“Effectiveness of SAP (Systems, Application & Products in data Processing) in Assets Management of Robi Axiata Limited”.
DERIVATION OF THE REPORT
This assignment based on “Effectiveness of SAP (Systems, Application & Products in Data Processing) in Assets Management of Robi Axiata Limited” with the concern of supervisor.
The main purpose of writing a report is to describe in a nut shell the total report findings with a definite sight which draws attention of surroundings to make understand depth and relevance of the report.
OBJECTIVE OF THE REPORT
The objective of the report is to analyze and study the aspect of maintaining, controlling, transferring & updating of fixed assets under SAP of Robi, method of recording fixed asset management system in Robi. The effectiveness of SAP in maintaining fixed asset management system of Robi as a tool of valuation and safeguarding the capital investments. The effectiveness of SAP for generating report & interpreting with the all other division of Robi.
METHODOLOGY
In case of research design, the whole population will be taken rather than depending on samples. This research will cover the whole costing and asset management of Robi Axiata Limited.
All the report will be prepared after analyzing both primary and secondary data.
The primary data will be collected through conversation with;
· Higher management and other official of Robi Axiata Limited.
· And visit to the newly established SAP Project.
The secondary data will be collected through
· Some Financial and Accounting related academic texts.
· Financial Policy and Procedure of ROBI (FPP)
· http://Robi.com.bd/ (ROBI HOME SITE)
· Various Reports
· Various Accounting Manuals
· Interact Robi Officials
· Searching different web-sites by using Yahoo, Google
Thus the methodology of this research will follow the following steps:
Sampling Technique
Sample Size
Data Collection
Data Source: Primary Data/ Secondary
Data Processing
INTRODUCTION
In this era of communication, cell phone undoubtedly has positioned itself in hearts of the consumers. That is why, consumers are the prime focus of all cell phone companies and thus the satisfaction level of consumers regarding the services offered by cell phone companies is the key success factor for them. Accordingly, this is vividly important to know and assess the satisfaction level of the cell phone consumers. This is because, upon this the sales figure of each and every company counts on and sales are the ultimate factoring which drives one company towards profit. Considering all these, this is very clear that the study of satisfaction level of cell phone subscribers carry a significant meaning.
THE ORGANIZATION IN BRIEF (Robi at a Glance)
In this age of speedy communication, Bangladesh is not staying behind in terms of keeping pace with the rhythmic movement of this age of information. Among the key players who are having a significant role to fasten the growth of telecommunication in Bangladesh, Robi is the third market leader in the telecommunication sector in Bangladesh. With the beginning of 1997 the company completed its fourteen year of business. The company achieved remarkable success during this period. It is now able to say that it has the third biggest subscriber base and more value added services than any other mobile phone operators in Bangladesh. Robi has a very strong competitive position in the telephone industry in the country.
NAME AND ORGANIZATIONAL HISTORY OF ROBI
Robi is the dynamic and leading end-to-end countrywide GSM mobile communication solutions in Babgladesh. Robi Axiata Limited is a joint venture company between Axiata Group Berhad, Malaysia and NTT DOCOMO INC, Japan. It was formerly known as Telekom Malaysia International (Bangladesh).The Ministry of post and Telecommunication of the Government of Bangladesh offered TM International (Bangladesh) limited a nationwide digital cellular license in 1996. TM International (Bangladesh) Limited launched its services in Bangladesh on November 15, 1997 under the brand name AKTEL. On 28th March 2010, the service name was rebranded as ‘Robi’ and the company came to be known as Robi Axiata Limited.
Robi is truly a people-oriented brand of Bangladesh. Robi, the people’s champion, is there for the people of Bangladesh, where they want and the way they want. Having the local tradition at its core, Robi marches ahead with innovation and creativity.
To ensure leading-edge technology, Robi draws from the international expertise of Axiata and NTT DOCOMO INC. It supports 2G voice, CAMEL Phase II & III and GPRS/EDGE service with high speed internet connectivity. Its GSM service is based on a robust network architecture and cutting edge technology such as Intelligent Network (IN), which provides peace-of-mind solutions in terms of voice clarity, extensive nationwide network coverage and multiple global partners for international roaming. It has the widest International Roaming coverage in Bangladesh connecting 600 operators across more than 200 countries. Its customer centric solution includes value added services (VAS), quality customer care, easy access call centers, digital network security and flexible tariff rates. With a network covering all 64 (allowable) districts of Bangladesh, coupled with the first Intelligent Network (IN) Prepaid Platform in the country, Robi is geared to provide a wide range of products and services to customers all over Bangladesh. At the heart of all of Robi’s success today, is a young dynamic workforce comprising of over 1500 highly motivated and skilled professionals.
