Reporting System on Accounting Separation Regulations, 2012
PREAMBLE
In exercise of the powers conferred by section 36 read with sub-clause (i) of clause (b) of sub-section (1) of section 11 of the Telecom Regulatory Authority of India Act, 1997 (24 of 1997), the Telecom Regulatory Authority of India hereby makes the following regulations, namely:-
The Reporting System on Accounting Separation Regulations, 2012 (7 of 2012)
C HAPTER I
PRELIMINARY
1 . Short title, commencement and application.--
(1) These regulations may be called the Reporting System on Accounting Separation Regulations, 2012.
(2) They shall come into force from the date of their publication in the Official Gazette.
(3) These regulations shall apply to all service providers having aggregate turnover of not less than rupees one hundred crore, during the accounting year for which report is required to be submitted under these regulations, from operations under the licence issued under section 4 of the Indian Telegraph Act, 1885.
2 . Definitions.--
In these regulations, unless the context otherwise requires, -
(i) "Act" means the Telecom Regulatory Authority of India Act, 1997 (24 of 1997);
(ii) "Accounting Separation Statement" means statement furnished in proforma specified in Schedule III to these regulations;
(iii) "Annual Financial Statement" means financial statements prepared under section 211 of the Companies Act, 1956;
(iv) "Authority" means the Telecom Regulatory Authority of India established under sub-section (1) of section 3 of the Act;
(v) "Broadband" or "Broadband Service" means a data connection --
(a) which is always on and is able to support interactive services including Internet access;
(b) which has the capability of the minimum download speed of two hundred fifty six kilobits per second or such minimum download speed, as may be specified by the licensor, from time to time, to an individual subscriber from the point of presence of the service provider intending to provide Broadband service where a multiple of such individual Broadband connections are aggregated and the subscriber is able to access these interactive services including the Internet through the said point of presence;
(c) in which the interactive services shall exclude any services for which a separate licence is specifically required (such as real-time voice transmission) except to the extent permitted, or, as may be permitted, under Internet service provider's licence with internet telephony, and which shall include such services or download speed or features, as may be specified from time to, by the licensor;
(vi) "Cable Landing Station" means a location,
(a) at which the international submarine cable capacity is connected to the backhaul circuit; and
(b) at which international submarine cables are available on shore for accessing international submarine cable capacity and such location includes buildings containing the onshore end of the submarine cable and equipment for connecting to backhaul circuits;
(vii) "collocation charges" means the charges paid by a service provider for using facilities including land, building space, apparatus and plants, environmental services, security, site maintenance, power, electrical installations, cables, transformers, fire detection, fire fighting systems and back-up power for the purpose of interconnection including installation of collocation equipments i.e. switches, racks and cages, cross-connects and other cabling at the premises owned by another service provider;
(viii) "Cost Centre" means the support function or department of a company or a network element for which cost is incurred;
(ix) "Financial Capital Maintenance" is a methodology of recognising profit after taking account of holding gain or loss arising as a result of Replacement Cost Accounting;
(x) "geographical area" is a service area, which is treated as separate segment for purpose of preparing reports under regulation 4;
(xi) "Historical Cost Accounting" means a system of accounting where assets, liabilities, costs and revenues are recorded at the value when the transaction was made and where assets are valued and depreciated according to their cost at the time of purchase;
(xii) "Holding gain or loss" means gain or loss arising out of change in the replacement cost of an asset while the asset is still being held at the Historical Cost and is computed as under:-
Holding Gain or Loss= NBVt-1X (GRCt /HC) - NBVt-1X(GRCt-1 /HC)
Where, NBVt-1 = Written down value of an asset at historical cost at the beginning of year t,
GRCt = Gross replacement cost of an asset at the end of year t,
HC = Historical Cost of an asset at the time of its purchase
(xiii) "Internet Service" means all type of internet access or internet content services as provided in the licence;
(xiv) "Licence" means a licence granted or having effect as if granted under section 4 of the Indian Telegraph Act, 1885 (13 of 1885) or the provisions of the Indian Wireless Telegraphy Act, 1933 (17 of 1933);
