arslan ptcl report
TRANSCRIPT
INTERNSHIP REPORT ON
PAKISTAN TELECOMMUNICTION COMPANY
LIMITED
MUHAMMAD ARSLAN ALI
Enrollment # 01-122081-063
Submitted in partial fulfillment of the requirements
For the degree of Master of Business
Administration
At
BAHRIA UNIVERSITY ISLAMABAD, PAKISTAN
DECEMBER, 2010
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ACKNOWLEDGEMENT
First of all I am thankful to “ALMIGHTY ALLAH”. Who gave me the strength, patience,
courage and enthusiasm needed to write and complete this report, then to my friends
who assisted me in this effort and we worked daylong to accomplish this assignment and
to my parents who supported me financially and encouraged me morally. I have a debt of
gratitude to all my teachers who taught me throughout my academic career.
It was pleasure for me to be sent to The PTCL Headquarters G-8/4, Islamabad. I am very
thankful to the honorable internship incharge. I learnt a lot from this training program
and this would guide me a lot while selecting my career. I also know how to face the
problems and how to find out the ways for their solutions.
The preparation of this report was the massive undertaking but the highly competent and
experienced employee of PTCL Mr. Asad Qadeer and Mam Sumaira, provided me with all
Assistance, information, Advice and suggestion that I needed which contributed
importantly to this report.
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DEDICATION
This report is dedicated to:
Most Lovable “My GRAND FATHER & PARENTS”
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EXECUTIVE SUMMARY
It is the requirement of the university for the MBA degree to complete a eight week
internship program. After completion of the internship, the students have to submit a
written report to the department.
The purpose of this study is to get experience of the real life finance practices in order to
bridge the gap between the theoretical and the practical approaches and to gather the
knowledge of the different aspects of this vast field of profession. Besides, this report also
aims to inculcate amongst the students the method of collecting relevant material and
shaping it in the forms of formal report writing.
This report provides information about the main functions and operations of Pakistan
Telecommunication Company Limited. All the information is gathered during on the job
training in Pakistan Telecommunication Company Limited. The information contained in
this report was mainly collected from two departments, i.e. Budgeting & International
accounts.
During my internship at PTCL, I experienced a positive and cooperative environment
which helped me in my learning. Not only I learned different finance practices but also I
came to know that how to behave and talk with seniors, juniors and peers. I have
described my experience in detail in the 3rd chapter.
The problem I found at the PTCL is that they don’t treat their customers that well and new
services like PTCL broadband is not still producing satisfactory results. Management is
confused how to get maximum benefit and keep on introducing and eliminating their
services and packages. During the first nine months of financial year 2007-08, total
revenue of the company was Rs. 44.0 billion, showing a decline of 9% compared with Rs.
48.5 Billion of the same period last year. However, revenue performance has shown a
consistent growing trend from quarter to quarter during the current fiscal year. The
operating expenses increased to Rs. 56.9 billion from 33.7 billion only because of VSS cost
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impact. As a result, there was an operating loss of Rs. 13.0 billion. The non-operating
income increased by 11% to Rs.3.4 billion. The Company suffered a loss before tax of Rs.
10.0 billion for the nine month period ended 31st March, 2008. There is a net gain in the
provision for tax amounting to Rs. 3.4 billion which reduced the net loss to Rs. 6.6 billion.
The consolidated results of PTCL group showed a better picture as the net loss before tax
amounting to Rs. 8.3 billion was less due to positive contribution of Ufone. Excluding VSS
impact, the group would have shown a profit before tax of Rs. 14.9 billion. Moreover
reference matters more then skills and qualities of an employee. Promotion is done on
the basis of seniority and experience. It is briefly discussed in 4th chapter.
The efforts should be made that PTCL be made independent in its internal matters and
ministry of communication may give only guidelines. The officers must be trained to
adopt the company culture, soft spoken, good relations with customers and target
oriented. Finance and Marketing officers and Engineers may be sending to international
seminars/workshops to get knowledge of new technique and procedures. Promotion
should be made on the basis of performance rather than seniority.
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TABLE OF CONTENTS
ACKNOWLEDGEMENT....................................................................................................iiiDEDICATION......................................................................................................................ivEXECUTIVE SUMMARY....................................................................................................vTABLE OF CONTENTS.....................................................................................................viiLIST OF TABLE..................................................................................................................ixINTRODUCTION:.................................................................................................................1
HISTORY OF TELECOMMUNICATION.......................................................................1EARLY TELECOMMUNICATIONS...........................................................................1
INTRODUCTION OF THE HOST ORGANIZATION....................................................2COMPANY PROFILE.......................................................................................................2
PRODUCTS & SERVICES...................................................................................................8VALUE ADDED SERVICES............................................................................................8
QUALITY OF SERVICE..............................................................................................9NEW PROJECTS AND SERVICES IN PIPELINE......................................................9
COMPANY ANALYSIS:....................................................................................................10SWOT ANALYSIS OF PTCL.........................................................................................10
STRENGTHS...............................................................................................................10WEAKNESSES............................................................................................................11OPPORTUNITIES.......................................................................................................13THREATS....................................................................................................................14
FINALCIAL ANALYSIS....................................................................................................16LIQUIDITY ANALYSIS.................................................................................................20
ACCOUNT RECEIVABLE TURNOVER..................................................................20ACCOUNT RECEIVABLE TURNOVER IN DAYS.................................................20WORKING CAPITAL.................................................................................................21CURRENT RATIO AND ACID- TEST RATIO.........................................................21CASH RATIO..............................................................................................................21SALES TO WORKING CAPITAL.............................................................................21
PROFITABILITY ANALYSIS.......................................................................................21TOTAL ASSET TURN OVER RATIO.......................................................................22DUPONT RETURN ON ASSETS...............................................................................22OPERATING INCOME MARGIN (PERCENT)........................................................22OPERATING ASSET TURN OVER..........................................................................22RETURN ON OPERATING ASSET (PERCENT).....................................................23RETURN ON INVESTMENT (ROI) (PERCENT).....................................................23RETURN ON TOTAL EQUITY (PERCENT)............................................................23
INVESTOR ANALYSIS.................................................................................................24DEGREE OF FINANCIAL LEVERAGE (TIMES)....................................................24
RATIO’S..........................................................................................................................24LONG TERM DEBT PAYING ABILITY......................................................................25
WORKING EXPERIENCES...............................................................................................27LEARNING IN PTCL AS A INTERNEE.......................................................................27
STRUCTURE OF BUDGET DEPARTMENT...........................................................27WORKING...................................................................................................................28DUTIES AND RESPONSIBILITIES..........................................................................28
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FINANCE DEPARTMENT.............................................................................................29BUDGET DEPARTMENT..............................................................................................31
RECOMMENDATIONS.....................................................................................................35CONCLUSION....................................................................................................................36REFRENCES.......................................................................................................................37ONLINE REFERENCES.....................................................................................................38APPENDIX-A......................................................................................................................39
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LIST OF TABLE
1. RATIO ANALYSIS……………………………………………………………….17
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INTRODUCTION:
HISTORY OF TELECOMMUNICATION
The history of telecommunication began with the use of smoke signals and drums in
Africa, the Americas and parts of Asia. In the 1790s the first fixed semaphore systems
emerged in Europe however it was not until the 1830s that electrical telecommunication
systems started to appear. This article details the history of telecommunication and the
individuals who helped make telecommunication systems what they are today.
