Final Project

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PAKISTAN TELECOMMUNICATION LTD

MISBAH MUSHTAQ BURKI | ROLL NO 101 | B.B.A VIII SEMESTER

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SupervisorSupervisor

Miss. Ayesha Riaz

UNIVERSITY OF EDUCATION UNIVERSITY OF EDUCATION

OKARA CAMPUS


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Dedication

I dedicate this project to

Almighty Allah, The Creator of worlds

And

Hazrat Muhammad (P.B.U.P), the cause of

The creation of the Universe

And

To my parents,

To the persons who loved me,

persons whom

I loved and for all those who prayed for me.


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Acknowledgment

First of all thanks to Almighty Allah, who have given me the strength and

knowledge to complete this project.

I would like to specially thank for the help of my finance teacher

Miss. Ayesha Riaz who helped me a lot regarding this project.

I have learned a lot with the kind guidance of Miss. Ayesha Riaz and I think

I have achieved my goal of learning practical things.

BBA (Hons) Finance

Table of Contents

Sr. No Description


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1. Executive Summary

2. Vision Statement

3. Mission Statement

4. Company Achievement

5. Production process

6. Exports

7. Purchases

8. Personnel Management

9. Organization Culture

10. SWOT Analysis

11. PEST Analysis

12. BCG Matrix Analysis

13. Summarized Balance Sheet

14. Trend Analysis of Balance Sheet

15. Vertical analysis of balance sheet

16. Summarized Income Statement

17. Trend Analysis of Income Statement

18. Ratio Analysis

19. Recommendations

20. Conclusion


EXECUTIVEEXECUTIVE SUMMARYSUMMARYEXECUTIVEEXECUTIVE SUMMARYSUMMARY

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INTRODUCTION OF

INDUSTRY

HISTORY OF TELECOMMUNICATION IN PAKISTAN

A BRIEF HISTORY OF TELECOMMUNICATION IN PAKISTAN

The history of telecommunication in the sub continent is as old as the history of our slavery. In the subcontinent before independence this sector was under the Indian post and telegraph department and developed as a successful industry. The role of telecommunication in Pakistan can be broadly divided in to four phase.


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PAKISTAN POST AND TELEGRAPH

At the time of independence and telecommunication services were performed by a single department known as Pakistan post and telegraph (P&T).his department started its telephone service with only 12346 telephone lines and seven telegraph offices all over Pakistan. All the telephone service at that time was manual. This department continues its business up to 1962.the government of Pakistan adopted the government of India telegraph act 188 to control and direct the activities of telecommunication.

PAKISTAN TELEPHONE AND TELEGRAPH (PT&T)

The first step towards reform in telecommunication sector was made in 1962.when the ayyub khan government decided to split up the (PT&T) department into two separate departments Pakistan post and Pakistan telephone & telegraph (PT&T) under the presidential ordinance. The PT&T in fact a civil service department under the minstrel controls. This department was headed by director general. The decision making power was concentrated with the post of dg, whilst the responsibilities were delegated to general managers and chief engineers and general managers reporting directly to the director general. The centralized structure of PT&T caused inefficiency in operations and long delay in implementing decisions. At the time of inception of PTCL the total number of employees working in PT&T was 45686 and total network comported of 922,000.

PAKISTAN TELECOMMUNICATION CORPORATION (PTC)

The decade of 1990s brought about many changes in the economic structure of Pakistan. The government of Pakistan pursued the deregulation and liberalization policy in production and service industry. The major change in this regard was privatization and deregulation of many of the departments of government of Pakistan. The objective was to reduce the burden of the government minimize the bureaucratic influence and improve the efficiency of these departments.

A major break through in the history of telecommunication in the country occurred with the gradual deregulation and privatization of t) t, at the first stage Pakistan telephone and telegraph department (PT&T) was converted into a statutory corporation Pakistan telecommunication corporation. On December 5th, 1990 the PT&T department was transformed into Pakistan


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Telecommunication Corporation with a legal identity separate from the government. This change in the statute introduced by the government of Pakistan enabled PTC to move from administrative to contractual relationship with its customer. It provided the opportunity for the development of telecommunication facilities to an unprecedented level and also for an increased customer satisfaction. Working under the PTCL act noxv111 of 1991, the corporation was responsible for establishment maintenance and operation of telecommunication services telephone telegraph telex, tele fax and data transmission with in the country and establishment of international link with all member countries of ITU (international telecommunication union

Pakistan telecommunication corporation in it five years life spread the network of its services all over the country and the total number of telephone lines expanded TP 2127344 in addition to telegraph the telex services. The total number of employees at the end of 1995 was 53705.

In addition to inland telephone network PTCL did a lot to improve the international communication. The international communication network of PTCL comprised of variety of satellite earth stations, terrestrial systems, submarine cable system and coastal radio systems, as well as international gateway exchanges.

PAKISTAN TELECOMMUNICATION COMPANY LIMITED (PTCL)

Pakistan telecommunication Company Limited (PTCL) is a company established to undertake the telecommunication business formally carried on by Pakistan.

Telecommunication corporation (PTCL) Pakistan telecommunication corporation (PTCL) was transformed into Pakistan telecommunication company limited (PTCL) on January 1st ,1996 under Pakistan telecommunication reorganization act 1996 according to which PTCL took over all the properties assets rights and obligations of PTCL. Under the PTCL reorganization act, 1996 the telecommunication sectors were split up into four bodies.

· Pakistan Telecommunication Company limited (ptcl)

· Pakistan telecommunication authority (PTCL)

· National Telecommunication Corporation (NTC)

· Frequency allocation board (FAB)


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Pakistan telecommunication authority is a regulatory body responsible for monitoring the telecommunication business in Pakistan. It frames rules and regulation for private telecom companies such as mobile phone companies, internet service providers, paging companies and pay card phone companies. It also issues licenses to the new companies in entering to this business.

National Telecom Corporation (NTC) is responsible to provide the telecommunication services to the various departments of government and armed services.

Pakistan Telecommunication Company limited is the primary provider of telecommunications services in Pakistan. The range of its services includes basic telephone, telegraph, fax, telex, email, digital cross connect, public data network, internet, isdn, and other digital facilities. The total number of installed telephone lines (ali) at June 30, 1998 was 35, 19,877 while the total number of actual lines in service (alis) was 26, 60,898. The difference between Ali and Alis issue to pending and potential future demands


INTRODUCTION OF INTRODUCTION OF COMPANYCOMPANY

INTRODUCTION OF INTRODUCTION OF COMPANYCOMPANY

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PTCL – PAKISTAN TELECOMMUNICATION LIMITED

Introduction of PTCL

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 and local loop services have started to be modernized and upgraded from copper to an optical network. On the Long Distance and International infrastructure side, the capacity of two SEA-ME-WE submarine cables is being expanded to meet the increasing demand of International traffic.


