Report On Tm International Of Bangladesh (Aktel)

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Report On

A Tm International Of Bangladesh (Aktel)

1.1 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.

1.2 The Organization in Brief (AKTEL 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, AKTEL is the second market leader in the telecommunication sector in Bangladesh. With the beginning of 2005 the company completed its seventh year of business. The company achieved remarkable success during this period. It is now able to say that it has the second biggest subscriber base and more value added services than any other mobile phone operators in Bangladesh. AKTEL has a very strong competitive position in the telephone industry in the country.

1.2.1 Name and Organizational History of AKTEL:

AKTEL is the dynamic and leading end-to-end countrywide GSM mobile communication solutions of TM International (Bangladesh) Limited. 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.

Since the commencement of its operation, AKTEL has been a force to be reckoned with in the telecommunication industry of Bangladesh, being one of the fastest growing mobile communication companies offering comprehensive GSM mobile solutions to more than two million subscribers. In 1997, AKTEL boast the widest International Roaming service in the market connecting 315 operators across 170 countries. With a network covering all 61 (allowable) districts of Bangladesh, coupled with the first Intelligent Network (IN) Prepaid Platform in the country, AKTEL is geared to provide a wide range of products and services to customers all over Bangladesh.

Through aggressive investment to extend network coverage and improving call quality, AKTEL 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. AKTEL looks 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 AKTEL’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 AKTEL over others.

1.2.2 Location of AKTEL:

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 SILVER TOWER & UDAY TOWER, Gulshan-1, All together; there are elevencustomer service centers. Among them five are in Dhaka (Gulshan-1, Gulshan-2, Motijheel, Dhanmondi, and Uttara), two are in Chittagong and one each in Cox’s Bazar, Comilla, Sylhet, and Khulna consecutively.

1.2.3 Founders of AKTEL:

AKTEL is a joint venture company between Telekom Malaysia Berhad from Malaysia and A.K. Khan & Co. Limited of Dhaka, Bangladesh.

1.2.4 Vision of AKTEL:

The vision of AKTEL is To be a leader as a Telecommunication Service Provider in Bangladesh.

1.2.5 Mission of AKTEL:

To provide total customer satisfaction as the company strives to become the most preferred GSM cellular service provider in Bangladesh. TMIB 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,

Ø Securing quality of the service to match the quality of services offered by the world’s most successful companies in the field,

Preserving the Company’s leading position in the national market of mobile telecommunications

1.2.6 Theme of AKTEL:

AKTEL always strives to uphold the dictum “Customer First

Customer Trend Analysis

1.2.7 The Business Slogan of AKTEL

“Clearly Ahead”

The whole is the sum of parts and when the best come together; the results can be truly spectacular. TMIB brings AKTEL Mobile phone service, a digital cellular phone service, which will prepare better for life in the fast lane. AKTEL GSM always keeps so near, even when so far.

1.2.8 Strategy of AKTEL:

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 TMIB 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 outlets

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

1.2.9 People of AKTEL:

The most important key resource factor in TMIB 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. AKTEL has put its keen eyes in developing its employees through proper training, as they believe that the most important asset for TMIB is its staff members. As of June, 2006, TMIB has approximately 1,600 staffs composed of locals and expatriates to serve its more than 20, 00,000subscribers. And, AKTEL is ensuring the quality services by quality people.

1.2.10 Technology of AKTEL:

AKTEL’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 AKTEL in Bangladesh use the 900 GSM technology because AKTEL are committed to give the customer the very best. Presently TMIB offers GSM digital cellular services in all divisional Headquarters and all major big districts.

1.2.10 Major Milestone of the AKTEL Business:

AKTELis 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. AKTEL 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 Bangladesh

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 fladged IVR based Customer Services (Call Center) in telecom market.

Ø First time introduced cellular services in the most northern part of Bangladesh by launching AKTEL 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. Recently AKTEL has introduced 10-second pulse for the pre-paid users and 1 second pulse for the post-paid users.

Ø First time introduced club membership offer for the exclusive users of AKTEL. The club is known as Club Magnate, which offers extra services with its Platinum, Gold and Sliver cards.

1.3 Products and Services of AKTEL:

Telephone sector is a service-oriented sector. AKTEL 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 AKTEL 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. AKTEL 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 AKTEL are broadly categorized in the two types: the Post-paid service, and the Pre-paid service.

Industry Life Cycle

The industry is 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.


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 objective of all the companies are to maximize there 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.

1.5 Shareholders of AKTEL:

The Company AKTEL, with a full title being: TM International (BD) Ltd. (TMIB), was founded as a joint company of the Telekom Malaysia Berhad from Malaysia and the A. K. Khan & Co. of Dhaka, Bangladesh.

Figure 2: The shareholders of AKTEL

It operates as a Limited Liability Company, where a founder and a majority shareholder, the TMIB- member of the Telecom Malaysia, owns 70% shares, while the minority shares of 30 % are being controlled by the A. K. Khan & Co. Bangladesh.