History of telecommunication is an important part of the larger history of communication
EARLY TELECOMMUNICATIONS
Early telecommunications included smoke signals and drums. Drums were used by natives
in Africa, New Guinea and South America, and smoke signals in North America and China.
Contrary to what one might think, these systems were often used to do more than merely
announce the presence of a camp.
In 1792, a French engineer, Claude Chapel built the first visual telegraphy (or semaphore)
system between Lille and Paris. This was followed by a line from Strasbourg to Paris. In
1794, a Swedish engineer, Abraham Decants built a quite different system from
Stockholm to Drottningholm. As opposed to Chapel’s system which involved pulleys
rotating beams of wood, Edelcrantz's system relied only upon shutters and was therefore
faster. However semaphore as a communication system suffered from the need for skilled
operators and expensive towers often at intervals of only ten to thirty kilometers (six to
nineteen miles). As a result, the last commercial line was abandoned in 1880.
TELEGRAPH AND TELEPHONE
RADIO AND TELEVISION
COMPUTER NETWORKS AND THE INTERNET
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INTRODUCTION OF THE HOST ORGANIZATION
COMPANY PROFILE
With employee strength of more than 29,500 and customers less than 6 million, PTCL is
the largest telecommunications provider in Pakistan. The company maintains a leading
position in Pakistan as an infrastructure provider to other telecom operators and
corporate customers of the country. It has the potential to be an instrumental agent in
Pakistan’s economic growth. PTCL has laid an Optical Fiber Access Network in the major
metropolitan centers of Pakistan and local loop services have started to be modernized
and upgraded from copper to an optical network. However, the telecommunications
sector has been deregulated in recent years leading to a production of first domestic and
more recently international cellular phone providers. It is a part of the overall strategy in
the sector to privatize the public monopoly, or what is effectively a natural monopoly.
VISION STATEMNET
“To be the leading Information and Communication Technology Service Provider in the
region by achieving customer satisfaction and maximizing shareholders 'value'.”
MISSION STATEMENT
To achieve that vision PTCL has the following viewpoints.
An organizational environment that fosters professionalism, motivation and
quality.
An environment that is cost effective and quality conscious.
Services that are based on the most optimum technology.
Quality and Time conscious customer service.
Sustained growth in earnings and profitability.
CORE VALUE
Professional Integrity
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Customer Satisfaction
Teamwork
Company Loyalty
HISTORY OF PTCL
Telecommunication is older than Pakistan, before the independence of Pakistan this
sector was under the Indian post and telegraph department. Pakistan Telecommunication
Corporation (PTC) set its journey in December 1990, taking over operations and functions
from Pakistan Telephone and Telegraph Department under Pakistan Telecommunication
Corporation Act 1991. This coincided with the Government's competitive policy,
encouraging private sector participation and resulting in award of licenses for cellular,
card-operated payphones, paging and, lately, data communication services. Pursuing a
progressive policy, the Government in 1991, announced its plans to privatize PTCL, and in
1994 issued six million vouchers exchangeable into 600 million shares of the PTCL in two
separate placements. Each had a par value of Rs.10 per share. These vouchers were
converted into PTCL shares in mid-1996. In 1995, Pakistan Telecommunication
(Reorganization) Ordinance formed the basis for PTCL monopoly over basic telephony in
the country. It also paved the way for the establishment of an independent regulatory
regime. The provisions of the Ordinance were lent permanence in October 1996 through
Pakistan Telecommunication (Reorganization) Act. The same year, Pakistan
Telecommunication Company Limited was formed and listed on all stock exchanges of
Pakistan. Pakistan Telecommunication Company Limited (PTCL) was incorporated as a
public limited company, with the objective of providing domestic and international
telecommunication and related services. About 95% of the assets and liabilities of PTC, at
net book value, were transferred to PTCL whereas the remaining 5% assets were vested in
PTA, NTC etc. The vesting of assets to new entities took place with effect from 1st January
1996. PTCL is listed on the Karachi Stock exchange and comprises about 30% of the
weight age of the KSE 100 index. In 1995 under the Chairmanship of Mian Javed, the PTCL
in its first four years installed nearly 2 million telephone lines, about 200 percent increase
in total capacity. Today, the number of working lines has been raised to about 2.82
million. The fixed line telephone density is 2.2 telephones per thousand people, which is
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higher than in some countries of the region. The number of telephone lines is expected to
total nearly 4 million within the next 2 years. In addition PTCL started a very aggressive
roll out of the conversion of the old analog telecom technologies to digital telecom
including installation of Fiber Optic backbone between Karachi and Lahore in the initial
phases. The company is in process of enhancing organizational and business proficiency
through vertical integration and horizontal diversification. At the same time, cross-
national ownerships, operations and partnerships are being evaluated with a view to
developing and diversifying the business.
With employee strength of 29500 and customers less than 6 million, PTCL is the largest
telecommunications provider in Pakistan. PTCL also continues to be the largest CDMA
operator in the country with 0.8 million V-fone customers. The company maintains a
leading position in Pakistan as an infrastructure provider to other telecom operators and
corporate customers of the country. It has the potential to be an instrumental agent in
Pakistan’s economic growth. PTCL has laid an Optical Fiber Access Network in the major
metropolitan centers of Pakistan.
SUBSIDIARIES
U-fone(Pakistan Telecom Mobile Ltd) a wholly owned subsidiary of PTCL commenced its
operations on 29th January 2001 as a GSM 900 service provider. Since the beginning, it
has expanded its coverage and customer base at a rapid pace and established itself as one
of the leading cellular service providers in Pakistan. U-fone is now considered to be one of
the most active, aggressive and innovative players in the mobile sector of Pakistan. The
growth of the cellular industry is a direct result of the successful execution of the telecom
deregulation and cellular mobile policy by the Ministry of IT and Telecommunications
(MOIT&T) and the support, guidance and timely enforcement of regulatory process by the
Pakistan Telecommunication Authority (PTA). U-fone successfully maintains its market
share of 25% by increasing its subs to 18.5 million. During the year, U-fone successfully
completed the launching of sites under Phase V in existing as well as new cities and towns
by investing more than US$ 575 million. This has increased the asset base of U-fone from
rupees 33.5 billion to 55.9 billion. To further enhance the subscriber base and strategically
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position the company in the growing telecom market, U-fone has finalized a network
expansion for Phase VI contract amounting to about US$ 126 Million.
U-fone currently, has network coverage in more than 3,756 locations throughout the
country. U-fone's operational performance has been very encouraging despite hard
competition in Pakistan telecom market, which has led to reduction of prices to bare
minimum level. U-fone managed to improve its revenue and operating profit by 35% and
47% respectively, as compared to the last year through insistent policies and exercising
strict control over expenses.
