INTERNSHIP REPORT ON

PAKISTAN TELECOMMUNICATION COMPANY LIMITED

SUBMITTED TO:
SIR HASEEB AHMED
SUBMITTED BY:
SHUMAILA SAMAD
ROLL NO: 937
8th BBA (Hons)
SESSION: 2013-2017

UNIVERSITY OF EDUCATION (MULTAN CAMPUS)

 DEDICATION
This project is dedicated to my parents who ever wished to see me as a successful person in
every field of my life. May they live long (Ameen)
 ACKNOWLEDGEMENT

To Him belongs the dimension of the Heavens and the earth, it is He who gives life and death and He has
power over all things.(Al-Quran)

All praise to Allah Almighty, the most merciful, kind, and source of all knowledge and wisdom.
All respect and possible tributes goes to my Holy Prophet Mohammad (SAW), who is forever
guidance and knowledge for all human beings on this earth. I am really every thankful to Sir Qamar
Iqbal for his cooperative attitude during the completion of my internship report. He helped and
support me during gathering and analyzing information.
 EXECUTIVE SUMMARY
Thanks to ALLAH Almighty I have successfully completed my 6 weeks internship as
per requirement of BBA (Hons) Degree. I was appointed at Dera Adda Branch of PTCL, Multan.
My internship started on 17-07-2017 and ended on 26-08-2017, with the official working hours
starting from 9am to 4pm. I worked here in Revenue Department.

The basic objective of my internship to know the issues related to finance department & to know
find out problems regarding the theoretical concepts with practical experience working in an
organization during my internship. With the emerging trend of computerized system the load of
work can be decreased. It is not easy to implement a system immediately it take a lot of time.so it
is important for the organization to develop a research for redesigning the operations organization.
Fresh graduates have more knowledge about business administration and skills in information
technology.

To update the skills, it is suggested to develop human resource training programs for fresh
graduates. PTCL is the largest telecommunication company in Pakistan and almost all over the
Pakistan no other company is as famous as PTCL especially for landline services.

With employee strength of 80,000 and 5.7 million customers PTCL is enjoying the leading position
in telecommunication industry. This report with other helpful material also contains SWOT
analysis which is useful in academia and for organization as well.
 TABLE OF CONTENTS

Dedication
Acknowledgement
Executive Summary
1. Overview of Organization 1
Historical Background 2
Vision Statement 2
Mission Statement 2
Core Values & objectives 3
Business Volume 3
Product Lines 4
Competitors 6
2. Organization Structure 7
Organization Hierarchy chart 7
No of Employees 7
Introduction to Departments 7
Comments 11
3. Plan of Internship Program 12
4. Training Program 12
5. Structure of Finance Department 15
Department of Hierarchy 15
No of Employees in finance Departments 15
Finance and Accounting Operations 15
6. Functions of Finance Department 16
Accounting System of Organization 17
Finance System of Organization 17
Financial Statements 19
Profitability Analysis 22
Liquidity Analysis 23
Long Term Paying Debt Ability Analysis 23
 Analysis for Investor 24
7. Vertical and Horizontal Analysis 24
Graphical Representation 29
8. Critical Analysis 31
9. SWOT Analysis 32
10. Conclusion 33
11. Recommendation 33
12. References 34
13. Annexure 34
 1. Overview of Organization
In Pakistan, at the time of independence telecommunication services were performed by a single
department known as Pakistan post and telegraph (P&T). This department continues its business up to
1962. In 1962, Ayyub Khan Government splits it into two departments Pakistan Post and Pakistan
telephone & telegraph (PT&T). PT&T continues till 1990s and it ends up because of the
centralized structure caused inefficiency in operations and long delay in implementing decisions. This
coincided with the Government's competitive policy, encouraging private sector participation and
resulting in award of licenses for cellular, card-operated payphones, paging and, lately, data
communication services. So in 1991, it converted into a private company. Now, (PTCL) is the leading
telecommunication company in Pakistan. The company provides telephonic and Internet services
nationwide and is the backbone for the country's telecommunication infrastructure despite of the
arrival of dozen telecommunication corporations. The corporation manages and operates around
2000 telephone exchanges across the country, providing the largest fixed-line network. G S M ,
CDMA and Internet are other resources of PTCL, making it a gigantic
organization. According to the government documents, the Share Purchase Agreement (SPA) of the
PTCL with Etisalat lapsed in September 2005. Now PTCL is a semi government firm in which
62% shares are of government, 26% are sold to Etisalat Telecommunications and remaining 12%
are of general public. After privatization, PTCL has divided into three parts;

National Telecommunication Company (NTC)

It basically deals with the government connections.
Frequency Board
It monitors the quality of signals etc.
Pakistan Telecommunication Authority (PTA)
It is a regulatory authority and it controls all the other three branches.
 Historical Background
1947 Posts & Telegraph Dept. established

1961 Pakistan Telegraph & Telephone Dept.

1990-91 Pakistan Telecom Corporation

1995 About 5% of PTC assets transferred to PTA, FAB & NTC.

1996 PTCL Formed listed on all Stock Exchanges of Pakistan.

1998 Mobile (Ufone) & Internet (Pak Net) subsidiaries established.

2000 Telecom Policy Finalized

2003 Telecom Deregulation Policy Announced

2006 Etisalat Takes Over PTCL's management

Mission & Vision

Our Mission:

To achieve our vision by having

An organizational environment that fosters professionalism, motivation and quality

An environment that is cost effective and quality conscious
Services that are based on the most optimum technology
"Quality" and "Time" conscious customer service
Sustained growth in earnings and profitability

Our Vision:

To be the leading Information and Communication Technology Service Provider in the region by achieving customer
satisfaction and maximizing shareholders' value'.
 Core Values & Objectives
Core Values:

Professional Integrity
Teamwork
Customer Satisfaction
Loyalty to the Company
Objectives:

Profit maximization
Cost Leadership
Retain customers
Best and affordable service

Business volume

No. of shares

Today PTCL has 15,000,000 no of shares and per share price is Rs 14.04.The shares closing
price touched a high of Rs 19.45 on January 27, 2017.
The PTC stock drives regular interest in daily trading. During the period under review,
average daily trading volume of the stock stood at over 2.6 million shares.

