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Internship Report on Global Telecom 2009
INTRODUCTION
Global Telecom is the leading nationwide card payphone operator. Since 1999, it has experienced phenomena growth in both its clientele as well as installed base. From a small base of 500 payphones in 1999, Global Telecom now boasts a network of 7000 state-of-the-art software based card payphones. With 32 offices nation wide for sales and operational support, Global Telecom extends its service to over 220 cities/towns in Pakistan.
Today, with its nationwide network of card payphones, Global Telecom is poised to lead the communication revolution in the payphone industry in Pakistan.
QUALITY POLICY
To provide the best, value added telecommunication services to all our valuable customers.
DISTINCTIONS
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ISO 9002 CertificationPakistan's first and only organization belonging to the payphone industry to achieve quality certification. Meaning that all its departments and every single process in our hierarchy is standardized, controlled and monitored which has resulted in a satisfied customer base.
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Phone Sets OfferedGlobal Telecomis only the second company in the world to deploy M/s. Schlumberger's software based Grafit series phone sets after the Chek Lap Kok International Airport.
Whereas of today, most of the upper competitive organizations are following our lead.
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ExpansionBeing professionally planned and developed, Global Telecom has been able to gain rapid market share and expansion. The company has developed a Network of 32 regional and sub-regional offices in all 4 provinces of Pakistan and covering a total of 224 cities, towns and villages.
In addition to that hte launch of Global software solutions have stretched further the parameters of Global's operations, providing multimedia services like Web Design, E-commerce and interactive CDs.
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State-of-the-art Payphone technologyRealizing the need of the 21st century and precise industry analysis has helped us to gain and develop a complete stat-of-the-art technology system. Line Protections Units (LPU), Network Management System (NMS) and Management Information Systems (MIS) are various segments of the technology used by it and compiled for our purposes.
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Major CompetitorsThere are many companies of Pakistan which are providing services of card payphones but Global Telecom has only two main competitors:
1. World Call Telecommunications Limited
2. Dancom (Call Point) Pvt. Ltd.
The booking rate of both is Rs.15000 for one PCO and to compete with this package Global Telecom has introduced its new company "Star Tel" in market to attract the customers.
CUSTOMER'S OF GLOBAL TELECOM
Since Global Telecom is a card payphone company, so it has following target customers.
Colleges, Schools, Airports, Medical Stores, General Stores, Fruit shops and hospitals.
LIST OF EXECUTIVE STAFF
Chief Executive Officer (CEO) Mr. Asad Nawaz Khan
General Manager (Operations & HR) Mr. Fahim Durrani
Country Manager (Sales & Marketing) Mr. Amer Salam
Country Manager (Accounts) Mr. Aqib Zulfiqar
Manager Sales Promotion Mr. Hassan Haidar
Manager (Technical) Mr. Sajjad
Manager Customer Services Mr. Mohsin Tareen
Assistant Manager (Sales & Mark.) Mr. Nadeem Khan
Assistant Manager (Technical) Muhammad Ashraf
STRUCTURE OF THE OFFICE
1. Sales & Marketing Department is headed by Country Manager (S&M)
2. Sales Promotion Department is under the responsibility of Sales Promotion Manager.
3. Customer Services Department is controlled by Country Manager Customer Servies.
4. GM headed all the departments especially the Technical Department.
5. Technical Department is also headed by Manager Technical and Assistant Manager Technical.
6. Accounts Department is headed by Country Manager Accounts.
7. MIS Department is under hte responsibility of its Manager.
PROCESS OF OPENING A PCO
1. FILLING THE APPLICATION FORM
First of all application form is filled by the Sales Department and receives application fee Rs.5000/- from customer and gives one copy of voucher to customer and copy of CSD and one copy to finance department.
Application form includes following things:
1. Station where customer wants to open a PCO
2. IDN allotted to customer
3. Date of agreement
4. Name of customer adn some in formations related to customer like date of birth, place of birth, address etc.
4. Site address where customer wants to open a PCO, the site address should exact other wise application is rejected by PTCL during survey report.
