A RESEARCH ORIENTED REPORT ON SOCIAL RESPONSIBILITY

OF A MANAGER

OF PAKISTAN TOBACCO COMPANY

By

Tanzeel-ur-Rehman Qazi
Qazi Roll No.AH525452

A research project submitted to

Allama Iqbal Open University
Islamabad,H-8

A Research Project Submitted in Partial Fulfillment of the 2nd Assignment

of Management
 Acknowledgement

I wish to thank to Almighty Allah, who gave me this opportunity to acquire all this

knowledge. It is His blessing for me that I am able to do all this.

I want to thank all those people whose support and cooperation was essential in this

project. It is very important to thank to my supervisor, Ms Qlandar whose help and

advice helped me a lot. Without his guidance and support, it was impossible for me to do

this project.

Lastly but most importantly I am indebted to my Parents and entire family who gave me

confidence, support, love and care. Their emotional support, care and help were helpful

for me throughout difficult time. All of them are blessings for me.

I want to dedicate this research project to my Dearest Parents without whom I am

nothing.

Tanzeel ur Rehman Qazi

 Abstract

As a student of master in Business administration (MBA-IT) in my course of

management. Our respected teacher Sir Qalandar has given me a project which is about

“Social responsibilities of a business manager”. For this project I have consulted

different articles in global and Pakistan’s perspective that how a concept of social

responsibility emerged in business sector and its importance in it

Then I have chosen Pakistan Tobacco Company a major player in tobacco industry by

keeping thousands of people employed; and by contributing to the annual GDP of

Pakistan through the large amount of taxes paid on cigarette manufacturing and sales. By

having the mission of being the “first choice for everyone” PTC is obviously portraying

itself as a very focused determined and goal-oriented company .its objectives are not only

related to sales and profit, but are also reflective of the of the excellent corporate culture

and the high level of ethical responsibility that the company takes on. Then from facts

and figures and data through internet and PTC, I have analyzed that how PTC is paying

its primary attention towards social welfare and retaining its image. On the basis of this, I

have critically analyzed this company regarding its social concern and also given

recommendations for it.

 BACKGROUND

Who is Manager..??

A Manager is the person responsible for planning and directing the work
of a group of individuals, monitoring their work, and taking corrective
action when necessary.

Or
A manager is not a person who can do the work better than his men; he
is a person who can get his men to do the work better than he can.
Frederick W. Smith.

What is Social responsibility..??

Social responsibility is an ethical ideology or theory that an entity, be it

an organization or individual, has an obligation to act to benefit society at large. This
responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by
performing activities that directly advance social goals.

What is CSR..??

Corporate social responsibility (CSR) is social responsibility as applied to businesses. It

involves businesses acting in accordance with social principles. This could come in the
form of outright philanthropy or modified practices, and involves the appliance
of business ethics in determining business policy.

For each business, different measures are taken in consideration to classify a business as
"socially responsible". Each business attempts to reach different goals. There are four
areas that should be measured regardless of the outcome needed: Economic function,
Quality of life, Social investment and Problem solving.[1] that are trying to be achieved
should be measured to see if it meets with the cost guidelines that the business is willing
to contribute.
Emerging Normative Status of Social Responsibility
Social responsibility as a non-binding, or soft law principle has received some normative
status in relation to private and public corporations in the United Nations Educational,
Social and Cultural Organization (UNESCO) Universal Declaration on Bioethics and
Human Rights developed by the UNESCO International Bioethics
Committee particularly in relation to child and maternal welfare.(Faunce and Nasu 2009)
The International Organization for Standardization (ISO) is developing an international
standard to provide guidelines for adopting and disseminating social responsibility: ISO
26000 - Social Responsibility. Due for publication in 2010, this standard will "encourage
voluntary commitment to social responsibility and will lead to common guidance on
concepts, definitions and methods of evaluation." (ISO, 2009) The standard describes
itself as a guide for dialogue and action, not a constraining or certifiable management
standard.

Social Responsibility of business management

Social responsibility is the awareness that business activities have an impact on society,
and the consideration of that impact by firms in decision making. Besides emphasizing
profits, firms concerned with social responsibility voluntarily engage in activities that
benefit society. A socially responsible firm makes deliberate, regular efforts to increase
its positive impact on society while reducing its negative impact.

