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INTERNSHIP REPORT ON

Associate Degree in Commerce

(Accounting & Finance)
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Presented to Mam Zainab Aziz

Government College for Women, Model Town,

Gujranwala.

Presented by Hamna

Roll No. 031059

Semester: 4th

Class: ADP Commerce (Accounting & Finance)

Session: 2018-2020

Department: Finance

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 LETTER OF TRANSMITTAL
Miss Zainab Aziz
Govt. College for Women, Model Town, Gujranwala
University of Punjab, Lahore

Subject: Submission of Internship report.

Respected Madam,

I am pleased to present to you the internship report made on Pakistan

Telecommunication Company Limited, dated from 06-10-2020 to 15-11-2020.
The report has been prepared in accordance with the requirements and the
guidelines approved by the competent authority.

This report includes the introduction of Pakistan Telecommunication Company

Limited, organizational structure, ratio analysis with bar charts, interpretation of
ratio analysis, SWOT analysis, general recommendations to the organization,
skills that are acquired by me, and some additional data on how the organization
works.

In this report I have covered the history, mission and vision and ratio analysis of
the company, my work experience, my observation and my recommendations.

Thank you for your time and consideration.

Thank You,

Hamna,

Roll No. 127

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 Mention Areas Covered By the Report

The report which I prepared highlights almost main contents of Pakistan

Telecommunication Company Limited. The report covers the history of the
Company, introduction, and vision, mission statement, the objectives, core
values and the company target setting for its future promotion, SWOT, Products
and Services, Subsidiaries of PTCL, Departments of PTCL and Financial
Analysis.

This area deeply covers the almost things which are necessary to understand
the above mention things. Later this report covers the organizational structure
which includes the management and departments of PTCL. After that report
consists of the data regarding the products and services and work done by
student in different department. The report covers the overall financial highlights
of institute which includes ratio analysis of balance sheet items and income
statement items. Later that in this report remaining areas such as conclusion,
suggestions and recommendations, skill acquired by student and appendix
which consists balance sheet, income statement, cash flow statement and
statement of owner equities.

All above mention name deeply clarify the explanations which are necessary to
understand the working report of Pakistan Telecommunication Company
Limited.

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 ACKNOWLEDEMENT
First of all, I want to express all my humble thanks to ALLAH who is very
sensitive about each and every activity of all his man and without whose help, I
am unable to accomplish any objective in my life.

Secondly, I am grateful to my worthy and devoted supervisor Sir Irshad

hussain and Sir Tayyab Shabbir for his encouragement, invaluable
guidance, advice and indispensable help without which the completion of this
work would not be possible. We are also very thankful to all the managers and
staff members of Accounting & Finance department for their co-operation in
developing this report.

I would also like to take this opportunity to express special thanks to our family
for their support and patience.

I am deeply indebted to a large group of teachers, friends and colleagues, who

have suggested, choose and advise us to be a member of Pakistan
Telecommunication Company limited.

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 Table of contents

Executive summary 10

History of telecommunication in Pakistan 11

History of PTCL 16

Vision statement 18

Mission statement 18

Core values 18

Objectives 20

Management 21

Board of directors 22

Division of PTCL in regions 24

Organizational structure 24

Departments of PTCL 28
 Human Resource Management Department
 Finance Department
 Commercial Department
 Operational Department
 Technical Department
 Information technology Department
 Corporate Affairs Department
 Special Projects Department
Products and services of PTCL 32
 PTCL V-fone

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  PTCL broadband services
 Smart services
 Pak internet exchange
 Promotions
 Digital facilities
 Prepayment telephony services
 Voice messaging services
 PTCL messaging plus
 Co-location centers
 Services concept
 Satellite communication
 Customer care
 Internet services
 SEAMEWE-3 Submarine Cable System
 SMW-4 Submarine Cable System
 SAP Software
Subsidiaries of PTCL 41
 U-Fone
 U-Bank
 DVCOM Data Pvt. Ltd.
 Pak Sky Private Ltd.

Work done by me 43

Finance Department 48

Ratio analysis 52
 Liquidity ratios
 Activity ratios
 Debt ratios
 Profitability ratios

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Trend analysis
 Vertical analysis 73
 Horizontal analysis

SWOT analysis 84

Conclusion 87

Work sheets 88

Skills acquired 93

Bibliography 94

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 Executive Summary

Pakistan Telecommunication is the result of the efforts to promote and spread

telecommunication services throughout the country and to minimize the
dependence on foreign countries. Making this report is a part of this semester
of associate degree program. The report covers all the aspects of PTCL‘s
structure and design. In 1947, the Department of Posts and Telegraph was
established and in 1962, the Department of Telephone and Telegraph came
into being. In December 1990, Pakistan Telecommunication Corporation (PTC)
took over operations and functions from Pakistan Telephone and Telegraph
Department. In 1996, PTCL was formed after privatization and issued 600
million shares and got listed on all stock exchanges of Pakistan. PTCL
launched its mobile and data services subsidiaries in 2001, by the name of
Ufone and PakNet respectively. From establishments it has contributed a lot to
the development of telecommunication in the country. Pakistan
Telecommunication Company Limited not only Provides Conventional
telephone facilities, it also offers optical fiber services to the private sector.
They provide services for home and for business use. The organization
structure followed by PTCL includes the decisions made by the top level
management, stroked rules and regulations, mixture of both narrow and wide
span of control, much of the authority is in the hands of top level managers, and
the jobs are performed according to the functions performed. There are some of
the factors which effect PTCL composed of the external environment, or if the
size becomes too large or any new strategy made by the board of directors, or
any technology advancement. The purpose of this report is to review the
structure and systems adopted by the organization. The primary data for this
report is collected through personal observations and through interviewing while
the secondary data is collected through the company‘s website.

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 History

Telecommunications in Pakistan
Telecommunications in Pakistan describes the overall environment for the
mobile telecommunications, telephone, and Internet markets in Pakistan.

In 2008, Pakistan was the world's third-fastest growing telecommunications

market. Pakistan's telecom infrastructure is improving dramatically with foreign
and domestic investments into fixed-line and mobile networks; fiber systems
are being constructed throughout the country to aid in network growth. The
major growth in mobile telephony was triggered by two steps taken by Prof.
Atta-ur-Rahman FRS when he was Federal Minister of Science & technology.
These were to introduce a "Calling Party Pays" (CPP) regime under which no
charges are paid by the call receiving party on mobile phone calls. The second
was the launching of U-Fone as a government owned Mobile Phone
Company that competitive call rates that led to strong market competition. The
impact of these two measures has been the expansion of mobile telephony
from 0.3 million mobile phones in 2001, to 160 million mobile phones by 2018.

Regulatory environment

The Telecommunications Ordinance of 1994 created the Pakistan

Telecommunication Authority (PTA), Pakistan's first independent
telecommunications regulator, and the Pakistan Telecommunication Company
Ltd (PTCL), a state-owned monopoly.

Due to a lack of competition, local telephone call rates were high

and international call rates were even higher. During the 1990s, a call
to United States cost $5 per minute (300Pkr‘s per minute), which was not
affordable for the majority of the population. In addition, customer service was
poor; fixing a problem might take an average of 10 to 15 days. Despite this,
consumers had to stick with PTCL, as they had no other options. This
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prompted the government to take a series of actions to improve the service by
opening the telecommunications market. This was critical, but required a fine
balance because opening the market and preserving PTCL were both
important for the government.

In July 2003, the government introduced a Deregulation Policy for the

Telecommunication Sector, which allowed and encouraged foreign
companies to invest in the Pakistani telecommunications market. Two sets of
criteria set by the regulatory authorities must be met before an operator is
allowed to start operation: one for the issuance of a license and another for the
maintenance of service quality.

In 2006, Etisalat International Pakistan, a wholly owned subsidiary of Emirates

Telecommunications Corporation, purchased a 26% stake in PTCL and
assumed management control of the company.

Pakistan's telecommunications infrastructure includes: Microwave radio relay,

coaxial cable, fiber-optic cable, cellular, and satellite networks. Pakistan is
connected to the rest of the world through nine submarine cable systems that
provide links to Asia, the Middle East, Africa, Europe; 3 Intelsat (international
telecommunication satellite) earth stations; 3 operational international gateway
exchanges; and microwave radio relay to neighboring countries.

Perception survey

LIRNEasia's Telecommunications Regulatory Environment (TRE) index

summarizes stakeholders‘ perception of the regulatory and policy environment
and provides insight into how conducive the environment is for further
development and progress. The most recent survey was conducted in July
2008 in eight Asian countries, including Pakistan. The tool measured seven
dimensions: (i) market entry; (ii) access to scarce resources; (iii)
interconnection; (iv) tariff regulation; (v) anti-competitive practices; (vi)

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universal services; and (vii) quality of service; for the fixed, mobile, and
broadband sectors.

The survey found that in Pakistan the mobile sector was most active, followed
by broadband; while the fixed-line sector remained somewhat static. The
parameters that improved compared to the 2006 survey were: interconnection,
tariff regulation, regulation of anti-competitive practices, and universal service
obligation in the mobile sector; and market entry, interconnection, regulation of
anti-competitive practices and universal service obligation in the fixed
sector. Market entry received a low score in mobile sector due to the
perception that the cost of a new or renewal mobile license was prohibitive,
thus posing a serious barrier to entry. However, this conclusion may have
been incorrect, as the license fee, at least in the case of renewal by Mobilink
GSM, was paid in installments over a period of three years. Thus, lack of
complete information on the part of survey participants may have skewed the
results.

Mobile telecommunications

Instaphone and Paktel were the pioneers in mobile communication in Pakistan

during the 1990s. They were joined by Mobilink in 1998 which was owned by
Motorola until its sale to ORASCOM. The trio offered AMPS
(Advanced Mobile Phone Service) before switching to GSM (Global System for
Mobile). Ufone joined the mix in 2001. The sector was highly regulated which
led to high call rates and poor service quality.

In January 2004 the Ministry of Information Technology issued its Mobile

Cellular Policy with objectives to:

1. Promote efficient use of radio spectrum;

2. Increase choice for customers of cellular mobile services at competitive

and affordable prices;

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 3. Encourage private investment in the cellular mobile sector;

4. Recognize the rights and obligations of mobile cellular operators;

5. Provide for fair competition among mobile and fixed line operators; and

6. Provide an effective and well defined regulatory regime that is

consistent with international best practices.

The deregulation bore fruit as international companies Telenor (Norway)

and Warid Pakistan set up operations in the country in 2005.

Subscriber base

The mobile telecommunications sector is seeing very large year-to-year growth

in Pakistan. Approximately 90 percent of Pakistanis live within areas that have
cell phone coverage and more than half of all Pakistanis have access to a cell
phone. With 118 million mobile subscribers in March 2012, Pakistan has the
highest mobile penetration rate in the South Asian region.

According to the Pakistan Telecommunication Authority (PTA), Jazz leads the

market with 59 million subscribers, followed by Telenor with 29.3
million, Ufone with 23.1 million and Zong with 15.6 million. All telecom
companies are working to broaden their networks in the Azad Jammu and
Kashmir and Northern Areas, which were largely ignored until recently. Five of
the seven Agencies of the tribal areas have mobile coverage.

SMS

Pakistanis collectively sent over 151 billion text messages during the year
2009. Nokia has cited Pakistan to be producing the third-highest SMS traffic in
the world in 2010.