Today, Robi is recognized as a leading brand in Bangladesh and this is driven by its persistent pursuit of quality and technology, putting it clearly ahead of the rest. The future with Robi is promised to be exciting as it strives to employ the best resources and latest technology in offering many more innovative and exciting products and services.
Through aggressive investment to extend network coverage and improving call quality, Robi has been in constant motion to maintain its commitment to provide subscribers the best possible cellular service. This momentum enveloped all (allowed) puzzles by the end of 2005. Robi is looking forward to massive investment to target 3 million subscribers by 2005, facilitated by more than doubling the number of the base stations. That is, the objective for Robi’s communication seems to generate sales and to approach toward building a strong and consistent brand image in the mind of the consumers to provide them a reason to select Robi over others.
LOCATION OF ROBI
The head office of the company is situated in the BRAC CENTER, Mohakhali. CEO’s office, IT, Finance, Marketing, Technical, Human Resource divisions are located in the Robi Corporate Centre, Nafi Tower, 53 Gulshan South Avenue, Gulshan 1, All together, there are twenty onecustomer service centers. Among them Six are in Dhaka (Dhanmondi, Gulshan-1, Paltoon, Nirpur-10, Basundhara City and Uttara), two are in Chittagong and one each in Cox’s Bazar, Comilla, Sylhet,Barsal, Bogra and Khulna consecutively.
FOUNDERS OF ROBI
Robi was formed by a joint venture agreement between Telekom Malaysia Berhad from Malaysia and A.K. Khan & Co. Limited of Dhaka, Bangladesh. Japanese cell company NTT DoCoMo took off 30% stake of Robi which won by AK Khan & Co in 2008. And Telekom Malaysia Berhad rename to Axiata Group Berhad in 2010.
VISION OF ROBI
The vision of Robi is “To be a leader as a Telecommunication Service Provider in Bangladesh.”
MISSION OF ROBI
To provide total customer satisfaction as the company strives to become the most preferred GSM cellular service provider in Bangladesh. Robi will achieve this through developing people, products, and services of the highest quality and meeting the needs of its employees, shareholders and the nation.
Ø Total quality objective
Ø Total commitment to the needs of our customers,
Ø Following the highest ethics standards,
Ø Continual improvement of all work processes,
Ø Continual improvement of all work processes,
Ø Permanent improvement of all the employees knowledge and skills, Securing quality of the service to match the quality of services offered by the world’s most successful companies in the field,
Ø Preserving the Company’s leading position in the national market of mobile telecommunications
THEME OF ROBI
Robi always strives to uphold the dictum “Customer First”
THE BISINESS SLOGAN OF ROBI
“Jole Uthon Upon Soktita”
The whole is the sum of parts and when the best come together; the results can be truly spectacular. Robi Axiata Limited brings Robi Mobile phone service, a digital cellular phone service, which will prepare better for life in the fast lane. Robi GSM always keeps so near, even when so far.
STRATEGI OF ROBI
- Product & Services:
Ø Attractive product packages for segmented customers
Ø Implementation of enhanced messaging and VASs like SMS, FAX & Data, Internet &WAP to increase for airtime usage.
- Market Promotion & Communication:
Ø Brand Management
Ø Events Management
Ø Advertisement & Promotion
Ø Press Advertisement, Outdoor Advertisement in Strategic points, Point of Purchase (POP)
- Sales & Distribution:
Ø Focus on corporate sales through Robi’s sales executive
Ø Strengthen & build up the relationship with dealers & outlet holders
Ø Increase sales outlets in strategic points
Ø Re-alignment of distribution structure
Ø Uniform profiling of sales outlet
- Customer Service Management:
Ø Uniform for Customers Relation Executives
Ø Implementation of One-stop Customer Services through improvised billing system
Ø Strengthen fraud management through customized report from billing system
PEOPLE OF ROBI
The most important key resource factor in Robi Axiata Limited is its efficient human resource. Moreover, its decisions are based on facts from market research and coverage survey. Moreover, the entire above can only be achieved through the right people. Robi has put its keen eyes in developing its employees through proper training, as they believe that the most important asset for Robi is its staff members. As of June, 2011, Robi Axiata Limited has approximately 1,600 staffs composed of locals and expatriates to serve its more than 11,707000subscribers. And, Robi is ensuring the quality services by quality people.
TECHNONOGY OF ROBI
Robi’s Global System for Mobile or GSM technology is the most widely accepted digital system in the world, currently used by over 300 million people in 150 countries Robi in Bangladesh use the 900 & 1800 GSM technology because Robi are committed to give the customer the very best. Presently ROBI offers GSM digital cellular services in all divisional Headquarters and all major big districts.