Future Outlook

The PTCL management's strategy is to upgrade the fixed (wireline) broadband

infrastructure to compete with 3G and 4G operators. That should help, given the high
speed and quality of service of fixed-line broadband. Meanwhile, Ufone is showing a
turnaround, which needs to be sustained by retaining market share in the 3G segment.
PTCL main focuses is on retaining customer because of due to privatization, it influences
negatively on revenue.
 Product and Services

Products

As field of technology is growing rapidly, its becoming hard for companies to keep up pace
with the latest technologies but PTCL is doing good as it has technological fit products

For current era. Its products include;

Landline

It is abbreviated as PSTN _ Public Switch Telephone Network. Landline services are the basic
services of PTCL. Voice calls quality increasing day by day while its charges are becoming less.
For local calls the code used is non-STD. For calls to other cities (e.g. Karachi to Lahore) the code is called
STD. For International calls the code used is ISD. PTCL also gives the landline phone as a product.

Broadband

It is abbreviated as BB. PTCL is providing high speed internet browsing. DSL is now in top internet
speed and is widely used. It is serving over 1.3 million satisfied customers in over 2000 cities and
towns across Pakistan. Its unique offers that make PTCL Broadband unmatchable are special
packages for the student segment, free Wi-Fi modem.

Smart TV
It is abbreviated as IPTV-Internet Protocol Television. They are proving smart TV services to
different urban areas mainly. Over 150 live channels are available to see with good picture quality.
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 through TSTV (Time Shift
Television) feature, the ability to block / unblock any TV channel for parental lock and the ability
to search through video on demand content.

Wireless
V-fone is its wireless product. Internet and web browsing is also its feature. It can be used
anywhere in Pakistan.

Evo-Charji

Charji Wi-Fi modem is in the form of a USB Stick (Plug-n-Share). It has the ability to connect up
to 10 Wi-Fi gadgets simultaneously.
Three basic and largely provided products and services by PTCL nowadays, are PSTN, BB and
IPTV. It has some other products and services which are unique now like calling cards etc.

Services
PTCL offers its services to two types of customers.

Home services
Business services

Home services

PTCL Broadband
Calling cards
Connectivity
Emails and fixed lines
Pakistan package
Phone n net
EVO

Business services

TV Transmission
Call Canters
Calling Cards
Fixed Lines

Competitors

Mobilink
china mobile
 Telenor
Warid

2. Organizational Structure

Board of
directors

President

&CEO

&CEO

SEVP SEVP SEVP SEVP SEVP SEVP Chief SEVP SEVP

HR Finance commercial coorporate technical operation information business business
officer zone south zone south

SEVP: Senior Executive Vice-President

CEO: Chief Executive Officer

No. of Employees:
Currently PTCL manages and operates around 2000 telephone exchanges across the country, in which 80,000
employees are working.

PTCL Departments
Every organization is divided into deferent departments. Each department performs different kind of jobs
and requires staff with specialized skills to handle particular job. This increases the efficiency of workers
and makes. There are several aspects on which departmentalization in an organization can be based. The
division can be done on the basis of function, product, customers or geographical locations. 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;

Human resource management Dept.

Finance Dept.
Commercial Dept.
Operational Dept.
Technical Dept.
I.T Dept.
Corporate affairs Dept.
Social projects Dept.
Marketing Dept.
Customer care Dept.
Revenue Dept.

Human Resource Management Dept.

It is huge organization and being considered as one of the biggest company in Pakistan

It has more than 56,000 employees and a huge network of or 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. Efforts are being made to improve productivity and efficiency of the Company while
emphasis is also being placed on effective management employees relationship and better line
of communications to achieve corporate goals

Finance Dept.

The finance wing deals with the revenue matters of company& the account wing is responsible for proper
book keeping of the financial transaction, commercial audit & preparation of periodic accounts of the
company.

This department is divided into following three sub-sections

Finance
Accounts
Revenue

Commercial Dept.
 Commercial section with qualified/experienced staff is being established.
Company section is taking both short-term and long-term view of emerging trends of highly
competitive markets as its monopoly is coming to an end.
It analyses 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.
Operational Dept.

Manages operations of PTCL HQ, with regional offices, branches, and, subsidiaries as well as with other
corporations.

Technical Dept.

This department is engaged in the management and control of technical aspects

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

I.T Dept.

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

Corporate Affairs Dept.

This department deal corporate level issues such as PTA, International Telecom Union, Legal and
Regulatory affairs etc.

Social Projects Dept.

This department is doing their activities on behalf of president

Marketing Dept.

Marketing Department is called a revenue-generating department of an organization. Marketing

Department undertakes market research and gives feedback to management about customers needs and
wants on the basis of which, products and services are developed and positioned to give value to
the customers.
Customer Care Dept.

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

Corporate Customer Care Center

To facilitate Corporate Customers PTCL has established Corporate Customer Care Centers at all Operation
Regional Head Quarter Level, in all the meager cities country wide. The Corporate Customers can get their
problems resolved under one roof in a one window environment by dialing UAN 111-20 20
2.The Customer Relation Officers register the complaints & forward these to the related office.