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With the promulgation of Telecommunication (Re-Organization) Act 1996, the Pakistan Telecommunication Authority was established as the Telecom Regulatory body. Following the open licensing policy in BUY @ PKR 45.40 accordance with the instructions of Government of Pakistan and in exercise of powers conferred by Pakistan Telecommunication (Re-Organization) Act 1996, the basic telephony was put under exclusivity and PTCL was given a seven years monopoly over basic telephony which ended by December 31, 2002. The year 2006-07 in the telecom sector witnessed a phenomenal growth in the mobile phone sector in Pakistan, which doubled its subscriber base to 60 million. The Teledensity increased from 26% to 40%, helping to spread the benefits of communication technology across the country. PTCL's mobile phone subsidiary Ufone's subscriber base grew by more than 87%, from 7.49 million to 14 million.

The year also witnessed the entry of major telecom companies, most notably China Telecom and Singtel, into the market. Restructuring and re-engineering are in their final stages along with the implementation of ERP system. From the end customer's perspective, a major initiative was put in place in the shape of 'Broadband Pakistan' service launch as a first step towards providing its customer with more value added service and convenience. With this offering, the PTCL not only bringing the benefit of high speed Internet access to subscribers in major cities but will also generate new revenue streams for future growth. The company also continued to invest in infrastructure development and addition of network capacity with a view to enhance services and to expand its reach across the country.

MISSIN STATEMENT

To achieve our vision by having:

An organizational environment that fosters professionalism, motivation

and quality

An environment that is cost effective and quality conscious


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Services that are based on the most optimum technology

"Quality" and "Time" conscious customer service

Sustained growth in earnings and profitability


VISION STATEMENTSSTATEMENTS VISION STATEMENTSSTATEMENTS

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Vision

“To be the leading Information and Communication Technology

Service Provider in the region by achieving customer satisfaction

and maximizing shareholders' value'”.

The future is unfolding around us. In times to come, we will be the link that

allows global communication. We are striving towards mobilizing the world


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for the future. By becoming partners in innovation, we are ready to shape a

future that offers telecom services that bring us closer.


CORE VALUES

CORE VALUES

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Core Values

Professional Integrity

Customer Satisfaction

Teamwork

Company Loyalty

Corporate Information


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Company ProfileCompany Profile

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Company ProfileCompany Profile

PTCL is all set to redefine the established boundaries of the telecommunication market and is shifting the productivity frontier to new heights. Today, for millions of people, we demand instant access to new products and ideas. More importantly we want them for their better living standards with increased values in this ever-shrinking globe of ours. We are setting free the spirit of innovation.PTCL is going to be your first choice in the future as well, just as it has been over the past six decades.

Business & Corporate Users:

For clear communication the first choice of business circles is PTCL telephone for local, nationwide and international calling. Today businesses can have 10-100 lines with modern day services to meet their needs. Now you get options like Caller-ID, call-forwarding, call-waiting, Call Barring, to name a few.

Other business specific services include:


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0800-Toll free number, 0900-Preminum rate services, VPN-Virtual Private Network, Audio Conference Service, Digital Cross Connect (DXX), ISDN (Policy), Teleplus(ISDN/BRI), Digital Phone Facilities/ Modification Charges, UAN, UIN.

Nationwide Infrastructure:

We have the largest Copper infrastructure spread over every city, town and village of Pakistan with over million installed lines.The network has over 6 million PSTN lines installed across Pakistan with more than 3 million working. Furthermore installed capacity of broadband is more than 0.6 million ports spread across 318 cities and town of the country

National Long-haul Core Network:

We have over 10,400 km fully redundant, fiber optics DWDM backbone network. It connects over 840 cities and towns with 270G bandwidth.

Carriers Services

As carriers-carrier, we provide the core infrastructure services to the cellular, LDIs, Local Loop operators, ISPs, Call Centers and payphone operators.

We provide all carrier services, right from inter-connects and tele housing to DPLC and IPLC connectivity. Our interconnect services are provided from our 3200 exchange locations that connect your carriers networks domestically, in addition to providing IPLC bandwidths to connect you internationally through our four international gateways and SEA-ME-WE3 and SEA-ME-WE4 international submarine, also IMWE submarine cable will be added by the end of the year. Furthermore to provide connectivity to operators in the extreme remote areas of the country, PTCL launched its state of the art satellite service (Skylink). PTCL satellite service (Skylink) is provided using the Intelsat Satellite System, an undisputed leader in satellite communications.

White Label Services:


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PTCL customers can now provide uninterrupted services to their clients without undertaking large scale investment in infrastructure or developing expertise in their own network.PTCL White Label Services are focused on speed and simplicity at minimal capex. This will enable our customer to offer their own branded WLL, DSL etc to customers nationally, together with an array of key support services.

EVO Wireless Broadband

PTCL EVO 3G Wireless Broadband is Pakistan’s fastest wireless internet which offers its customers – “superior 3G internet experience”. Evo Wireless Broadband is enabling the wireless broadband revolution in Pakistan with flexibility to roam freely like never before. PTCL Evo has revolutionized the way people connect to the internet by offering true mobility. PTCL Evo is currently offering its services in more than 18 cities on EV-DO technology offering speeds up to 3.1 Mbps. PTCL Evo gives its customers the advantage of nationwide roaming with seamless internet connectivity across Pakistan. The coverage of Evo is not limited to 18 cities as Evo customers can enjoy CDMA-1X data rates of up to 153.6 Kbps at more than 1000 destinations across Pakistan.

The portable, small & stylish Evo USB device is a multipurpose device which not only delivers fastest wireless internet but can also be used for Voice Calls by inserting a Vfone SIM and for data storage by inserting a standard Micro SD Card.


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President's Message

The challenges faced by PTCL became even tougher in the past year where Pakistan experienced a spillover from the global recession. However, with unwavering determination and strong passion we have remained steady and focused on our course – to be the leading customer oriented ICT Company in Pakistan. This year PTCL has achieved numerous milestones, from some of which customers can benefit today while other

long term initiatives will bring a fruitful tomorrow. Broadband Pakistan became the largest broadband service in Pakistan. EVO launched in June 2009 and made the Company the first 3G wireless broadband provider in Pakistan. This service is set to become one of the primary products of PTCL for years to comeAs is evident from the excellent reception it has received. PTCL continues to enhance and consolidate its position as the leading and premier broadband provider in the country and undoubtedly the sole Integrated Telecom Service Provider offeringBundled Voice, Data, and Internet and TV services at compelling and competitive rates to a wide audience. At the corporate front, we have remained equally successful. PTCL today is the backbone for businesses throughout Pakistan through Voice, Data and Internet services. This year has seen the revolutionary roll out of customized services and state of the art audio and video conferencing facilities.