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 Fixed-line telephones

Fixed-line subscriptions declined from a peak of 5.2 million in 2005–06 to 3.4

million in 2009–10.When dialing on landlines, calls made within cities are
considered local calls and you just dial the local number. Calls to other cities
(e.g. Karachi to Lahore) are considered long-distance calls, e.g., when dialing
to Lahore from Karachi you have to dial the code for Lahore then followed by
the number of the destination, therefore you dial 042-XXXX-XXXX. For
international calls, you dial "00" followed by the country code, e.g., for calls to
the UK from Pakistan you dial 00 - 44 - XXXXXX.

The country code for Pakistan is 92.

List of telecommunication companies in Pakistan

JAZZ
(Previously Mobilink & Warid)
Telenor
Ufone
Zong
SCOM
(In Azad Jammu and Kashmir)

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 Brief History of PTCL

Posts and telegraph:

From the beginning of the Posts & Telegraph Department in 1947 and
establishment of Pakistan Telephone & Telegraph Department in 1962, PTCL
has been a major player in telecommunication in Pakistan.

Pakistan Telecommunication Corporation:

Pakistan Telecommunication Corporation (PTC) took 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 the award of licenses for cellular, card-operated pay-phones, paging
and, lately data communication services.

Privatization Policy:

Pursuing a progressive policy, the Government in 1991, announced its plans

to privatize PTCL, and 1994 it sold 12% share to people.

Pakistan Telecommunication Company Limited:

In 1995, Pakistan Telecommunication (Reorganization) Ordinance formed

the basis for PTCL monopoly over basic telephony in the country. In 1996,
Pakistan Telecommunication Company Limited was formed and listed on all
stock exchanges of Pakistan.

PTCL launched its mobile and data services subsidiaries in 2001 by the name
of Ufone and PakNet respectively. Ufone had increased its market share in the
cellular sector. The PakNet brand has effectively dissolved over a period of
time.

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In 2005, Government of Pakistan decided to sell 26% of the company to some
private corporation. There were three participants in the bidding process for the
privatization of PTCL.

The government's plan of privatizing the corporation was not welcomed in all
circles; countrywide protests and strikes were held by PTCL workers. They
disrupted phone lines of institutions like Punjab University Lahore along with
public sector institutions were also blocked. The military had to take over the
management of all the stock exchanges in the country. They arrested many
workers and put them behind bars. The contention between the Government
and the employees ended with a 30% increase in the salaries of workers.

Overview of Historical Background

1947 Posts & Telegraph Dept. established

1962 Pakistan Telegraph & Telephone Dept.

1990-91 Pakistan Telecom Corporation

PTCL monopoly
1995 Pakistan Telecom Ordinance
(Reorganized)
PTCL Formed listed on all Stock
1996
Exchanges of Pakistan
Mobile & Internet subsidiaries
1998
established
2000 Telecom Policy Finalized
Launched 2 subsidiaries (U-Fone and
2001
PakNet)
2005 Sold 26% shares to Etisalat

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 About PTCL
National and International Awards
PTCL awarded ‘Best HR Practices in Telecom Sector’ award
Pakistan Telecommunication Company Limited (PTCL) has been presented
with the ‗Best HR Practices in Telecom Sector‖ award at the 4th Global HR
Excellence Awards 2013 held in Karachi.

PTCL’s Annual Report earns SAFA’s award

PTCL had won distinction for the country, with South Asian Federation of
Accountants (SAFA) conferring the ‘Best Presented Accounts Award 2011’
to the company, in the category of ‗Communication and Information
Technology‘. The award is presented to companies that exceed industry
standards in quality and transparency of financial reporting parameters.

Vision Statement
PTCL struggles to be the leading and most admired Telecom and ICT
(Information Communication Technology) provider in and for Pakistan.

Mission Statement
PTCL struggles to be the partner of choice for our customers, to serve our
people and to deliver value to our shareholders.

Corporate Values
 We Care

We treat everyone with respect, dignity and responsibility.

 Desirable Behaviors
1. We respect everyone.
2. We treat others the way we want to be treated.
3. We maintain safe and enabling environment.
4. We fulfill our commitments.
5. We care for our communities and society.

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6. We safeguard company assets and information.
 We Put Customers First

We are passionate about serving our customers. Their satisfaction is a key

measure of our success.

 Desirable Behaviors
1. We look at everything through the eyes of the customer.
2. We build trust through our open and transparent communications.
3. We create ease of use by making things simple.
4. We anticipate customer needs and resolve proactively.
5. We go out of our way to build customer relation.
6. We take pride in making our customer experience delightful
 We Work as One Team

We seek and value everyone’s contribution. Together we are strong.

 Desirable Behaviors

1. We trust each other.

2. We set realistic expectations.

3. We listen and share candid feedback.

4. We recognize contributions, celebrate success and learn from failures.
5. We exhibit patience and tolerance.
6. We go extra mile to support others.
 We Embrace Change
We shape our own destiny by being proactive and open to new ideas.
 Desirable Behaviors
1. We pursue excellence.
2. We encourage diverse perspectives.
3. We are empowered and accountable.

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4. We exhibit entrepreneurial mindset.
5. We are ready to unlearn and relearn.
6. We take risks for meaningful change.

Objective

Objectives are the ends towards which activity is aimed. These are the results
to be achieved. The objective of PTCL is to provide the latest telecom facilities
at reasonable rate with quality standard of International level. As other world
telecoms are proceeding in this direction, so we should also make investment in
project pertinent to the objectives of a business. It should involve new
component of the core business of telecom operator. Pakistan
Telecommunication Company limited states its objectives as under:

 To provide quality services to its customers in Pakistan.

 To provide maximum satisfaction to its customers by using the latest
technology.
 To increase the worth of owners.
 To lead the telecommunication industry in Pakistan

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 Management

Rashid Naseer Khan

President & Chief Executive Officer

Mohammad Nadeem Khan

GCFO (Group Chief Financial Officer)

Syed Mazhar Hussain

GCHRO (Group Chief Human Resources Officer)

Zahida Awan
GCLO (Group Chief Legal Officer)

Naveed Khalid Butt

GCRO (Group Chief Regulatory Officer)

Moqeem Ul Haque
CCO (Chief Commercial Officer)
GCSO ( Group Corporate Strategy Officer)

Saad Muzaffar Waraich

GCTIO (Group Chief Technology and Information Officer) Operations

Jafar Khalid
GCTIO (Group Chief Technology and Information Officer) Development

Adnan Anjum
GCMO (Group Chief Marketing Officer)

Zarrar Hasham Khan

CBSO (Chief Business Services Officer)

Muhammad Shehzad Yousuf

CBOO (Chief Business Operations Officer)

Shahid Abbas
CIA (Group Chief Internal Auditor)

Saima Akbar Khattak

Company Secretary

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 Board of directors

Mr. Shoaib Ahmad Siddiqui

(Chairman)

Mr. Abdulrahim Abdullah

Abdulrahim Al Nooryani
(Non-Executive Director)

Mr. Naveed Kamran Baloch

(Non-Executive Director)

Mr. Rizwan Malik

(Non-Executive Director)

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 Dr. Karim Bennis
(Non-Executive Director)

Syed Shabahat Ali Shah

(Non-Executive Director)

Mr. Hesham Abdulla Al Qassim

(Non-Executive Director)

Mr. Khalifa Al Shamsi

(Non-Executive Director)

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 Division of PTCL in Regions

To carry out the business effectively and efficiently the Pakistan

Telecommunication Company Limited has divided itself into different regions.
Each ―Regional Office‖ acts as the Head office of that region. It is also
responsible for the smooth running of the operations in the region.

Punjab

 MTR (Multan Telecom Region)

 LTR (Lahore Telecom Region) II
 ITR / RTR (Islamabad / Rawalpindi Telecom Region)
 FTR (Faisalabad Telecom Region)
 GTR (Gujranwala Telecom Region) CTR (Central Telecom Region)

Sindh

 HYTR (Hyderabad Telecom Region)

 STR (Sukkur Telecom Region)
 KTR I, KTR II, KTR III (Karachi Telecom Region)

Khyber Pakhtoonkhwa

 HTR (Hazara Telecom Region)

 NTR I (Northern Telecom Region I)

Gilgit Baltistan

 Skardu / Gilgit
 AJK

Balochistan

 QTR (Quetta Telecom Region)

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 Organizational structure
Organizational Structure describes the organization's formal framework or
system of communication and authority.

In other words, the organization structure sets forth each principal,

management position and helps to define authority, responsibility and
accountability.
An organization chart is essential to the development of a cost system and
cost reports which indicates the responsibilities of individuals for implementing
management plans.

In PTCL President / CEO is the head of major functional areas i.e. State
management, Finance, Technical, Operations, HR & Admin and Corporate
affairs. So Senior Executive Vice President who is the head of these units
generally reports directly to the President.

The main purpose of PTCL is allowing them to effectively and efficiently

accomplish organizational goals and objectives. Designing an appropriate
structure means that managers must decide how to coordinate work activities
and efforts.

 The head of Pakistan Telecommunication Company Limited is called

―President‖.
 Then there come the SEVPs (Senior Executive Vice Presidents) i.e.
SEVP (Finance), SEVP (Operations), SEVP (Technical), SEVP (Human
Resource Management), SEVP (Marketing & Business Development)
and SEVP (Legal affairs).
 Then there is a chain of Executive Vice Presidents (EVPs) like EVP
(Finance Central), EVP (Marketing), EVP (HR Central), EVP (Accounts),
EVP (Operation), EVP (Information Technology, Training & Research),
and EVP (Revenue).

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 Apart from these EVPs, there are also EVP (Operation), EVP (HR) etc.
who are heading the other regions of PTCL in major cities country wide.
 Then there are Chief Engineers and General Managers who report to
their relevant EVP.
 Then there are Senior Managers, Deputy Directors, Assistant Directors,
Account Officers, Assistant Account Officers, Financial Analysts,
Marketing Managers, Computer Programmers, and IT Specialists etc.
 There are also Regional Heads (General Managers) to head PTCL
Regions then comes the Senior Managers (Operations), Senior
Engineers (Operations), Engineers to look after the telecom system of
Regions. In non-gazette staff there are Engineering Supervisors
Operations /Switching /Power plant /Optical Fiber system/M.W Media,
Account Assistants, Stenographers, Assistants, Key.
 Punch Operators, Telecom Technicians, Upper Division Clerks, Lower
Division Clerks, Line Men, Wire Men, and Exchange Cleaners.
 All the staff is recruited by the HR Department headed by SEVP HR.
The HR experts are responsible for hiring & to further streamline its
recruitment process.

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27
 Departments of PTCL
Every organization is divided into definite departments. Each department
performs different kind of jobs and requires staff with specialized skills to
handle particular job. This increases the efficiency of workers.

The PTCL Head Quarters is comprised of several departments. The division

is made on the basis of function they perform. Hence it can be concluded that
PTCL has adopted the policy of functional departmentalization. The main
departments of PTCL are mentioned below:
1. Human Resource Management Department
2. Finance Department
3. Commercial Department
4. Operational Department
5. Technical Department
6. Information technology Department
7. Corporate Affairs Department
8. Special Projects Department
1. Human resource department
 It is a huge organization and being considered as one of the biggest
company in Pakistan.
 It has more than 18,000 employees and a huge network of organizational
management has been spread throughout the country.
 PTCL is engaging a substantial number of experts and specialists of
standing caliber in different spheres of profession.
 Job analysis and revision of jobs description was undertaken for improving
the performance standards.
 To meet the future challenging situations in the phase of privatization and
post monopoly challenges, a corporate culture and competitive environment
has to be developed, for which all the available resources have been taped.