Consumers

Business
Employees Activities Investors

Environment
1. RESPONSIBILITY TO CONSUMERS
Pressure from consumers and special interest groups has prompted many
business firms to adopt socially responsible policies. Consumerism includes the
activities of individuals, groups and organizations aimed at protecting consumer
rights. Consumer groups perform many activities, including testing and
reporting on the safety and performance of products and service firms,
informing the public and government officials of consumer issues, and
advocating legislation.
• Evolution Of Consumer Movement :
The consumer movement gained momentum during the 1920s and 1930s.
During the Great Depression, many consumers blamed business firm’s for
joblessness and difficult economic times. During this time, President John F.
Kennedy established the consumer “Bill of rights”, which includes the right to
safety, the right to be informed, the right to choose and the right to be heard.
These four rights underlie many of the goals espoused by people and
organizations active in consumerism today.
• The Right to Safety :
The most basic consumer right is the right to products that are safe to possess
and use. To ensure safety of goods, manufacturers should test them and provide
buyers with explicit directions for use. In 1972 the federal government created
the consumer product safety commission (CPSC) to monitor the safety of
thousands of products sold to consumers. Many state and local agencies also
regulate product safety.
• The Right to Be Informed :
Consumers have the right to receive information available about a product
before they purchase it. Necessary information for goods includes ingredients
and detailed instructions for use.
• The Right to Choose :
Consumers have the right to choose and make purchases from a variety of
products at competitive prices. They also have the right to expect quality at a
fire price.
• The Right to Be Heard :
Consumers also have the right to have their opinions considered in the
formation of government policies and in business firms’ decisions that affect
them. A number of large firms have established consumer affairs departments to
address consumer concerns.
2. RESPONSIBILITY TO EMPLOYEES :
Like consumers, employees hold certain expectations of business firms. They
expect safe working conditions, fair compensation, equal opportunities and
adequate benefits.
• Safety in the Workplace :
In 1970 congress passed the occupational safety and Health Act, which created
the occupational Safety and Health Administration (OSHA), Charged with the
primary purpose of ensuring safe working conditions.
 • Equality in the Workplace :
Individuals also expect to be treated equally in the workplace. The Civil Rights
Act of 1964 guarantees equal employment opportunities for all people
regardless of age, race, sex, religion, or national origin. This act established the
Equal Employment Opportunity Commission (EEOC) a federal agency whose
purpose is to increase job opportunities for women and minorities.
• The Hard-Core Unemployed :
Some organizations also have taken active steps to train the hardcord
unemployed. These are individuals with little training or few skills and a long
history of unemployment.

3. RESPONSIBILITY TO THE ENVIRONMENT :

Business decisions have a profound impact on the environment. One vital
environmental concern is pollution, the contamination of water, air and land. As
with other social concerns, laws and regulations play a critical part in
environmental issues.
• Water Pollution :
Water pollution is caused by the dumping of toxic chemicals, sewage and
garbage into rivers and streams. Toxins and pollutants from buried industrial
waste can also find their way into underground water supplies. A recent concern
is the liberal use of agricultural fertilizers and pesticides, which drain into water
supplies.
• Air Pollution :
Air pollution is caused by carbon monoxide and hydrocarbons that come from
motor vehicles and by smoke and other pollutants from manufacturing plants.
The clean Air Act of 1970 and the 1977 clean Air Act Amendment provide
stringent emission standards for automobiles, airplanes and factories.
• Land Pollution :
Land pollution results from strip mining of coal and minerals, forest fires,
garbage disposal and dumping of industrial wastes, Land pollution often results
in water pollution because toxic wastes drain into water.
4. RESPONSIBILITY TO INVESTORS :
Firms have a responsibility to manage funds properly so as to return a fair profit
to investors. Mishandling of funds goes beyond penny stock scams. Managers
have a responsibility to thoroughly investigate their investments and to clearly
present all facts and risks to investors. When mismanagement causes investors
to lose large sums of money, the results can be disastrous. Firms have the
responsibility to make stock information available to all potential investors.
5. ADVANCING SOCIAL RESPONSIBILITY :
Many firms recognize the importance of social responsibility and take steps to
see that their policies and activities make a positive impact on society.
• Community Support :
Business firms throughout the world provide support for a wide variety of
activities designed to improve their communities. Both large and small
 businesses contribute to the arts, build parks, donate equipment to schools and
sponsor academic scholarships.
• Self- Regulation :
The business community can also advance social responsibility by establishing
standards of conduct and ensuring that individuals follow them.
• The Social Audit :
Some firms conduct a systematic review of their performance of social
responsibility activities through a social audit. A social audit looks at the firm’s
short and long-run contributions to society. Activities safety and the impact of
business practices on the environment.

