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Sep 06, 2014

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A PROJECT REPORT ON

COST ANALYSIS AND ACCOUNT RECIEVABLE MANAGEMENT AT IDEA

BY ANKUR JAIN 10BSP0073 IDEA CELLULAR LTD

(An !dea can change your life)

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A PROJECT REPORT ON

COST ANALYSIS AND ACCOUNT RECIEVABLE MANAGEMENT AT IDEA

BY ANKUR JAIN 10BSP0073

IDEA CELLULAR LTDA Report Submitted in partial fulfillment of the requirements of PGPM Program of the IBS BANGALORE

DISTRIBUTION LIST: Mrs. Mahalaxmi Hariharan GM, Finance IDEA CELLULAR Mr. Pankaj Tayal Assistant manager, Finance IDEA CELLULAR DATE OF SUBMISSION - TH 112 - MAY 2011 Prof. Aparna Hawaldar Faculty Guide IBS BANGALORE

CERTIFICATE

This is to certify that the Project Report entitled COST ANALYSIS AND ACCOUNT RECIEVABLE MANAGEMENT AT IDEA. submitted by Ankur Jain, student of PGPM as partial fulfillment of the requirements of PGPM of IBS, BANGALORE is a bonafide work done by him at IDEA CELLULAR LTD. The Summer Internship Program was scheduled from 15 February, 2010 to 13 May, 2010 and the project was completed under our supervision.

Mr. Pankaj Tayal Assistant Manager, Finance IDEA CELLULAR LTD, Bangalore

Mrs. Mahalakshmi Hariharan General Manager, Finance IDEA CELLULAR LTD, Bangalore

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DECLARATION

I, Ankur jain Enrollment No.10BS0073, hereby declare that the project entitled COST ANALYSIS AND STREAMLINING OF DEBTORS AT IDEA CELLULAR LTD is my original work and does not contain any work which has been submitted for award of any other diploma or degree anywhere. This project has been completed under the supervision of Mr.Pankaj Tayal, AM finance, and the guidance of Mrs.Mahalaksmi Hariharan, GM Finance and Mr.Sachi Panigrahi, Senior Manager Finance for the Summer Internship Program as partial fulfillment of the requirements of PGPM program of IBS Bangalore.

PLACE: DATE:

Bangalore 10.05.2011

Signature of Candidate Ankit Chandak 10BSP0069 Class of 2012

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ACKNOWLEDGEMENTS

I would like to thank Honble Mrs.Mahalaksmi Hariharan (General Manager, Finance, IDEA CELLULAR Ltd.), for providing me this opportunity to complete my project work and gain optimum knowledge & experience by working in IDEA CELLULAR Limited. The project would have concluded no-where if Mrs.Mahalaksmi Hariharan (General Manager, Finance and Company Guide for the project) , Mr. Pankaj Tayal (Assistant Manager, Finance) ,Mr. Sachi Panigrahi (Senior Manager, Finance) were not there to give me the in-depth ideas & knowledge of Finance and Accounting. Behind every success there are many unsung heroes who have a great role in scripting the story of success. I would like to extend my thanks to Mr.Sudarshan Reddy, Mr.Shivraju S.D, and Mr. Som Shekhar who guided me on the financial and technical terminologies.

I am grateful to my faculty guide, Prof. Aparna Hawaldar (Faculty, IBS Bangalore) who guided me and also played a vital role during my project work at IDEA CELLULAR Ltd. Also I would like to thank my friends for their co-operation and suggestions, in completion of this project.

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TABLE OF CONTENT

SR NO I II III 1 2 2.1 2.2 2.3 2.3.1 2.3.2 2.3.3 3 4 4.1 4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 4.2 4.2.1 4.2.2 4.2.3 4.2.4 4.3 4.3.1 4.3.2 4.3.3 4.4 4.4.1 4.4.2

TOPIC CERTIFICATION DECLARATION ACKNOWLDGEMENTS COMPANY PROFILE SYNOPSIS PROJECT PROPOSED PURPOSE AND OBJECTIVE OF THE PROJECT PROJECT METHODOLOGY PROCESS FLOW ISSUE POPPED UP DURING THE PROJECT SOLUTION TO THE ISSUE ABSTRACT OF THE PROJECT INTRODUCTION PART 1:- PREPAID BRIEF PROJECT LAYOUT OF MONTHWISE CALCULATION FINAL CALCULATION RESULT /ANALYSIS PART 2:- POSTPAID BRIEF PROJECT CALCULATION RESULT /ANALYSIS AGEING BRIEF PROJECT CALCULATION PART 4:- ROAMING BRIEF PROJECT