MAJOR MILESTONE OF ROBI’S BUSINES
Robiis a mobile operator in Bangladesh, which concentrates on offering GSM communication services for private and corporate customers. The company’s intention is to promote the wireless lifestyle – the complete mobile society. Robi is renowned for bringing new service offers in Bangladesh. Below, some of the first time offers are mentioned:
Ø First time introduced the ‘mobile Plus (PSTN Incoming Connectivity only) Product Services’ in Banglades.
Ø First time introduced the Tele-ramadan (Timing of Iftar and Sehri during Ramadan) under Tele-info Services in Bangladesh.
Ø First time introduced the Seamless Coverage thoughout the Dhaka-Chittagong Highway and named it as ‘Chittagong Dhaka Corridor (CDC)’.
Ø First time introduce the full fledged IVR based Customer Services (Call Center) in telecom market.
Ø First time introduced cellular services in the most northern part of Bangladesh by launching Robi Service in Rangpur and Dinajpur in 2002.
Ø Introduced the automatic system generated bill amount and payment request for the Post-paid subscribers in 2002. The automatic unbarring facility, after necessary payment making by the subscribers, is also a part of this system.
Ø First time introduced electronic recharge facility called E-fill in Bangladesh.
Ø First time introduced message-greeting system with FunDose in Bangladesh.
Ø Introduced GPRS (General Packet of Radio Service) for the first time in Bangladesh.
Ø First time introduced 30-second pulse rate in Bangladesh and 1 second pulse for the post-paid users.
Ø First time introduced club membership offer for the exclusive users of ROBI. The club is known as Club Magnate, which offers extra services with its Platinum, Gold and Sliver cards.
PRODUCTS AND SERVICE OF ROBI
Telephone sector is a service-oriented sector. Robi offered various types of new and innovative telephone services to customer of Bangladesh during the last eight years. The power & Forty are largest innovations. Besides these largest ones Robi also introduced a number of value added services like the Short Message Service, international roaming facility, Voice Mail Service, SMS based content services, night bird talk plan, General packet Radio service (GPRS), etc.
The company is the pioneer in most of its services. Handsets or the phone-set and the SIM Cards are the only physical products provided by the company. Robi is able to reach telephones in many far-flung areas of the country and also connects those areas with the far foreign countries.
The prime services provided by Robi are broadly categorized in the two types: the Post-paid service, and the Pre-paid service.
Industry Life Cycle
The industry is now at its growth stage with demand increasing at 20% every year. It will be another 5 – 7 years before the industry reaches the maturity stage.
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Graph: Industry Life Cycle
From the graph it is apparent that the mobile telecommunication industry is in the growth phase of the market as a whole. Form analyzing the characteristics of the product life cycle the characteristic, marketing objective & strategies the companies are setting up to.
The sales in the mobile industry are rapidly increasing. The cost is average per customer. Profits are marginally increasing. Customers are more or less early adopters. They are aware of the services that have been offered to them more precisely. The competitors are growing in number. The common marketing objectives of all the companies are to maximize their market share.
On the market strategies segment the product strategy is on the offer product extensions and on service orientation. More and more offers of value added service and added features are included in the package. The pricing strategy is to penetrate the market. So they are all more or less following the penetration pricing strategy. In distribution strategy the industry is the building on intensive distribution. More and more emphasis is given on gaining the market. So distributing the product to the far corners of the country has become a priority. In case advertising & promotional strategy the companies are all in aggressive advertising policy. Using all the possible media uses to increase the market share & reaching potential customers in mass market. Lastly in sales promotion the companies are on a rampage. They are offering enormous amount of services with the same package & low cost rate with different events all round the year.
SHAREHOLDERS OF ROBI
Robi Axiata Limited is now a Joint Venture company between Axiata Group Berhad (70%) and NTT DOCOMO INC. (30%)
Figure 2: The shareholders of ROBI
AXIATA GROUP BERHAD
Axiata is an emerging leader in Asian telecommunications with significant presence in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia. In addition, the Malaysian grown holding company has strategic mobile and non-mobile telecommunications operations and investments in India, Singapore, Iran, Pakistan and Thailand. Axiata Group Berhad, including its subsidiaries and associates, has approximately 120 million mobile subscribers in Asia, and is listed on Malaysia’s stock exchange (Bursa Malaysia).