PRIVATIZATION
The growth of the cellular sector in Pakistan can also be attributable to good governance
policies of the government of Pakistan and the Privatization Commission. In April 2006,
Emirates Telecommunication Corporation, which is commonly known as Etisalat, has
assumed management control of Pakistan Telecommunication Corporation Ltd – part of
the $2.6bn deal to buy a 26% stake in PTCL. The successful Privatization of PTCL, and
consequently U-fone, is hailed as ushering in a new era for telecommunications in
Pakistan. Now, under the management of Etisalat, U-fone will concentrate on customer
needs and benefits and is more determined than ever to be the leading cellular player in
the market. U-fone has been known for providing superb propositions and quality service
to its customers. With the new expected investment, U-fone can now aggressively expand
its network coverage.
PerformanceAs mobile users in the country have reached over 30 million at a very rapid pace, U-fone
has maintained itself as the 2nd largest cellular operator in Pakistan with a subscriber
base of around 6.8 million and a market share of nearly 28%. U-fone has seen a subscriber
growth rate of over 200% in the last year, and since the start of 2005 U-fone added nearly
5 million subscribers onto its network. Subsequently the growth in subscriber base caused
revenue to be doubled. In the recent year its DSL services are the major contributor in its
revenues.
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Product and Pricing
Since the recent telecom de-regularization and the issuance of two more GSM licenses,
the Pakistan telecom market has become very competitive and is changing at a very fast
pace. U-fone once again set a trend in the market by introducing simplified tariffs. The
company has two main product lines (prepaid and post paid) for all its valued customers.
To capture every segment of the market, U-fone has further customized its packages.
Postpaid is further differentiated into 4 plans including a very competitive Zero Line Rent
package. U-fone has introduced a very simplified tariff structure for its customers with a
flat rate of Rs. 1/ 30 sec to any operator all over the country. Similarly U-fone has the
most competitive SMS, GPRS and MMS rates having the lowest international SMS rate at
Rs.1.50. These simplified tariff plans and user-friendly packages have greatly helped U-
fone in becoming the fastest growing operator in the country. U-fone understands the
need to communicate effectively and efficiently at all levels of society and its various
products are catering for the needs of the Pakistan corporate market.
International Coverage
U-fone provides International Roaming facility with more than 150 international
operators across 79 countries. U-fone has GPRS roaming agreements with several
international operators and also provides prepaid roaming facility to selective
destinations.
Network Coverage
U-fone has always believed in a solid commitment to growth, security and reliability.
Therefore, U-fone has always balanced its expansion efforts and quality of service. With a
total current investment of $400 Million, U-fone has network coverage in more than 300
cities and towns and across all major highways of the country. U-fone has been
instrumental in the growth of the cellular market in Pakistan. It is a company committed
to excellence. Under the new vision of Etisalat and with the support and collaboration of
its employees and vendors, U-fone aspires to be the best in the market by offering
customer focused products.
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Historic Background
1947 Posts & Telegraph Dept. established
1962 Pakistan Telegraph & Telephone Dept.
1990-91 Pakistan Telecom Corporation
ALIS: 850,000
Waiting list: 900,000 Expansion Program of 900,000 lines initiated
(500,000 lines by Private Sector Participation
400,000 lines PTC/GOP own resources).
1995 About 5 % of PTC assets transferred to PTA,FAB & NTC.
1996 PTCL Formed listed on all Stock Exchanges of Pakistan
1998 Mobile (U-fone)& Internet(PakNet)subsidiaries established
2000 Telecom Policy Finalized
2003 Telecom Deregulation Policy Announced
2006 Etisalat Takes Over PTCL
MONOPOLY STATUS
Pakistan Telecommunication Company Limited has monopoly over fixed line voice
telephony expires on 31s1 December 2002 and we do not anticipate any extension.
However, armed with various entry barriers to fixed line telephony, such as large capital
requirements and first mover advantages, we believe Pakistan Telecommunication
Company Limited will not be substantially affected for several years thereafter.. Pakistan
Telecommunication Company Limited has already adopted a flexible approach toward the
private sector and has implemented BOT contracts with private sector participation.
Pakistan Telecommunication Company Limited has latest expansion plans also envisage
private sector participation over the next two years and interest has been solicited for
installation of 270K lines. In effect, the sector is already open to private .sector 7
participation, though without threatening Pakistan Telecommunication Company's
monopoly as these projects function under Pakistan Telecommunication Company
Limited licenses and may take the form of a flexible service model like franchising, sub-
agency arrangements, and small Build. Own.
PRODUCTS & SERVICES
VALUE ADDED SERVICES
Marketing department is providing value added services to its subscribers (both individual
& organizations) and aims at improving its efficiency by offering discounts and other
benefits to its subscribers.
Marketing Department is offering the following value added-services to its subscribers.
Toll Free Numbers.
Universal Access Number.
Digital Facilities. (Call transfer, call transfer on busy, call transfer on no reply, conference call, abbreviated dialing, wake up call, call waiting, hotline)
Domestic and Commercial ISDN (Integrated Service Digital Network) Service.
Internet/E-Mail Services.
Digital Leased Lines/Cross Connect.
CLI Service.
ADVANTAGES OF INTEGRATED SERVICE DIGITAL NETWORK.
High speed computer to computer data communication
Computer based videoconference.
Caller line identification.
Eight times faster than fax transmission.
High quality video communication.8
QUALITY OF SERVICE
PTCL has improved considerably in this area. At present there are much fewer complaints
pertaining to dropping of calls, cross talk and wrong dialing due to achievement of 82%
digitalization of its network but there are still some complaints like late delivery of bills
and excessive billing, poor response from 17, 18, 109 and higher faults. PTCL is taking
following measures to further improve the quality of service:
Upgrade old Outside Plant
Good management of digital transit/local exchanges
Optimize optical fiber links and digital radios
Effective monitoring and fault management
Achieve call completion ratio of 50% inland and 55% on international calls
Improve response time and quality on 17, 18 & 109
Modernize Directory service and distribution
Expand and improve Customer Service Centers
Create customer care culture
Providing diversity on main arteries for National & International circuits including leased lines to mobile operators for interruption free service during breakdown and Universal Access Numbers __ access to mobile networks.
NEW PROJECTS AND SERVICES IN PIPELINE
PTCL is also in the process to complete the following projects:
Addition of 300,000 new telephones during 1999-2000.
Replacement of 229,000 EMD lines with Digital lines in 1999-2000.
160,000 Wireless Local Loop Payphones.
Turnkey project for 275,000 lines contract with ZTE-China Wanbao.
Expansion of Internet service - 150,000 new connections.
Quetta-Shikarpur Optic Fibre Cable installation work in progress
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Global Mobile Personal Communication by Satellite (GMPCS)
Voice Messaging Service.
Video Conferencing.
Intelligent Network Platform
Electronics/Radio Based Burglar Alarm System/Service
Prepaid Calling Card Service for NWD Calls
Voice Messaging Service
COMPANY ANALYSIS:
SWOT ANALYSIS OF PTCL
Strengths are positive internal characteristics that the organization can exploit to
achieve its strategic performance goals.