PAKISTAN TOBACCO COMPANY

Introduction:
Pakistan Tobacco Company Limited (PTC) is a part of British American Tobacco - the
world's most international tobacco group - with brands sold in 180 markets around the
world. Pakistan Tobacco's operations in Pakistan began in 1947, making it one of
Pakistan's first foreign investments.

Principal line of business:

The company produces high quality tobacco products to meet the diverse preferences of
millions of consumers, and it works in all areas of the business - from seed to smoke.
The company provides a number of reputed brands of cigarettes to consumers in
Pakistan, including Benson and Hedges, Embassy, Gold Flake, Capstan and Gold Leaf.

Location:

Registered Office:
Pakistan Tobacco Company Limited
Dubai Plaza, Plot No. 5
Street 20, Salman Market, F-11/2
P.O. Box 2549
Islamabad-44000
Telephone: +92 (51) 2083200, 2083201
Fax: +92 (51) 2111913
Web: www.ptc.com.pk
Regional Sales Offices:
North Punjab & N.W.F.P.
House # 57-A/6, Satellite Town
Rawalpindi
Telephone: +92 (51) 4582390-91
Fax: +92(51) 4582392
Total Number of Employees:
Total number of employees as at December 31, 2008 was 1,655 (2007: 1,668).

Reason for decreasing Employees

• Organizational restructuring
• Telecom sector attracted many employees of the company at high pays, as a result
high turnover of employee observed. This issue is somewhat now resolved by the
company as it has started paying more incentives to the employees and also
giving training and development courses to its employees.
Awards Won in the current year:
The Company was awarded the following Awards:
• Corporate Excellence Award by the Management association of Pakistan
• BAT’s Global Environmental Health & Safety Award
• BAT’s Global Leaf Award.
• 25th Corporate Excellence Award in Business and Industry Category
PTC Annual Report for 2007 was recognized as the best in its category by ICAP
CORPORATE STRUCTURE OF PTC
Focus of the Organization
The Company focuses on the following operational targets:
• Continued strong volume and profit growth.
• Increased focus on productivity savings.
• Launch of the 3rd cycle of our social reporting dialogues.
• Improved corporate governance.
• Environment, Health & Safety

PTC and Corporate Social Responsibility

Maintaining a large scale Corporate Social Responsibility (CSR) program in the

midst of political change and economic uncertainty was not only a challenge but also a
personal stretch for the people involved. In the past, we have seen and surmounted many
hurdles, however, the kind of problems we faced in NWFP in 2008 were unprecedented.
In this context, it is indeed a testament to the steadfast nature of our resolve that we
remain partners of first choice for our communities, and our CSR initiatives continue
undeterred, with the same energy and resolve as before. Our afforestation program
continues, with an expansion of the total plantation area and increased distribution of
saplings. In the area of public health, we have completed construction of 8 water filtration
units, with 5 more planned in 2009. Our Mobile Doctors Units continued to operate
extensively treating patients in the underprivileged areas; this was in addition to the 19
medical camps organized in the year. We also held free eye camps and diabetic
screenings in partnership with various organizations such as Merck and Layton
Rehmatullah Benevolent Trust. In education, the Company’s Learning Resource Centers
saw 588 more students graduate, with an 11% increase in the number of female students.
Some 200 students have been provided with the Adult Basic Education Society
scholarships during the course of the year. We also continued our tradition to engage with
our stakeholders, having initiated Stakeholder Dialogue at the end of 2008. Our well
established sustainability agenda will see us publishing a Stakeholder Report in 2009.
PTC is well aware of the unique challenge of operating in the ‘field’, and is committed to
rise to the occasion. I commend their efforts in the year past, and am confident that
despite some testing times ahead, we will continue to contribute to the communities that
we work with. People The people in PTC have always been one of our greatest asset and
we will continue to invest in the same through various initiatives that help us build a
winning organization. These include programs such as WAADA focusing on shop floor
employee morale, continuous investment in focused functional/leadership training
programs and coaching programs for first line leader such as TLDW (Team Leader
Development Program). An Employer Branding campus campaign by the name of
“Battle of Minds” was also launched in 2008, focusing on attracting the right talent to our
organization, and this was met with great success. Demand for our highly developed
local talent also remained high and during 2008, 15 of our managers were sent out for
long and short term assignments to various Operating Companies of BAT around the
globe. Environment Health & Safety.
 PTC has always been a leader in the field of Environment, Health & Safety. EHS
principles are woven into the fabric of our organization and have now become part of the
culture in all areas of our business from seed to smoke. Our endeavor to improve
environmental programs has been recognized repeatedly by the Parent Group (BAT) with
PTC being awarded the annual EHS Excellence award for the fourth consecutive year in
2008 and also, being awarded the accident free award for 2008 with “No Lost
Work day Case” incident reported across the organization during the year.