NTT DOCOMO INC
NTT DOCOMO INC is the world’s leading mobile communications company and the largest mobile communications company in Japan. DOCOMO serves over 56 million customers, including 44 million people subscribing to FOMA™, launched as the world’s first 3G mobile service based on W-CDMA in 2001. DOCOMO also offers a wide variety of leading-edge mobile multimedia services, including i-mode™, the world’s most popular mobile e-mail/Internet service, used by 48 million people. With the addition of credit-card and other e-wallet functions, DOCOMO mobile phones have become highly versatile tools for daily life. With cutting edge technology and innovative services, DOCOMO is fast becoming a preferred lifestyle choice, continuously expanding its role in its users’ lives, growing globally throughout Asia, Europe and North America. NTT DOCOMO INC is listed on the Tokyo (9437), London (NDCM) and New York (DCM) stock exchanges
ORGANIZATION STRUCTURE OF ROBI
Robi places a high value on human resource development and the contributions made by its employees. Because of the rapid expansions of Robi’s networks and enormous growth of its subscriber base, the company has increased its workforce. Robi has successfully hired some key senior managers who were recruited on the basis of their professional expertise and experience. In order to cope up with the dynamic nature of the company’s business, initiatives are always taken to restructure and reorganize the company’s existing set up. It always evolves standardized management systems and procedures across functional divisions, focusing in particular, on the effective integration and assimilation of all the organizational units.
The organogram indicates that the top-level management consists of the MD, the COO and the CFO. The chief operating officer (COO) monitors the direct operations of the company, whereas the chief financial officer (CFO) monitors the financial matters of the direct operations. At the same time, they co-operate each other and report to the managing director (MD). The managing director is the direct supervisor of all the divisions and departments. Currently, there are four divisions and four departments. The chief of the divisions are called the general manager (GM). Conversely, the chief of the departments are called Vice President (VP). Divisions deal with the core activities of the company, whereas the departments deal with the supporting activities. Every division has precise units and there is a head for every unit. Below, a concise description of every unit is specified:
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Finance Division
Financial division has eight units dealing with financial matters of the company.
- Corporate Finance
Corporate finance unit consists of treasury management and L/C. Treasury management deals with the inflow and outflow of the company, whereas L/C (Letter of credits) deals with the L/C opening banks and other foreign banks.
- Account Payable
This unit keeps track on the accounts payable of the company.
- Accounts Receivable
This unit keeps track on the accounts receivables of the company while preparing the balance sheet. As Robi is a large company with thousands of financial transactions every day, a unit to keep track on the accounts is necessary.
- Core Account
Core account is an important unit of the finance division dealing with the budget and fixed assets. The annual budget of various departments is prepared under the close observation of this unit.
- Revenue Assurance
Revenue assurance unit consists of revenue assurance and fraud management. Revenue assurance monitors the transactions and assures full protection of the finances. On the other hand, fraud management protects the fraudulences take place in the daily transactions.
- Taxation:
Taxation unit takes care of the tax, VAT and tariffs of the company.
- Reporting
The reporting unit reports the entire financial transactions of ROBI to the parent company in Malaysia.
- Costing
This unit forecasts the costing of different departments and reports them regarding the expected expenditure of any alteration.
Financial Year
The financial year of the entity is from 1 January to 31 December. Any change in the financial year is subjected to the approval of the Board of Directors.
Monthly Financial and Management Report
The Financial and Management report is to be produced on the monthly basis not later than the 7th day of the following month to the Board of Directors. These Financial Statements shall include Profit and Loss Account, balance Sheet and Cash flow Statement.
Annual Report
The annual financial statement shall be produced not later than the end of March following the end of the financial year for audit. The audited financial statements must be presented to the Board of Directors not later than end of March of the following year
DEFINITION OF SYSTEM APPLICATION & PRODUCT IN DATA PROCESSING (SAP)
At actually who determines the success of a company? Is it the stock price, the revenue, or the products? Certainly, these are all important indicators, but they are in fact really just that indicator which employees make a company valuable, uniquely valuable. Employees define a company and give it the qualities that ultimately translate into a competitive edge. At SAP, it is truly our employees who make our company what it is today – the world’s leading provider of business solutions. The exceptional quality of our products has been possible due to high-caliber employees who work in an environment that allows them to achieve their fullest potential. The creativity and individuality of every SAP employee manifests itself in everything we do. The result is innovation at all levels.
Our commitment to our customers, our global, dynamic corporate culture, and the potential for personal and professional development – these elements define SAP. I invite you to peruse the SAP Employee Report 2005 and meet the company and our greatest asset – our people.
History of SAP
In 1972, five systems analysts began working nights and weekends to create standard software with real time data processing. Twenty-five years later their vision is a reality: SAP is the world’s market and technology leader in business application software.