Customer Services Center

To facilitate consumers PTCL has established Customer Services Centers at all Tehsil Level
cities/offices. Here the consumers can use Fax Facility, Voice Telephony for Local/NWD/ISD dialing. On
divisional Offices Level duplicate phone bills may also be obtained from C.S.Cs

Toll for Help Lines

PTCL offers state of the art call center network to its all types of valued customers for
convenient frequently asked questions, complaints regarding their services/N enquiry. The
following three toll free T/Numbers are available for this purpose.

Revenue Dept.

The revenue generated by the marketing department through selling the company
services/products is collected by the revenue department are following

Bill Printing & Distribution

Issuance of Duplicate Bills.

Error correction of Bills.

Collection of defaulter amounts.

Bill Printing & Distribution

The printing is basically carried out by regional billing computer center at every
regional headquarter. These printed bills are handed over to Post Office after sorting& stapling by the
Assistant Revenue Officers staff at Distt level

Issuance of Duplicate Bills.

In case of missing or damaged bills received to customers the correction is also
Revenue departments responsibility. For this purpose the revenue office deputes its staff for each Tehsil
level PTCL office during the bill payment dates normally from18th to 30th of each month
Error Correction of Bills.
In case of late payment or any other discrepancy due to missed collection by banks the
previous amount is also included in the new bill. The revenue office is responsible for such kind of
correction.
Collection of Defaulter Amounts.
The amounts defaulted by the customers or the bad debts are also collected through
revenu e department. Each Telecom Recovery Inspector (TRI) is assigned a target
of bad debts collection on monthly bases. Now a days as incentive is also offered on more
than 100% recovery each month.

Comments:
As I worked here in Revenue department, I observed that here organization structure is highly
centralized to SEVP, all subordinates EVPs & General Mangers reported to SEVP. One more thing
that I have observed here chain of command bows down from SEVP to EVP and then general
managers. All the important decision taken either by SEVP or EVP, general managers are not
included in any decision making.

3. Plan of Internship Program

As I was appointed in Dera Adda exchange of PTCL. Here I worked in Revenue
Department. Sir Qamar, who is regional officer trained all internees. My internship started
on 17-07-2017 and ends on 26-08-2017 with the official working hours 9am-4pm.Basically
the objective of my internship to know the issues related to finance department & to know
find out problems regarding the theoretical concepts with practical experience working in
an organization during my internship.
 With the current trend of computerized system the work load can be decreased. It is not
easy to implement a system immediately it takes a lot of time.so it is necessary for the
organization to develop a research for redesigning the operations organization. Fresh
graduates have more knowledge about business administration and skills in information
technology, they should prefer them instead of experienced people because they are more
energetic and dedicated towards their working.
For increasing skills and abilities, I suggested to develop human resource training programs
for fresh graduates. PTCL is the largest telecommunication company in Pakistan and
almost all over the Pakistan no other company is as famous as PTCL especially for landline
services. So it can provide lot of job opportunities for fresh graduates.

4. Training Program
About Revenue Department
It overseas total profits & total losses, Accounts Receivables, & Accounts Payables.
This department has four main functions that are briefly described below:

Proper Billing:

This function includes billing of the services provided by PTCL to its customers. Issues related to
billing like extra charges in bill that customer has not used, are handled by the department through
standard policies.

Bill Printing

The department checks whether the bills are printed correctly or not. They check for any error or
if the number of bills is correct or not.

Bill Delivery

This department makes sure that the bills are properly delivered to the customers. PTCL has
alliances with TCS, Post office and other third parties like Talha Hameed for delivering bills to
the customers. The couriers from these alliances take the bill deliveries to the customers. The
department handles complaints like non-delivery, misplacement of bill and providing the required
copy of bill to the customers.

Bill Collection

For bill collection, PTCL uses institutes like banks and post office that charge them per bill. For
example, Banks charge Rs10/bill. After collecting the payments from customers, they transfer
payments to PTCL account. Sometimes, bill may be paid by the customer but not received in PTCL
account i.e. not punched. Or may be paid to the wrong account i.e. wrong punching.

What I Learned

In revenue department I learned about software that are used for daily operations
Softwares:
Basically there are four types of software are used in revenue deptt.
Billing and customer care (B&CC)
Siebel communication(CRM)
VPN(virtual private network)
AAA Portal
Siebel Communication (CRM)
This software basically use for
Registration of customer complaints
Investigation of customers accounts
Billing and customer care (B&CC)
It is used for the following functions
Bill printing
Enquiry console
Bill adjustment
Advance billing
Turning off network
Online collection
Virtual Private Network (VPN)
All data are in excel sheet (overall checking).it doesnt Allow to work in any system while it is in
working. It is gate way. Communication is the secret of success in todays highly competitive
market. When it comes to enabling your enterprise, your communication got to be instant, fast and
hassle free. The answer to this corporate need is virtual private network.
AAA Portal
It overseas the day by day usage of DSL.

Credit Monitoring Policy

This department also monitor the credit monitoring policy,
For NTC (new telephone customers): for three months
Existing customers: after three months
NTC
For NTC if bill is not paid at due date, then after 15 days if is exceed from 2500 then
customer account will convert into one way and listed as TOS. After considering customer
account as TOS we will monitor its account for 90 days if bill is still not paid after 90 days
customer account will be cancelled and listed as POS.
And if bill amount does not exceed from 2500 then customer payment will be deferred for
one month. In second month if customer not pay his bill, then 15 days after due date
customer account will be listed as TOS and convert into one way. We will not considered
whether it bill amount is exceeding from 2500 or not. If bill is still not paid in next month
then POS condition mentioned above will be applied on this account.