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With the launch of our Data Centre in Karachi and subsequently in other cities, corporate customers now have access to highly secure, reliable and networked hosting facilities for critical applications and services. Continuing with its efforts to improve and diversify Pakistan’s international connectivity with the rest of the world, PTCL has embarked on an ambitious project to link the country to the future data highway. Along with eight other international telecom providers, PTCL signed the Construction and Maintenance Agreement (C&MA) for IMEWE Fiber Submarine Cable System linking Karachi with Western Europe directly. The capacity of this system, to enter service shortly, will meet and cater to the growing and expanding demand for the broadband internet traffic for years to come. We fully realize in PTCL that while we work dedicatedly to enhance our Systems and Processes,Network, Products and Services our real reward and success originates from our customers, consumers and users from all over the country. It is therefore vital that PTCL continues to strive towards providing the highest quality of customer service to the full satisfaction of our users. In this respect, we continue to work on several projects and initiatives to improve our efficiency and response to customer demands and complaints. Also, we remain confident that our customers will see a marked and noticeable improvement in our services. With this in mind, we shall continue to invest in our people and workforce to cultivate a culture of service and differentiation and inculcate in them a new sense of purpose and self worth for reaching out to our customers. In view of the above achievements and undertakings, I am confident that our future is bright and promising and we look forward to successfully delivering on our commitments.

Best Wishes

Walid Irshaid President & CEO


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Corporate InformationCorporate Information

Management

Walid IrshaidPresident & Chief Executive Officer

Muhammad Nehmatullah ToorS.E.V.P (Finance) / Chief Financial Officer (C.F.O)

Mohammad Nasrullah Chief Technical Officer (C.T.O)

Mr. Javed MushtaqChief Information Officer (C.I.O)

Syed Mazhar HussainS.E.V.P (HR / Admin & Procurement)

Sikandar NaqiS.E.V.P (Corporate Development)

Naveed SaeedS.E.V.P (Commercial)

Mr Tariq SalmanS.E.V.P (Business Zone North)

Mr Abdullah YousefS.E.V.P Business Zone South

Mr Hamid FarooqS.E.V.P Special Project

Farah QamarCompany Secretary

Legal AffairsDr. Syed Mohammad Anwar Shah


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BankersAskari Bank Limited

Citibank N.A.

Faysal Bank Limited

Habib Bank Limited

MCB Bank Limited

National Bank of PakistanRBS (formerly ABN AMRO)

Standard Chartered Bank Limited

United Bank Limited

Registered Office

PTCL Headquarters,Block-E, Sector G-8/4,Islamabad-44000, Pakistan.Tel: +92-51-2263732 & 34Fax: +92-51-2263733E-mail:[email protected]: www.ptcl.com.pk

Auditors

A.F. Ferguson & Co.Chartered Accountants Ernst & Young Ford Rhodes Sidat Hyder, Chartered Accountants

Share Registrar

M/S FAMCO Associates (Pvt.) LimitedGround Floor,State Life Building 1-AI . I Chundrigar RoadKarachi 74000Tel: +92-21-2422344, 2467406Fax: +92-21-2428310


http://www.ptcl.com.pk/

mailto:%[email protected]

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Board of Directors

Mr. Naguibullah MalikChairman PTCL Board

Secretary IT & Telecom Division, Ministry of Information Technology Government of Pakistan,

Islamabad

Mr. Abdulrahim Abdulla Abdulrahim Al NooryaniChairman & Chief Executive Officer, Etisalat International Pakistan L.L.C

Executive Vice President Contracts & Administration Etisalat, UAE.

Mr. Salman SiddiqueSecretary (Finance), Ministry of Finance

Government of Pakistan, Islamabad


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Mr. Abdulaziz Ahmed Saleh Ahmed Al SawalehChief Human Resources Officer

Etisalat, UAE

Mr. Mushtaq Ahmad BhattiMember Telecom

Government of Pakistan,Islamabad

Mr. Fadhil Mohamed Erhama Al AnsariExecutive Vice President Engineering

Etisalat, UAE

Mr. Khursheed Ahmed JunejoAmbassador, Embassy of Pakistan

Abu Dhabi, UAE

Mr. Abdulaziz Hamad Omran TaryamGeneral Manager, Northern Emirates

Etisalat, UAE

Dr. Ahmed Al JarwanGeneral Manager

Real EstateEtisalat, UAE


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Ms. Farah QamarCompany Secretary PTCL

PTCL Headquarters, Islamabad


CORPORATE RESPONSIBILTY

CORPORATE RESPONSIBILTY

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Corporate ResponsibilityCorporate Responsibility

PTCL employees donate One-Day salary for IDPs

Pakistan Telecommunication Company Limited employees have contributed their one day salary that amounts Rs. 20 million for the support of internally displaced people of Swat and other affected areas.CEO and President of PTCL Mr. Walid Irshaid called on Prime Minister Syed Yousuf Raza Gilani at PM’s House and presented him a cheque of Rs. 20 million on behalf of PTCL employees for PM’s Special Fund for the Relief of Victims of Terrorism.While thanking PTCL employees for their generous contribution and appreciating their willingness to help IDPs, Mr. Waild Irshaid said that PTCL employees have exhibited their profound sense of sharing and empathy on this occasion. This highly speaks of the strong commitment of our employees with this national cause.”“Contribution from our employees during these days specially donating one day salary for IDPs in these testing times shall be greatly helpful in mitigating IDPs miseries and will go a long way in their rehabilitation process.

Donation to SOS Villages

PTCL keeping with its healthy tradition of supporting non-governmental organizations recently donated a sum of Rs.2.5 million to the SOS Villages. As most people would be aware, SOS is an organization that looks after the well-being and education of orphans and the destitute.


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Last year, PTCL organized a special event at the SOS Village Rawalpindi, which the then Prime Minister of Pakistan, Mr. Shaukat Aziz, attended. He handed over a cheque of Rs.2.5 million, donated by PTCL for this noble cause, to the SOS Children’s Village.

PTCL as a socially aware and responsible entity is determined to do its utmost in furthering worthy causes that contribute to the lives of individuals and help better the standards of society as a whole.

Scholarships for Persons with Disabilities

Another recent CSR initiative taken by PTCL was announced at the World Telecommunication Day held on May 17, 2008. This year the worldwide theme for the Day was “Connecting Persons with Disabilities.” To raise awareness of this theme and support initiates focusing on less privileged persons, PTCL chose to become the lead sponsor of the World Telecom Day event in Islamabad contributing PKR 6.8 Million.

During his address at the event, PTCL’s President/CEO, Mr. Walid Irshaid announced five academic scholarships per year for persons with disabilities so that they could pursue their career of choice by obtaining higher education at any university with Pakistan. PTCL would bear the full tuition costs and living expenses of those awarded these scholarships. PKR 1.5Million was announced focusing on the education of the special people

Collaboration with Universal Service Fund (USF)

The Universal Service Fund (USF) and PTCL have entered in a contract to provide basic telephony and data services to the population in the yet un-served areas of Baluchistan districts of Pishin, Killa Abdullah and Quetta. PTCL is making consistent efforts to enhance Pakistan’s capacity to develop and produce a globally competitive telecom sector and industry.

Making a determined effort develop Pishin, a far flung area of Baluchistan is a clear manifestation of PTCL’s resolve to bridge the digital divide. With the support of USF, PTCL is set to extend the benefits of its ubiquitous network


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coverage to the under-served communities in the un-served areas. PTCL is contributing Rs. 149 million to this endeavor in an effort to bring information and communication technology to the remotest areas. The total costs of the projects are PKR 2000 Million out of which PTCL contribution is PKR 1275 Million while USFCo contribution is PKR 725 Million.