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 Special training courses and workshops have been conducted for the top
and middle management through reputed organizations like LUMS.
 Efforts are being made to improve productivity and efficiency of the
Company while emphasis is also being placed on effective management
employee‘s relationship and better line of communications to achieve
corporate goals.
 The Human Resource department of the company operates in an auxiliary,
advisory, or facilitative relationship to other departments in the organization.
 The SEVP of the H.R. Department is the individual most actively involved in
policy revision to cover recurring problem or to prevent anticipated problems.
 A major portion of the activities of those engaged in staff personnel work is in
the nature of counsel and advice to line manager.
 The H.R. Dept. carries out important control functions. It monitors the
performance of line department and other staff departments to ensure that
they conform to established personnel policy, procedures, and practices.
 The service responsibilities of the H.R. department are apparent when one
examines such things are as the employment, training, and benefits
functions. The tasks of recruiting, interviewing and testing job applicants are
performed in the H.R. Dept.
 The manager of HR department of GTR is Tayyab Shabbir during our
training.
2. Finance department

This department is divided into following three sub-sections:

 Finance
 Accounts
 Revenue

The Finance Wing deals with the finance matters of the company & the
Accounts Wing is responsible for proper book-keeping of the financial
transactions, commercial audit & preparation of periodic accounts of the
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company. The Accounts Office of PTCL is in Lahore. The manager of Finance
of GTR is Irshad Hussain during our training.

Finance is the backbone of every organization because without finance an

organization can‘t run its business. It plays an important role in determining the
long-term objectives and evaluating the feasibility of the business. The
financial activities of PTCL have been split up into three major branches:
Finance, Accounts & Revenue. The details regarding this section will be
covered in finance section with reference to my report.
3. Commercial department
 Commercial section with qualified/experienced staff is being established.
 Company section is taking both short-term and long-term view of emerging
trends.
 It analyzes all the possible Company options, i.e. introducing new services,
adopting new technologies to maintain the leading role in the sector and
preserve its dominant position in the industry.
 The Company likes to repeat that it will continue to play a prominent role in
Telecom sector of Pakistan.
 It considers that one of the most important aspects of the forthcoming
competitive environment is pricing of products and services.
 The new paradigm would require cost-based services with thin-profit margins
but higher volumes. Inherently, PTCL services were not cost- based. There
were in-built subsidies and long distance calls, both domestic and
international, were highly priced. The Company, therefore, evolved strategies
of gradual price rationalization.
 Commercial department should try to make PTCL the most profitable
organization, which should generate a great deal of revenue in local &
foreign currency.

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 4. Operational department

Manage operations of PTCL HQ with regional offices, branches and

subsidiaries as well as with other corporations.
The purpose of operation department is:
 To control, monitor and manage the entire PTCL Network
 To create a highly available, adaptable and default strong network that can
meet the market demand and provide customer satisfaction.
 Enhanced Quality of Service and centralized performance statistics and
reporting mechanism.
5. Technical department

This department is engaged in the management and control of technical

aspects of the company, e.g. technical manpower, technical training, technical
equipment, etc.

6. Information technology department

This department is established to introduce new and advance technology in

PTCL. Due to IT department working system is too converted in a
computerized system.

7. Corporate development department

This department deal corporate level issues such as PTA, International

Telecom Union, Legal and Regulatory affairs etc.

8. Special projects department

This department is doing their activities on behalf of president.

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 Products and Services of PTCL

 PTCL V-Fone

PTCL also continues to be the largest CDMA (Code-division multiple access)

operator in the country with approximately 1.25 million V-fone customers.

It offers fixed wireless telephone for your homes & business. Ours is the largest
WLL (Wireless local loop) network with a capacity of 2.6M, covering almost all
urban & rural areas. The network is already enabled for Voice, Dialup-Internet
access and EVDO (Evolution-Data Optimized) Broadband.

V-fone can be bought from PTCL franchises or by dialing 1236 and it will be
delivered within 48-72 hours.

 PTCL Broadband Services

PTCL Broadband is the largest and the fastest growing Broadband service in
Pakistan. In less than two years of it launch, PTCL has acquired over 1.3
million Broadband customers in over 2000 cities and towns across Pakistan,
leading the spread and awareness of Broadband services across Pakistan.

With its entry in this market segment, PTCL opened up a broadband culture in
Pakistan, where till a couple of years back there was very little awareness in
the country about broadband & high speed internet services. PTCL made the
broadband technology affordable by lowering the barriers to entry, by
geographically bringing the service within the reach of a common user across
Pakistan and by continuous improvements in customer care for the service.

 Smart Services

Using its state of the art Broadband network, PTCL entered the media sector
on 14th August 2008, by launching a digital interactive television service for
the first time in Pakistan. Employing the IPTV (Internet Protocol TV)

32
technology, PTCL brought Pakistan in the list of a few countries across the
globe that offers this state of the art interactive TV service to its subscribers.

Branded under ‘PTCL Smart Line’, the service includes Interactive Television,
Broadband and voice telephony all at the same time on PTCL‘s telephone line.
Besides offering the highest digital quality TV picture, the most revolutionary
section of this offering is the ability to ‗rewind‘ and ‗pause‘ live TV channels, the
ability to block / unblock any TV channel for parental lock and the ability to
search through video on demand content. Currently PTCL Smart TV offers its
viewers over hundred live channels and over 350 local and international Movie
titles ‗on Demand‘. The service for now is available in four cities Karachi,
Lahore and Rawalpindi or Islamabad however is planned to be expanded to all
the major cities and towns across Pakistan.

 Pak Internet Exchange

It is the only IP enabled network with point-of-presences (POP) in 26 cities. The

existing 3GB active bandwidth is used for internet, data, and video and video-
conferencing services and for voice of LDI (Long Distance and International).
All PTCL Broadband users, narrow band users, corporate, mobile operators,
and ISP (Internet service provider) are connected to this network.

 Promotions

PTCL use different promotional tools for Advertising and promotions for
bringing a service to get the attention of potential and current customers.
Advertising and promotions are best carried out by implementing advertising
and promotions plan. The goals of the plan should depend very much on the
overall goals and strategies of the organization, and the results of the
marketing analysis, including the positioning statement.

PTCL plan usually includes what target markets you want to reach, what
features and benefits you want to convey to them, how convey it to them (this

33
is often called your advertising campaign), who is responsible to carry the
various activities in the plan and how much money is budgeted for this effort.
Successful advertising depends very much on knowing the preferred methods
and styles of communications of the target markets that you want to reach with
your ads. A media plan and calendar can be very useful, which specifies what
advertising methods are used and when. Different techniques are used for
promotions such as:

 PTCL broadband customers will get a free for life personalized e-mail
account with 50mb of space
 Broadband keeps you connected to high speed internet all the time.
 Economical packages for students
 Special packages for corporate and individuals
 Access to free movies, music, classical Pakistan plays, famous cricket
matches, educational and religious contents exclusively for PTCL broadband
customers.
 PTCL achieving the important milestone of taking broadband into over 414
cities/towns across Pakistan
 Customer can save his time by paying his bill on phone
 Customer can pay his bill whenever he wants
 Digital Facilities

PTCL offers a variety of features to digital exchange customers like:-

 Hotline
(A hotline is a point-to-point communications link in which a call is
automatically directed to the preselected destination without any additional
action by the user when the end instrument goes off-hook).
 Abbreviated Dialling
 Call Waiting
 Don‘t Disturb

34
 Call Transfer on (a) Busy (b) No Reply (c) Immediate
 Wake up call
 Absent Subscriber
 Code Barring
 Prepayment Telephony Services (PPT)

With the changing trends most telecoms are diversifying their services towards
prepaid solutions. One of such modern era telecommunication service is
Prepayment Telephony services (PPT).It provides the facility to subscriber to
load a prepayment Telephony card against their telephone number thereby
generating an account on I/N platform and any call made from that telephone
will be charged to this account. The service will provide state of art
technological facilities to the subscribers.

 Voice Messaging Service: (VMS)

With PTCL Messaging Service, you can have all for (or Desired) calls
recorded when you are absent, busy on phone or do not want to attend the
calls for any reason. You can, later on at your convenience, retrieve all
recorded messages from any telephone anywhere in the country. Security of
message is ensured against eavesdropping through subscriber controlled
password.

PTCL VMS is designed for those who do not want to miss a call or Fax
because that can be beneficial .Great for anyone owning a telephone or Fax,
at home or business. Much more powerful and flexible than answering
machine due to Message options available in your voice mail system.

Features

 Call answer
 Fax
 Messaging
35
  Notification
 Capacity 10 messages
 Free for user paying Rs. 2000/- or more bill/month.
 PTCL Messaging Plus

PTCL Messaging Plus is designed for small and medium business enterprises
having problems with managing telephone message.

PTCL messaging plus will definitely handle problems. Advanced messaging

features save time, make you truly mobile and increase productivity. Its main
feature is call answering.

 Co- Location Centres

Pakistan Telecommunication Company has taken land mark decision to

establish collocation centres throughout the country.

 Service concept

This service is basically for telecom data and I.T companies. These
companies will install their equipment directly on PTCL premises in a ready
fitting environment. The primary purpose is to provide a number of strong and
centralized connection and control facilities in which co-location centre‘s
communication can be located.

Benefits

 Easy access to local & international connectivity

 Quick placement of services
 Minimum capital investment and cost saving
 Higher reliability and quality of service
 Full connectivity under one roof

36
 Target market

 Corporate customer
 Software exporters
 Data network operators
 Airlines/travel agencies
 ISP‘s
 Financial institutes
 Courier services
 Satellite Communication

PTCL has Intelsat Standard Earth Stations near Karachi and Islamabad.
These installations provide the diversity for International voice connectivity and
also work as Hub for domestic satellite users. There are four Intelsat Standard
B Earth Stations at Islamabad, Gilgit, Skardu and Gwadar.

 Customer Care & Customer Services Department

PTCL has established its Customer Services Department at different levels the
overview of the said department is as follows:

 Corporate Customer Care Centre Operation Region Level

 Customer Services Centres Tehsil Level
 Toll Free Help Lines for Complaint & Enquiry

Now we briefly introduce the functions of these:

 Corporate Customer Care Centre

To facilitate Corporate Customers PTCL has established Corporate Customer

Care Centres at all Operation Regional Head Quarter Level, in all the Intelsat
Standard Earth Stations major cities countrywide. The Customer Relation
Officers register the complaints & forward these to the related office.

37
  Customer Services Centres

To facilitate consumers PTCL has established Customer Services Centres at

all Tehsil Level cities/offices. Here the consumers can use Fax Facility and
Voice Telephony dialling. On divisional Offices Level duplicate phone bills may
also be obtained from C.S.C‘s.

 Toll Free Help Lines

PTCL offers state-of-the-art call centre network to its all type of valued
customers for convenient frequently asked Questions, Complaints regarding
their services, T/No. enquiry. The following three Toll Free T/Numbers are
available for this purpose.

 1236 (Service Activation)

This toll free No. is used to change the tariff packages of land line, WLL (V-
fone), PTCL phone & net service activation, & for Broad Band customers. The
service activation is electronically ordered & activated within 24 hours through
concerned department.

 17 (Telephone Directory)

This facility is also Toll Free & is used to obtain the telephone numbers of
some specific subscribers (College, Govt. offices, Private offices etc.). This is
centralized & is being used as Telephone Directory.

 18 (Land Line Complaints)

To register the faulty Telephone complaints PTCL has established a Toll Free
No 18 where a computerized central mode is used to register & rectify the
consumer complaints for land line numbers.