Existing Customers
For existing customers if bill is not paid at due date. We will create credit limit (by adding
last three months bill, dividing by 5 and then multiplied by 200%or double amount).
If bill amount is not exceeding credit limit then, customer account will be deferred for one
month. It bill is still not paid in second month customer account will be listed as TOS. And
converted into one way. After 90 days customer account will be listed as POS.
 And if bill amount exceed from credit limit then, 15 days after due date customer account
will be listed as TOS, and converted into one way. After 90 days customer account will be
listed as POS.

Key points:

I learned to work on B&CC and CRM software.

I learned to formulate bill charges with all taxation and policies of PTCL. And now have a
understanding of the technical language used in these bills.
I learned to do bill adjustments in Recovery Console of B&CC software. These
adjustments have to be done in response of non-punching issue.
I learned to print out bills on the demand of customers.
I learned how to deal customers and how to manage their complaints.
I learned what to do with the customers having overdue accounts.
I learned how to deactivate or reactivate a customer connection.
5. Structure of Finance Department

SEVPS

EVP (Accounts) EVP (Revenue)

EVP (Finance)

GM (Stores) GM (Accounts) GM (Finance) GM (Revenue)

Senior Vice Executive President (Finance)

Executive Vice President (Accounts)
Executive Vice President (Finance)
Executive Vice President (Revenue)
General Manager (Store)
 General Manager (Accounts)
General Manager (Finance)
General Manager (Revenue)

No of Employees:
About 30,000 employees are working in PTCL finance department.
Finance and Accounting Operations

Finance operation:

The Finance Wing deals with the revenue matters of the company. Finance is the backbone of
every organization because without finance any organization cant run its business. It plays an
important role in determining the long-term objectives and evaluating the feasibility of the
business.

Accounting operations:

The Accounts Wing is responsible for proper bookkeeping of the financial transactions,
commercial audit & preparation of periodic accounts of the company. The Accounts Office of
PTCL is in Lahore .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 project

6. Functions of Finance Department

Major functions of finance department are following

accounting system of the organization

finance system of the organization

Generation of funds

Mobilization of funds

Accounting system of organization

It is responsible for proper book keeping, account receivables and account payables. All bill
collection and bill printing are recorded in this system.
Finance System of the Organization
Finance is the backbone of every organization because without finance any organization cant
run its business. It plays an important role in determining the long-term objectives and evaluating
the feasibility of the business.

Finance Wing
Split up into three major branches; Finance, Accounts & Revenue.

G.M Finance heads this department. The responsibilities of the General Manager (Finance)
usually fall in the area of financial management, preparation of annual budgets, determining
the revenue targets for the year, investor, and banker relations and controlling the Directors
revenue in all the regions.

Budget Wing

Budgeting is the most effective instrument to exercise quality control over the financial
resources of an organization and their better utilization. A budget is a comprehensive financial
plan setting forth the expected route for achieving the financial & operational goals of an
organization. The companies engaged in large-scale business essentially have a budget
department to carry out budgeting for the coming financial year. Various functions performed
by Budget Dept. of PTCL are:

Allocation of funds to different head of accounts.

Disbursement of funds or physical transfer of funds to different heads of accounts.
Receive and analyze budget reports.
Recommended actions designed to improve efficiency where necessary.
Classification of Budget

For simplicity and application, a master budget is classified into following categories:-

Revenue Budget.
Working Expenditure Budget.
Capital Expenditure Budget.
The Revenue Budget consists of estimated collections under different receipts heads while
Working Expenditure Budget includes the estimated amounts to be incurred during the budgetary
period for operational needs. The capital expenditure budget is mainly developed with the
consent of Development wing and the details are given in the Annual Development Program.

Tariff Wing

Tariff Wing is further divided into international tariff and domestic tariff. International tariff means
international business with the whole world i.e. international communication with different
countries. However, there is no direct connectivity with all the countries. There are only 40
countries with which PTCL is directly connected through satellite while the remaining
international connection of traffic to other countries through different carriers. There are 52
carriers for this purpose. There are 220 destinations in the whole world to which there is
international communication but the active relationship of PTCL with 52 carriers. The tariff
department decides about TAR & routing plan for international traffic. It also issues Transit
Charges Agreement for those countries to which there in no direct connectivity. Due to I.T boom,
tariff is going to be changed frequently e.g. for international leased circuits, domestic leased
circuits rates are frequently changing and for this tariff department has to work out

Generation of Funds

An organization can be called self-sufficient if it is producing its maximum cash flow from
operating activities. The table and given below chart for last five years data indicate that PTCL is
producing maximum of its cash flows from operating activities.

Mobilization of funds

Purchase the new imported infrastructure like new Exchanges etc. PTCL mobilized its finds
mostly in the purchase of new telephone exchanges from abroad (France, Italy & China). There
is also purchase of accessories of telephone exchange generators and other equipments.
Salaries of the staff all over the country. Obviously services rendered by the staff and in this
way PTCL has to pay handsome amount to their staff, those are the main source of generating
the revenue.
Security deposits, Transfer of Companys Land & Building
 Financial and Operating Highlights