Thus, PTCL, as a socially responsible corporate entity, has been pursuing different social causes touching on areas of culture, sports, music, environment and general welfare by supporting different initiatives. As such, PTCL’s CSR activities and new ventures are warmly welcomed.

Donation to Earthquake victims in Baluchistan

Earthquake struck the western telecom region Quetta leaving terrifying effects in the region. Mr. Walid Irshaid President & CEO PTCL donated Rs.10 Million for the reconstruction and rehabilitation of the area.

Donation to Benazir Income Support Program

Mr. Walid Irshaid President & CEO PTCL donated Rs.10 Million to the Benazir Income Support Program. This program directly focuses on the poor populace of Pakistan.

Sponsoring Event at LUMS

PTCL was the lead sponsor for Synergies 2008; the 1st ever Business School Competition in Pakistan organized by Lahore University of Management Sciences costing PKR 1 Million.

PTCL President Mr. Walid Irshaid announces Rs 10 Million for National Press Club Islamabad

The president of PTCL, Walid Irshaid has said that PTCL was still one of the most profitable National organizations, despite all economic and financial crises and back draws.Addressing the inaugural of the new building, alongside president NPC (National press Club), Tariq Chaudhry, general secretary Afzal Butt, and


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other luminaries, including SEVP PTCL Sikandar Naqi, EVP Ali Qadir Gilani. Walid Irshaid expressed the company's willingness and readiness to tackle any impending challenges with élan and preparedness.Mr. Walid Irshaid also assured press club about his full cooperation and assistance, and during the lunch hosted in his honor by NPC also announced a grant of Rs. 10 million, DSL Internet services, IPTV and other facilitiesHe said that PTCL would continue to work for betterment of media in Pakistan, and also lauded media services rendered during the last few years

PTCL Gets Environment Friendly

The Pakistan Telecommunication Company Limited (PTCL) has decided to introduce a new bill format for its customers, effective February 2009.This decision was taken to ensure that PTCL stir towards adopting environmental-friendly and customer-friendly policies inline with the government of Pakistan's efforts, which recommends companies and institutions to go green.This initiative of PTCL also coincides with the Government’s decision to celebrate 2009 as the "Environment Year". PTCL's decision to reduce the number of billing pages is an environment friendly initiative and is a way forward towards becoming a paperless enterprise. According to Dr. Sadik Al-Jadir, SEVP Commercial PTCL, preceding bill format comprising multiple pages, would be replaced with a new one-page bill format, thus packing all the essential billing details on a single page. This single page bill format would help save, at least 12 million papers every month that are being used for printing the billing details. To facilitate the customers, itemized billing details would remain obtainable and accessible. Customers would be able to obtain their itemized billing details by visiting any customer service centre of PTCL and would also be able to access essential billing details through IVR by dialing 1200. PTCL Call center is also expected to start taking orders from customers for their itemized billing details. Subsequently, these details would be delivered to the customers through courier within a certain time frame.Dr. Sadik said, “PTCL is determined to improve and build good relationship with its customers by providing novel and superior telecom products and services to its valued customers and is striving hard to meet their expectations.”


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PTCL, CISCO and NUST to establish Center of Excellence for Internet Technologies

Islamabad: Under the banner of PTCL, CISCO and NUST, Center of Excellence for Internet Technologies is being established at NUST SEECS, Islamabad. The Center – a brainchild of Mr Walid Irshaid, President and CEO, PTCL - is to be set up in the state of the art. A MoU to this effect was signed yesterday by the three parties, with the Chief Guest being Dr Ata Ur Rahman, Chairman HEC. The occasion was also graced by high officials from public sector, academia and industrial organizations. The ceremony was a huge success and PTCL, CISCO and NUST’s leading role in taking up new challenges to improve the quality of IT education in Pakistan was greatly lauded by members of academia, industry and the media present at the ceremony.

Mr Sikander Naqi Executive Vice President Corporate Development speaking on the occasion said that by setting up such a Center, PTCL will be able to benefit from world class research that will be of immense value to them. In addition, the human resources that will be developed at this Center will be able to export their skills and expertise to the region and beyond. This will spur growth in the Pakistani IT sector, and will contribute towards enhancing the quality and quantity of exportable IT related skills to the global marketplace.

The Center, staffed by researchers from NUST, will work closely with Cisco engineers in the US who will provide the thematic direction of the joint research. The Center’s research is to be funded by the National ICT R&D fund. Dr. Qasim Sheikh, the CEO of ICT R&D fund, stated that his organization is pleased that PTCL, NUST and CISCO are forming a joint research group that will work on significant problems that are relevant to Pakistan. A research project under similar arrangements, funded by the National ICT R&D Fund, is currently underway with Cisco scientists and Pakistani researchers collaborating to develop open source tools for performance monitoring of network traffic. The output of this work has already generated An application for a US patent is being filed as a result of the work carried out during the course of that research. In addition to its research ambitions, the Center will also be providing high quality professional training courses to PTCL and other telecom companies.


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PRODUCTS&

SERVICES

PRODUCTS&

SERVICES

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Products & ServicesProducts & Services

1. PTCL Landline

Since the deregulation of the telecom sector, a large number of foreign investors opted for licenses in LL, LDI and cellular operations, identifying Pakistan as an emerging market.

Investors entered the market forcefully in the cellular segment, introducing heated competition for PTCL. In this situation PTCL's counter strategy for landline service, during the year 2007-08 was aimed to increase ARPU, acquire new subscribers and contain churn.

To increase operations, PTCL shifted from its conventional duration based charging system to value based options, like 'Pakistan Package' that offered 5,000 minutes for on-net nationwide calls at Rs. 199/month. PTCL also launched 'International Plus' package to facilitate cost effective international calls at unmatchable rates alongside offering Voice messaging and Phone n Net services, adding more value to the landline service.

To increase customers' base, 'order on phone' was introduced, allowing customer to apply for a new connection by simply calling 0800-80800.

To tackle the churn PTCL established an outbound call center to reach out to potential customers with an objective to attain higher level of brand loyalty.


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2. PTCL V-Fone

PTCL V-Fone (WLL Service) was another major area of focus for PTCL during the year. A few prominent measures taken in this area during the year were launching of free home delivery service. No line rent package was launched in September 2007. In June 2008, 30 seconds billing was introduced contributing as an effective customer retention tool. PTCL has expanded the network to provide coverage in all large and small cities including over 10,000 villages in rural areas of Pakistan.

As Vfone becomes the Wireless substitute to landline in un-served areas, it will be a robust line for voice, data and fax services for use at home and in the office. In business markets it will be positioned as the CDMA tellular extension to add trunk lines to the ever expanding business PABXs. Vfone will be spearheading the launch of the new postpay and pre-pay tariffs with no line-rent to meet the market demand. The tariff will include new post-pay unlimited local and nationwide calling packages to bring traffic back to PTCL’s networks to stabilize the revenues.