38
  Internet Services

Internet service is becoming an essential part of life in Pakistan especially in

urban areas where large segment of the businesses are using it for diverse
purposes. Domestic air lines including PIA and Air Blue have started e-
ticketing through internet to offer better and efficient services to its customers.
According to an estimate of ISPAK (Association of Pakistani ISPs), at present
there are about 76.38 million internet subscribers all across in Pakistan.
Currently around 3,002 cities are connected to internet.

PTCL started offering its DSL services since June 2007 in major cities for
home users with free installation services. It is anticipated that steps taken by
PTA will ensure better and economical broadband services in Pakistan.
Broadband connection is available in Pakistan for as low as Rs.1200 for a 512
Kbps connection with unlimited download.

 Broadband Pakistan

PTCL Broadband is the largest and the fastest growing Broadband service in
Pakistan. In less than two years of its launch, PTCL has acquired over 3
million Broadband customers in cities and towns across Pakistan, leading the
production and awareness of Broadband services across Pakistan. With its
entry in this market segment, PTCL opened up a broadband culture in
Pakistan, where till a couple of years back there was very little awareness in
the country about broadband & high speed internet services.

PTCL made the broadband technology affordable by lowering the barriers to

entry, by geographically bringing the service within the reach of a common
user across Pakistan and by continuous improvements in customer care for
the service.

Unique offers that makes PTCL‘s Broadband unmatchable are special

packages for the student segment, FREE modem and installation, FREE dial

39
up service for its Broadband customers and FREE access to movies, music,
classical Pakistani dramas, cricket matches, gaming, educational and religious
content on PTCL‘s entertainment portal ‗BUZZ‘, (made exclusive only to PTCL
Broadband subscribers). PTCL also offers multiple FREE personalized e-mail
accounts exclusively to its broadband users. In addition, PTCL recently
doubled its broadband speed for all its existing and new customers at the
same price, making 1 MB as its minimum offered speed

 SEAMEWE-3 Submarine Cable System

PTCL is a member of SEAMEWE 3 Cable Consortium with its Cable Landing

Station at Karachi. SMW-3 cable connects 39 cable landing stations in 33
countries and four continents. SMW-3 is the longest system of the world with a
total length of 39,000 Km.

 SMW-4 Submarine Cable System

SMW-4 is a relatively new submarine cable system (inaugurated in December

2005) and links 14 countries with 16 landing stations across Europe, Middle
East and Asia.

 SAP Software
 This software used for recording information of employees.
 This software up to dates everyday
 This software maintain record of hiring and firing of the employees
 This software also record leave cases
 This software record all the information of the company

40
 Subsidiaries of PTCL

 U-Fone

U-fone is a wholly owned subsidiary of PTCL and is a means of mobile telecom

sector of PTCL. Ufone‘s market share has decreased from 15.6% to 13.5%.
Ufone now covers more than 200 cities and towns, prominent highways and
caters for international roaming. The figure is lowest among all four mobile
operators.

 U-Bank

U Microfinance Bank Ltd. (U Bank) is a wholly owned subsidiary of Pakistan

Telecommunication Company Limited (PTCL) – Etisalat Company. The bank
has a network of more than 200 touch points, across 183 cities and rural areas
in Pakistan and offers a wide range of microfinance loans, deposit products,
and branchless banking solutions. U Bank‘s branchless banking offers services
under the banner of U-Paisa in collaboration with Ufone (Pak Telecom Mobile
Limited). The service is offered at nearly 45,000 agent locations across
Pakistan.

 DVCOM Data Private Limited

DVCOM Data, a 100% owned subsidiary of PTCL, was acquired in nine

telecom regions to provide Wireless Local Loop (WLL) operations after fully
complying with all the regulatory requirements.

Objective of the said acquisition is to accumulate the EVDO wireless

broadband services of PTCL through collaborations within the PTCL Group
companies.

Towards this end, formal commercial arrangements are in place in between

PTCL and DVCOM Data.

41
  Smart Sky Private Limited

Smart Sky, a 100% owned subsidiary of PTCL, was incorporated in October

2015 with the objective to provide Direct-to-Home (DTH) television services
throughout Pakistan under the license from Pakistan Electronic Media
Regulatory Authority (PEMRA). The auction for DTH license was held in
November 2016, in which Smart Sky also participated. Subsequent to the
auction, however, the Honorable Lahore High Court declared the whole
process of DTH auction as null and void and advised PEMRA to restart the
whole process. As the said auction is yet to be re-processed by the regulators,
Smart Sky has not started its commercial operations.

42
 Work done by me
Date Assignments, tasks and learning
6-10-2020  A document was given to me naming ―SOP‘s on
travel management‖. This document after studying
was explained to us by Mr. Abd-ul-Aziz.
 Also studied the flow of work in HR department.
 Learned the allowances that employees are served
with by PTCL.
 Moreover, told us about the profitability position of
their branch and headquarters and all of their major
branches.
 Studied a case of travelling by an employee BPS-16
with the purpose of attending a court hearing.
 Company‘s policy is very good although facilities for
low scale employees should also be improved.
8-10-2020  Studied different types of allowances that PTCL
offers to its employees.
 The percentage of allowance or reimbursement is
different for each scale of employees.
 After approval of the expense happening and also
its amount. It is sent for payment to finance
department where it is paid after approval.
 Company should provide vehicle for travelling to its
employees for official purposes.
 The employees are really skillful and fulfill their
duties with great attention.
13-10-2020  Calculated pay & respective allowance of that
employee.

43
  These allowances are % of the BPS.
 Examples are: 1. Cost of living allowance 2.
Washing allowance 3. Telecom allowance
 Made travel authorization form along with expenses
reimbursement form using the excel spreadsheet.
 HR department is honest with its work and does all
of its duties in accordance with the policies.
15-10-2020  From this day we did all work in finance department.
 The manager of Finance department Mr. Irshad
Hussain is our supervisor.
 He told us basics of accounting.
 Studied a document naming ―Delegation of Powers.
 The document tells about the power flow within the
organization and also the authority in the hand of
each officer.
 Understood about the organizational structure and
the committees of PTCL made for different
purposes.
 Audit, HR & remuneration and investment and
finance are these three committees.
20-10-2020  Supervisor took a test of assignment given on the
calculation of sales tax.
 Calculated sales tax inclusive and exclusive of tax.
 Studied purchase requisition form, purchase order,
payment voucher, goods receipt note and bill with
detail.
 Studied difference between bill and invoice.
 Assignment given for the differences between
advance and invest.

44
  Practically studied many new things and concepts
due to a hospitable teacher.
22-10-2020  Asked some questions to supervisor about the
profitability condition of the firm.
 Assignment given to us for making some journal
entries in head office and branch accounts and also
in the SAP software.
 Sir told us about major revenue earning products
and services of them and also the key major officers
of their department.
 Home work was given to study all the taxes and
surcharges included in the bill.
 And also to study types of vouchers.
27-10-2020  Sir Irshad was absent due to some reason.
 Did no work.
29-10-2020  Studied different types of advances that PTCL gives
to employees.
 This include 1: Imprest advance: for petty and
unknown expenses 2: Temporary advance: for
operating and known expenses.
 Home work was given to study the annual report of
PTCL of 2019.
03-11-2020  Supervisor asked questions about the annual report
and its key performance indicators.
 A task assigned to us to find difference between
accrued and provision.
 A second task assigned was to study bank
reconciliation statement.
 Supervisor gave us reconciliation statement for 3

45
 months.
 Asked us to find reasons for difference between the
balances.
 Studied different methods of invoicing including
value-based, fixed-bid billing and time-based billing.
 Studied different documents to be checked for
finding difference between pass book and cash
book.
05-11-2020  Our supervisor Mr. Irshad Hussain was absent due
to some reason.
 So, in his absence Mr. Ashraf acted as supervisor
of internees on the instructions by Sir Irshad
Hussain.
 In the supervision of Sir Ashraf studied the process
of making payment of a purchased asset by
accounts and payment department.
 He taught us the steps to be followed or points to be
remembered before making payment to the
purchasing department.
 Studied a purchase of pipe fittings for a branch of
PTCL from COMCO Pak Ltd.
 The process should be simplified to make it easy to
understand.
 Moreover, the process includes the checking of the
documents by many hands. Which makes it free
from all errors and if exists any fraud can be
detected easily.
10-11-2020  A test was taken from us for the homework
previously given about the annual report of PTCL

46
 for the year 2019.
 A lecture was given to us about the net profit of the
organization for the last 5 years.
 Current employees are about 1.3 billion.
 Its profit for one quarter is about 2 to 3 billion which
on yearly basis come to the point of 7 to 8 billion.
 Sale for one year is about 71 to 72 billion each year.
 Major changes each year are caused by trade debts
and property, plant and equipment.
 SAP process of entering an asset and its
expenditures are taught to us by supervisor.
 The flow of these documents was also learnt
through the document naming‖ DG sets running and
maintenance expenses‖.
 Homework was given to us to study FBR major
revenue collection areas.
12-11-2020  Test was taken by the supervisor about the
previously given homework.
 Found difference between tax, cess and surcharge.
 Relief packages given by Govt. of Punjab to SME‘s
and labors was studied.
 A brief discussion was made on this topic.

Due to the COVID-19 pandemic the period of our internship was reduced and
was only total up to12 days. On the 19-11-2020 internship completion certificate
was issued to us with great regards and best wishes.

47
 FINANCE DEPARTMENT

In finance department all accounts are maintained and are payable. Payments
are made for which a software is used (SAP). All data is entered and then
creates the invoice and then cheques are ready for payment to different
companies or employees for the purpose of petty cash or other.

Different invoices came in the finance department for the payment purpose.
Before making payment they firstly check all data and then enter that data in
SAP in the head of parking and get the invoice. Before that SAP itself checks
the budget if the amount is within the budget limit then creates the cheque.

Departmental Hierarchy:

Payable department of PTCL has the hierarchy where three Assistant

Managers are under the subordination of a Finance Manager that directly
reports to its senior manager. Following the practical diagram of hierarchy

 Assistant Manager - (Finance)

 Assistant Manager -(Acting Manager)
 Assistant Manager - (Accounts)

48
 Voucher Payment Procedure

Following is the entire procedure of PTCL payable department:

 Bills and vouchers are received by scrutiny departmental members

 Required documents are verified then it is sent for Placement of
Payment to its Assistant Manager
 Scrutiny of Bills is done within a day
 Once the scrutiny is done, vouchers are placed on it
 Then it is Sent for Signature of Manager (F) and Senior Manager (F) for
Pre-audit Checks and Approval for Process
 Voucher are then parked in SAP
 Posting in SAP is followed by printing of cheques
 Signing of cheque by particular authority
 In the end dispatch of cheques through TCS

Stepwise Procedures

Now we will analyse each procedure of the cycle individually.

Bill is received:

 Entry of bill in an incoming invoice registers (MS ACCESS)

 Assigning of serial number to the original, duplicate and triplicate copies
of each bill
 Entry of serial number and date with initials of receiving person on all
copies
 Checking of available documents with bill
 Return of triplicate copy to the person submitting the bill
 Filling of both copies cost centre wise

49
 Parking in SAP

 Login in the parking(enter and store) user ID in SAP

 Use of Short code for parking of payment voucher
 Use of Short Code for parking of journal voucher
 Printing of parked SAP voucher
 Attachment of voucher with the original bill
 Forwarding of file for scrutiny

Scrutiny of Bills

 Checking of availability of relevant documents

 Checking rates of good acquired
 Checking of availability of approval from concerned authority
 Signing of person scrutinized the bill if found correct in all respects
 Attachment of objection letter in case there is any objection
 Checking and signing of voucher by the AM Finance-Scrutiny
 Checking and signing of voucher by the Manager Finance.
 Demanding funds from AM finance budget if not available in the cost
centre
 Sending of files for posting

Posting of Voucher

 Overview of voucher
 Posting of voucher through code in SAP
 Signing and stamping over the voucher
 Forwarding of vouchers file to Manager Finance for payment process

50
 Payment Process in SAP

 Payment process in SAP through login ID of user

 Calculation of income tax
 Code used for creating payment document
 The document number entered on voucher for
cheque printing reference
 Voucher is forwarded for cheque printing.