STRENGTHS
Biggest Foreign Exchange Earner
PTCL is the biggest source of foreign exchange for Pakistan. It earns a lot of foreign
exchange form its international traffic and interconnect’s revenue.
Modern Technology
PTCL is running modern technology to develop its products and services and
improve the quality of services. In this connection it has replaced the old exchanges with
new digital exchanges. It has computerized billing system for domestic landline
customers. Due to this technology thousand of complaints have been reduced. PTCL has
also entered in the business of Mobile phone, internet services, IPTV (PTCL SMART TV). Its
product line is continuously expending. Also it now it has licenses of SMW3 and SMW 4,
two optical fiber cables. Incase one gets disconnected under sea; other can take its load
of traffic.
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Good Will
Good sound image is prolonged through innovation and as long as a company has
well image, its share market will be growing. It should be remembered that even very
good image, starts smelling badly without innovation. PTCL was privatized and its shares
were purchased on higher price because PTCL is the biggest telecom company of Pakistan
and stands among higher ranks of the telecom industry of sub continent region.
Largest Installed Network
PTCL has the largest nationwide installed network infrastructure capability which
includes switching, transmission, fiber optic backbone, co-location and international
capacity. This provides an ample space and unique state to offer these services on turnkey
basis to the upcoming list of carriers including Mobile, WLL (Wireless Local Loop), ISPs
(Internet Service Providers) and Resellers.
OSS (One Stop Shop) Provider
To simplify IPLC ordering and billing, a concept called One Stop Shopping (OSS)
was developed. OSS allows an organization to place a single order with a single carrier for
two private leased circuits for two offices in two different countries. In the past, an
organization had to contact each carrier in each country to order the two circuits, which
included two separated invoices. OSS consolidated the billing for both circuits into a single
invoice, handles all currency issues, and allows the organization to report all problems
from either circuit to one carrier.
WEAKNESSES
Communication Barriers
There is ineffective communication between the higher and lower staff; this is due
to less qualified lower staff. During process of restructuring many new employees with
greater qualifications are recruited. However the lower permanent employees, who
either didn’t take VSS by themselves or VSS was not applicable to them, are having almost
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obsolete skills incapable for re-usage in new structure. The old employees are not
comfortable working with new employees.
Lack of Professional Staff in Region
It is observed the offices PTCL in the region lack professional staff and qualification
and thus they can’t cope with modern and competitive requirements of the market.
Low Employee Work Morale
The morale of older employees is much low. The new employees are really
motivated and are well incorporated into corporate culture. But the old employees are
not motivated to work. The come late to offices, spend most of the time chatting with
colleagues, leaves office early. It is because they consider themselves to be inferior now.
A new young, agile employee of nearly half of their age performs work better then them
and is getting their supervisor praise. They feel that their experience, years of serving to
PTCL and loyalty has gone wasted.
Ambiguity in Strategic Direction
PTCL is doing business very well but only to that extent to which customers
respond. Though company is transforming itself to “Customer Oriented business” and has
declared this year of “Customer Care” but vision is not clearly shred by all. Also it is
thoughtful that a company declares a year of “Customer Care” and its employees are on
strike sitting in a 42 degree Celsius. Though strike issue has been solved but a company
needs a transformation first in its employees. Employee care and customer care should go
side by side. Although PTCL is generating revenue from its value added services but it
doesn’t have any solid financial strategic outline, which can cope the entire complex
financial situation and recovery of bad debts. Also ambiguity exists in implementation
strategic financial plans. Externally PTCL has competitors so it has no benchmark to gauge
financial performance of its different departments with those of competitors.
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Lack of Training Program
There is no proper training program to improve the skill of PTCL employees to
cope with every changing telecommunication sector. Less skilled & inefficient workers are
creating hurdles in its growth. Though 8,931,500 Rs. has been budgeted for training year
2008-2009 but is almost equally distributed among Administration, HRD and finance. No
need based division of budget is done. Training on employee motivation, team building
and about new processes and software are essential.
Essence of Bureaucratic Touch
The organization has transformed to company and emphasis is on corporate
culture but still the classical touch of a bureaucratic organization exists. Especially some of
the officers at the senior or middle management level like to enjoy power in the
bureaucratic style and want to see the acceptance of their command down the order.
The awareness with modern management concept is the part of the “change of
culture” program which has been stated at all management level.
OPPORTUNITIES
Increasing Awareness Rate
PTCL can show its interest in educating people & increasing literality rate in this
way, PTCL will not only fulfill its social responsibility but will also be able to increase
awareness rate & it will be helpful in the expansion of PTCL
Skillful Human Resources
PTCL can improve the skill of its manpower by providing them the opportunities of
advanced courses that will make them to cope with the ever changing condition in field of
telecommunication.
Telecom facilities in the rural areas
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All the value added services and digital facilities are available only in the main
cities of Pakistan like IPTV, DSL etc. PTCL can expand its business by providing value added
telecom facilities in rural areas, which is only possible when adequate planning is done.
Addition to the Product line
Top management of organization can make additions to its existing product line by
providing more services. In this way it can increase its revenue and customer satisfaction.
This requires market research. PTCL has already captured the industry so all kind of the
opportunities are for PTCL till the end of monopoly. PTCL can launch “Wireless Internet
Services” for excelling in telecom sector.
Licensing as a Source of Revenue
Private mobile companies are getting license from PTA, which is a source of
revenue has also launched its own mobile services. New licenses though will reduce
market share for Ufone but will also help in revenue transformation.
IT and Communication: Vehicles of Modern Businesses
PTCL being the biggest telecom operator of the country has huge potential for
growth. Company can expand its services through innovation. The broad band market is
nascent market with very low levels of penetration. The market potential for broadband is
up to 2 million lines and by unique nationwide landline infrastructure PTCL can dominate
this segment.
THREATS
Unstable Economic and Political Condition of Pakistan
The economic situation of Pakistan is unstable. The unstable economic condition
of Pakistan is a great threat to PTCL. In strong economic conditions, the growth of
business is very frequent. The poor economic conditions increase the inflation rate that
decreases the buying power which is very threatening for PTCL. Also political and
economic instability creates uncertainness. Stock market and shares can sustain bearish
or bullish trend but it cannot tolerate uncertainty. 14
Decrease in Market Share Due to Competition
Entering into the new era of competition may pose difficulties. Many dissatisfied
customers may shift to those telecom service providers who they think would offer better
services than PTCL, and will increase customer satisfaction. Decrease in market share
would decrease the profitability of PTCL, which will be a real threat in near future. PTCL
broadband is unable to compete with other private DSL’s like Link Dot Net by Orascom
Company limited and Wateen telecom in service quality.
Also in mobile sector the share of Ufone has decreased due to entry of China
Mobile and Telenor and it can further decrease if more companies will enter.