After the initial launch, the Company aims to retain the momentum by offering different bundled packages for voice to increase the subscriber base, including specifically targeting the rural areas where copper infrastructure does not exist. On Wireless broadband front, a major upgrade of PTCL WLL CDMA network is underway to provide Wireless broadband services in 17 major cities by end 2007. Currently technical trial is in progress which will be followed by a pilot project on WiMax technology. This will enable PTCL to maintain its competitive edge.


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3. Ufone

(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 outset, 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. Ufone 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 implementation 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).

Ufone's operational performance has been very encouraging despite stiff competition in Pakistan telecom market which has led to reduction of prices to bare minimum level. Ufone managed to improve its revenue and operating profit by 35% and 47% respectively, as compared to the last year through aggressive policies and exercising strict control over expenses.

4. Paknet Limited

Paknet was incorporated in year 2000 for providing internet related services in the country is being wound up. However, PTCL has developed its own voice, data and video infrastructure and services. Paknet's operations have been closed and liquidator appointed for completing the formalities involving the company closure. All customers, assets, liabilities and capital stand transferred to PTCL in accordance with the special resolution passed in General Meetings.


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5. PTCL Broadband

The first major product initiative taken towards a changing PTCL during the year 2006-07, was the launch of PTCL’s Broadband service under the theme of ‘Broadband Pakistan’ by the Prime Minister of Pakistan. The service was launched on PTCL’s new state of the art BroadbandInfrastructure that was added to our network during the last three quarters of 2007 with the initial capacity of over 100,000 subscribers.

PTCL achieved unprecedented success as it added over 10,000 customers within the first 120 days of its launch while historically it had taken four years collectively for all the other operators to achieve 30,000 customers in Pakistan! The hallmark of PTCL service was the removal of theTraditional barriers such as the upfront costs of installation and customer premises equipment and added bandwidth download.

This high customer take up also reflected on the Company’s trusted image in the eyes of the nation. The service is already available in the five largest cities of Pakistan and will be expanded into another dozen cities during the coming year.

6. Smart Services

In March 2008, PTCL introduced a trial service that put PTCL on the path of a paradigm shift. Branded under 'PTCL Smart Line', the service included Interactive Television, Broadband and voice Telephony all at the same time on PTCL's telephone line. The 'Smart TV', for the first time offered TV viewers the power to control the TV channels interactively. This included the ability to rewind and pause live TV channels, block / unblock any TV channel for parental lock and search through video on demand content.

The Commercial launch of the PTCL Smart Line services across the three largest cities in Pakistan was arranged on the 14th of August 2008 which will be expanded to the other cities during the course of the year.


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Industry Or

Environment Analysis

Industry Or

Environment Analysis

46


ANALYSIS OF EXTERNAL ENVIRONMENT

Pakistan followed a gradual approach to liberalize its telecom market. During 1990s, as a first step, market was opened for value added services and competition was introduced in cellular mobile sector as four licenses were issued (Mobilink, PTML, Paktel and Instaphone). The government monopoly was retained in fixed line services, however, PTCL legal monopoly ended with effective from 31st December 2002. The government announced Telecom Deregulation Policy and Cellular Mobile Policy in 2003 and 2004 respectively.

The telecom regulatory, issued new licenses for Long distance International (LDI) and Local Loop Fixed (LLFixed), Wire Local Loop (WLL) and Cellular Mobile. With the issuance of new licenses the market is now open for full competition in all segments of the sector.

1. Industrial Structure

Pakistan’s telecom sector has finally begun moving and looked set for an era of phenomenal growth. The sector has witnessed tremendous growth in recent years with Teledensity depicting major expansion after deregulation. The primary purpose of deregulation of the sector was to encourage healthy competition while providing better quality products and services to customers on lower prices as well providing best technology available worldwide. Current Teledensity in Pakistan has expanded exponentially from 4.3 percent in 2002-03 to stand at 48.4 percent in 2006-07 with currently standing at over 52 percent, with better services and competitive rates.

Also, increasing inflow of foreign investment in the telecomm sector has resulted in the introduction of new cut throat technologies for provision of various telecom services including cellular, wireless and internet services. In recent times, the focus has increasingly shifted from Fixed Lines to Cellular and Wireless Fixed Lines (WLL), with better portability and convenience. WLL has shown an improvement from 0.7 percent to 1.1 percent in 2006- 07 from last year with subscribers of 2 mn.

Cellular segment remained the vital player with increase in total Teledensity contributing 48 percent. In the urban markets introduction of Broadband internet services by various Telecomm giants such as PTCL, WorldCall and Wateen has further benefited the consumers to access timely information over the internet with competitive rates. The broadband


46


penetration however has not depicted as much growth as expected growing with 3.5mn subscribers in 2007 against 2.4mn subscribers in 2006. PTA estimates broadband subscribers to grow to over 5mn by 2010. WorldCall has initiated cable television services with PTCL expected to follow suite by providing IPTV services through its Triple Play services, ensuring diversification of products and services.

Recent conducive environment provide by PTA has resulted in increased FDIs in the sector with investments of USD2.7 bn during the last five years making it the largest recipient of highest FDI during the past few years.

The future for telephony lies amongst unexplored rural regions of Pakistan with all major telecom operators looking forward to tap these markets with a major contribution by WLL and Cellular segments due to cheaper installation costs. With healthy competition instigating lower local and international tariffs and availability of alternative services has progressively benefited the consumers overall.

2. Market Operation

Pakistan Telecommunication Company Limited, or PTCL, keeps callers connected from Karachi to Islamabad. The communications services provider offers consumers and businesses with basic landline, DSL broadband, interactive television, and IP telephony services. The company also provides wholesale services such as traffic routing and call termination to other carriers. PTCL's subsidiaries include wireless phone services provider Pakistan Telecom Mobile, which operates as Ufone. In 2006 EmiratesTelecommunications (Etisalat) acquired a 26% stake in PTCL and assumed management control of the company.

Demand is driven by technological innovation and by growth in business activity. The profitability of individual companies depends on efficient operations and good marketing. Large companies have big economies of scale in providing a highly automated service to large numbers of customers, and have the financial resources required building and maintaining a large network. Smaller companies can compete effectively only in small markets or by providing specialty services.


46


Top PTCL Competitors

China Mobile Orascom Telecom Telenor

3.Market Structure

Wireless Local Loop (WLL) is growing at a rate of about 100 percent per annum as its teledensity has reached to 1.34 percent by end of December 2007. The quarterly addition of WLL subscriber is approximately 0.14 million on an average.

PTCL is leading in terms of traffic on WLL in Pakistan, which has about 54 percent market share of total traffic of WLL segment. Two major players,

PTCL and Telecard have lost market share in WLL traffic in quarter ending December 2007 when compared with the same quarter of the last year.