CORPORATE SOCIAL RESPONSIBILITY IN TOBACCO

COMPANY
ACCORDING TO THEM….We abide by this philosophy each step of the way:
from appropriate marketing and consumer information to supporting sensible tobacco
regulation; from respecting workplace human rights and reducing our environmental
impact to contributing to local communities. We seek to work continuously to engage
with our stakeholders, to balance their views and to align our business decision-making
with the reasonable societal expectations of a modern tobacco company.

We recognize that Corporate Social Responsibility (CSR) presents particular challenges

for a tobacco company. Tobacco products pose real risks to health and raise important
questions about how best to define responsible product stewardship. We, therefore,
believe that for our business, the only meaningful approach to CSR is one based squarely
on our products, on the issues around them and on ways of responding to the sometimes
strongly held views of our stakeholders.
We also hope that more corporations include CSR in their strategic planning processes
and understand that their businesses provoke a social cost which has to be balanced by
keeping in mind the interests of all the stakeholders and communities involved.

SOCIAL REPORTING
Social reporting is a relatively new discipline that, put simply, is the process of
listening and responding to stakeholders. We are pleased to have evolved this
process for the third cycle of reporting here in Pakistan, as we have moved to an
issues based dialogue.

In reaching consensus on many of the issues that surround our operations, social
reporting has proven to be an effective mechanism to objectively and robustly address
society's needs while embedding the idea of engagement into all areas of business.
The process provides a structured approach for us to:
• Understand more about the expectations of our stakeholders.
• Enable our stakeholders to listen to each other.
• Ensure that these expectations are given due consideration in the company's
decision making.
• Demonstrate with actions that we are responsive to reasonable stakeholder
expectations and concerns.
• We have chosen to follow the most rigorous international standard, AA1000, set
by the Institute of Social and Ethical Accountability. In addition, in order to
 ensure full compliance with AA1000 and verify the entire reporting process, we
have selected Bureau Veritas Quality International as our social and ethical
auditor.

Youth Smoking Prevention

We strongly believe children should not smoke, and smoking should only be for
adults who understand the risks associated with it.
British American Tobacco Group companies support and run programmes worldwide
tackling underage smoking. Due to concerns expressed on youth smoking, Pakistan
Tobacco Company has taken initiatives on several fronts such as voluntary withdrawal
from electronic media, prohibiting the use of celebrities in marketing material and
embedding a robust marketing code; the International Marketing Standards (IMS).
We were the first company to pilot a retailer education programme in 1999 and
continue to do so. Additionally, our packs and advertising materials have a voluntary
inscription with the legend ‘under-age sale prohibited.’ We have supported the
Government in raising the minimum age limit from 16 to 18 through changes in tobacco
legislation.

Education programmes aim: to give young people ‘life skills’ to deal with the many
challenges they face during adolescence, including peer pressure to smoke. Such
programmes are amongst the initiatives that British American Tobacco Group companies
sponsor worldwide and support to help convince young people not to smoke. We are
willing to work with the Ministry of Education and the Ministry of Health to develop
educational modules for incorporation in the national curricula, but we feel the
programme content is best left to experts and its delivery to teachers or youth leaders.