Increased Competition and Turnover
Due to emergence of bulk of WLL, ISP’s, Mobile companies and WLL operators,
company would have to compete for quality human capital also. Though the pay structure
has greatly improved after privatization of PTCL, but as new employees are on contract so
company should provide competitive pays to its employees. Other wise the human capital
trained and developed by PTCL would be captured by bulk of other telecom industry
companies.
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FINALCIAL ANALYSIS
All the ratios are calculated on the basis of financial statements prepared till this
quarter i.e. 9 months period. It is because the audit in company was still in process by the
external auditors, KPMG Taseer & Hadi, so after audit the financial statements will be
published. The interim financial information has been prepared in accordance with the
requirements of the International Accounting Standard (IAS) 34 ''Interim Financial
Reporting''.
The condensed interim financial information is unaudited and is being submitted
to the shareholders as required by Section 245 of the Companies Ordinance, 1984 and
the listing regulations of the Karachi, Lahore and Islamabad Stock Exchanges (Pakistan
Telecommunication Limited, 2008).
Income tax expense is recognized based on management's best estimate of the
weighted average annual income tax rate expected for the full financial year.
The calculation however in some ratios is done on previous year data also, where
quarterly ratios were meaningless.
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Year ended
June 30 2009 2008 2007 2006 2005 2004
Key
Indicators
Operating
Gross Margin
(Operating
Profit Margin) % 18.15 24.67 26.33 34.5 41.63 51.37
Pre Tax
Margin (EBIT
Margin) % 25.2 -5.45 34.13 39.43 45.5 53.94
Net Margin % 15.45 -4.25 22.01 26.16 30.46 35.73
Performance
Return on
Operating
Assets % 10.96 -3.34 18.76 25.53 34.83 38.46
Debtors’
Turnover TIMES 4.9 2.35 48.86 4.76 5.35 5.14
Return on
Equity % 9.28 -2.17 14.45 20.22 25.45 28.2
17
Ratio Analysis of PTCL
Leverage
Debt: Equity RATIO 16.48 15.85 14.86 14.86 13.87 13.87
Leverage % 35.66 27.48 27.92 31.28 25.65 23.91
Time Interest
Earned Times 15.43 -5.26 46.54 92.07 86.35 64.34
Liquidity
Current Times 1.5 1.81 2.19 1.66 1.89 2078
Quick Times Times 1.36 1.58 2.03 1.54 1.13 2.67
Valuation
Earnings per
share (pre tax) Rs. 2.75 -0.88 4.66 6.07 7.71 8.5
Earnings per
share Rs. 1.79 -0.55 3.07 4.07 5.22 5.72
Breakup value
per share Rs. 19.49 19.19 21.75 20.68 19.61 21.31
Payout Ratio
(after tax) % 83.6 0 65.22 122.73 38.34 87.42
Market Price
to Breakup
Value times 0.88 2.01 2.62 1.96 3.58 1.97
Dividend per
share Rs. 1.5 0 2 5 2 5
18
Market value
per share (as
on June 30) Rs. 17.24 38.64 57 40.6 70.25 42.15
Market
Capitalization Rs.(m)
87,924
197,064
290,700
207,060
358,275
241,965
Historical
Trends
Operating
Results
Revenue Rs.(m)
59,239
66,336
71,068
69,085
87,356
81,633
Profit/ (loss)
before Tax Rs.(m)
14,021
(4,463)
23,744
30,974
39,296
43,360
Profit/ (loss)
after Tax Rs.(m)
9,451
2,825
15,639
40,777
26,606
29,170
Dividend
declared Rs.(m)
7,650
-
10,200
25,500
10,200
25,500
Financial
Position
Paid up Share
Capital Rs.(m)
51,000
51,000
51,000
51,000
51,000
51,000
Reserves Rs.(m)
32,183
32,183
32,249
31,922
32,008
32,000
19
Shareholders’
Equity Rs.(m)
99,390
97,888
110,913
105,475
100,014
109,100
Current Assets Rs.(m)
54,220
39,603
53,561
50,168
39,269
48,294
Non Current
Liabilities Rs.(m)
18,572
17,646
17,460
1,689
15,258
15,126
Operational
ALIS (000) * NOS
4,681
5,181
5,455
5,568
5,235
4,837
ALIS Per
Employee NOS
168
118
91
89
82
71
Table 1 RATIO ANALYSIS
LIQUIDITY ANALYSIS
This shows that the number of days for the receivable outstanding have increased,
which indicates that in 2007 PTCL has 86 days for the receiving back their receivables
from its customers and in 2008 there is an increase of 14 days because in 2008 days sales
in receivables has increased to almost 101 days. This is a not positive sign.
ACCOUNT RECEIVABLE TURNOVER
The turnover ratio of 2008 has decreased which is a not good sign because it
shows that the chances of getting back receivables have decreased. It shows greater
amount of sales is in receivables and has not yet been recovered.
ACCOUNT RECEIVABLE TURNOVER IN DAYS
It indicates that the number of days of the chance of getting back the receivables has
decreased as compare to 2007.
20
WORKING CAPITAL
A decrease in the amount of working capital in 2008 shows that it is a
deteriorated situation of the company, which shows that it will be difficult for company
to be able to borrow on short notice.
CURRENT RATIO AND ACID- TEST RATIO
This indicates that in 2007 the company had a high ability to meet its current
liabilities out of its assets as compare to year 2008.
CASH RATIO
There is a decrease in 2008 in cash ratio, which shows that the company is not
having enough cash to its best advantage. As it is less then 1 and current liabilities have
increased also so the overall cash ratio is not satisfactory. It can become difficult for
company to meet its immediate cash needs. The greater the cash ratio, the greater it is
better for company to meet its short term immediate expenses.
SALES TO WORKING CAPITAL
In year 2008 the sale to working capital ratio has deteriorated as compared to
year 2007, which indicates that company is overcapitalizing its assets. It means that PTCL
is able to generate enough sales to meet its obligations. This on one end is a positive sign
also that assets are properly utilized. But at the same time it shows that working capital
is not invested in assts till this quarter.
PROFITABILITY ANALYSIS
Ratio for this period cannot be calculated as company is in loss till this quarter.
This ratio expresses the relationship between net profit after tax and sales. This ratio is
the measure of all profitability. It also tells us that how much the company is saving after
deducting all the expenses from sales. Net profit margin ratio is also known as return on
sales. Higher the net profit ratio, higher the profitability of business. Profitability of a firm
is continuously deteriorating for 2007 which has deteriorated even more over the year it
is because company sales have been increased however the increase in operating income
21
was less then increase in net sales. The expenses of company has also increased a lot due
to VSS cost and the company is in loss till this period. There is a catch here that the
company though has earned greater revenue for these nine period but has shown this
revenue as a usage of VSS cost.
TOTAL ASSET TURN OVER RATIO
This ratio indicates that how well the company has used its total assets in
generating sales. This ratio measures the activity of assets and the ability of the firm to
generate sales through the use of assets. If both of these have been well managed then
the sales would go up or vice versa. Higher ratio is better for business. But due to
increased amount of assets and less increase in sales as compared to increase in assets
the company total asset turnover ratio has decreased.