Organization Structure of AKTEL:

AKTEL places a high value on human resource development and the contributions made by its employees. Because of the rapid expansions of AKTEL’s networks and enormous growth of its subscriber base, the company has increased its workforce. AKTEL has successfully hired some key senior managers who were recruited on the basis of their professional expertise and experience.

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 the head of department. Every general manager has an assistant general manager (AGM) and the heads of the departments are on the equivalent rank of the AGMs. Divisions deal with the cor e 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:

Organization Structure (Organogram)

® Planning

® Infrastructure

® Property Management

® Billing

® Value Added Services (VAS)

® Rating (Post-Paid)

® Customer Relations Management (CRM)

® Pre-Paid

® Product Configuration

® Billing Operation Team

® Account Receivable

® Account Payable

® Core Account

® Revenue Assurance

® Corporate Finance

® Taxation

® Reporting

® Costing

® Brand and A&P (Advertising & Promotion)

® Product Development

® Marketing Research & MIS

® International Roaming

® Corporate Salesirect Sales

® Dealer Management

® Customer Care

1.6.1 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 TMIB is a large company with thousands of financial transactions everyday, 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 TMIB 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.

1.6.2 Coordination Department

The coordination department is responsible for the internal and external synchronization. At one hand, they coordinate with outside companies. Along with that, they harmonize among the divisions and departments inside the company.

1.6.3 Relationship among Different Division and Departments

An organization is like complex machinery consisting of different parts. Different functional divisions and departments are the different parts of this organizational machinery. Therefore, to make an organization a success, the divisions and departments must work accordingly. In AKTEL all the divisions and departments are closely tied with one another.

Sales unit makes sales forecast, identifies market’s potential opportunity and sends it to the technical division for doing the plan for new coverage area. These two divisions jointly plan for increasing the coverage area. If there is any complaint regarding the networks Customer Relation Management unit informs it to technical division for solving it. Again Customer Relation Management Unit informs marketing division about the problems and suggestions regarding the products and their selling procedure. Finance division is related with al the divisions for fund allocation and fund management of all shorts and giving salary to all the AKTEL employees. Human Resource Department meets the employee need of other divisions by conducting total recruitment process.


2.1 Definition of Systems 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.

2.2 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 Systemanalyse und Programmentwicklung (“Systems Analysis and Program Development”) in Mannheim, Germany. Their vision was to develop and market standard enterprise software which would integrate all business processes.

2.2.2 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 was 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.

2.2.3 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.

2.2.4 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.

2.2.5 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.



2.3.1 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.

2.3.2 Affordable IT’S 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.

2.3.3 SAP Financing – Benefits at a Glance:

With SAP financing you get:

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.

2.4 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 a 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.

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).

2.5 Classification of assets

· 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.

· 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.

2.6 Intangible assets

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.

2.7 Leased Assets

Assets acquired under finance leases are included as property in the Balance Sheet.Finance leases effectively transfer from the lessor 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

· 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.

2.8 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, especially

2.9 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 alongwith 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.

2.10 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 reasons.

Site Acquired to Construction Start Improvement

2.11 Fixed Asset (OF AKTEL)

AKTEL as a Telecommunication industry is a Fixed Assets intensive company. It has invested almost BDT 300 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-2006, 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.

2.11.1 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

2.11.2 Components of fixed asset of AKTEL

(a) Telco assets

(b) Non Telco assets

(a) Telco Assets

(I) Telecommunication equipment

(II) Telecommunication infrastructure

(III) IT infrastructure

(IV) IT Applications

(V) Support Systems

(VI) Staff Handset

(b) Non Telco Assets

(I) Billing Equipment

(II) Office Equipment

(III) Other Equipment

(IV) Furniture & Fixture

(V) Motor Vechile

2.02 :Fixed Asset Trend Analysis

Organogram of Assets Management – Existing

2.12.1 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. and th4.6.1 Cost Centre:

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 centres).

Currently no cost centre is applicable as of the date in TMIB

TMIB 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 centres according to their organizational standpoint. Cost centres 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.

SOP under process for finalization.

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

2.12.2 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 TMIB, 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, fixed assets policy and procedures

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 TMIB and TMI 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

2.12.3 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.

2.12.4 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


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

2.12.5 Achievements in 2006

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 AKTEL 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 AKTEL asset,

Ø Identification of Disposable Assets,

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.

2.12.6 Key Challenges for 2007

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 15,2007

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 -2007.

Ø Training , orientation for SAP application

Ø .Disposal Process execution quarterly

Ø Impairment Review of Network and other than Network assets.

Ø Transfer Process monitoring and awareness for smooth implementation.& MSC -Price distribution in component level.

2.13 Physical Verification of Telco Equipments Under SAP

Physical Verification-Telco Equipments

Process flow-1


Physical verification is very important in order to ensure physical existence of the assets as well as update in SAP and batter control. We may divide into two parts of our assets i.e. Telco Equipment and Non-Telco Equipments.