PG NO 3 4 5 9 12

15 16

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4.4.3 4.4.4 4.4.5 5 6 7 8 9

CALCULATION OBSERVATION RESULT/ANALYSIS FINDINGS RECOMMENDATIONS CONCLUSION REFERENCES GLOSSARY

47 47 48 49 50

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LIST OF FIGURES &TABLES

FIGURE NO 1-3 4 5 6 7 8 9 10 11-12 13 14 15 16 17 18 19 20 21 22 23 24-31

FIGURE NAME REVENUE AND GROWTH FIGURE OF IDEA PROCESS METHODOLOGY PROCESS FLOW PREPAID TARRIF INCENTIVE FLOW CHART AT IDEA COMMISSION PAYOUT FOR JAN 2010 ZONAL WISE COST PER ACTIVATION COST PER ACTIVATION TABLE COST PER ACTIVATION GRAPH GRAPHICAL REPRESENTATION OF TOP DSTS TOP 10 DSTS -POSTIVE GROWTH TOP 10 DSTS -NEGATIVE GROWTH TOP 10 RDSTS -POSTIVE GROWTH TOP 10 RDSTS -NEGATIVE GROWTH COST PER ACTIVATION GRAPH PIVOTED FORMAT OF AGEING SCHEDULE COMPOSITION CHART FOR MAKING SITE PIVOTED SUMMARY OF INVENTORY MARCH 2011 NATIONAL ROAMING TARRIF INTERNATIONAL ROAMING TARRIF ORACLE SNAPSHOT

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1. COMPANY PROFILE:IDEA Cellular is a publicly listed company, having listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in March 2007. IDEA is the 3rd largest mobile services operator in India, in revenue terms recorded a subscriber base of over 84 million as on end January 2011, which is 10.93 %( approx.)Of the total mobile connection in India. It is a pan India integrated GSM operator covering the entire telephony landscape of the country, and has NLD and ILD operations. In FY 2010 Idea increased its revenue market share by over 1%, despite stiff tariff war in the market.

The company has won license to offer 3G services in 11 service areas. Idea's 3G services are launched in the year 2011.Idea's strong growth in the Indian telephony market comes from its deep penetration in the non-urban and rural markets. Idea has the highest share of rural subscribers as a percentage of total subscribers, amongst other GSM players. In fact, two out of every three new subscribers now come from non-urban market. The company has its retail outlets under the "My Idea" banner. The company has also been the first to offer flexible tariff plans for prepaid customers.

IDEA offers seamless coverage to roaming customers traveling to any part of the country, as well as to international traveling customers across over 200 countries. Idea's partnership with over 400 operators ensures that customers are always connected while on the move, within the country or other parts of the world. IDEA Cellular is an Aditya Birla Group Company, India's first truly multinational corporation. The group operates in 26 countries, and is anchored by over 130,600 employees belonging to 40 nationalities. The Group has been adjudged the '6th Top Company for Leaders in Asia Pacific Region' in 2009, in a survey conducted by Hewitt Associates, in partnership with The RBL Group, and Fortune. The Group has also been rated 'The Best Employer in India and among the Top 20 in Asia' by the Hewitt-Economic Times and Wall Street Journal Study 2007. Idea Cellular won the GSM Association Award for "Best Billing and Customer Care Solution" for 2 consecutive years. IDEA Cellular has been recognized as the 'Most Customer Responsive Company' in the Telecom sector, at the prestigious Avaya Global Connect Customer responsiveness Awards 2010.

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STATISTIC OF IDEA CELLULAR LTD

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FIG 1 & 2 & 3:- REVENUE AND GROWTH FIGURE OF IDEA IN 2010

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2. SYNOPSIS:-

The project has been accomplished in IDEA CELLULAR Ltd. in view of better understanding of working of the Finance & Accounts department of an organization.

2.1 Project Proposed :-

PART 1 :- To calculate commission payout of Idea Cellular Limited to its Distributors and retailers with respect to number of activation done by them in each zone of Karnataka and finally calculate cost of customer acquisition (COCA) which means cost of acquiring each prepaid customer. PART 2 :- To calculate the total payout by Idea Cellular Limited to each DSTS for acquiring each postpaid customers and finally calculating the effectiveness of each DSTS

PART 3 :- To calculate the ageing schedule of (active, passive, core items) used by Idea Cellular Limited and then calculate per unit cost and number of site which can be made from inventory in hand for particular month, match it with the particular month projected figures made by IDEA network department and see how much deviation is there.

PART 4 :- To give on hand on practice of complete accounting module covered in oracle by idea and to rectify the errors in previous closed books and prepare bank reconciliation statement for cash at bank as part of auditing process. Also we have to rectify the errors and calculate the exchange in roaming scheme for selected inter-operators of idea and pass the final entries in oracle. Note: First three part of the project is related to COST ANALYSIS and part 4 is related to STREAMLINING OF DEBTORS.

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2.2 Purpose and Objective of the Project:-

The main aim behind this project to be familiar with the technicality & working environment of financials of corporate. The projects also gives brief insight in telecom world and give deep understanding of financial works in this sector. Each part of the Project has following Objectives:-

PART 1:- To analyze cost of acquiring each prepaid customers of organization across each zone and finally calculating which zone is doing well. In this way we can derive cost effective policy for organization with respect to each zone. Then analyze in which zone company is spending more and where it should cut down its cost.

PART 2:- To analyze cost of acquiring each postpaid customers of IDEA Cellular Limited and finally calculating which DSTS is doing well. In this way we can calculate efficiency of each DSTS and which one is performing better and how long they are beneficial for organization (i.e. to analyze for how many months they are with the organization and how much business they are giving to idea)

PART 3:- To analyze that