PTCL share came down to 54 percent from 57 percent while Telecard share in total traffic has come down to 22 percent from 30 percent. WorldCall has gained 100 percent and its share reached to 22 percent at the end of 2007 compared to the same quarter last year. PTCL, the incumbent operator in fixed line in Pakistan has also emerged as market leader with 57 percent market share followed by Telecard and Worldcall with 19.6 percent and 20.2 percent market share at the end of December 2007.

Great Bear International share is reported to be 3 percent, while Wateen Telecom share is 0.2 percent, which started their services during the quarter. PTCL has gained over 1 percent market share compared to the same quarter of last year while Telecard added over 5 percent market share during this period.

Great Bear International though a smaller shareholder in WLL market but its share is increasing due to its quality of service as it reached to 3 percent as compared to 2 percent in December 2006.It is believed that fixed-line tele-density will recover with WLL taking off due to its cost effectiveness and in particular this technology suits for the hilly areas and far-flung regions in the country. The estimated WLL per line cost is around US$ 100-150 in comparison to wire line cost which still remains to be more than US$ 250-350 per line.


46


PTCL has already covered over 11,500 cities/towns/villages while other major operators like Worldcall, Telecard and Greatbear are increasing their coverage too.

WLL system is used when low to medium subscribers densities are located apart from each other and deployment of primary or secondary copper network is difficult. WLL system is best suited for rural, sub urban areas and very congested metropolitan areas.

4. Regulatory Environment

The local telecom market has altered significantly since the creation of PTA as an independent regulatory agency and had enjoyed sizeable success to open up the local market to competing operators. With the governments deregulation policies, Etisalat, the UAE based telecom player being the highest bidder emerged as the buyer of the 26 percent share in PTCL in April 2006. PTCL, despite being a giant, had to face many bottlenecks in its operations with such large network.

PTCL has recently taken an initiative to right size itself by introduction of VSS for its employees where about 28000 employees are accepted under the scheme.

Introduction of various diversified products and services to sustain its market share, Implementation of ERP solutions to provide integration of various departments through acquisition of SAP software and state of the art billing and customer service software, translates PTCL’s long term goals of operational effectiveness into practice.

The telecom giant PTCL has observed cutthroat competition from various service providers after the implementation of the deregulation policies by the PTA. However, through the vast infrastructure and being the carriers’ carrier, PTCL with diversification of its various services has enjoyed well-built position and posses immense potential for growth, while need for telecom services is on rise as economy continues to grow on the right track.

The telecom De-regulation and Cellular Mobile Policies announced by the Federal Government place certain obligations on Pakistan Telecommunication Company Limited (PTCL) to facilitate market liberalization. PTCL is bound to comply with these obligations within a stipulated time frame. These obligations are of paramount importance for successful implementation of the policy and failure or any deviation thereof


46


may result in substantial damage to the deregulation process/liberalization program.

Similarly Defense, NTC and SCO also depend on PTCL for many facilities. Therefore, PTCL has important obligations towards Defense of the country and other existing operators. In addition, PTCL has been declared SMP operator. Under the status of SMP also, PTCL has certain obligations. PTA, as regulator, has to ensure that new management of PTCL fulfils all these obligations.

ANALYSIS OF INTERNAL ENVIRONMENT

Being a public limited company whose majority shares are controlled by the Government of Pakistan, PTCL is responsible to provide


46


telecommunication services in the country on affordable prices while ensuring that the telecom services become accessible throughout the country.

Since exclusivity of PTCL has ended on 1st Jan 2003, the telecom sector of Pakistan has entered into a new era and PTCL is slowly moving towards competition in the basic telecom services. The company’s policy objectives are as follows:

Increase service choice for all consumers of telecom services at competitive and affordable prices.

Increase private investment in the telecom sector and encourage local telecom manufacturing/service industry.

Enhance long run benefits to the Government’s financial position by expanding the taxable revenue base.

Accelerate expansion of telecom infrastructure to extend telecom services to unserved and undeserved areas.

Encourage fair competition among service providers, while maintaining leadership in the telecom sector.

Maintain consistency with the Pakistan IT and internet promotion policy of low prices for Bandwidth and Internet access.

1. Organizational Management Cycle


46


The cycle above describes the Organizational Management process at PTCL. Yellow blocks describe the core functions of the Company performed at all levels in the Organization. Blue Blocks are the Strategic functions which are performed at the Strategic level only.

2. Financial Aspects

The structural adjustments undertaken by the company in response to the increased competition and substitution impact of mobile expansion has adversely hit the profitability of PTCL in the short run.


46


The first quarter of FY'08 recorded a drop in profitability of PTCL, as the company's profit after taxation declined 41.5% over the three months period to September 2007, as compared to the same period last year. Sales revenue dwindled during three months period, reaching Rs 14.4 billion, compared to Rs 16.9 billion last year, depicting a decline of 15%. A 6% rise in operating expenses as a result of high provisioning against doubtful debts and infrastructure development for high speed DSL connections, combined with a 32% increase in financial charges, provided a further blow to the bottom line.

Consequently, operating profit declined 46%. However the effect on net profit was somewhat diluted by a 14% increase in non-operating income of the company so that the company posted profit after tax of Rs 3.01billion, compared to Rs 5.15 billion in1Q'07.

At the end of first quarter, the company stock was trading at a P/E ratio of 18.20. As illustrated by the graph, the stock has performed remarkably well relative to the market. The stock has shown consistent performance over the three months, dropping only slightly as the rest of the market dipped sharply during August. As a consequence of the fading sales revenue for the period, the profit after tax of the company in FY06 declined by 21.91% over FY05. The net profit margin has also been declining since the FY'04 and the trend persisted in FY06.

The decline in profit margin may be attributed to a 5.25% increase in operating expenses for the year.


Environmental Scanning

Environmental Scanning

46


SCANNING OF INTERNAL ENVIRONMENT

SWOT ANALYSIS

1. Strengths

Largest operational network and infrastructure within ICT (Information

& Communication Technologies) segment.


46


An integrated Monoply Market leadership in Local loop, Wireless local

loop (WLL) and fixed telephony.

PTCL (Ufone) is market challenger in GSM segment Ufone is performing

well though Warid and Telenor are tough competitors.

PTCL, Ufone’s profitability increased by 49.2 percent to Rs 977 million

in 1H/FY07 as compared to Rs 655 million in the corresponding period

last.

Competitors still depend on PTCL network either directly or indirectly

Experienced Telecom Resources

2. Weakness

Not been able to nurture its growth around customer services oriented

strategy Internal organizational and business processes issues

Monopolistic culture has further added to its complexities

Paknet, the internet service provider arm of ptcl continues to incur

losses due to poor management and lack of network optimization

Ptcl-v, the fixed wireless phone service is poor

Over employment & low productivity.

Slow decision making including external interferences.

Corporate culture akin to government departments.

3. Opportunities

Low teledensity of Pakistan.


46


Have vast infrastructure and real estate assets which can be leveraged

further.

Global connectivity reliability has been improved. PTCL is expanding

the long distance and infrastructure side through spreading out two

sea-me-we submarine cables...

Partnership with new entrants in a deregulated environment. Scope for

efficient/cost effective operations.