Cheque Printing

 Blank cheques are inserted in printer for printing with complete serial
 Printing done through login ID of user
 Code used for cheque printing
 Stamping of cheque printing authorities done after its printing
 Cheque numbers are entered over the voucher

Signing and Dispatching of Cheques

 Checking and verifying particulars of cheques with the voucher

 Cheque along with voucher send to SM Finance for signing as a first
authority
 Signing of cheque from second signatory
 Separation of cheque from voucher for dispatch
Printing of envelops
 Handing over the cheque envelope to the representative of TCS
 Updating of Incoming Invoice Register by entering cheque number
against each bill
 Voucher stamped as PAID Voucher sent for binding.

51
 Ratio analysis of PTCL

Liquidity Ratios

Liquidity ratios are the ratios that measure the ability of a company to meet its
short term debt obligations. These ratios measure the ability of a company to
pay off its short-term liabilities when they fall due.
The liquidity ratios are a result of dividing cash and other liquid assets by the
short term borrowings and current liabilities. They show the number of times the
short term debt obligations are covered by the cash and liquid assets. If the
value is greater than 1, it means the short term obligations are fully covered.
Generally, the higher the liquidity ratios are, the higher the margin of safety that
the company possesses to meet its current liabilities. Liquidity ratios greater
than 1 indicate that the company is in good financial health and it is less likely
fall into financial difficulties.

Sr. no. Ratio Unit 2019 2018 2017 2016 2015

1 Current N/A 0.87 1 1.14 1.27 1.55
2 Acid-test N/A 0.8 0.91 1.09 1.23 1.49
3 Cash N/A 0.05 0.14 0.32 0.5 0.63
Sales
Times
to
4 per 1.4029 1.3745 1.3678 1.4004 1.4853
working
year
capital

52
  Current Ratio:
=Current assets/Current liabilities
Current ratio is balance-sheet financial performance measure of company
liquidity. Current ratio indicates a company's ability to meet short-term debt
obligations. Benchmark rate for this ratio is 2 and PTCL‘s current ratio has fallen
from previous years which show poor position and too much low from
benchmark rate. This low ratio is due to increase in trade debts and increased
investment in PPE. Company‘s current ratio was 1 in 2018 and decreased to
0.87 in 2019.

53
  Acid-test Ratio:
=Quick assets/Current liabilities
The term ―Acid-test ratio‖ is also known as quick ratio. The most basic
definition of acid-test ratio is that, ―it measures current (short term) liquidity and
position of the company‖. Current assets of the company against the current
liabilities are matched which result in the ratio that highlights the liquidity of the
company. This ratio has also been decreased in comparison to previous 5
years. This decrease is the result of increase in trade debts and increased
investments in PPE. Currently this ratio has fallen from 0.91 in 2018 to 0.8 in
2019.

54
  Cash Ratio:
=Cash+ Marketable securities/Current liabilities
Cash ratio (also called cash asset ratio) is the ratio of a company's cash and
cash equivalent assets to its total liabilities. Cash ratio is a refinement of quick
ratio and indicates the extent to which readily available funds can pay off
current liabilities. This ratio has decreased substantially from previous years.
Although it is usually low because companies does not retain so much cash
rather invest it. PTCL‘s cash ratio has decreased from 0.14 in 218 to 0.05 in
2019. The cause of this decrease is increased spending of cash in PPE.

55
  Sales to Working Capital Ratio:
=Sales/Working capital
The working capital turnover ratio is calculated by dividing net annual sales by
the average amount of working capital—current assets minus current
liabilities—during the same 12-month period. This ratio has decreased till 2017
but after that it is showing good position which means that company can pay its
current debts as they came due.it was 1.39 in 2018 and is 1.40 in 2019 which
shows a positive trend.

56
 Activity Ratios

The activity ratios show the connection between sales and a given asset. It
indicates the investment in one particular group of assets and the revenue the
assets are producing. Assets such as raw materials and machinery are
introduced to generate sales and thereby, profits. The activity ratios show the
speed at which the assets are converted into sales.

Activity ratios play an active role in evaluating the operating efficiency of the
business as it not only shows how the company generates revenue but also
how well the company is managing the components in its balance sheet.

Sr. no. Ratio Unit 2019 2018 2017 2016 2015

Times
Recievables
1 per 3.88 4.36 4.6 5.01 5.04
turnover
year

Inventory Times
2 turnover per 10.228 8.6126 14.048 18.36 18.291
ratio year

Average
3 collection Days 97 113 103 115 97
period

Times
Total assets
4 per 0.3407 0.3576 0.3747 0.3965 0.42
turnover
year

57
  Receivables Turnover Ratio:

=Net sales/average receivables

The accounts receivables turnover ratio, also known as debtor‘s ratio, is an

activity ratio that measures the efficiency with which the business is utilizing its
assets. It measures how many times a business can turn its accounts
receivables into cash. The ratio indicates the efficiency with which the
business is able to collect credit it issues its customers. PTCL‘s ratio has
decreased from previous years and is 3.88 in 2019. Company should improve
its receivable collection system to avoid any deficiency.

58
  Inventory Turnover Ratio:

=Cost of Goods Sold/Average inventory

The inventory turnover ratio measures the efficiency with which inventory is
managed. The ratio shows how well the business manages its inventory
levels and how frequently they are replenished. It is calculated by dividing
the cost of goods sold by the average inventory for the same period.
Company‘s inventory turnover ratio was been decreased 8.82 in 2108 and
is now 10.22 in 2019 which shows that company has improved its inventory
usage from previous year and also its product‘s demand is increasing and
showing a positive trend but it still needs improvement as it is still lower
than last three years used in analysis above.

59
  Average Collection Period:

=Average Accounts Receivable/Net Sales*365

The average collection period represents the average number of days

between the date a credit sale is made and the date the purchaser pays for
that sale. Companies calculate the average collection period to ensure they
have enough cash on hand to meet their financial obligations. This ratio
was showing a negative trend in previous years but is showing a positive
trend in 2019 and is 97 days which shows that company takes 97 days to
make credit sales and realize cash from those sales.

60
  Total Assets Turnover Ratio:

=Net sales/average total assets

The asset turnover ratio measures the efficiency with which a company
utilizes its assets to generate sales. The ratio calculates net sales as a
percentage of assets. The higher the asset turnover ratio, the better the
company is performing. This ratio is decreasing from previous years which
show that company is not utilizing its assets efficiently and is showing a
negative trend. It is 0.34 times in 2019 and was 0.36 in 2018.

61
 Debt Ratios

Financial leverage ratios (debt ratios) measure the ability of a company to

meet its financial obligations when they fall due. Financial leverage ratios
(debt ratios) indicate the ability of a company to repay principal amount of its
debts, pay interest on its borrowings, and to meet its other financial
obligations. They also give insights into the mix of equity and debt a company
is using. Financial leverage ratios usually compare the debts of a company to
its assets.

Sr. no. Ratio Unit 2019 2018 2017 2016 2015

1 Debt % 55.39 53.92 50.76 50.57 49.01
Times Times
2 interest per 30.36426 20.423303 43.16988 53.66069 42.81827
earned year
Debt to
3 % 1.393057 1.3458258 1.191337 1.169649 1.092104
equity

62
  Debt ratio

=Total Liabilities/Total Assets

Debt ratio is a ratio that indicates proportion between company's debt and its
total assets. It shows how much the company relies on debt to finance assets.
The debt ratio gives users a quick measure of the amount of debt that the
company has on its balance sheets compared to its assets. Company‘s debt
ratio has increased from previous years which show a negative trend. The
higher the ratio the greater risk will be related to the debt position. It was
55.40% in 2019 and was 54.9% in 2018. It shows that 55% or more of the
assets are provided by creditors which is very unfavorable situation.

63
  Times interest earned

= (Net Income+ interest expense)/interest expense

This ratio is also called interest coverage ratio. The interest coverage ratio
(ICR) is a measure of a company's ability to meet its interest payments.
Interest coverage ratio is equal to earnings before interest and taxes (EBIT) for
a time period, often one year, divided by interest expenses for the same time
period. The interest coverage ratio is a measure of the number of times a
company could make the interest payments on its debt with its EBIT. It
determines how easily a company can pay interest expenses on outstanding
debt. This ratio has been falling since 2016 but has increased in 2019 in 30.40
times. This means that company earns 30.40 times that it pays for interest.
This has shown a positive trend but is still low from 2015 and 2016.

64
  Debt to equity ratio:

=Liabilities / Equity
The debt-to-equity ratio (debt/equity ratio, D/E) is a financial ratio indicating
the relative proportion of entity's equity and debt used to finance an entity's
assets. This ratio is also known as financial leverage.
Debt-to-equity ratio is the key financial ratio and is used as a standard for
judging a company's financial standing. It is also a measure of a company's
ability to repay its obligations. When examining the health of a company, it is
critical to pay attention to the debt/equity ratio. If the ratio is increasing, the
company is being financed by creditors rather than from its own financial
sources which may be a dangerous trend. Company‘s ratio has been
increasing a bit since 2018. But this increase is not so substantial. Although
the ratio for PTCL is good this means that about 1.40% assets in 2019 are
provided by creditors which is favorable situation for PTCL.

65
 Profitability Ratios

Profitability ratios are financial metrics used by analysts and investors to

measure and evaluate the ability of a company to generate income (profit)
relative to revenue, balance sheet assets, operating costs, and shareholders‘
equity during a specific period of time. They show how well a company utilizes
its assets to produce profit and value to shareholders.

A higher ratio or value is commonly sought-after by most companies, as this

usually means the business is performing well by generating revenues, profits,
and cash flow. The ratios are most useful when they are analyzed in
comparison to similar companies or compared to previous periods. The most
commonly used profitability ratios are examined below.

Sr. no. Ratio Unit 2019 2018 2017 2016 2015

Gross
1 % 23.731 25.452 26.827 29.49 29
profit
Operati
2 ng % 6.9 9.14 10.31 12.83 11.45
profit
Net
3 % 8.87 10.41 12.02 9.57 11.56
profit
Earning
4 s per Rs. 1.24 1.46 1.64 1.34 1.72
share
Return
5 on total % 3.0226 3.7861 4.4852 3.7947 4.8562
assets
Return
on
6 commo % 7.2332 8.8816 9.8285 8.2331 10.16
n
equity

66
  Gross Profit:
=Gross profit/net sales
This ratio compares gross profit to sales revenue. This shows how much a
business is earning, taking into account the needed costs to produce its goods
and services. The higher the ratio better it is for the firm. The ratio was 29% in
2015 and was increased in 2018 and reached to 29.49 in 2016 after that this
ratio is decreasing in all years and is 26.83% in 2017 and 24.90% in 2018 and
finally, in 2019 is 23.73%. Causes of decrease in this ratio are high cost of
goods sold, which can be attributed to adverse purchasing policies.