On April 1, 1972 five former IBM employees founded SAP as System analyses and Programmer (“Systems Analysis and Program Development”) in Mannheim, Germany. Their vision was to develop and market standard enterprise software which would integrate all business processes. The idea came to them through their work as systems consultants for IBM when they noticed that client after client was developing the same, or very similar, computer programs. The second part of their vision was that data should be processed interactively in real time, and the computer screen should become the focal point of data processing.
R/2 System goes international
SAP’s close relationships with customers led to continuous enhancements in the existing program modules, while important new additions were made, such as the Cost Accounting (RK) System. The R/2 System was now ready for the international market. New computers with drastically improved price/performance ratios helped expand the customer base, and SAP raised its profile still further by appearing at the Systems trade fair in Munich – the company’s first-ever presence at an industry trade show.
In 1982, SAP celebrated its tenth anniversary, with sales soaring 48% to over DM 24 million. By the end of the year, 236 companies in Germany, Austria and Switzerland were working with the SAP standard programs. Sales continued to climb in the following year, increasing by 45%.
In 1984 SAP took additional steps into the international arena with the founding of SAP (International) AG in Switzerland, whose focus was to increase sales of the R/2 System in international markets. Development teams began work on two new applications, Personnel Management and Plant Maintenance, while the Production Planning and Control System were installed at its first pilot customers.
1985 was characterized by further expansion. The Walldorf headquarters had grown to 10,000 square meters of space, while at the Swiss subsidiary a new headquarters was occupied. SAP systems were now in use in most European countries, and SAP began to penetrate markets outside Europe – with customers in South Africa, Kuwait, Trinidad, Canada and the US.
SAP goes public
SAP continued to grow in 1988 with the international sales network strengthened by the establishment of subsidiaries in Denmark, Sweden, Italy and the US. Other events included: the founding of SAP Consulting GmbH as a joint project between SAP and the consulting firm Arthur Andersen; the opening of an International Training Center in Walldorf; and the welcoming of Dow Chemical as SAP’s 1,000th customer. However, the most significant events of the year were the increase of SAP’s capital stock from DM 5 million to DM 60 million, the subsequent conversion of SAP GmbH into a stock corporation, SAP AG, and the flotation of SAP shares on the stock market. SAP shares were quoted on the securities exchanges in Frankfurt and Stuttgart.
During the next year, 1989, SAP shares began trading on the Zurich stock exchange. SAP expanded its alliance and strategic cooperation approaches by taking a majority investment in TOS GmbH in Freiberg. Through the “International User Conference” in Lausanne, Switzerland, and the first “SAPPHIRE” user conference in North America, SAP demonstrated its solid commitment to direct international customer contact. This crucial commitment was to become more and more important to SAP’s success in the coming years.
Over 1,000 employees
SAP (International) soon grew to twelve subsidiaries, including Canada, Singapore and Australia. SAP’s growing profile in 1989 was evidenced by a number of events: the large number of participants attending the first Annual Stockholders’ Meeting, the strong employee growth to more than 1,000, and the expansion of the customer base. Recognizing this success manager magazine named SAP “Company of the Year” – a distinction SAP would receive twice more in the next few years.
In 1990, SAP’s capital stock was expanded to DM 85 million with the issue of preference shares. SAP strengthened its commitment to small- and medium-sized businesses by an investment in the software company Steep and the acquisition of software vendor CAS. In the same year, SAP and Siemens Nixdorf founded SRS GmbH in Dresden, gaining a firm foothold in the East German market. Sales grew strongly to over DM 500 million, and the number of staff grew to 1,700
R/3 becomes Internet-enabled
The success of R/3 has propelled SAP to the top of the global software market. IT is undergoing yet another revolution with the advent of the Internet, and SAP is again there with a solution: the latest version of R/3 provides the first comprehensive, Internet-enabled business application package. Release 4.0, which is already in development, further increases the attractiveness of the R/3 System by making it more user-friendly. Small and mid-sized businesses should specially welcome this development. The R/3 System is here to stay, and users can look forward to its continuing enhancement.
SAP FINANCING
Affordable IT Investments through SAP Financing
SAP Financing offers a long-term alternative to lump-sum payments and unpredictable follow-up costs. The result: access to IT solutions previously available only to the largest corporations through financing with monthly payments that are affordable and predictable, and processing that is fast and easy. As small and mid-sized firms find it increasingly difficult to finance their IT investments, SAP has filled the gap. The financing of an SAP project, including all related infrastructure and services, can start at € 15,000 – giving you greater financial flexibility for other strategic business areas.
“SAP Financing means that an up-front investment in SAP solutions— including all major project cost elements—is changed to affordable and predictable periodic payments. Customers can even choose to start payments only when the IT project is deemed productive. We recognized the market’s need for an all-inclusive financing service and are responding to this need with SAP Financing.”