(xv) "Manual" means manual referred to in regulation 3 of these regulations;
(xvi) "Meet Me Room" means a place where telecom service providers connect their equipment;
(xvii) "Modern Equivalent Asset" means the current value of available asset with the same level of capacity and functionality as that of the original asset;
(xviii) "Off-net call" means a call which terminates in the network of a service provider other than the originating service provider;
(xix) "On-net call" means a call which originates and terminates in the network of the same service provider;
(xx) "Pass through charges" means the charges excluded from gross revenue to arrive at adjusted gross revenue for the purpose of levying licence fee as provided under the licence agreement of the service provider;
(xxi) "Profit Centre" means a service or a product offered by a service provider to which revenue and cost can be traced to calculate profit from that activity;
(xxii) "regulations" means the Reporting System on Accounting Separation Regulations, 2012;
(xxiii) "Related Party" has the meaning assigned to it in the Accounting Standard on Related Party Disclosures (AS 18) issued by the Institute of Chartered Accountants of India;
(xxiv) "Related Party Transaction" means a transfer of resources or obligations between related parties whether a price is charged or not;
(xxv) "Replacement Cost Accounting" means system of accounting where value of an asset is entered in the financial statement at the price which is required to be paid if same or equivalent asset is purchased;
(xxvi) "Report" mean financial and non-financial Accounting Separation statements furnished by service providers under regulation 4;
(xxvii) "Retail Revenue" means revenue earned by the service provider from the sale of products and services directly to the end consumer;
(xxviii) "service provider" means the Government as a service provider and includes a licensee;
(xxix) "Supplementary depreciation" refer to the difference between depreciation on historical cost and depreciation on replacement cost of an asset;
(xxx) "Transit Carriage Charge" means charge for carriage of intra-circle traffic handed over from Cellular Mobile Networks to Fixed Network at Level II Trunk Automatic Exchange (TAX) of Long Distance Charging Area for terminating in Short Distance Charging Area of the same Long Distance Charging Area;
(xxxi) "Value Added Services" means services which are offered to add value to the core services, the core services being voice calls, voice or non-voice messages and data transmission;
(xxxii) "wholesale interconnection" means a product for which revenue is received from other service providers for carrying or terminating calls or messages or for providing interconnection facilities;
(xxxiii) "wholesale revenue" means revenue realised from the sale of products and services other than to end consumers;
(xxxiv) all other words and expressions used in these regulations but not defined, and defined in the Act and the rules and other regulations made thereunder, shall have the meanings respectively assigned to them in the Act or the rules or other regulations, as the case may be.
CHAPTER II
MANUAL & REPORTS
3 . Manual.--
(1) Every service provider shall for the purpose of implementing the accounting and reporting practices specified under these regulations furnish to the Authority within 90 days from the date of commencement of these regulations, a manual containing policies, principles, methodologies and procedures for accounting and cost allocation;
(2) The manual referred to in sub-regulation (1) shall contain the following items, namely: -
(a) the details of the organisational structure of the service provider;
(b) a list of the all entities within the group operating in the telecom sector and relationship of the service provider with such entities and other group companies and related parties with regard to interconnection and sharing of common resources etc.;
(c) the details of the financial accounting system adopted by the service provider including policies relating to capitalisation, depreciation, advance receipts of revenue, security deposits, provision for bad and doubtful debts etc.;
(d) the description of the related party transactions, allocation of shared services and jointly used assets;
(e) the details of products, services, network elements and geographical areas which shall be treated as separate segments for preparing Accounting Separation Statements;
(f) the description of accounting policies for allocation and apportionment of revenue, cost, assets and liabilities;
(g) the details of the accounting system followed for recording and generation of the accounting separation information and reports which shall include list of cost and profit centres, linkages of financial heads to cost and profit centres;
(h) the description of studies, surveys and model employed in cost apportionment and cost allocation process;
(i) the definition of terms used in the manual; and
(j) the...
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