Mobile Doctor
Our dedicated mobile doctor teams take pride in providing health care in areas
where there are no medical facilities. Since the early 1980s we have been running a
mobile doctors program in the areas where health care facilities are lacking and
basic health care needs are the most acute.
The program has grown over the years and treats close to 7,000 patients on a monthly
basis. The facilities provide free medical check-ups and diabetic screening as well as eye
care and general health advice in the areas around our factories and the leaf growing
regions which have poor or absent medical facilities.
Medical camps have also been arranged in collaboration with LRBT and Merck, and we
continue to partner with NGOs in our attempts to cater to patients' needs more
effectively. In the aftermath of the earthquake, we established a state of the art
Rehabilitation Center in Batagram in partnership with CHAL.

LEARNING RESOURCE CENTRES

Keeping in mind the need to invest in education and the non-availability of quality
institutes, the company has established free Learning Resource Centres (LRCs) in
our Leaf Areas in the Punjab (Gujarat), and the NWFP (Mansehra, Yar
Hussein, and Buner).
In addition, since we lack separate institutes for women, the LRC at Adam Zai in the
vicinity of our factory in Akora Khattak was set up to provide opportunities to local
women. The primary objective was to provide access to IT education free of cost to our
stakeholder's families. It was also agreed to use these centers in the future for imparting
vocational training and generating health and hygiene awareness.
Our LRCs are affiliated with the Skill Development Council which falls under the ambit
of the Ministry of Labour and Welfare. Currently, we have seven LRCs, at our factories
and in the leaf growing areas. These centres provide state-of-the-art IT skills to the
children of our employees and to the members of our community. 4,307 students have
graduated from our centres so far.
• The expected benefits of the programme are summarized below:
• Contribute in the development of skilled resources in the country.
• Help participants obtain employment.
• Generate awareness about technology and its uses.
• Bridge the information gap by providing access to the internet.
• Provide women with training and awareness, as there are no separate centres for
women in remote areas.
• Provide a communal forum to discuss and resolve issues.
• Bring people with diverse interests and backgrounds together in a common forum.
• In addition to our involvement in providing learning opportunities within our
community in the leaf growing areas of Pakistan, we have also partnered with The
Citizen’s Foundation in sponsoring two schools, one in earthquake ravaged
Bherkund and the other in Nowshera.

Health and Safety Measurements..

Almost everything we handle – tobacco, paper, board – is grown in the natural
environment, so it makes good economic and environmental sense for us to make
sure our use of raw materials is completely sustainable.

We believe good environmental practice is good business practice. Businesses can

enhance efficiency through environmentally sound technology, optimizing products and
processes and conserving energy and natural resources. We monitor measure and report
our progress against targets and aim at continuously improving our performance.
We seek to control and reduce our impact via the ‘3 Rs’ principle: Reduce, Recover, and
Recycle. Our programmes cover energy conservation, water, air and soil protection,
afforestation, minimizing waste and minimizing the use of natural resources,
agrochemicals and raw materials. Important aspects include reducing water and energy
consumption and CO2 equivalent and managing our impact on biodiversity.
We are committed to conducting our business operations in a manner that sustains the
environment and protects the health and safety of our employees, by adopting a proactive
approach to using cleaner technologies and safer systems of work while ensuring
compliance with all applicable National laws and regulations and British American
Tobacco's Environment, Health and Safety (EHS) policy.

Our EHS programme ensures a safe work place for our employees, contributing to
improvements in environment with a focus on minimizing natural resource depletion
through various initiatives such as, reduction of energy usage, water use and discharge
management, waste reduction, waste recycle and controlled air emissions. We are very
proud to say that all our discharges to the environment are well within the National
Environmental Quality Standards (NEQS) limits set by the Government of Pakistan.
Our manufacturing sites ensure compliance with the following national legislations:
• Pakistan Environmental Protection Act 1997
• Factories Act 1934 & Provincial Govt. Factories Rules 1978
• Electricity Rules, 1937
• Boiler and Pressure Vessels Ordinance 2002
• Over and above all this, Pakistan Tobacco Company ensures compliance with the
stringent British American Tobacco EHS policy which is a compilation of
International Standards and Best Practices.
• As a part of the British American Tobacco Group, we are also involved in
monitoring and reporting our environmental performance for the Global
Reporting Initiative (GRI) whereby we publicly communicate our economic,
environmental, and social performance.