Balance sheet
Account title 2016 (Rs,000) 2015 (Rs,000) 2014(Rs,000)
Assets
Fixed assets
Property, plant and equipment 94,779,483 94,912,046 94,452,061
Intangible assets 2,332,789 2539,060 4,826,422
97,112,272 97,451,106 99,278,483
Long term investments 7,977,300 7,977,300 7,791,296
Long term loans& advances 2,152,757 2,261,126 2.794,106
Investment in finance lease 38,513 96,113 84,398
107,280,842 107,785,645 104,948,283
Current assets
Stores, spares and loose tools 2,742,794 2,940,425 2,872,542
Trade debts 14,227,974 14,304,039 15.758,805
Loans and advances 676,556 1,593,099 4,136,133
Investment in fianc lease 53,030 52,255 28,305
Accrued interest 231,902 128,174 344,801
Recoverable from tax authorities 14,550,689 18,179,032 16,366,457
Receivable from govt. 2,164,072 2,164,072 2,164,072
Payment and others receivables 8,279,236 4,982,082 4,994,327
Short term investment 24,000,000 26,038,803 18,441,389
Cash and bank balance 5,902,144 2,210,148 4,518,546
72,828,406 72,592,129 69.625,377
Total assets 180,109,248 180,377,774 179573660
Equity and liabilities
Share capital and reserves
Share capital 51,000,000 51,000,000 51,000,000
Revenue reserves
Insurance reserves 2,621,288 2,416,078 2,196,770
General reserves 27,497,072 2,302,282 30,500,000
Unappropriated profit 1,894,739 2,302,282 8,117,782
83,013,099 86,218,360 40,814,552
Liabilities
Non-current liabilities
Long term security deposits 553,049 552,122 549,256
Deferred income tax 4,737,260 5,754,847 2,676,026
Employees retirement benefits 24,068,008 32,111,859 33,011,258
Government grants 8,594,920 8,926,403 6,848,180
37,953,237 47,345,231 43,084,180
Current liabilities
Trade and other payables 59,142,912 46,814,183 44,345,349
Total liabilities and equity 180,109,248 180,377,774 179,573,660

CASH FLOW STATEMENT

Account title 2016(Rs,000) 2015(Rs,000) 2014(Rs,000)

Cash flow from operating activities
Cash generated from 34,497,687 36,557,686 38,548,190
operations
Payment to Pakistan (11,972,112) (6,120,992) (12,551,507)
telecommunication employee
trust(PTET)
Employee retirement benefits (997,164) (1,832,857) (1,055,098)
paid
Payment of voluntary (29,815) (783,691) (8,422,813)
separation scheme
Long term security deposits 927 2,866 19,898
Income tax paid-net (827,492) (2,938,974) (2,157,850)
Net cash flow from operating 23,672,031 24,884,083 14,380,820
activities
Cash flow from investing activities
Capital expenditure (13,982,251) (14,488,326) (20,938,960)
Acquisition of tangible assets (251,892) (380,500) (244,373)
Proceeds from disposal of 87,090 145,976 38,768
property, plant& equipment
Short term investment (988,608) (11,011,392) (12,000,000)
Finance lease 72,441 (40,325) (74,432)
Long term loan and advances 66,844 522,717 1,007,682
Receipts against loan to - 3,000,000 5,500,000
Pakistan telecom mobile
limited
Return on long term loans 2,066,874 2,308,431 4,064,490
and short term investment
Government grants received 275,521 2,606,362 2,106,683
Long term investment in (U - (100,000) 10,000
bank)
Long term investment in - (1,000) -
DVCOMM Data(Pvt)limited
Long term investment in - (1,00,000) -
Smart Sky(Pvt)limited
Dividend income on long term 12,500 10,000 -
investments
Net cash flow from investing (12,641,481) (17,528,057) (15,803,995)
activities
Cash flow from financing activities
Dividend paid (10,365,965) (13,078,357) (9.652.673)
 Net increase/(decrease) in 664,585 (5,722,367) (15,803,995)
cash and cash equivalents
Cash and cash equivalent at 5,237,559 10,959,935 26,763,930
the beginning of year
Cash and cash equivalent at 5,902,144 5,237,599 10,959,935
the end of the year

INCOME STATEMENT
Account title 2016(Rs,000) 2015(Rs,000) 2014(Rs,000)
Revenue 71,420,100 75,751,975 81,512,598
Cost of services (50,358,343) (53,783,589) (55,682,723)
Gross profit 21,061,757 21,968,386 25,829,875
Administrative and general (8,770,136) (9,782,258) (9,857,639)
expenses
Selling and marketing (3,129,868) (3,514,400) (3,290,137)
expenses
(11,900,004) (13,296,658) (8,174,536)
Operating profit 9,161,753 8,671,728 4,507,563
(Voluntary separation (4,601,379) -
scheme cost
Other income 5,834,131 4,917,762 4,706,389
Finance costs (193,708) (317,376) (295,193)
Profit before tax 10,200,797 13,272,114 (907,230)
Provision of income tax (3,366,263) (4,512,519) (2,804,035)
Profit of the year 6,834,534 8,759,595 5,207,494
Earnings per share 1.34 1.72 1.02

Note: All the financial statements are obtained from PTCL official site.
Ratios Analysis
1. Profitability analysis
Net Profit Margin
Net profit margin 2016(%) 2015(%) 2014(%)
Formula=G.P/Sales 9.57 11.56 6.39

Interpretation: net profit margin shows how business is effectively earning profit by selling. According
To above result PTCL profit margin were high in 2015, about 11.56 and were low in 2016 and 2014
gradually.
 Administrative Expense Ratio
Administrative expense 2016(%) 2015(%) 2014(%)
ratio
Formula=admin 12 13 12
exp/Sales

Interpretation: it measure the administration expense in sales proportion, which are 12, 13, 12% in
2016, 2015 and 2014 respectively.

Operating Expense Ratio

Operating expense ratio 2016(%) 2015(%) 2014(%)

operating expense
Formula=operating 16.6 17.55 10.02
exp/Sales

Interpretation: it measure the operating expense proportion to sales. In 2016 it 16.6 in 2015 it was
17.5And 10.02 in 2014.

Return on equity

Return on equity 2016(%) 2015(%) 2014(%)

Formula=net 8.08 9.82 5.40

income/total equity

Interpretation: this shows the profit proportion against one rupee equity. It was 8.08, 9.82, and 5.40 in
2016, 2015, 2014 respectively.

