laws, regulations, policies and procedures are being
followed. The audit report will identify areas where compliance is lacking or inadequate,
and will recommend improvement in processes and controls intended to ensure future
compliance.

Operational or Financial Audits:

These examine whether the organization is using available resources in the most
effective, efficient and economical manner to achieve the units mission and objectives.
This can include looking at whether good business practices and internal controls are
being followed, and whether operations or programs are being carried out in accordance
with established goals and plans. The audit report may recommend business process
changes.

Information Systems or Information Technology Audits:

It is a specialized type of audit that focuses on the internal control environment or

automated information processing systems. IS audits have become increasingly important
as we automate more and more of our record keeping processes. IS audits typically
evaluate input and output system access and security, and back up and recovery plans.

107
 Problems faced

by

Finance Department

108
 Problems

1. Complaints from the Distributors and Vendors for the large time lapse
between cheque issuing and cheque clearance.

Vendors should be suggested to open their account in their nearby SBI Bank branch
so that payment can be transferred directly to their account through E-Banking (On-
line Payment).

2. Vendors dealing with Airtel UP East face problem in receiving WCT

Certificate, Form C in time as the Registration Office is situated in
Merrut (UP West).

Company must appoint a competent person who should deal directly with the
Registration Office and UP West Head Office of the company on behalf of UP East,
for all the problems of Vendors and also for the requirements of the UP East.

109
.

3. Problem related to Critical Path Management (CPM) i.e. Task of the

linked departments are not finished within Turn Around Time (TAT)
which results in the delay of the entire job as such.

To solve the above problem the Authority must conduct Network Analysis
In order to know whether the time allotted for the interrelated tasks of linked
department is correct or not and if correct then the Authorized Person must ask all the
Head Of the Departments (HODs) to get their job done within TAT, even after this if
there is any delay in the job then strict disciplinary action should be taken against the
concerned department in order to maintain Inter-departmental Discipline

4. According to the companys provision TDS is deducted on all the

invoices raised by the Parties. Now suppose a party Z raised 100
invoices within a month then the company is suppose to issue 100 TDS
Certificates i.e., one certificate per invoice. Problems incurred by the
employees are as follows:-
a). Workload increases.
b). Probability of errors increases.
c). Large amount of data is to be maintained.
d). Wastage of time.

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 In order to avoid these problems, company at the time of signing the
agreements should ask the parties to submit a letter saying that the company
should issue them a single TDS Certificate for all the invoices they had
raised at the end of the stipulated period which could be a month or a year.

5. Major problem that the company faces with its Distributors and Vendors
whether of the urban areas or of the remote areas, is their lack of
knowledge regarding the Governments Provisions (Legal) and also the
companys provisions.

The company at the time of signing the agreement with the Distributors or
Vendors should inform them about the companys provisions as well as the
Governments provisions. The company should sign the agreement only
when the party (Distributors/Vendors) agree to the terms and conditions of
the provisions and also fulfill the norms of those provisions like they should
provide the company their PAN, their permanent address.

6. Site Rent Payment Problem

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Site rents are paid to those owners, who have rent their land for tower
erection. Recently Bharti Airtel UPEast has nearly 2200-2300 sites modes of
payment is via
Cheques of HDFC Bank
D.D. of SBI
Major Problem lies with the DD is that as soon as the DD is issued the
company A/C is debited by the bank and if due to any reason DD is lost then
the company has to suffer loss.

Owners should be asked to have their A/C in their nearby S.B.I. Branches. Issue all
cheques from SBI instead of HDFC as SBI has its branches in remote & rural area.

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 Conclusion

In a marketing that has transformed one of the worlds most competitive, in just five
years, Bharti Airtel Limited continues to win recognition for its world class management,
marketing leadership and successful execution of long term strategy, it has maintained its
position as the biggest mobile operator and the sole nationwide provider. In the past two
years it has more than doubled sales while preserving gross margin.

It was a fine experience to work with such a large organization like Bharti AIRTEL ltd.
For six weeks I was made to feel a part of the establishment by all the officials.

I also came to know the work culture, amiability of the officials, their spirit which has
made Bharti AIRTEL ltd. the leading brand in communications.

While I thank each and every personnel for their kind cooperation and guidance without
which this project on Account Payable Management would not have been in
existence. I wish AIRTEL continues with its achievements in the same vein to emerge as
the largest communication network all over the world.

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 Bibliography

www.google.com
www.airtel.in
www.bhartiworld.com

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