67
  Operating profit:
=Operating profit/ net sales
Operating margin measures how much profit a company makes on a dollar of
sales after paying for variable costs of production, such as wages and raw
materials, but before paying interest or tax. It is calculated by dividing a
company‘s operating income by its net sales. A company‘s operating margin,
also known as return on sales, is a good
indicator of how well it is being managed and how risky it is. It shows the
proportion of revenues that are available to cover non-operating costs, like
paying interest, which is why investors and lenders pay close attention to it.
PTCL‘s operating profit ratio was 11.45% in 2015 and it increased in 2016
(12.83%) after that it started moving downward and was 10.31 in 2017, 9.31 in
2018 and 6.41 in 2019. It shows negative trend since last 3 years. Cause for
such decrease is increase in administrative and general expenses. Company
should put proper control over these expenses.

68
  Net profit:

=Net profit/ Net sales

Net profit margin is the bottom line. It looks at a company‘s net income and
divides it into total revenue. It provides the final picture of how profitable a
company is after all expenses, including interest and taxes have been taken
into account. A reason to use the net profit margin as a measure of profitability
is that it takes everything into account. This ratio was highest in 2017. It was
11.56% in 2015 and 9.56% in 2016. In 2017 it increased a lot and reached to
12.02%.In 2018 again there is downward flow of this ratio 10.41 and in 2019 it
was 8.87%. this decrease is due to substantial decrease in operating profit
and operating profit‘s decrease was due to decrease in administrative
expenses.

69
  Earnings per share:

=Net income / no. of common shares outstanding

EPS is a financial ratio, which divides net earnings available to common

shareholders by the average outstanding shares over a certain period of time.
The EPS formula indicates a company‘s ability to produce net profits for
common shareholders. This ratio has shown many fluctuations .It was Rs.1.72
in 2015 and reduced to 1.34 in 2016. After 2016 it again showed positive trend
and reached at Rs.1.64 in 2017 and again started reducing and was Rs.1.46
in 2018 and Rs.1.24 in 2019. This decrease is also due to increase in
administrative and general expenses and impairment loss.

70
  Return on total assets

= EBIT/Average Total Assets

Return on total assets (ROTA) is a ratio that measures a company's earnings

before interest and taxes (EBIT) relative to its total net assets. It is defined as
the ratio between net income and total average assets, or the amount of
financial and operational income a company receives in a financial year as
compared to the average of that company's total assets. this ratio tells that
company‘s return on assets has decreased in 2016 and was 3.02% in and it
increased in 2017 and was 4.48% and again it decreased in further 3 years and
has shown negative trend.it is currently 3.02% in 2019.

71
  Return on common equity
= Net Income (NI)/ Average Common Shareholder’s Equity
The return on common equity, or ROCE, is defined as the amount of profit or net
income a company earns per investment dollar. The investment dollars differ in
that it only accounts for common shareholders. This is often beneficial because
it allows companies and investors alike to see what sort of return the
voting shareholders are getting if preferred and other types of shares are not
counted. The ratio shows that company‘s return on common equity has
decreased in 2016 and is 8.23% and it again increased in 2017 it increased and
shown a positive trend and is 9.82%. in further two years it again decreased and
reached 7.23% in 2019.

72
 Trend analysis
 Vertical analysis
 Horizontal analysis
PTCL
Statement of financial position
Vertical analysis
All amounts are in thousands of PKR except of %
2019 2018 2017 2016 2015
Rs. VA Rs. VA Rs. VA Rs. VA Rs. VA
Equity & Liabilities
Equity
Share capital & reserves
Share capital 51,000,000 24.286 51,000,000 26.015 51,000,000 27.396 51,000,000 27.924 51,000,000 28.274

Revnue & Reserves

Insurance reserve 3,172,624 1.5108 2,985,696 1.523 2,806,993 1.5079 2,621,288 1.4352 2,416,078 1.3395
General reserve 27,497,072 13.094 27,497,072 14.026 27,497,072 14.771 27,497,072 15.056 30,500,000 16.909
Unappropriated profit 6,081,683 2.8961 2,088,583 1.0654 3,647,809 1.9595 1,894,739 1.0374 2,302,282 1.2764
36,751,379 17.501 32,571,351 16.614 33,951,874 18.238 32,013,099 17.528 35,218,360 19.525
87,751,379 41.788 83,571,351 42.629 84,951,874 45.634 83,013,099 45.453 86,218,360 47.799
Liabilities
Non-current liabilities
Long term security deposits 0 0 553,446 0.2973 553,049 0.3028 552,122 0.3061
Deffered income taxes 5,932,356 2.825 6,991,303 3.5662 7,086,423 3.8067 7,264,575 3.9776 5,754,847 3.1904
Employee retirement benefits 27,042,310 12.878 28,487,425 14.531 23,503,831 12.626 24,068,008 13.178 32,111,859 17.803
Deffered Govt. Grants 7,578,974 3.6091 7,841,637 3.9999 8,059,878 4.3296 8,594,920 4.706 8,926,403 4.9487
Advances from customers 1,526,911 0.7271 1,112,453
Lease liability 927,185 0.4415
43,007,736 20.48 44,432,818 22.665 39,203,578 21.059 40,480,552 22.165 47,345,231 26.248
Current liabilties
Trade and other payables 78,261,680 37.269 67,195,789 34.276 62,002,745 33.306 59,142,912 32.383 46,814,183 25.953
Security deposits 583,739 0.278 579,039 0.2954
Unpaid/Unclaimed dividend 211,589 0.1008 264,836 0.1351
Current maturities of lease liabilities 177,955 0.0847
79,234,963 37.732 68,039,664 34.706 62,002,745 33.306 59,142,912 32.383 46,814,183 25.953

Total equity & liabilities 209,994,078 100 196,043,833 100 186,158,197 100 182,636,563 100 180,377,774 100

Interpretation:

The technique for identifying relationship between items in the same financial
statement by expressing all amounts as the percentage of the total amount taken
as 100 is vertical analysis. In a balance sheet, for example, cash and other
assets are shown as a percentage of the total assets and, in an income
statement, each expense is shown as a percentage of the sales revenue.
Financial statements using this technique are called common size vertical
financial statements.

73
 In 2015, equity represents 47.80% of total equity and liabilities while the
greatest portion is represented by general reserves. Non-current liabilities are
26.25% employee retirement benefits represent a substantial proportion of it.
Current liabilities represent 25.95% of total equity and liabilities which is only
formed by trade and other payables.
 In 2016, equity represents 45.45% while non-current liabilities represent
22.16% and current liabilities represent 32.38% of total equity and liabilities this
shows that proportion of equity and non-current liabilities has decreased from
previous year but current liabilities have increased which is due to increase in
trade payables.
 In 2017, equity is 45.63%, non-current liabilities are 21.05% and current
liabilities are 33.03%. Again equity and non-current liabilities are at about same
point but there is an increase in current liabilities which is an increase in trade
payables this shows that company purchases more on credit.

 In 2018, 42.62% of equity, 22.60% of non-current liabilities and 34.70%

current liabilities compose total equity and liabilities. The proportion of current and
non-current liabilities has increased as compared to previous year while equity‘s
proportion has decreased. Because of addition of some new items in current and
non- current liabilities which are loans from customers and security deposits etc.

 Equity represents 41.78% of total equity and liabilities, non-current liabilities

represent 20.48% while current liabilities represent 37.73% in 2019. Non-current
liabilities have again decreased because of a decrease in employee retirement
benefit and deferred income taxes

In all these points it can be seen that equity‘s proportion and non-current liabilities
proportion has decreased while the proportion of current liabilities has increased
in each year which means that company is greatly makes purchases on credit
and must have enough liquidity to pay its current liabilities.

74
 2019 2018 2017 2016 2015
Rs. va Rs. va Rs. va Rs. va Rs. va
Assets
Non-current assets
Property, plant & equipment 116,719,808 55.582 106,151,422 54.147 98,250,679 52.778 94,779,483 52.691 94,912,046 52.618
ROU assets 1,144,505 0.545 0 0 0 0
Intangible assets 1,463,269 0.6968 1,690,725 0.8624 1,882,868 1.0114 2,332,789 1.2969 2,539,060 1.4076
119,327,582 56.824 107,842,147 55.009 100,133,547 53.789 97,112,272 53.988 97,451,106 54.026
Long-term investments 8,936,284 4.2555 8,968,757 4.5749 7,977,300 4.2852 7,977,300 4.4349 7,977,300 4.4226
Long-term loans & advances 12,387,056 5.8988 10,690,139 5.4529 7,670,324 4.1203 2,152,757 1.1968 2,261,126 1.2536
Contract costs 508,615 0.2422 364,502 0.1859 17,268 0.0093 38,513 0.0214 96,113 0.0533
141,159,537 67.221 127,865,545 65.223 115,798,439 62.204 107,280,842 59.641 107,785,645 59.756
Current assets
Stores, spares & loose tools 5,335,121 2.5406 6,067,575 3.095 3,633,569 1.9519 2,742,794 1.5248 2,940,425 1.6301
Contract costs 1,525,845 0.7266 1,093,505 0.5578 0 0 0
Trade debts & contract assets 20,258,574 9.6472 16,178,523 8.2525 16,040,224 8.6164 14,227,974 7.9098 14,304,039 7.93
Loans & advances 922,344 0.4392 1,762,470 0.899 1,511,669 0.812 676,556 0.3761 1,593,099 0.8832
Investment in finance leases 0 0 35,137 0.0189 53,030 0.0295 52,255 0.029
Accrued interest 0 0 0 231902 0.1289 128,174 0.0711
Income taxes recoverable 17,756,175 8.4556 16,478,323 8.4054 15,263,357 8.1991 14,550,698 8.0892 18,179,032 10.078
Recievale from GoP 2,164,072 1.0305 2,164,072 1.1039 2,164,072 1.1625 2,164,072 1.2031 2,164,072 1.1997
Prepayments & other recievables 16,697,980 7.9516 14,128,424 7.2068 11,860,653 6.3713 8,279,236 4.6027 4,982,082 2.762
Short-term investments 6,906 0.0033 4,930,370 2.5149 5,607,778 3.0124 24,000,000 13.342 26,038,803 14.436
Cash & bank balances 4,167,524 1.9846 5,375,026 2.7417 14,243,299 7.6512 5,902,144 3.2812 2,210,148 1.2253
68,834,541 32.779 68,178,288 34.777 70,359,758 37.796 72,596,504 40.359 72,592,129 40.244
Total assets 209,994,078 100 196,043,833 100 186,158,197 100 179,877,346 100 180,377,774 100

Interpretation:

 In 2015, non-current assets represent 59.75% and current assets

represent 40.24% of total assets. Property, plant and equipment portion of non-
current assets and income taxes recoverable in current assets portion represent
the greatest part. This also shows that company has more long-term assets
than short-term assets which mean that company spends more on long-term
policies.
 In 2016, proportion of non-current assets has decreased and now it
represents 59.64% of total assets. This decrease is due to property, plant and
equipment. Current assets are now 40.36% of total assets. The figure has
increased from previous years which mean that company has now more assets
than previous year that can be readily available to convert into cash.
 In 2017, non-current assets are 62.20% and current assets are 37.80% of
total assets. Non-current assets have increased from previous year and current
assets have decreased a lot. The increase in non-current assets is due to
increase in PPE and loans and advances. The decrease in current assets is due
to a huge decrease in short-term investments.

75
 In 2018, 65.22% of non-current assets and 34.77% of current assets
compose total assets. The proportion of current assets for the payment of
current liabilities has decreased which is a negative point for liquidity of the firm.
The decrease is due to a decrease in cash balance which may be spent for the
purchase of PPE that‘s why non-current assets have increased.
 In 2019, current assets have met with a decrease in comparison to
previous year and are now 32.77% of total assets. This decrease is due to
decrease in short-term investments and cash. Non-current liabilities are 67.22%
this increase is due to increase in PPE. The decrease in current portion is due
to increase in non-current portion.