Furthermore, both our production facilities were re-certified with ISO 14001 earning
an ‘Evergreen’ status. We have consistently sustained our accreditation in the last eleven
surveillance audits with zero major and minor non-conformances.
The initiatives taken by Pakistan Tobacco Company in the area of Environment, Health
and Safety have been recognized at national and international forums. We are the
recipients of the annual Environment Excellence Award by the National Forum for
Environment & Health awarding the Company for a second consecutive time.
Our endeavor to improve on our environmental program has been recognized globally by
the British American Tobacco Group and we have been awarded the “EHS Excellence
Awards” in the following areas in 2006 and 2007.
• Use of Cleaner Technologies
• Water Re-use
• Energy Conservation

Our focus on accident prevention and lost work day case reduction has come a long
way by managing our Environmental Health & Safety programmes which involve
extensive health & safety training, safety audits, incident investigation, and safety
communications. Utilising all these components has helped us maintain a zero lost work
day case during 2007 and to date. Both of our manufacturing facilities are the recipients
of British American Tobacco's “EHS Golden Award” for successfully completing and
exceeding 5 million working hours without a lost work day case incident.

Data Collection Method

The method for data collection is the central theme of the study no study will be
completed without using the scientific and systematic ways to get the latest knowledge
about the study
 • Primary Data Collection
• Secondary Data Collection

Primary Data Collection

In primary data collection I used the technique of:

• Personal observation
• I also used unstructured interview techniques when I faced any problem during
work

Secondary Data Collection

In secondary data collection method I got information from:
• Annual report of different years.
• Brochures from the company
• PTC website
• Different articles and journal about the company from internet and newspaper.

SWOT ANALYSIS OF PAKISTAN TOBACCO COMPANY

Strengths

• Strong market position.

• Geographically diversified.
• Decentralization at each level of management.
• PTC provides opportunities for professional and career growth.
• Large brand portfolio and strong market share.
• Social responsibilities activities by implementing international market standards.
• Continuous market research by AC Nelson to develop future plans and strategies.
• Multinational company connected with BAT worldwide.

Weaknesses

• Resource allocation for rural communication is not according to number of outlets

in a village which is improper utilization of resources.
• Slow in new brand development.
• Salesman commission is low.
• Offices should be maintained according to PTC standards. (Regional Office)
• Lack of advertisement due to controversial industry.

Opportunities

• As most of the population is in low social economic class, there is an opportunity

for PTC to increase market share in this segment through focus strategy.
• Light cigarettes.
 • Market potential in rural areas.
• Rising popularity of smokeless tobacco.
• Promoting IMS implementation can enhance the relationship with government
and other regulatory authorities.
• Participation in social activities can enhance the corporate image.
• Intense competition provides opportunity for continuous improvement in the
quality of brand.

Threats

• Strict laws and regulations by Government.

• Increase in Taxes.
• Increasing health concerns.
• Competitor strategies
• Contraband and counterfeit cigarettes
• Philip Morris International acquired Lakson Tobacco Company.
 RECOMMENDATIONS
On the basis of facts and figures and keen observations following are the
recommendations that can be put forward for the company’s improvement:
• PTC should increase best practice sharing within its system to enhance the
transfer and sealing of the most efficient and innovative initiatives.
• It should integrate company’s values into key people programs form hiring to
training to career development.
• It should continue to enhance its employment value propositions to drive
employee engagement in the company’s value added social programs.
• It should continue to enhance children’s well being through programs and
initiatives that provide “fun with a purpose”.

CONCLUSION

In conclusion it can be said that social responsibility is one of the most important
factors for any company in today’s corporate business environment. Companies are
investing their billions fro social marketing. The basic aim beside this activity is to
present itself a socially responsible company among masses and to differentiate itself
from those of competitors.
Pakistan Tobacco Company also indulged itself in social causes. The company is
involved in anti-smoking policy for under ages, building schools in far areas, plantation
and women training programs. The basic aim behind is to minimize its negative image of
being a non-cooperative and dangerous company for the citizens.
PTC acts responsibly and respectfully towards the people and authorities
in different societies and aims to contribute to social and economic development. It gives
its employees reasons to be proud of the way PTC demonstrates Corporate
Responsibility. This is the essences of its commitment to Corporate Responsibility.
 REFERENCES

• Retrieved from www.ptc.com.pk

• The News

• Annual Reports 21007 and 2008 of PTC