4. Reports - (1) Based on the information available in the books of accounts and
other documents specified in the Rules and the order/notification issued there
under, service provider shall prepare geographical area-wise following financial
and non-financial reports: -
Financial Reports
Profit and Loss Statements
(i) Profit and loss statement of the products mentioned in column (4)
against services rendered by the service providers specified in column
(2) of the Schedule I. The statement shall be prepared in the Proforma
“A” of Schedule III;
(ii) Separate Profit and Loss statement for each of the service rendered by
the service provider and specified in regulation 1(2). The statement
shall be prepared in the Proforma “B” of Schedule III;
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Product Cost Statement
(iii) Product wise Cost Sheet in the Proforma “C” of Schedule III;
Network Element Cost Statements
(iv) Network Element wise Cost Sheet shall be prepared which clearly
indicates cost and its allocation to various products. An indicative list
of Network elements of services for which these cost sheets shall be
prepared is at Schedule II. However, the list of network elements shall
depend on network architecture used by the service provider. The
Network Element Cost Statements shall be prepared in the Proforma
“D” of Schedule III;
(v) A summary sheet showing network element wise total cost, cost driver
and cost per unit of usage. The statement shall be prepared in Proforma
“E” of Schedule III;
(vi) A summary sheet indicating network element wise cost allocated to
various products. The statement shall be prepared in Proforma “F” of
Schedule III;
Capital Employed Statements
(vii) Capital Employed Statement for each of the service rendered by the
service provider and specified in regulation 1(2). The statement shall
be prepared in Proforma “G” of Schedule III;
(viii) A statement showing allocation of capital employed for a service to the
network elements. The statement shall be prepared in Proforma “H” of
Schedule III;
Fixed Asset Statement
(ix) Statement showing category wise fixed assets and depreciation in the
Proforma “I” of Schedule III’; and
Non-Financial Report
(x) A statement of operational data relating to network architecture,
network usage, network capacity, product, services volumes, tariffs,
etc. Reports for services mentioned in Regulation 1(2) shall be
prepared in Proformae “L” to “T” of Schedule III.
(2) The service providers shall prepare Reports mentioned in Regulation 4 (1) every
year on the basis of historical cost accounting and every second year on the basis
of replacement cost accounting:
Provided that if less than three years have elapsed since issue of the license to
provide a particular service, the financial statements based on Replacement Cost
Accounting may not be prepared for that service.
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(3) The profit and loss statement and capital employed statement mentioned under
Regulation 4(1) of this regulation prepared on the basis of the Historical cost
Accounting shall be reconciled with the Annual Financial Statement of the
service provider prepared under Section 211 of the Companies Act, 1956. The
reconciliation statements shall be prepared in Proformae J and K of Schedule III.
(4) The service providers shall prepare financial reports mentioned in regulation
4(1) on the basis of replacement cost accounting, by-
(i) following financial capital maintenance methodology;
(ii) limiting cost adjustment to the fixed assets;
(iii) ignoring replacement cost adjustment for assets having life of less
than 3 years;
(iv) taking cost of modern equivalent asset when existing asset is not
available due to change in technology. Whenever, old asset is
replaced by modern equivalent asset, change in operational
expenditure as a result of such replacement shall also be accounted
for; and
(v) clearly indicating holding gain or loss, supplementary depreciation
and change in the operational cost due to replacement of old asset by
modern equivalent asset.
5. Periodicity of submission of report � (1) The service providers
shall submit
audited reports based on the historical cost accounting every year
within six
months of the end of accounting year to the Authority.
(2) The service provider shall also submit reports based on the
replacement cost
accounting every second year within six months of the end of
accounting year to
the Authority.
(3) The reporting period shall be same as followed by the company for
preparation
of the annual financial accounts under sub section (4) of section 210
of the
Companies Act, 1956.
Provided that, if reporting period exceeds fifteen calendar months,
the accounting
separation statements shall be divided into 12 months and the balance
period.
6. Audit - (1) Every service provider, to which these regulations
apply, shall appoint
an auditor who is qualified for appointment as an auditor under
section 224 or
233-B of The Companies Act, 1956.
(2) The auditor shall audit the reports so prepared.
(3) The auditor in his report shall express an opinion as to whether
the reports
have been properly drawn in accordance with the regulation and he has
received
all information and explanation necessary for the purpose of audit.
7. Confidentiality - The Authority shall ensure the confidentiality of
the financial
information submitted under various provisions of the Regulation.
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Provided that, where the Authority is of the opinion that it is
necessary or
expedient to disclose the information in public interest, it may, for
reasons to be
recorded in writing, do so.
Provided further that no information shall be disclosed by the
Authority, except
after giving the company an opportunity of making such representation
in writing,
as it may wish to make in that behalf and taking such representation into
consideration.
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