In all of the years, it is clear that company is continuously spending its current
assets (cash and short-term investments) to produce non-current assets (PPE).
Although company tends to improve its long-term debt paying ability but its
current assets are about 30-35% of its total assets while its current liabilities are
37.73% which means that company has not enough short-term assets to pay its
current liabilities. It needs to improve its short-term debt paying ability.

76
 PTCL
Income Statement
Vertical analysis
All amounts are in thousands of PKR except of %
2019 2018 2017 2016 2015
Rs. % Rs. % Rs. % Rs. % Rs. %
Revnue 71,548,302 100 70,099,626 100 69,757,391 100 71,420,100 100 75,751,975 100
Cost of sales 54,569,330 76.269 52,257,894 74.548 51,043,742 73.173 50,358,343 70.51 53,783,589 71
Gross profit 16,978,972 23.731 17,841,732 25.452 18,713,649 26.827 21,061,757 29.49 21,968,386 29
Administrative & general expenses 6,759,574 9.4476 8,456,188 12.063 8,617,477 12.353 8,770,136 12.28 9,782,258 12.914
Selling & marketing expenses 2,991,971 4.1817 2,871,420 4.0962 2,947,347 4.2251 3,129,868 4.3823 3,514,400 4.6394
Impairment loss on TD & CA 2,288,544 3.1986 0
12,040,089 16.828 11,327,608 16.159 11,564,824 16.579 11,900,004 16.662 13,296,658 17.553
Operating profit 4,938,883 6.9029 6,514,124 9.2927 7,148,825 10.248 9,161,753 12.828 8,671,728 11.448
Voluntary seperation scheme cost 4,601,379 6.4427
Other income 4,710,120 6.5831 4,796,873 6.8429 6,001,194 8.603 5,834,131 8.1688 4,917,762 6.4919
Finance cost 317,775 0.4441 553,828 0.7901 304,611 0.4367 193,708 0.2712 317,376 0.419
Profit before tax 9,331,228 13.042 10,757,169 15.346 12,845,408 18.414 10,200,797 14.283 13,272,114 17.52
Provision for income tax 2,983,993 4.1706 3,334,722 4.7571 4,495,894 6.445 3,366,263 4.7133 4,512,519 5.957
Profit for the year 6,347,235 8.8713 7,422,447 10.588 8,349,514 11.969 6,834,534 9.5695 8,759,595 11.564

Vertical analysis is a method of financial statement analysis in which each line

item is listed as a percentage of a base figure within the statement. Thus, line
items on an income statement can be stated as a percentage of gross sales.

 In 2015, the profit that is earned only from sales and purchases is 29% of
the total revenue. The profit earned from operations is 11.44%. Net profit
concluded after all deductions and additions is 11.56%. The highest expenses
in 2015 are cost of sales and administrative and general expenses which
represent 71% and 12.91% of total revenue respectively.
 In 2016, Gross profit is 29.49% of total revenue which shows an increase
from previous year. Operating profit represents 12.82% of total revenue.
These profit figures have increased because cost of sales and admin. and
gen. expenses which are 70.51% and 12.28% of total revenue have
decreased a bit that caused this increase. Net profit for this year is 9.56% of
the total revenue which has decreased about 2%. This decrease is caused by
voluntary separation scheme.
 In 2017, Gross profit is 26.82% this decrease is caused due to an
increase in cost of sales which is 73.13% of total revenue. Operating profit is
10.25% of total revenue. Net profit is 11.97% of total revenue. In expenses,
77
largest operating expenses after cost of sales-administrative expenses are at
about stable rate. The exclusion of voluntary suspension expense caused
profit before tax to increase which in return increased the provision for taxation
which is 6.44% of the total revenue.
 In 2018, Gross profit now represents 25.45% of total revenue. This
representation has decreased due to increased cost of sales 74.54%.
Operating profit‘s (9.29%) proportion has also decreased although
administrative expenses have decreased to 12.06% but the inclusion of
impairment expense 2.74% has caused this decrease. 10.58% of net profit
has also shown a negative trend which is caused by decreased operating
profit.
 In 2019, Gross profit is 23.73% of total revenue. This decrease is due to
increased cost of sales 76.26%. Operating profit is 6.90% of total revenue.
This decrease has shown the continuous negative trend in these figures,
which is caused by increase in administrative expenses and impairment loss
and also due decrease in gross profit. Net profit is 8.87%. This decrease is
also caused by decrease in gross and operating profit.

In all of the above years, it can be concluded that gross profit is decreasing
and cost of sales are increasing year by year except for the year 2016, which
means that firm needs to control its cost of sales. Operating profit also has
only shown positive trend in 2016 but after that it is continuously decreasing
due to increased administrative expenses and impairment loss. Net profit is
also showing negative trend after 2016. In short, company needs to control its
cost of sales and administrative expenses.

78
 PTCL
Statement of financial position
Horizontal analysis
All amounts are in thousands of PKR except of %
2019 2018 2017 2016 2015
Rs. % Rs. % Rs. % Rs. % Rs. %
Equity & Liabilities
Equity
Share capital & reserves
Share capital 51,000,000 100 51,000,000 100 51,000,000 100 51,000,000 100 51,000,000 100

Revnue & Reserves

Insurance reserve 3,172,624 131.31 2,985,696 123.58 2,806,993 116.18 2,621,288 108.49 2,416,078 100
General reserve 27,497,072 90.154 27,497,072 90.154 27,497,072 90.154 27,497,072 90.154 30,500,000 100
Unappropriated profit 6,081,683 264.16 2,088,583 90.718 3,647,809 158.44 1,894,739 82.298 2,302,282 100
36,751,379 104.35 32,571,351 92.484 33,951,874 96.404 32,013,099 90.899 35,218,360 100
87,751,379 101.78 83,571,351 96.93 84,951,874 98.531 83,013,099 96.282 86,218,360 100
Liabilities
Non-current liabilities
Long term security deposits 0 0 553,446 100.24 553,049 100.17 552,122 100
Deffered income taxes 5,932,356 103.08 6,991,303 121.49 7,086,423 123.14 7,264,575 126.23 5,754,847 100
Employee retirement benefits 27,042,310 84.213 28,487,425 88.713 23,503,831 73.194 24,068,008 74.951 32,111,859 100
Deffered Govt. Grants 7,578,974 84.905 7,841,637 87.848 8,059,878 90.293 8,594,920 96.286 8,926,403 100
Advances from customers 1,526,911 1,112,453
Lease liability 927,185
43,007,736 90.839 44,432,818 93.849 39,203,578 82.804 40,480,552 85.501 47,345,231 100
Current liabilties
Trade and other payables 78,261,680 167.18 67,195,789 143.54 62,002,745 132.44 59,142,912 126.34 46,814,183 100
Security deposits 583,739 579,039
Unpaid/Unclaimed dividend 211,589 264,836
Current maturities of lease liabilities 177,955
79,234,963 169.25 68,039,664 145.34 62,002,745 132.44 59,142,912 126.34 46,814,183 100

Total equity & liabilities 209,994,078 116.42 196,043,833 108.69 186,158,197 103.2 182,636,563 101.25 180,377,774 100

Horizontal analysis (also known as trend analysis) is a financial statement

analysis technique that shows changes in the amounts of corresponding
financial statement items over a period of time. It is a useful tool to evaluate
the trend situations.

The statements for 5 periods are used in horizontal analysis. The earliest
period is usually used as the base period and the items on the statements for
all later periods are compared with items on the statements of the base period.
The changes are generally shown both in dollars and percentage.

 Revenue and reserves have shown many fluctuations in these 5 years

which is composed of insurance reserve, general reserve and unappropriate
profit. In 2016, it is decreased to 90.89% which shows a decrease of about
10%. In 2017, it represents 96.40% of the base. In 2018 it again decreased to
79
92.48% of the base. In 2019, it increased and then is 104.35% of the base in
2015. In all of these years many fluctuations took place but the reserves are
greatest in 2019.
 Total equity of the company has also fluctuated like reserves. It showed
decrease in 2016 and then increase in 2017. In 2018 it again decreased to
96.28% of the base. In 2019, it showed a very good position and is now
101.78% of the base. It showed different fluctuations but is very good in 2019.
 In liabilities the lower the percentage the better the results are. In non-
current liabilities, these figures are showing about good trend. In 2017 and 16,
it decreased this is a good sign. In 2018, it increased and represents 93.84%
of the base. But this has been controlled in 2019 and is 90.83% of the base.
Non-current liabilities are most favorable in 2017. Deferred income taxes and
deferred government grants have shown positive trend in all of the 5 years
except employee retirement benefits it only showed an increase in 2018 and
was 88.71% of the base.
 In current liabilities, the only item that could be seen for trend analysis is
trade and other payables have increased from previous years. It was 143.54%
in 2018 and 167.18% in 2019 of the base amount of 2015. The total current
liabilities have shown increased since last 5 years. It is 145.34% in 2018 which
shows an increase of 45.34%. In 2019, current liabilities are 169.25% of the
base amount which shows an increase of 69.25%.
 Total equity and liabilities are showing a positive trend. It is increasing
since last 5 years. It is 101.25%in 2016, 103.2% in 2017, 108.69% in 2018
and 169.25% in 2019.

In all of the above points, it can be seen that liabilities in all of the 5 years is
increasing but the equity and reserves are showing fluctuation, but are best in
2019. So, the company needs to improve its debt paying ability as its
liabilities are increasing year by year and also it should improve grounds for
investments for increasing its equity.
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 2019 2018 2017 2016 2015
Rs. % Rs. % Rs. % Rs. % Rs. %
Assets
Non-current assets
Property, plant & equipment 116,719,808 122.98 106,151,422 111.84 98,250,679 103.52 94,779,483 99.86 94,912,046 100
ROU assets 1,144,505 0 0 0 0
Intangible assets 1,463,269 57.63 1,690,725 66.589 1,882,868 74.156 2,332,789 91.876 2,539,060 100
119,327,582 122.45 107,842,147 110.66 100,133,547 102.75 97,112,272 99.652 97,451,106 100
Long-term investments 8,936,284 112.02 8,968,757 112.43 7,977,300 100 7,977,300 100 7,977,300 100
Long-term loans & advances 12,387,056 547.83 10,690,139 472.78 7,670,324 339.23 2,152,757 95.207 2,261,126 100
Contract costs 508,615 529.18 364,502 379.24 17,268 17.966 38,513 40.071 96,113 100
141,159,537 130.96 127,865,545 118.63 115,798,439 107.43 107,280,842 99.532 107,785,645 100
Current assets
Stores, spares & loose tools 5,335,121 181.44 6,067,575 206.35 3,633,569 123.57 2,742,794 93.279 2,940,425 100
Contract costs 1,525,845 1,093,505 0 0 0
Trade debts & contract assets 20,258,574 141.63 16,178,523 113.1 16,040,224 112.14 14,227,974 99.468 14,304,039 100
Loans & advances 922,344 57.896 1,762,470 110.63 1,511,669 94.889 676,556 42.468 1,593,099 100
Investment in finance leases 0 0 35,137 67.241 53,030 101.48 52,255 100
Accrued interest 0 0 0 231902 128,174 100
Income taxes recoverable 17,756,175 97.674 16,478,323 90.645 15,263,357 83.961 14,550,698 80.041 18,179,032 100
Recievale from GoP 2,164,072 100 2,164,072 100 2,164,072 100 2,164,072 100 2,164,072 100
Prepayments & other recievables 16,697,980 335.16 14,128,424 283.58 11,860,653 238.07 8,279,236 166.18 4,982,082 100
Short-term investments 6,906 0.0265 4,930,370 18.935 5,607,778 21.536 24,000,000 92.17 26,038,803 100
Cash & bank balances 4,167,524 188.56 5,375,026 243.2 14,243,299 644.45 5,902,144 267.05 2,210,148 100
68,834,541 94.824 68,178,288 93.92 70,359,758 96.925 72,596,504 100.01 72,592,129 100
Total assets 209,994,078 116.42 196,043,833 108.69 186,158,197 103.2 179,877,346 99.723 180,377,774 100