4. Threats

Increased competition in long distance continues to exert pressure.

VOIP use is increasing despite ambiguous and discriminatory policies

Exposure to market competition

Migration to Cellular Networks

Ability to Attract & Retain Quality Professionals

Reduction in International Settlement Rates

SCANNING OF EXTERNAL ENVIRONMENT

PEST Analysis

In PEST

P stands for Political,

E stands for economical,

S stands for social

T stands for technological analysis


46


Of industry with respect to their environment. The organization's advertising

surroundings is made up from:

The organization inner environment e.g. staff (or internal customers),

office, technology, wages and finance, etc.

The organization external-environment e.g. our external customers,

agents and distributors, suppliers, our competitors, etc.

The country forces affecting the environment e.g. political forces,

Economic forces, Socio-cultural forces, and Technological forces. These

are known as PEST factors.

a) Political Factors

Political environment of Pakistan is stable in the current situation and country is not progressing in terms of economic growth that was expected.

Environment is investor non-friendly & telecommunication sector is under regulation.

Before WTO implementation government already took steps in regulation of Telecommunication sector.

b) Economic Factors

Marketers should consider long term and short term state of a trading market

Inflation is being controlled by state bank and under strict eyes but unemployment rate is going up & up with the increase of level of poverty

Economic instability is worsening day by day as liquidity crunch is prevailing in the world

C) Socio-Cultural Factors


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The socio cultural environment summarizes demand and tastes, which vary with fashion and disposable income, provide opportunities and threats to telecom companies.

As Pakistan is an Islamic country and people are very strict in case of Islam any thing against the philosophy of Islam on either print or electronic media are treated as against Pakistan. Most of the people dislike anything extra-ordinary or 19 something which sabotage their culture or subculture. Pakistani society is largely multilingual and multicultural.

The Pakistani people are more social and want to remain in contact with other people. They celebrate lot of festivals like Jashn-e-Baharan, Eid Celebrations and other cultural festivals. On these festivals they make calls to relative and one of the key issues is sending SMS regarding the event. This will influence the demand for the product.

Increasing globalization has amplified the influence of "Western culture" in Pakistan. The life style of Pakistani people is changing rapidly. People are more conscious about status pat most all people purchase multimedia mobile phones. And also there is trend for Black berry sets by youth which will help in enhancing their product and services.

The total population of Pakistan is approximately 169,248,500. The population is increasing rapidly which increase the number of cellular usage and help in projecting high profits.

Most of the people dislike anything extra-ordinary or something which sabotage their culture or subculture.

Companies who are targeting upper-end of market mostly published and aired their advertisement in English language.

In metropolitan cities women are doing work along with their other responsibilities but other than metropolitan cities it is difficult for women to convince their parents and spouses for work.

d) Technological Factors


46


Advances in technology can have a major impact on business success. Technological change impacts socio cultural attitudes as well as on economy.

Companies have technology with which they can compete in the Pakistan and now companies are investing in their infrastructure to not only expand coverage but also to upgrade their existing systems.

The current focus in cellular industry is coverage and establishing franchises which has a positive effect on the telecom industry.

Introduction of CDMA technology in the Mobile SIMS which is also an opportunity for the mobile companies.

The latest technology of 3G mobile communications has been earmarked and PTA will soon be inviting applications for 3G spectrum auction. This technology will increase operating capacity and revenues by using HSPA technology.


BCG MatrixBCG Matrix

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THE BOSTON CONSULTING GROUP (BCG) MATRIXThe BCG Matrix method is the most well-known portfolio management

tool. It is based on product life cycle theory. It was developed in the early

70s by the Boston Consulting Group. The BCG Matrix can be used to

determine what priorities should be given in the product portfolio of a

business unit. To ensure long-term value creation, a company should have a

portfolio of products that contains both high-growth products in need of cash


http://www.12manage.com/methods_product_life_cycle.html

46


inputs and low-growth products that generate a lot of cash. The Boston

Consulting Group Matrix has 2 dimensions:

Market share

Market growth

The basic

idea behind it

is: if a product

has a bigger

market

share, or

if the product's

market grows faster, it

is better for the company.

The four segments of the BCG Matrix

Placing products in the BCG matrix provides 4 categories in a portfolio

of a company:

Stars (high growth, high market share)

o Stars are using large amounts of cash. Stars are leaders in the

business. Therefore they should also generate large amounts of

cash.

o Stars are frequently roughly in balance on net cash flow.

However if needed any attempt should be made to hold your


46


market share in Stars, because the rewards will be Cash Cows if

market share is kept.

Cash Cows (low growth, high market share)

o Profits and cash generation should be high. Because of the low

growth, investments which are needed should be low.

o Cash Cows are often the stars of yesterday and they are the

foundation of a company.

Dogs (low growth, low market share)

o Avoid and minimize the number of Dogs in a company.

o Watch out for expensive ‘rescue plans’.

o Dogs must deliver cash, otherwise they must be liquidated.

Question Marks (high growth, low market share)

o Question Marks have the worst cash characteristics of all,

because they have high cash demands and generate low

returns, because of their low market share.

o If the market share remains unchanged, Question Marks

will simply absorb great amounts of cash.

o Either invests heavily, or sells off, or invests nothing and

generates any cash that you can. Increase market share

or deliver cas

The BCG Matrix and one size fit all strategies

The BCG Matrix method can help to understand a frequently made

strategy mistake: having a one size fits all strategy approach, such as a

generic growth target (9 percent per year) or a generic return on capital of

say 9.5% for an entire corporation.

In such a scenario:

Cash Cows Business Units will reach their profit target easily. Their

management have an easy job. The executives are often praised


46


anyhow. Even worse, they are often allowed to reinvest substantial

cash amounts in their mature businesses.

Dogs Business Units are fighting an impossible battle and, even worse,

now and then investments are made. These are hopeless attempts to

"turn the business around".

As a result all Question Marks and Stars receive only mediocre

investment funds. In this way they can never become Cash Cows.

These inadequate invested sums of money are a waste of money.

Either these SBUs should receive enough investment funds to enable

them to achieve a real market dominance and become Cash Cows (or

Stars), or otherwise companies are advised to disinvest. They can then

try to get any possible cash from the Question Marks that were not

selected.

Other uses and benefits of the BCG Matrix

If a company is able to use the experience curve to its advantage, it

should be able to manufacture and sell new products at a price that is

low enough to get early market share leadership. Once it becomes a

star, it is destined to be profitable.

BCG model is helpful for managers to evaluate balance in the firm’s

current portfolio of Stars, Cash Cows, Question Marks and Dogs.

BCG method is applicable to large companies that seek volume and

experience effects.

The model is simple and easy to understand.

It provides a base for management to decide and prepare for future

actions.

Limitations of the BCG Matrix


46


Some limitations of the Boston Consulting Group Matrix include:

It neglects the effects of synergy between business units.

High market share is not the only success factor.

Market growth is not the only indicator for attractiveness of a market.

Sometimes Dogs can earn even more cash as Cash Cows.

The problems of getting data on the market share and market growth.