DUPONT RETURN ON ASSETS
The core idea behind this ratio is that both Net Profit margin & Total Asset
Turnover have a direct impact on the return on assets ratio (ROA). When these ratios are
reviewed together it is called DUPONT return on assets. A high profit margin means a high
profit per 1Rs of sales. Higher ratio is better for company. The company is lacking behind
as compare to last year as both net profit margin and total asset turnover has decreased.
OPERATING INCOME MARGIN (PERCENT)
This ratio helps in determining the ability of the management in the running
business. It indicates the efficiency of the management. Operating profit shows that what
actually is left behind after deducting all direct & indirect expenses from operations.
Those expenses and incomes which has no direct relation with the operations but which
do happen will be deducted after operating profit giving the net profit before tax and
eventually net profit after tax. Higher ratio is better for company. It cannot be calculated
for this period because operating loss is occurring due high amount of operating costs
involving bad debts and VSS cost and company has deteriorated position over the
previous year end also.
22
OPERATING ASSET TURN OVER
The ratio measures the ability of operating assets to generate sales. Higher the
ratio is better for company. It means sales of the company has increased in greater
amount as compared to increase in operating assets which have also increased. However
it has decreased in case of PTCL due less amount of operating assets. Company has
greater investments in capital work in progress.
RETURN ON OPERATING ASSET (PERCENT)
Operating Assets Exclude Construction Work In Progress from property, plant and
equipment and added current assets in it. Investments and other long term assets are not
included in operating assets. Those assets are included which has a direct relation with
operations of a business. Higher return is better for company. The company position has
deteriorated as compared to the last year; it is because the increase in company
investments in capital works in progress and intangibles (Logo and patent of PTCL).
RETURN ON INVESTMENT (ROI) (PERCENT)
This ratio determines the total income or the return that is earned by all the
providers of the capital (debt or equity). It is used for the evaluation of enterprise
performance and earning performance of the firm. Further it measures the ability of the
firm to reward those who provide long term funds and to attract the providers of future
funds. Higher the ratio, the better it is. The company is lacking behind as compare to last
year because company equity has increased due to the increase in reserves however the
operating income increase is not sufficient to offset it.
RETURN ON TOTAL EQUITY (PERCENT)
This ratio measures the profit earned by the share holders on their invested
amount in the company. It measures the return on common shareholders, preferred
shareholders and reserves also. Dividends are deducted because its redeemable
preferred-stock which is included in the debt and not the equity so if there is any dividend
that is to be paid on it then that should be deducted from net profit so that the net figure
can be taken which is available to the total equity holders. Higher the ratio, the better it
is. The company is lacking behind as compare to last year because company first of all is
23
going in loss for this year. Also the dividends paid are increased in order to have stable
market price of share in stock exchange.
INVESTOR ANALYSIS
DEGREE OF FINANCIAL LEVERAGE (TIMES)
The degree of financial leverage represents the benefits earned from the funds
borrowed. If firm earns more then the funds borrowed then it is beneficial for them. The
DFL of the company has increased over the year slightly from 2006 to 2007, which shows
that company was effectively managing its borrowed funds and was able to generate
good earnings on it. However till these 9 month period, company is unable to sustain its
position and due to increased expenses is going in loss. So company is risky to invest in
and for the same reason company may would have difficulties in further borrowing of
funds from financial institutions.
RATIO’S
EARNINGS PER COMMON SHARE
EPS of the company is continuously decreasing over the years. So it shows that the
decreased earnings of the company have deteriorated it and the existing owners of the
company has earned lesser over the years. The number of shares has remained same but
earnings have been converted into loss, almost this year.
PRICE/EARNINGS RATIO
The P/E ratio of the company tells the increase in earnings translated into the
market price of the shares determined by demand and supply in the market. The P/E ratio
has increased over the year in 2007 which shows that market demand of the company
shares has increased (price on 30 June 50.48 Rs. as compared to 40.8 on 30 June 2006)
and the investors were interested to purchase the shares of the company due to its
increased performance. But due to VSS, many diverse restructuring reforms and large
amount of Bad Debts company share price is continuously decreasing in stock market to
almost 30.59 Rs.
24
BOOK VALUE PER SHARE
The amount of stockholder equity contributable to each shareholder has
decreased over the year which is a negative sign. The market value of stock is greater
then the book value and is a good sign but it is due to so much fluctuation and uncertainty
in stock market. Company management though has promised great potential and image
building in eyes of investors.
DIVIDEND PAYOUT (PERCENT)
The dividend payout ratio of the company has reduced over the year. This shows
that company is paying fewer dividends. The reason being the company is the retaining
more of the income for future purposes and to have cost effective processes.
DIVIDEND YIELD (PERCENT)
Dividend yield of the company has decreased over the year. This shows that
company is paying fewer dividends and also the market price per share of the company
has decreased. This shows that company is reinvesting its earnings and company is losing
its credibility in eyes of investors mainly due to uncertainty and restructuring. Current
retained earnings will result in future capital gains for long term investors.
LONG TERM DEBT PAYING ABILITY
DEBT RATIO / SOLVENCY RATIO / DEBT TO TOTAL ASSETS (PERCENT)
It indicates the firm’s long term debt paying ability. It indicates the percentage of
assets financed by creditors. From the perspective of long term debt paying ability, the
lower this ratio the better the company’s position is and as per International Standards it
should always be less then 35 %. It tells us the company has 32.2% liability against 100%
assets. Previously it was 27.4 % against 100% assets. This shows that company position
has deteriorated as large amount of assets are financed by the creditors and debts are
increasing. Company is losing its strength to take additional debts day by day.
25
DEBT – TO – EQUITY RATIO / DEBT TO NET WORTH RATIO (PERCENT)
It compares the outsider’s funds / total debt with the share holder’s funds / share
holders Equity. It fulfills the same objective of debt ratio. This ratio indicates us that which
external party finances the assets up to what extent. From the perspective of long term
debt paying ability, the lower the ratio is the better the company’s debt paying position.
However the higher ratio indicates the increased amount of debts. The amount of
liabilities have increased by not a large amount but employee retirement benefits have
tremendously increased to 16,018,903 on March 31, 2008 Rs. from 12,289,626Rs. on
March 31, 2007. Also the inappropriate profit has tremendously decreased causing
shareholder equity to decline.
DEBT – TO – TANGIBLE NET-WORTH RATIO (PERCENT)
This ratio determines the long term debt paying ability of a company. It also
indicates that how well creditors are protected in case of the firm’s insolvency. It is a
more conservative ratio than either the debt ratio or debt to equity ratio. From the
perspective of long term debt paying ability, the lower this ratio the better the company’s
position is. The higher ratio of PTCL indicates its poor condition. It is due to the increase in
liabilities over the year and decrease in unappropriated profit of the company.
So overall the position of company is not very hopeful from financial perspective.
The reason being the great structural changes and restructuring. Once restructuring will
be completed the financial position will be reinstated as additional costs will decrease.