2. Liquidity Analysis
Current Ratio

Current Ratio 2016(%) 2015(%) 2014(%)

Formula= C.A/C.L 123.14 155.06 157.01

Interpretation: The current ratio is the classic measure of liquidity. It indicates whether the
business can pay debts due within one year out of the current assets. By comparing PTCL current
ratio is decreasing per year which is not good. It means firm has shortage of assets to meet its
liabilities.
 Current Assets to total Assets

Current Assets to 2016(%) 2015(%) 2014(%)

total assets
Formula= C.A/T/A 40.44 41.91 38.77

Interpretation: it measure the proportion of current assets from total assets, the more it increases the
more it is beneficial for the organization. By comparing PTCL current assets proportion were high in
2015.

3. Long Term Debt Paying Ability Analysis

Debt Ratio

Debt ratio 2016(%) 2015(%) 2014(%)

Formula=T.A-T.E/T.A 51.28 49.01 47.20

Interpretation: it measure the proportion of total assets financed by the firms creditors. PTCL debt ratio
increased in 2016 as compare to 2015, and 2014.

Debt/Equity Ratio

Debt/ equity ratio 2016(%) 2015(%) 2014(%)

Formula=T.D/T.E 28.72 32.68 30.70

Interpretation: it measure the relationship between the external equities or outsiders funds and
internal equities or shareholders funds. In 2016 part 28.72 are financed by the issuing of bonds.

4. Analysis for Investor

Earnings Per Share

Earnings per share 2016(%) 2015(%) 2014(%)

Formula=net 1.34 1.72 1.02

profit/no.of shares for
common stock
outstanding
 Interpretation: it measure the return against on share. In 2016 PTCL gain 1.34% return against one
share, while in 2015 and 2014 it was 1.72 and 1.02 respectively.

Dividend Pay-out\ Ratio

Dividend payout\ ratio 2016(%) 2015(%) 2014(%)

Formula=yearly dividend 74.62 116.44 244.84

per share/earning per
share

Interpretation: it measure the proportion of earnings paid out as dividends to shareholders,

typically expressed as a percentage. A lower payout ratio is generally preferable to a
higher payout ratio.

7. Horizontal Analysis
Balance sheet
Account title 2016 (Rs,000) 2015 (Rs,000) 2014(Rs,000)
Assets
Fixed assets % % %
Property, plant and 94,779,483 99.68 94,912,046 100.1 94,452,061 100
equipment
Intangible assets 2,332,789 91.87 2539,060 52.60 4,826,422 100
97,112,272 99.65 97,451,106 98.15 99,278,483 100
Long term investments 7,977,300 100 7,977,300 80.35 7,791,296 100
Long term loans& 2,152,757 95.02 2,261,126 80.92 2.794,106 100
advances 4
Investment in finance 38,513 40.07 96,113 113.8 84,398 100
lease 8
107,280,842 99.53 107,785,645 102.7 104,948,283 100
0
Current assets 100
Stores, spares and loose 2,742,794 93.27 2,940,425 102.3 2,872,542 100
tools 6
Trade debts 14,227,974 99.46 14,304,039 38.51 15.758,805 100
Loans and advances 676,556 43.95 1,593,099 184.6 4,136,133 100
1
Investment in fianc lease 53,030 101.4 52,255 111.0 28,305 100
8 7
Accrued interest 231,902 180.9 128,174 100.0 344,801 100
2
Recoverable from tax 14,550,689 80.04 18,179,032 184.6 16,366,457 100
authorities 1
Receivable from govt. 2,164,072 100 2,164,072 100 2,164,072 100
Payment and others 8,279,236 4,982,082 99.57 4,994,327 100
receivables
Short term investment 24,000,000 92.17 26,038,803 141.1 18,441,389 100
9
Cash and bank balance 5,902,144 267.0 2,210,148 48.91 4,518,546 100
4
72,828,406 96.34 72,592,129 104.2 69,625,377 100
6
Total assets 180,109,248 99.85 180,377,774 100.4 179573660 100
4
Equity and liabilities
Share capital and reserves 100
Share capital 51,000,000 100 51,000,000 100 51,000,000 100
Revenue reserves 100
Insurance reserves 2,621,288 108.4 2,416,078 109.9 2,196,770 100
9 8
General reserves 27,497,072 119.4 2,302,282 7.54 30,500,000 100
Unappropriated profit 1,894,739 82.29 2,302,282 28.36 8,117,782 100
83,013,099 96.28 86,218,360 211.2 40,814,552 100
Liabilities 100
Non-current liabilities 100
Long term security 553,049 100.1 552,122 100.2 549,256 100
deposits 6
Deferred income tax 4,737,260 82.31 5,754,847 215.0 2,676,026 100
Employees retirement 24,068,008 74.95 32,111,859 97.27 33,011,258 100
benefits
Government grants 8,594,920 96.28 8,926,403 121.1 6,848,180 100
4
37,953,237 80.16 47,345,231 109.8 43,084,180 100
8
Current liabilities 100
Trade and other payables 59,142,912 126.8 46,814,183 105.5 44,345,349 100
3 6
Total liabilities and equity 180,109,248 99.85 180,377,774 100.4 179,573,660 100
4

INCOME STATEMENT
Account title 2016(Rs,000) % 2015(Rs,000) % 2014(Rs,000) %
Revenue 71,420,100 94.28 75,751,975 92.93 81,512,598 100
Cost of services (50,358,343) 93.63 (53,783,589) 96.58 (55,682,723) 100
 Gross profit 21,061,757 95.87 21,968,386 92.93 25,829,875 100
Administrative (8,770,136) 39.92 (9,782,258) 76.20 (9,857,639) 100
and general
expenses
Selling and (3,129,868) 89.05 (3,514,400) 106.81 (3,290,137) 100
marketing
expenses
(11,900,004) 89.49 (13,296,658) 162.66 (8,174,536) 100
Operating profit 9,161,753 105.6 8,671,728 106.816 4,507,563 100
(Voluntary (4,601,379) - - 100
separation
scheme cost
Other income 5,834,131 118 4,917,762 162.66 4,706,389 100
Finance costs (193,708) 61.03 (317,376) 192.38 (295,193) 100
Profit before tax 10,200,797 76.85 13,272,114 104.49 (907,230) 100
Provision of (3,366,263) 74.59 (4,512,519) 107.51 (2,804,035) 100
income tax
Profit of the year 6,834,534 78.02 8,759,595 14.58 5,207,494 100
Earnings per 1.34 77.90 1.72 168.62 1.02 100
share