Therefore, Telco Equipments are divided into two categories for physical verification i.e. BTS and other networking asset like MSC, BSC HLR etc.

1.1 Fixed Asset Management Unit will make a plan for BTS verification in January each year.

1.2 Asset Management Unit will communicate with the Concern Technical Core person in this issue. A meeting will be arranged with Technical so that a person is assigned for coordination of physical verification.

1.3 Technical person will finalize the plan and assist finance people in this issue.

1.4 Before starting verification, Resource person and logistic support to be confirmed as per plan.

1.5 A person will be dedicated as supervisor and will process and communicate with the management for update information.

1.6 Team formation is required to work simultaneously in entire country as per plan. Number of team will be determined based on the available resources as instance in the next page.

2.14 Under SAP Physical Verification (Network Asset)


A guideline / instruction along with location wise SAP equipment master data to be provided by the supervisor to the resource person for the execution of physical verification. Each team will work individually

Verification team will discussed with the respective zonal in charge in case of any short/excess with the SAP data. Verification report/form will be certified by the respective zonal in charges and then they will submit report to the supervisor.

1.7 A report to be compiled by the supervisor after collection of verification report from the concern person.

1.8 A meeting will be arranged with the technical division for the next course of action i.e. update in SAP or any discrepancies solution.)

1.10 SAP to be updated by Technical division

1.10 Asset Management Unit submits a report to the GM-Finance / CFO.

Physical Verification Process Flow-2

Company Name TM International Bangladesh Limited
Process Output Physical Verification
Area Impacted SAP Update, Operating cost, Asset Net Book Values
Process Owner Fixed Assets Management – Finance Division -TMIB


Physical verification is very important in order to ensure physical existence of the assets as well as update in SAP and batter control.

We may divided into two parts of our assets i.e. Telco Equipment and Non-Telco Equipments. Therefore, Telco Equipments are divided into two categories for physical verification i.e. BTS and other networking asset as MSC, BSC HLR etc.

1.1 Fixed Asset Management Unit will make a plan for MSC, BSC, HLR etc verification in January each year.

1.2 Asset Management Unit will communicate with concern person. A meeting will arrange with Technical so that a person is assigned from coordination of physical verification.

1.3 Technical person will finalize the plan and assist finance people in this issue.

1.4 Before starting verification, Resource person and logistic support to be confirmed as per plan

1.5 A person will be dedicated as supervisor and will process and communicate with the management for update information.

1.6 Team formation is required to work simultaneously in entire country as per plan. Number of team will be determined based on the available resources as instance in the next page.

Company Name TM International Bangladesh Limited
Process Output Physical Verification
Area Impacted SAP Update, Operating cost, Asset Net Book Values
Process Owner Fixed Assets Management – Finance Division -TMIB


A guideline / instruction along with location wise SAP equipment master data to be provided by the supervisor to the resource person for the execution of physical verification. Each team will work individually. Verification team will discussed with the respective NSS in charge in case of any short/excess with the SAP data. Verification report/form will be certified by the NSS in charges and then they will submit report to the supervisor

1.7 A report to be compiled by the supervisor after collection of verification report from the concern person.

1.8 A meeting will be arranged with the technical division for the next course of action i.e. update in SAP or any discrepancies solution.)

1.10 SAP to be updated by Technical division

1.10 Asset Management Unit submits a report to the GM-Finance / CFO.

2.15 Asset Impairment of Telco Equipment Under SAP

2.15.1 Determination of Asset Impairment (Network Asset)

The Technical Evaluation Committee reviewed all asset of TMIB and identified asset as require for impairment. Huge work done for process & communication by asset management to execute impairment evaluation.

About Impairment

Based on IAS 36, An entity shall assess at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, the entity shall estimate the recoverable amount of the assets.

The principles are derived from the basis asset measurement model, which can be portrayed as per diagram shown in this page Diagram-1

2.15.2 Determination of Asset Impairment (Network Asset-2)


Based on IAS 36, An entity shall assess at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, the entity shall estimate the recoverable amount of the assets.

1.1 Task force to quarterly review the Asset Impairment indicators as required under IAS 36 Para 12 and Para 110

Asset Review Committee to initiate and lead the task force meeting in 1st quarter & 3rd quarter.

Unit Responsible: Asset Review Committee

Task Force will be formed & Task Force Members will be selected by the Asset Review Committee as required

1.2 No impairment required for favorable indicators.

1.3 Identify assets involved based on the assessed indicators.

The identified assets can be by:– An individual asset .

Unit Responsible: Technical Division

1.4 Retrieve the related asset information from asset data base.

Unit responsible: Fixed Asset Management

1.5 To determine impairment loss as per IAS-36.To determine the recoverable amount of the asset as per Diagram-1.

1.6 Verify the asset impairment listing, confirm and prepare manual journal form :

If provision

Asset Impairment Loss Dr.