SAP and its partners are uniquely positioned to offer an all-inclusive IT solution that includes long-term financing. SAP Financing can help you predict your total cost of ownership and provide up to eight years of maintenance and support. These capabilities address the needs of small to mid-size enterprises to plan precise IT costs in advance.
Facing the Total-Cost-of-Ownership Challenge
To compete with the market leaders in your industry today, you need integrated IT solutions—like those provided by SAP®. Tight budgets place strategic IT investments out of reach for many companies; however, especially for small to mid-size firms these firms often compromise by purchasing software piecemeal from a variety of specialized suppliers. Although this may seem cheaper in the short term, it can mean considerably higher costs for maintenance, support, and integration in the long run. Now, for the first time, you can buy integrated IT solutions through the SAP financing service – in an all-inclusive offer that provides manageable, well-defined monthly payments.
SAP Financing – Benefits at a Glance
Ø An all-inclusive offer that includes fixed periodical payments to cover the entire SAP solution
Ø A pay-as-you-use financing plan
Ø Competitive finance rates
Ø Leaves capital free for other strategic investments
Ø Fast and easy processing
Ø The experience of market leaders
SAP Financing is an innovative service within the IT market. Complementing SAP’s broad range of solutions, the service provides comprehensive IT and financial support – all in one package. To learn more about increasing your competitive advantage through IT financing that is comprehensive, fast, and easy.
Assets
In business and accounting an asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or group acting together, e.g. a company, the measurement of which can be expressed in monetary terms. Asset is listed on the balance sheet. It has a normal balance of debit.
Similarly, in economics an asset is any form in which wealth can be held. Thus any item of economic value owned by an individual or corporation, especially that which could be converted to cash. Examples are cash, securities, accounts receivable, inventory, office equipment, real estate, a car, and other property. On a balance sheet, assets are equal to the sum of liabilities, common stock, preferred stock, and retained earnings.
Probably the most accepted accounting definition of asset is the one used by the International Accounting Standards Board (IASB). The following is a quotation from IFRS Framework:
“An asset is a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise.
From an accounting perspective, assets are divided into the following categories: current assets (cash and other liquid items), long-term assets (real estate, plant, equipment), prepaid and deferred assets (expenditures for future costs such as insurance, rent, interest), and intangible assets (trademarks, patents, copyrights, goodwill).
Ø Current assets
Current assets are cash and other assets expected to be converted to cash, sold, or consumed either in a year or in the operating cycle. These assets are continually turned over in the course of a business during normal business activity. There are 5 major items included into current assets.
· Cash
it is the most liquid asset, which includes currency, deposit accounts, and negotiable instruments (e.g., money orders, checks, bank drafts).
· Short-term investments
Include securities bought and held for sale in the near future to generate income on short-term price differences (trading securities).
· Receivables
Usually reported as net of allowance for uncollectible accounts.
· Inventory
Trading these assets is a normal business of a company. The inventory value reported on the balance sheet is usually the historical cost or fair market value, whichever is lower. This is known as the “lower of cost or market” rule.
· Prepaid expenses
These are expenses paid in cash and recorded as assets before they are used or consumed (a common example is insurance). See also adjusting entries.
The phrase net current assets (also called working capital) are often used and refer to the total of current assets less the total of current liabilities.
Ø Long-term investments
Often referred to simply as “investments.” Long-term investments are to be held for many years and are not intended to be disposed in the near future. This group usually consists of four types of investments:
§ Investments in securities, such as bonds, common stock, or long-term notes.
§ Investments in fixed assets not used in operations (e.g., land held for sale).
§ Investments in special funds (e.g., sinking funds or pension funds).
§ Investments in subsidiaries or affiliated companies.
§ Different forms of insurance may also be treated as long term investments.
Ø Intangible asset
Intangible assets lack physical substance and usually are very hard to evaluate. They include patents, copyrights, franchises, goodwill, trademarks, trade names, etc. These assets are (according to US GAAP) amortized to expense over 5 to 40 years with exception of goodwill.
Ø Leased Assets
Assets acquired under finance leases are included as property in the Balance Sheet. Finance leases effectively transfer from the lesser to lessee substantially all the risks and benefits incidental to the leased property. Where assets are acquired of mean of finance leases, the present value of the minimum leases payment is recognized as an asset at the beginning of the lease term and amortized on a straight line basis over the expected useful life of the leased asset. A corresponding liability is also established and each lease payment is allocated between liability and finance charge. As for operating leases, lease payments are charged
Ø Asset under construction
All expenditure incurred on asset under construction shall be capitalized as Capital Work in Progress. This expenditure shall include:
§ Director expenses incurred in bringing the asset to its present condition or location up to completion. These include cost expense on planning and design, installation, testing and commissioning.