Interpretation of horizontal analysis:

Interpretation: PTCL assets were 180,109,248 in 2016 and 180,377,774, 179573660 in 2015 and
2014 respectively. By comparing 2015 and 2016 total assets were decreased by 0.15%. As well as

liabilities are also decreased by 0.15% in 2016 as compared to 2105. PTCL revenue percentage in
2016 was 94.28, in 2015 it was 92.93 by comparing both year it is increased in 2016 by 1.35.

Vertical analysis
Balance sheet
Account title 2016 2015 2014(Rs,000)
(Rs,000) (Rs,000)
Assets
Fixed assets % % %
Property, plant and 94,779,483 100 94,912,046 100 94,452,061 100
equipment
Intangible assets 2,332,789 2.46 2539,060 2.67 4,826,422 5.11
97,112,272 102.46 97,451,106 102.68 99,278,483 105.11
Long term investments 7,977,300 8.42 7,977,300 8.40 7,791,296 8.25
Long term loans& 2,152,757 2.27 2,261,126 2.38 2.794,106 2.96
advances
Investment in finance 38,513 0.04 96,113 0.10 84,398 0.09
lease
Current assets
Stores, spares and 2,742,794 2.89 2,940,425 3.09 2,872,542 3.04
loose tools
Trade debts 14,227,974 15.01 14,304,039 15.08 15.758,805 16.68
Loans and advances 676,556 0.71 1,593,099 1.67 4,136,133 4.38
Investment in fianc 53,030 0.06 52,255 0.06 28,305 0.03
lease
Accrued interest 231,902 0.24 128,174 0.14 344,801 0.37
Recoverable from tax 14,550,689 15.35 18,179,032 19.15 16,366,457 17.32
authorities
Receivable from govt. 2,164,072 2.28 2,164,072 2.28 2,164,072 2.29
Payment and others 8,279,236 8.74 4,982,082 5.25 4,994,327 5.29
receivables
Short term investment 24,000,000 25.32 26,038,803 27.43 18,441,389 19.52
Cash and bank balance 5,902,144 6.23 2,210,148 2.33 4,518,546 4.78
72,828,406 76.84 72,592,129 76.48 69.625,377 73.72
Total assets 180,109,248 190.03 180,377,774 190.05 179573660 190.12
Equity and liabilities
Share capital and
reserves
Share capital 51,000,000 53.81 51,000,000 53.73 51,000,000 53.99
Revenue reserves
Insurance reserves 2,621,288 2.77 2,416,078 2.55 2,196,770 2.33
General reserves 27,497,072 29.01 2,302,282 2.43 30,500,000 32.29
Unappropriated profit 1,894,739 1.99 2,302,282 2.42 8,117,782 8.55
83,013,099 87.59 86,218,360 90.84 40,814,552 43.21
Liabilities
Non-current liabilities
Long term security 553,049 0.58 552,122 0.58 549,256 0.58
deposits
Deferred income tax 4,737,260 4.99 5,754,847 6.06 2,676,026 2.83
Employees retirement 24,068,008 25.39 32,111,859 33.83 33,011,258 34.95
benefits
Government grants 8,594,920 9.07 8,926,403 9.40 6,848,180 7.25
37,953,237 40.04 47,345,231 49.88 43,084,180 45.61
Current liabilities
Trade and other 59,142,912 62.40 46,814,183 49.32 44,345,349 46.95
payables
Total liabilities and 180,109,248 190.02 180,377,774 190.05 179,573,660 190.12
equity

INCOME STATEMENT
Account title 2016(Rs,000) % 2015(Rs,000) % 2014(Rs,000) %
Revenue 71,420,100 100 75,751,975 100 81,512,598 100
Cost of services (50,358,343) 70.5 (53,783,589) 70.99 (55,682,723) 68.31
Gross profit 21,061,757 29.5 21,968,386 29.0 25,829,875 31.69
Administrative and (8,770,136) 12.28 (9,782,258) 12.91 (9,857,639) 12.09
general expenses
Selling and (3,129,868) 4.38 (3,514,400) 4.63 (3,290,137) 4.04
marketing
expenses
(11,900,004) 16.67 (13,296,658) 17.55 (8,174,536) 10.03
Operating profit 9,161,753 12.83 8,671,728 11.45 4,507,563 5.53
(Voluntary (4,601,379) 6.44 -
separation scheme
cost
Other income 5,834,131 8.17 4,917,762 6.49 4,706,389 5.77
Finance costs (193,708) 0.27 (317,376) 0.41 (295,193) 0.36
Profit before tax 10,200,797 14.28 13,272,114 17.52 (907,230) 1.11
Provision of (3,366,263) 4.71 (4,512,519) 5.96 (2,804,035) 3.44
income tax
Profit of the year 6,834,534 9.57 8,759,595 11.56 5,207,494 6.39
Earnings per share 1.34 1.72 1.02

Interpretation of vertical analysis:

PTCL maintains its assets ratios in 2014-2016. It was 190,03in 2016 and 190.05. . 190.12 in 2015,
2014 respectively. PTCL revenue in 2016-17 is Rs.71 billion while it was Rs.75 billion & Rs.81 billion in
2015 and in 2014 respectively. Companys services cost ratio is 29.5% total revenue in 2016. And 29.0%
and 31.69%% in 2015 and 2016. This increase or decrease in services cost is because of decline in tariff
and prevailing high inflation rate in country. This increasing operating cost ratio is affecting the Gross
Profit Margin and is recorded to be 12.28%, 11.45% & 5.53 in 2016, 2015 and in 2014 respectively. PTCL
profit were recorded 9.57, 11.56 and 6.39 in 2016, 2015 and in 2014 respectively. Despite of all the above
constraints yet PTCL was able to maintain Earning per Share at the rate of Rs.1.34. Earnings per Share was
Rs.1.72and Rs1.02 in 2015 and 2014 respectively.
 Graphical Representation

Interpretation:
from the graphic representation it is clearly shown that PTCL profit before taxes in 2012 were low
in in 2012 about -1.25 and profit after tax were -0.81. While in 2013 both profit before and after
taxes were remarkably high. After 2013 it starts decreasing and recorded as profit before tax 8.01,
13.27 and, 10.20 in 2014, 2015 and 2016 respectively. PTCL profit after tax were recorded 5.21,
8.76 and 6.38 in 2014, 2015 and in 2016 respectively.
Interpretation:
PTCL breakup value per share were recorded 18.97, 19.78, 18.07.16.91 and 16.28 from 2012 -2016
respectively. PTCL market value per share recorded high at 28.44 in 2013, in 2012 it was 17.35.while after
2013 in 2014, 2015 and 2016, it were recorded 23.03,16.49 and 17.18 respectively.
Interpretation:
PTCL return on equity decreases after 2013. In 2013 it were recorded 16.57 which is maximum in this
graph. By comparing 2014-2016 return on equity were recorded 5.40,9.82 and 8.08 respectively. Same in
the case of return on operating assets, it were high in 2013.

Interpretation:
PTCL earning per share were high in 2013 about 2.49, and recorded as 1.02, 1.72. And 1.34 in
2014, 2015 and 2016 respectively. While on the other hand dividend per share were recorded as
2.00, 2.50, 2.00, and 1.00 in 2013-2016 respectively.

8. Critical Analysis
By overviewing the all financial statement, ratios analysis, vertical and horizontal analysis
including graphical representation, we conclude that PTCL overall performance is decline in 2016
as compared to 2015 and 2014. We analyze that in 2015 PTCL performance was up to the mark,
which is suddenly decrease in 2016. In my point of view increase in taxes from government on
telecommunication sector results in switching customer to other telecommunication provider
network like jazz, Wateen etc.
 9. SWOT Analysis
Strength:

PTCL enjoys monopoly

Government support
Largest operational network and infrastructure within ICT (Information
Communication technologies)
Competitors still depend on PTCL network either directly or indirectly PTCL
(Ufone) is market challenger in GSM segment
Market leadership in Local loop, Wireless local loop (WLL) and fixed telephony.
Weakness

Lack of aggressive marketing

Fixed wireless phone service is poor
Over employment
Image Government organization
Image Lack of customer focus
Image Outdated people and technology (perception)

Opportunities

Time to established brand loyalty

Growth in telecommunication industry
Scope for efficient/cost effective operations
Partnership with new entrants in a deregulated environment

Threats

Increasing Number of competitors

Cellular companys rates
Exposure to market competition
Migration to Cellular Network.
 1o. Conclusion
No doubt PTCL is enjoying monopoly but the time is came when competition will force company
to change its policies to become favorite telecom service provider in the market & keep its current
place & customer base. Internship at PTCL has given me the opportunity to gain acquaintance
with the workplace environment. Throughout my Internship period I have been auspicious enough
to grow in terms of comprehension as well as wisdom. This Internship experience has also
groomed me in terms of interacting with different places at workplace. The blend of stirring and
exciting assignments has contributed valuable skills in me. Moreover, the introductory briefing by
my supervisor helped fine-tune my understanding about the Revenue Department. In short, all my
six weeks internship at the PTCL has been a prolific and an amusing experience.

11. Recommendations

There are very few programs for career development of the employees. People working in one
section or department from years are still with the same knowledge and style of doing job. There
should be proper career planning of employee that not only sharpens the skills of the employee
& improve its efficiency but also results in better and improved output for the organization.

All the tool of enforcement of strict financial discipline may be under taken in order to monitor
the whole system.

Employees should be equipped with up to date IT skills and for this purpose refresher & training
courses should be designed.

Finance and marketing offices and engineers may be sending to international seminars/
workshops to get knowledge of new technique and procedures.

Over staffing and unbalanced distribution of employees in departments. Like all the government
and semi government institutions PTCL has also excessive staff than required. In order to increase
the efficiency of worker job is assigned to its caliper to develop his interest in work that increase
the output and decrease the overall cost of organization.
 12. References
https://ptcl.com.pk/Home/FinancialFiles?ItemId=51&linkId=115
https://ptcl.com.pk/images/financials_files/ptclannualreport2016.pdf
https://ptcl.com.pk/Financials/Annual-Report-2014
https://www.ptcl.com.pk/images/financials_files/PTCL%20AR2014%20-
%20Parent%20Acc-f%20.pdf
https://markets.ft.com/data/equities/tearsheet/forecasts?s=PTC:KAR
https://www.slideshare.net/heraillume/ptcl-internship-report-46964282
Mr. Sadiq Hussain (Revenue Manager)
Me. Qamar Iqbal (Regional Officer)
Mr. Iftikhar Ahmed (Revenue Officer)

Mr. Rana Ramzan (Regional Officer)

13. Annexure
All financial statements are attached in this report.

***THE END***