During the first nine months of financial year 2007-08, total revenue of the company was
Rs. 44.0 billion, showing a decline of 9% compared with Rs. 48.5 billion of the same
periods last year. However, revenue performance has shown a consistent growing trend
from quarter to quarter during the current fiscal year. The operating expenses increased
to Rs. 56.9 billion from 33.7 billion only because of VSS cost impact. As a result, there was
an operating loss of Rs. 13.0 billion. The non-operating income increased by 11% to Rs.3.4
billion. The Company suffered a loss before tax of Rs. 10.0 billion for the nine month
period ended 31st March, 2008. There is a net gain in the provision for tax amounting to
Rs. 3.4 billion which reduced the net loss to Rs. 6.6 billion. The consolidated results of
PTCL group showed a better picture as the net loss before tax amounting to Rs. 8.3 billion
26
was less due to positive contribution of Ufone. Excluding VSS impact, the group would
have shown a profit before tax of Rs. 14.9 billion.
WORKING EXPERIENCES
LEARNING IN PTCL AS A INTERNEE
Budget Department: I have worked in this department under the supervision of, Assistant
Manager Budget Finance, Sir Amir.
STRUCTURE OF BUDGET DEPARTMENT
27
WORKING
Assistance in preparation, documentation and filing of annual budget
Preparation of budget input form
Preparation of monthly variance report
Maintenance of petty cash using SAP
Preparation of budget input form
Maintenance of petty cash
Maintaining data
Analyzing the demand
File management
Preparation of reports regarding incoming projects through capital budgeting techniques
DUTIES AND RESPONSIBILITIES
I joined PTCL as an internee, so I have to perform different duties to assist my advisors
and office staff. I was working under the supervision of two persons at the time. First one
is the Finance Manager and the second person was the Finance Executive.
FILE MANAGEMENT
The Finance Manager assigned me duty of managing the files. File management includes;
Maintaining the arrangement of files
Filing the new vouchers in the file of current month
Providing the required vouchers from files to the Finance Manager and
Finance Executive.
EXPERIENCE LEARNED
Internship is the first step for every student to enter into the world of practical life.
Educational life and practical life has a lot of differences but academic life is the base for
28
the practical life. According to my experience internship is the best way to enter into the
practical life. During internship, students can learn a lot which is more than that they can
learn from books.
Internship has given a great boost to my knowledge, confidence and experience. It gave
me an opportunity to learn in the following areas;
The internship gave me chance to meet with different type of people which
have different types of thoughts, behaviors and actions. These people were
my colleagues, the customers, senior officers, mentors, members of other
departments and higher management of PTCL
When I met with so many types of people, which gave me a big chance to
learn more about the behavior of people.
The internship increased the level of my confidence and communication
skills as I had to meet so many people and faces them and had to
communicate with them on different matters.
This also increased the exposure of my thoughts. During my study period, I
was just like to think within the study material approach, but the practical
experience gave my mind new ways that I could not think in the study life.
I learned the actual implementation of the accounting, finance and mathematics in the
real practical life
FINANCE DEPARTMENT
Finance department of Pakistan Telecommunication Company Limited (Headquarter) is
coordinating the activities of its sub departments i.e. Budget, Revenue and Tariff.
Budget department has three branches i.e.
1. Preparation
2. Distribution
29
3. Ceiling
Preparation branch prepares the budget for the coming financial year. Distribution
branch is responsible for allotment of funds to different regions according to their
requirements. Before issuing ceiling it sees how much cash is available in the account of
Pakistan Telecommunication Company Limited in National Bank of Pakistan.
Revenue department is responsible for collection from its customers. Some customers
with huge amount of dues outstanding can't pay their bills immediately after a specified
time limit, list of defaulters is sent to billing and recovering branch (B &R). Revenue
department also sends its daily reports to B & R branch about how much amount it has
collected among the bills issued to customers.
Tariff department is responsible for setting the charges/rates of domestic as well as
international calls. Among domestic calls, there are local calls and long distance calls.
Local call charges are usually fixed and are for the calls with in the same city. Long
distance charges vary from city to city depending upon the distance between the cities.
Tariffs are usually modified at the beginning of each financial year. There is wide
difference between local call charges and long distance charges Pakistan
Telecommunication Company Limited is adopting the policy of reducing this difference so
it is gradually increases the local charges while making reduction in long distance charges.
Pakistan Telecommunication Company Limited has made concerted efforts to
collect arrears of dues from its customer. A special task force was constituted for this
purpose and the name of defaulters was published in the newspapers to help recovery.
The main reason for the increase in the amount of default, however, is that the efforts
for recovery starts only after the default has already occupied and the remedy lies in a
major shift in the credit policy of Pakistan Telecommunication Company Limited. Pakistan
Telecommunication Company' Limited is considering advance collection, which is already
the practice followed by mobile phone companies.
30
BUDGET DEPARTMENT
In Pakistan Telecommunication Company Limited the Budget Department is a sub
department of finance department of Pakistan Telecommunication Company Limited. It is
responsible for optimal estimates of budget for Pakistan Telecommunication Company's
main head of Accounts and its allocation to particular regions of Pakistan
Telecommunication Company Limited.
There are three branches of budget department:
1. Preparation Branch. (Budget-1)
2. Distribution Branch. (Budget-11)
3. Ceiling Branch.
PREPARATION BRANCH
Preparation Branch is responsible for the preparation of budget for all the main heads of
Accounts of Pakistan Telecommunication Company Limited. Preparation Branch makes
the budget in a realistic manner then its work is finished. For the realistic preparation of
budget for the main heads of Accounts, Preparation Branch has to see the past record. It
has to observe the historical revenue and expenses. It has also takes into account the
inflation rate for the year. Assuming the inflation rate to be constant for the coming
year, preparation Branch notices any development or expansion in the region, and then
it -has to increase the budget for that main head of Account. If preparation notices
recruitment of more employees for a particular region, then it has to increase the
budget for Account of staff salaries and allowances. If expenses of staff like stationary,
ink files etc. increase then preparation branch has to increase the Account of staff
salaries.
If increase in inflation rate is expected in the just coming years but no
development or expansion is expected then preparation branch will increase the budget
for that main heads of Accounts. -But only takes into account the effect of inflation.
Preparation Branch not only prepares the budget for the expenditure of different
31
heads of Accounts but also makes an estimate of budget for the company for the next
coming year. While preparing the budget branch revenue, preparation branch has some
assets like installation fee and line rent from where revenue is fixed. Preparation branch
has separate heads of accounts for telephone traffic receipts and telegraph traffic
receipts, miscellaneous telephone & telegraph receipts and joint telephone & telegraph
receipts. Having separate accounts of revenue, preparation branch doesn't feel difficulty
of preparing budget for revenue of the next coming year.
DISTRIBUTION BRANCH
When preparation branch completes the process of preparing the budget then starts the
work of distribution department. The Function of distribution branch is to allocate the
budget to the particular head of account of each region. Distribution branch keeps a small
portion of budget as reserve for contingent and unexpected events and allocates the
entire remaining budget to the particular head of account; this grant is called AFG.