There is no clear definition of what constitutes a "market".

A high market share does not necessarily lead to profitability all the

time.

The model uses only two dimensions – market share and growth rate.

This may tempt management to emphasize a particular product, or to

divest prematurely.

A business with a low market share can be profitable too.

The model neglects small competitors that have fast growing market

shares


46



SUMMARIZED FINANCIAL

STATEMENTS

SUMMARIZED FINANCIAL

STATEMENTS

46


SUMMARIZED BALANCE SHEET

Pakistan Telecommunication

limitedSummarized Balance

SheetAs on 31 December 2009

Assets 2005 2006 2007 2008 2009Current Assets Rs. Rs. Rs. Rs. RsCash and bank balances

172,814,896 16,049,950 9,686,177

7,584,259

1,486,068,648

Advances,deposits and other receivables

97,068,120 169,580,242 117,185,853

88,430,076

2,310,941

Trade debtors (net) 48,589,001 67,760,129 44,812,703

69,394,339

187,557,975

Stock-in-trade

Raw material 69,433,646 239,587,504 678,544,478

813,116,252

1,085,638,458

Work in process 24,855,609 31,738,172 29,227,518

30,807,354

21,007,454

Finished goods 126,440,912 117,640,324 146,632,574

95,951,990

92,354,018

Stock-in-trade(net) 220,730,167 388,966,000 854,404,570

939,875,596

1,198,999,930

Sales tax refundable 45,952,942

9,680,642

Short term investments

169,036,865

138,494,733

Stores, spares and loose tools

55,484,417 53,646,568 65,443,171

97,176,451

57,739,692

Total current Assets 594,686,601 696,002,889 1,260,569,339

1,386,908,396

2,942,357,828


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Fixed Assets

Operating Fixed Assets

708,267,837 701,075,042 738,093,535

1,665,827,350

Investment Property 14,058 14,058

1,563,628,509

capital work-in-progress

19,626,598 11,370,049 444,708,159

Long term Investment

146,806,000 146,806,000 146,806,000

134,804,956

207,547,729

Long term Deposits 1,644,030 1,833,030 1,180,685

3,771,143

4,347,499

Total fixed Assets 876,344,465 861,098,179 1,330,802,437

1,804,403,449

1,775,523,737

Total Assets 1,471,031,066 1,557,101,068 2,591,371,776

3,191,311,845 6,493,405,302

Liabilities

Short term liabilities

interest/markup on loans

1,908,804 1,411,284 15,995,363

13,793,090

4 9,005,607

current portion of long term liabilities

75,310,394 26,536,600 53,108,029

74,679,405

136,689,609

Short term finances 297,885 134,520,221 584,313,022

768,552,579

1,394,354,879

Creditors 42,281,203 47,569,156 53,767,978

66,037,846

40,664,725

accurals and other payables

86,325,079 94,848,370 177,473,542

131,461,316

27,062,791

Provison for taxation 1,745,999 2,291,263 3,266,410

1,300,650

6,900,809

Dividends 40,326,746

Total Current Liabilities

248,196,110 307,176,894 887,924,344

1,055,824,886

1,605,672,813

Long Term Liabilities

Long term loans and finances

66,341,447 39,804,847 366,446,223

550,618,900

304,349,426

Long term Payables 20,164,685 17,741,861 18,638,048

33,043,700

12,879,015

Total Long term Liabilities

86,506,132 57,546,708 385,084,271

583,662,600

317,228,441

Capital and Reserves

Issued'subscribed and paid-up capital

99,739,890 99,739,890 99,739,890

99,849,890

715,520,000

capital reserve 7,120,600

8 2,500,000

Unappropriate Profit 1,036,588,934 1,092,637,576 1,218,623,271

1,444,853,869

263,944,861

Total capital and reserves

1,136,328,824 1,192,377,466 1,318,363,161

1,551,824,359

979,464,861

Total Liabilities and owner's equity

1,471,031,066 1,557,101,068 2,591,371,776

3,191,311,845 2,902,366,115


46


SUMMARIZED INCOME SUMMARIZED INCOME STATEMENTSTATEMENT

Pakistan Telecommunication limitedSummarized income statementfor the year ended 31 December 2009

2005 2006 2007 2008 2009

Rs. Rs. Rs. Rs.

Sales (Net) 3,172,585,332

3,909,712,718

2,878,130,066 3,839,168,820 1,708,153,092

Cost of goods sold

Material 2,213,630,692

3,173,235,325

2,111,626,689 2,730,669,961 1 ,036,163,837

Labour 133,297,738

132,789,205

121,751,406

193,020,389

131,332,709

Foh 436,781,177

351,691,836

270,811,260

466,581,883

432,691,811

total factory cost

2,783,709,607

3,657,716,366

2,504,189,355 3,390,272,233 564,024,520

Work in process

(4,450,373)

(6,882,563)

4,936,003

(1,579,836)

21,007,454

Finished Goods

(2,720,508)

1,735,461

(21,397,559)

46,424,394

92,354,018

Cost of goods sold

2,776,538,726

3,652,569,264

2,487,727,799 3,435,116,791 1 ,450,247,795

Gross profit 396,046,606

257,143,454

390,402,267

404,052,029

257,905,297

Less Operating Expenses

Admin expenses

29,651,107

32,247,865

28,621,516

46,198,337

20,909,963

Selling expenses

89,978,928

95,151,804

88,692,539

73,696,732

63,697,327

other operating expenses

5,879,609

36,433,230

22,201,896

497,111


46


total operating expenses

119,630,035

133,279,278

153,747,285

142,096,965

135,072,569

Operating Profit

276,416,571

123,864,176

236,654,982

261,955,064

122,832,728

Add Other incomes

Export rebate on packing material

3,424,297

1,657,745

697,730

4,321

5,437

Exchange fluctuation gain-net

1,324,990

59,957

153,432

20,419

135,759

Income on bank deposits

1,255,303

438,693

75,546

123,921

321,834

dividend income

7,078,700

4,121,025

others 3,407,400

6,169,977

280,967

38,699,414

4,704,749

total other incomes

9,411,990

8,326,372

8,286,375

42,969,100

5,167,779

Less Other Expenses

14,079,928

16,125,114

15,461,706

20,326,630

17,623,607

Profit before Interest and taxes

271,748,633

116,065,434

229,479,651

284,597,534

110,376,900

Less Interest Expense

50,075,475

18,295,800

42,349,306

106,915,868

19,349,547

profit before taxation

221,673,158

97,769,634

187,130,345

177,681,666

91,027,353

Less provision for taxation

28,683,088

41,720,992

36,209,675

67,553,744

15,549,420

Profit after taxation

192,990,070

56,048,642

150,920,670

110,127,922

75,477,933

Add unappropriated profit

883,494,820

Profit available for appropriation

1,076,484,890

Less Appropriation

39,895,956

Unappropriated profit (carried to B/S)

1,036,588,934

-

-

-

-

EPS 19.35 5.62 15.13 11.03 9.56


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Final Project

Documents

Transcript of Final Project