 Non-current assets decreased in 2016 and presents 99.65% of the base

2015. In 2017 it increased by 7.43% and representing 107.43%. In 2018, it
reached to 118.63% of the base which shows a great increase in comparison
to the base year. In 2019, it reached at 130.96% which means that 30.96%
increase has occurred since 2015. Non-current assets are showing a very
good position.
 In non-current assets, only intangible assets have shown negative trend
and are 57.63% in 2019. This represents about 43% decrease in comparison
to 2015. Long-term loans & advances and contract costs have shown a
substantial increase. These are 547.83% and 529.18% respectively in 2019.
 Current assets of PTCL increased in 2016 and are 101.01% which
showed an increase of 1.01%. In all of the following years current assets
have decreased and are 96.92% in 2017, 93.92% in 2018 and are 94.82% in
2019. These are least favourable in 2018.
 The causes of such decrease are decrease in loans and advances
57.89%, investments in finance leases, accrued interest, short-term
investments 0.02% in 2019. Greatest decrease is decrease in short-term
investments. While all other assets have shown a positive trend. The greatest
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increase is in prepayments & other receivables and is 335.16% in 2019 and
after that cash and bank balance and stores, spares and loose tools which
are 188.56% and 181.44% in 2019.
 Total assets of PTCL have shown a positive trend and are increasing
year by year. These were 99.72% in 2016, 103.2% in 2017, 108.69% in 2018
and 116.42% in 2019. This showed an increase of 1.25%, 3.2%, 8.95% and
16.42% in all the respective years. The total assets have shown greatest
increase in 2019.
PTCL
Income Statement
Horizontal analysis
All amounts are in thousands of PKR except of %
2019 2018 2017 2016 2015
Rs. % Rs. % Rs. % Rs. % Rs. %
Revnue 71,548,302 94.451 70,099,626 92.538 69,757,391 92.087 71,420,100 94.282 75,751,975 100
Cost of sales 54,569,330 101.46 52,257,894 97.163 51,043,742 94.906 50,358,343 93.631 53,783,589 100
Gross profit 16,978,972 77.288 17,841,732 81.215 18,713,649 85.184 21,061,757 95.873 21,968,386 100
Administrative & general expenses 6,759,574 69.1 8,456,188 86.444 8,617,477 88.093 8,770,136 89.653 9,782,258 100
Selling & marketing expenses 2,991,971 85.135 2,871,420 81.704 2,947,347 83.865 3,129,868 89.058 3,514,400 100
Impairment loss on TD & CA 2,288,544
12,040,089 90.55 11,327,608 85.191 11,564,824 86.975 11,900,004 89.496 13,296,658 100
Operating profit 4,938,883 56.954 6,514,124 75.119 7,148,825 82.438 9,161,753 105.65 8,671,728 100
Voluntary seperation scheme cost 4,601,379
Other income 4,710,120 95.778 4,796,873 97.542 6,001,194 122.03 5,834,131 118.63 4,917,762 100
Finance cost 317,775 100.13 553,828 174.5 304,611 95.978 193,708 61.034 317,376 100
Profit before tax 9,331,228 70.307 10,757,169 81.051 12,845,408 96.785 10,200,797 76.859 13,272,114 100
Provision for income tax 2,983,993 66.127 3,334,722 73.899 4,495,894 99.632 3,366,263 74.598 4,512,519 100
Profit for the year 6,347,235 72.46 7,422,447 84.735 8,349,514 95.318 6,834,534 78.023 8,759,595 100

The horizontal analysis computes the percentage change in each income

statement account. Firstly change in profit items must be considered and after
that expense items must be taken into account.
 Net profit for year 2016 is 78.023% which shows a decrease. In 2017, this
figure has increased and reached to 95.31%. In 2018, net profit decreased and
is 84.735%. In 2019, it fall to 72.46% and is lowest in 2019.
 Operating profit is 105.65% in 2016, 82.43% in 2017, 75.12% in 2018 and
56.95% in 2019. This profit shows the profit earned from main business

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operations and it showed negative trend. It decreased a lot from previous years
and in 2019 it is decreased by 44.05% (100-56.95).
 Gross profit of PTCL is 95.87% in 2016, 85.18% in 2017, 81.21% in 2018
and 77.28% in 2019. It can be seen from the above figures that gross profit is
decreasing year by year and is lowest in 2019. This is showing a negative trend
which means that company is continuously losing its revenue from sales
 In expenses the most important expense of the company is cost of sales
which have shown a decrease in 2016 but in all other years it showed a rise in
expense which is an unfavourable condition for profitability of the company. It
was 93.63% in 2016, 94.90% in 2017, 97.16% in 2018 and 101.46% in 2019. In
all years except 2019 these figures remain less than base year but in 2019 it is
1.46% greater than the base year.
 Operating expenses have decreased in all of the years except 2019.
These are composed of administrative & general and selling & marketing
expenses. These are 85.19% in 2018 and 90.55% in 2019. This increase has
distorted the positive trend of operating expenses which was being made in
previous 4 years.
 Finance cost and provision for taxes are two major items after operating
expenses. These two expenses have shown many fluctuations but both were
best at 61.03% in 2016 and 66.12% in 2019 respectively. Finance cost is
currently 100.13%.
In all of the above points it is clear that profit prospects of the company are
decreasing year by year by the respective increase in expenses. So, the
management needs to control its expenses. These expenses are cost of sales
and operating expenses in accordance with the analysis.

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 SWOT Analysis
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so
a SWOT Analysis is a technique for assessing these four aspects of business.
Environmental factors internal to the firm usually can be classified as
strengths (S) or weaknesses (W), and those external to the firm can be
classified as opportunities (O) or threats (T).

Strengths
Strengths are the attributes of the organization those are helpful in achieving
the objectives.
Strengths of PTCL are:
 Basic strength is SAP software.
 Good infrastructure
 Regular employees are satisfied
 Employees has good communication skills
 Good relation with managers
 Cooperative employee
 Oldest Telecommunication Company of Pakistan founded in 1947.
 The largest landline network of Pakistan.
 Strong international brand names.
 Strong financial position
 Competent and Skillful Human Resources in few specialized fields.
 PTCL is offering multiple services which include Telephone, Internet
and T.V.
 PTCL can be used as a backup network if the mobile networks are
down due to any reason.
 PTCL maintain the records of customers in an organize way with the
principle of privacy.
 It has been offering Internet DSL connection to the customers with
students‘ package offer.
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  It offers low rates for the national calls etc. as compared to mobile
networks.
 All the telecommunication companies operating in Pakistan directly or
indirectly dependent upon PTCL network.
 Good market reputation in the stock exchange
 International Submarine Cables
Weaknesses
Weaknesses are the attributes of the organization that are harmful in
achieving the objectives.
Weaknesses of PTCL are:
 Quality of Service offered to the Customer is very poor and in-efficient,
specially the Internet service.
 Issues with employees promotions
 Unsecure job of contractual employee
 Lack of technical staff in DSL technical support.
 No research and development programs.
 Weak marketing of new services.
 Low revenue per user.
 Political intervention in decision making.
 Form processing for new connection takes more time in larger cities.
 Bad debts due to non-payments of bills.

Opportunities
Opportunities are external conditions that may be helpful, in achieving the
objectives.
Opportunities of PTCL are:
 Huge market size to Increase market share.
 Development of new, innovative and customized products (Increase in
company product lines).
 Proper planning and implementation is required, to Improve overall
services.
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  Adopt latest technologies.
 Making technology accessible to all.
 Hire competent marketers and adopt aggressive marketing that is
required to promote offered services and give tough time to
competitors.
 Improvement in customer services.
 Joint ventures with other telecommunication companies for introducing
new services.
 Hire technical staff in specific areas in order to increase customer
satisfaction.
 Can improve employees‘ motivation.
 Gain more efficiency through business process analysis.

Threats
Threats are external conditions that may be harmful in achieving the
objectives.
Threats to PTCL are:
 Strong competition from telecommunication companies.
 New players in the industry.
 Inconsistent and Ad-hoc decisions by Company management.
 Security and fraud issues.
 Cybercrimes percentage is increasing.
 Political instability.
 Inflation in the country may increase the cost of services which will
finally transfer to customers.
 Rapid raise in Government taxes.
 Recession in economy.
 Innovative competitor
 Virus to the system which can damage all the data.
 Software hacking

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 Conclusion
After the completion of my internship with PTCL for about 6 weeks for the
fulfillment of the requirement of my associate degree program I hereby
conclude that, the internship in PTCL was a good experience. During this
period I have gained a lot of knowledge and practical experience.
I have practically realized the importance of individual /practical work.
The very important thing which I realized is, like any other basic sphere of
modern socio Industrial activities, Telecommunication is a main and important
field for the development of any country.
The staff of organization especially the manager Finance Mr. Irshad Hussain
and the manager HR Mr. Tayyab Shabbir is highly qualified and their behavior
is friendly. They not only taught us about practical works but also of many
other aspects of life like practical behavior also the working environment of
organization is very good.
So I recommend all students who do their internship in future, should do the
training program with PTCL.

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 Work sheets

1. The document is the policy of the PTCL about travelling rules and regulation
set for the employees and also the compensation and reimbursement of
expenses to them on a journey made by them for official purposes.

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2. The document is designation of powers. The document describes the
structure of the organization and the powers given to each official under the
rules of the organization. Lead to us by manager Finance Mr. Irshad.

3. The picture is the screenshot of the annual report of PTCL 2019. It describes
the key performance evaluators of the organization for the period of 5 years.
This was our assignment for 29-10-2020.
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4. This was the bill of PTCL telephone exchange for the month of November
2020. Purpose of this assignment was to teach us about all the taxes and
surcharges levied by the Govt. and GEPCO authority. And also about the
govt. loan for SME‘s due to COVID-19.

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5. The document is the purchase requisition form of the organization. The
whole process of purchasing was taught to us and also the method of
payment made by finance department was also learned by me.

6. The image is the process of recording any asset or expense related to that
asset in the SAP software used by the organization.

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The image is a screenshot of the SAP software recording of the running and
maintenance expense of PTCL.

7. This is the screenshot of the MS Excel. An assignment given to us to find

the reasons of disagreement in pass book and cash book. This reconciliation
has been taught to us by Manager Finance PTCL.
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 Skills acquired

 Learnt the use of MS word and excel

 To prepare travel authorization form
 Learnt ethics at official level
 Learnt the points to be considered before making payment by finance.
 Learnt the process of purchasing
 Learnt to make an official mail
 Learnt the role of the upper level management in organization
 Learnt the process of making an entry in SAP software

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 Bibliography

 Freshbooks.com
 Investopedia.com
 Ready ratios.com
 Corporate finance.com
 Slideshare.net
 Financial statements analysis by Charles Gibson
 Financial statement analysis by Gokul Sinha

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