Distribution branch, at the end of each month, analyses the monthly expenditure of
different heads of accounts like conveyance allowance, out door treatment allowance,
have constant or fixed expenditure each month, so their analysis is quite easy. At the
beginning of year, expenditures are higher than ordinary expenditures in the remaining
period. Some heads of accounts have low expenditure slightly increases and after six or
seven months it begins to decrease. Distribution branch observes the monthly
expenditure of each and every head of account and after six months if expenditure is
more than expected then central audit verifies it that why it has been increased. Some
time, more expenditure is required in a region because of starting or development or
unexpected inauguration of project. So distribution branch allows the allocation of more
expenditure is necessary and is doesn’t exceed the need.
At the end of each financial year, allotted budget and the actual expenditure are
compared. If actual expenditure is less than allotment then there is saving to the
company so no action is taken. If actual expenditure is slightly more than allotment, then
it is unfavorable variance. If that increase in expenditure is fair, then it is accepted. If it is
permanent, then increase is made in budget for the next coming year. If actual
expenditure significantly exceeds the allotted budget then the case is given to the internal
32
audit for the finding the reasons of that significant increase in expenditure without any
notice.
The effective control of distribution branch depends on judging the fairness of any
unexpected event and estimation of the fair expenditure for allotment.
CEILING BRANCH
Ceiling branch issues funds for each head of account of each region. Hence,
ceiling branch is responsible for issuing the allocated funds by the distribution branch.
Ceiling branch issues funds to each region on monthly basis to certain head of
accounts. As head of account, for the whole year so ceiling branch divides the allotment
by 12 to make rough estimate for the monthly expenditure. Ceiling is issued to the DDO
of each region who is only responsible for drawing and disbursement of funds for each
head of account for his region.
Ceiling branch analyzes the expenditure of each head of account at the end of
each month. Ceiling branch make sure that expenditure for a particular head doesn't
increase beyond the ceiling issued (on monthly basis) with out any sound reason. Ceiling
branch like distribution branch also keeps some reserves for unexpected or unhappy
events while issuing the Ceiling to each region.
Ceiling for staff salaries and allowances are fixed, while ceiling for staff expenses,
maintenance and petty work, office contingencies (utilities, communication, printing
etc.) vary because these charges are not fixed. Ceiling branch has the daily record of
collection of revenue from customers and daily issuing of ceiling to different regions. By
continuously keeping and examining the record, the ceiling branch can see that how
much revenue has been collected and how much funds (ceiling) have been issued to
different regions All the revenue, which is collected by different banks from customers of
Pakistan Telecommunication Company Limited, finally comes into National Bank of
Pakistan, who acts on behalf of the company and in which company has its account.
Ceiling branch daily examines the collection of revenue in National Bank of Pakistan and
issue ceiling to different regions from that revenue. Company has also maintained
retained earning and reserves for contingencies. But some times, revenue collected from
33
customer is not sufficient to issue ceiling. Funds which to be issued are more than funds
available, so ceiling branch has to borrow running finance to issue funds to different
regions. Interest is paid on running finance and when enough revenue comes into
account, amount of running finance is automatically deducted by National Bank of
Pakistan.
Main heads that are used in issuing funds are:
Establishment
Working.
Maintenance.
General provident fund.
Miscellaneous. (Education grant)
34
RECOMMENDATIONS
The efforts should be made that PTCL be an independent organization in its
internal matters; ministry of communication may give only guidelines.
The officer may be trained to adopt the company culture, soft spoken, good
relations with customers and target oriented.
There should be full-fledged marketing department, which should be under
chairman PTCL.
Top management divisional engineers in the field to be business and target
oriented through short courses of marketing and finance.
Finance and Marketing officers and Engineers may be sending to international
seminars/workshops to get knowledge of new technique and procedures.
There should be effective human resource department in order to get right people
on the right job.
Promotion should be made on the basis of performance rather than seniority.
35
CONCLUSION
PTCL land line phone and wireless system is the best option among all the companies and
reason being that it’s a well established company, there are more chances to learn as
compare to a newly emerged company. While among the preceding companies, some has
government touch in its management style and some companies were at sluggish phase.
Management is well defined at PTCL. Rules are specified and implemented on all the
employees regardless of their designation. There is homogeny in all regulation aspects.
There are a time to time motivational rewards, increments and acknowledgment.
36
REFRENCES
Abbasi, F. A. (2008). Data Billing and Payments: Orientation report. Unpublished
manuscript, Pakistan Telecommunication Company Limited, Islamabad,
International Revenue Department.
Ali, S. F. (2005). Training report. Unpublished manuscript, Pakistan Telecommunication
Company Limited, Islamabad, Accounts Section.
Anonymous (2000). Billing and Receivables-International business. Annexure- Accounting
entries, p.iii.
Anonymous (2000). Billing and Receivables-International business. Follow up actions for
overdue balances, c.6.2, p.19.
Anonymous (2000). Billing and Receivables-International business. Bad debts and write-
offs, c.7, p.22.
Jabeen, A. (2008). Orientation report. Unpublished manuscript, Pakistan
Telecommunication Company Limited, Islamabad, Advisory Section.
Sumaira khan (2007) Financial Specialist, Capital Budgeting
Pakistan Telecommunication Company Limited, Islamabad.
M.Fahim Tariq (1986) Accounts Officer, Ceiling/Treasury
Pakistan Telecommunication Company Limited, Islamabad.
Pakistan Telecommunication Company Limited, (2008). Third Quarter Report. Islamabad,
p.13.
Analysis of financial statements by
Fundamentals of financial management by Van Horne
37
ONLINE REFERENCES
http://www.pta.gov.pk/
http://www.hoovers.com/ptcl
http://www.ptcl.com.pk
http://www.ptcl.net
38
APPENDIX-A
BOARD OF DIRCTORS
Chairman PTCL Board
Mr. Hifz-Ur-Rehman
Secretary IT&T, Ministry of Information
Technology
Government of Pakistan,
Islamabad
Chairman & Chief Executive Officer
Mr. Abdulrahim Abdulla Abdulrahim Al
Nooryani
Etisalat International Pakistan L.L.C
Executive Vice President Contracts &
Administration
Etisalat, UAE.
Secretary, Ministry of Finance
Mr. Ahmad Waqar
Secretary, Ministry of Finance
Government of Pakistan,
Islamabad
Chief Human Resource Officer
Mr. Abdulaziz Ahmed Saleh Ahmed Al
Sawaleh
Etisalat, UAE
Member (Telecom), Ministry of
Information Technology
Mr. Noor-ud-Din Baqai
Government of Pakistan,
Islamabad.
Executive Vice President Engineering
Mr. Fadhil Mohamed Erhama Al Ansari
Etisalat
UAE
Ambassador, Embassy of Pakistan General Manager, Northern Emirates
39
Mr. Ahsanullah Khan
Abu Dhabi, UAE
Mr. Abdulaziz Hamad Omran Taryam
Etisalat, UAE
General Manager
Dr. Ahmed Al Jarwan
Real Estate
Etisalat, UAE
Company Secretary
Ms. Farah Qamar
PTCL Headquarters, Islamabad
40