§ Interest on loans or borrowing specifically for financing asset to expense over the period of expected benefit.
Ø Fixed assets
Also referred to as PPE (property, plant, and equipment). Assets which are purchased for continued and long-term use in earning profit in a business. This group includes land, buildings, machinery, furniture, tools, wasting resources (timberland, minerals), etc. They are written off against profits over their anticipated life by charging depreciation expenses (with exception of land). Accumulated depreciation is shown in the face of the balance sheet or in the notes. These are also called capital assets in management accounting.
Revaluation
In general, Fixed Assets shall not be revalued on a regular basis. However, where the net realizable value of the asset concerned has exceeded its book value, BOD may revise the value of such asset.
However, interest on term loan obtained and used exclusively for the purchase, acquisition of Capital Assets be capitalized and depreciated along with the fixed assets.
§ Exceeding one year,
§ Costing more than BDT 8,000/- per unit and
§ Intended to be used on a continuous basis and not intended for sale in the ordinary course of business
Capital Work in Progress
A Capital Project Accounting System shall be devised and implemented to record all capital projects. Each approved capital project shall be registered with this system and assigned a reference number.
Head of Division shall appoint the Project Manager for capital project within the Division.
Responsibility of Project Manager
A Project Manager shall be appointed for each capital project and shall be responsible for:
§ Preparing monthly progress report.
§ Checking and verifying all invoices and bills against equipment supplied. work completed or service rendered.
§ Managing the project to ensure the work is progressing as scheduled.
§ Monitoring and controlling the capital budget approved and allocated to the project.
§ Ensuring that all terms and conditions in the contract are complied with.
§ Preparing a completion report upon satisfactory completion of the project.
§ Preparing a problem report to the MD where the project cannot be completed for whatever reason
Fixed Asset (of Robi)
Robi as a Telecommunication industry is a Fixed Assets intensive company. It has invested almost BDT 400 billion for Fixed Assets in the last couple of years. Fixed Assets Unit is playing a vital role of maintaining records of these huge Fixed Assets. The main responsibility of this unit is to ensure that fixed assets are acquired, controlled, accounted for and Fixed asset management unit belief that Telecommunication company posses huge asset for its operation, process & communication. So it is an asset base company. Proper recording, controlling and compliance is very important for value added with the company for its long time sustainability. It is in need to aware about property pant and equipment condition, implementation, deviation to the management. In FY-2010, we are disclosing major disposed off in the best interest of the Company. Maintaining accurate records helps to control theft, avoid excess insurance premiums, safeguard and facilitates the audit process.
Definition of Fixed Asset
§ Asset which has more than one year service potential or economic benefits.
§ The asset value is equal or more than BDT 8,000 per unit.Project costs shall be recognized as Fixed Asset when the project is completed and ready to be used. Normally the capitalization exercise will be supported by the Certificate of Acce.
Components of fixed asset of Robi
a) Telco assets
1. Telecommunication equipment
2. Telecommunication infrastructure
3. IT infrastructure
4. IT Application
5. Support Systems
6. Staff Handset
b) Non Telco Asset
1. Billing Equipment
2. Office Equipment
3. Other Equipment
4. Furniture & Fixture
5. Motor Vehicle
2.01 :Fixed Asset Trend Analysis
Organogram of Assets Management – Existing
Policy Procedures Review
Asset Management unit reviewed Financial Policy Procedures (FPP) and Fixed Asset Policy as well Proposal submitted for amendment as required with the concern of respective authority. Besides, Standard Operational Process reviewed for Asset Management Unit like Impairment, Disposal, Residual Value, Physical Verification etc.
Cost Centre accounting enables an enterprise to get information about the point of cost incurrence. It provides information with respect to all costs assigned for management decision making. It facilitates check/control of costs incurred for individual functional areas (cost centers).
Robi has decided that not only various Departments, but also individual BTS sites will be consider as one cost centre to track the separate responsibility of cost involved.
Cost centre to be created must belong to a node in the standard hierarchy in the controlling module. The standard hierarchy groups together cost centers according to their organizational standpoint. Cost centers will be required for planning of costs at the beginning of the year, distributing the costs periodically to reflect the total costs in various controlling objects.
Cost Center Process Flow
Automatic Flow of Entries to CO from other Modules on online real time basis. Primary Costs are first posted / recorded in Financial Accounting and flows automatically to the Controlling component through the primary cost elements (equivalent to general ledger account in FI). For each controlling relevant business transaction two separate documents are simultaneously generated by the system in SAP for FI and CO modules.
Profit Centre
Group of BSC/BTS sites as falling under one responsibility i.e. MSC will be consider as a base for profit centre determination
Overall List of activities perform by fixed asset management unit
Ø Settlement of project expenses to AUC
Ø AUC Settlement to Final Asset
Ø Depreciation run- Planned , Unplanned for ROBI, Group and Tax
Ø Material master update
Ø Creation of settlement rule by system/manual
Ø Checking of Evaluation group, cost centre, Functional location & site code at the time of final settlement
Ø Project monitoring from creation to Final settlement
Ø Ensure all items have been capitalised as per FPP
Ø Ensure all assets transfers have been properly recorded
Ø Preparing Cost sheet to be calculated for every asset and affix on the top of the respective file.
Ø Monthly reporting on Fixed Asset Schedule in ROBI and Group level, CAPEX Schedule, CWIP schedule
Ø Class wise breakup of Asset
Ø Produce location wise asset list with value for Insurance purpose
Ø Schedule as per IAS/IFRS monthly basis
Ø Prepare schedule of Work in progress and transfer to assets on monthly basis
Ø Prepare schedule and checking of impairment, disposal and list of idle assets on quarterly basis
Ø Schedule preparation of payable to vendor and tack down the payment
Ø Ensure physical verification of assets have been done periodically.
Ø Ensure all information found in the physical verification have been notified to the senior and effect given in the accounts.
Ø Ensure all assets are properly tagged and IT affixed security seal
Activities under SAP
Ø Settlement of project expenses to Asset Under Construction (AUC)
Ø Settlement of AUC to Final Asset
Ø To Run Depreciation and other month-ending procedures
Ø Update Material Master
Ø PO condition update
Ø Checking of Evaluation Group, Cost Centre, Functional Location & Site Code at the time of final settlement
Ø Location wise asset checking and update with actual, through physical verification
Ø Invoice verification for Foreign PO
Ø Project monitoring from creation to final settlement
Ø Coordinating with other modules to implement project creation, PO issuance, GR, GI in time.
Reporting
Ø Preparation of Fixed Asset Schedule ~ Monthly
Ø Preparation of Fixed Asset schedule as per IAS/IFRS ~ Monthly
Ø Preparation & checking of schedule for Impairment, Disposal and identify Idle Assets ~ Quarterly
Others Activity
Ø Conduct Physical Verification of Fixed Assets ~ Periodically.
Ø Ensure all Asset are properly tagged
Ø Prepare open box inspection report
Ø Coordinate with other departments regarding Asset transfer, disposal, impairment
Achievements in 2010
Ø Successfully implementation of Asset Module (AM) in SAP
Ø Integration of AM with PS,SCM, PM, GL and Other Modules,
Ø Master Data Collection as well Physical Verification of all Robi assets,
Ø Creation of Material Master, Equipment Master and Asset Master through uploading of Master Data,
Ø Group Reporting implemented through SAP Asset Module,
Ø Implementation of component level asset tracking based on serial number profile,
Ø Impairment review of all Robi asset,
Ø Identification of Disposable Asst
Ø Notification of technical obsolescence of 49 G2 BTS and subsequent buy back arrangement from the vendor,
Ø FPP related to Fixed Asset has reviewed and amendment proposal submitted to Management,
Ø Successfully implemented Asset Transfer Form for both Telecom and Non Telecom Equipments.
Key Challenges for 2011
Ø Post SAP implementation work
– Conduct Physical Verification of Asset
– Reconciliation of Physical data with SAP database
– Updating SAP Database based on Actual
Ø Component level allocation of MSC, BSC and other Switching Equipments
– Data collection of all MSC, BSC and other switching equipments
– Price allocation for uploading file preparation in SAP
– Creation of material master, equipment master and Asset master
Ø Review and update of Fixed Asset Policy and Procedure
Ø Review and development of SOP for Asset Management
Ø Impairment Review
Ø Disposal review and execution on quarterly basis
Ø Full fledge implementation of project system in SAP
Ø PO wise cost tracking in respect of assetization
Ø Fixed Asset Policy Review & Update – By March 15,2011
Ø SOP Development: Impairment, Dismantling, Residual Value, Restoring, Physical Verification, Disposal Process.
Ø SAP Update regarding : Network Asset-Reconciliation of SAP data based on standard Non Telco- Asset- Reconciliation of SAP data based on physical
BTS –Based on Physical Verification of all sites
BSC – Based on Physical Verification of all sites
MSC – Based on Physical Verification of all sites
Non Telco – Based on Physical Verification of all sites
BSC 3.Capitalisation through SAP for the year -2011
Ø Training , orientation fo