6. Customers contact No. and
7. Finally signature of customer
2. Documents required from Customer
* One copy of ID Card
* One copy of any utility bill
Entering Data in Computer
Operations Department of Global Telecom enters the important data customer in computer by seeing the application form like IDN, name of customer, residential address, site address, contact no. and name of exchange.
3. Preparation of Survey Report
After applying for a PCO connection a survey report is made by PTCL lineman checked the place of PCO land examine whether there is any pair available or not.
4. Survey Report Okayed
Survey report is okayed by lineman if there is any pair available on hte site of PCO.
5. Demand Note Charges
Global Telecom
Global Telecom charges the Rs.4074/- from customer for issuing of Demand Note and give him a voucher and one copy of voucher is attached by CSD in customer's file.
6. Issuing of Demand Note
Technical Department pays Demand Note charges to PTCL and supervisor issues Demand Note.
7. Advice Note
After issuing of Demand Note, Advice Note is issued by PTCL it concludes the instructions that customer has paid the charges and now allot the number to customer.
8. Submission of Advice Note
Supervisor submits advice Note and he shifts this Note line M.D.F (Main Distribution Frame) and now is allotted to customer.
9. Jumper & Looping
After allotting the number next step is jumper & looping. In this step number of customer is installed in exchange and wire is provided to customer.
Security Charges & Issuing of Telephone Set
Global Telecom charged Rs.20000/- as a security from customer and issue him Telephone set. One copy of voucher of Rs.20000/- is given to customer and one copy is attached in customer's file.
Time period required for the whole process
This process required a time period of six to eight week but by giving the speed money to PTCL staff, the process has been completed in one month.
SALES AND MARKETING DEPARTMENT
Global Telecom has 32 offices in Pakistan and each office has a Sales & Marketing Department.
RESPONSIBILITIES OF COUNTRY MANAGER SALES & MARKETING
1. Country Manager observes the performance of all hte branches of the country and gives the report to C.E.O.
2. He gives suggestion to improve teh unit card sale and also prepare incentive list of customers to compete with competitors and give different packages to customers to increase unit card sale.
Implementation Of Incentive List
Incentive List is checked by CEO and Country Manager Accounts. They give suggestions and after the recommendation of both, list is launched for customers.
During my internship Country Manager prepared the following incentive list:
Units used in one month Free Units
4000 60
5000 70
6000 90
7000 120
8000 160
9000 180
10000 200
11000 220
12000 240
13000 260
14000 280
15000 300
16000 330
17000 360
18000 390
19000 420
20000 450
Country Manager also sets targets for different cities and send letters to different sales and marketing offices to accomplish these targets.
Warning and appreciation letters
If targets are not achieve by sales staff country manager writes warning letters to the managers and he also write appreciation letters if sales target is achieved by the sales staff and also request to C.E.O to give teh sales persons extra bonus on their performance.
Other Responsibilities
1. He gives consultation to C.E.O for the benefit of the company.
2. He visits different offices of the country to check the performance of Sales & Marketing Department of the whole country.
3. He does agreements to get palce for the Telephone booths in Hospitals, Schools, Colleges and Restaurants.
He also did agreement with PHA for getting the place for calling booths in Race Course Park Lahore on festival of Jashn-e-Baharan.
4. He also adopt different strategies to introduce the Global Telecom in Market, for this purpose he also gives suggestions to Sales Promotion Department.
In January 2002, the company conducted an exhibition in Pearl Continental and introduces its new Telephone set (MTL 2000).
Providing Training to Sales Executives
He also provides training to sales executives and telling them the strategies to influence people to start the business of PCOs.
ASSISTANT MANAGER
Assistant Manager only assists country Manager and in absence of country manager he works as a manager.
Responsibilities
He deals the cases of shifting, change of ownership and if customers have any complaint then he deals the customers.
1. Providing guidance to customers to open a PCO and he fills the application form for new PCO. He checks the performance of Sales persons and report to Country Manager.
2. He also collects the daily unit card sale of the whole country by making the calls in all offices of the country gives report to Country Manager.
SALES EXECUTIVES
When the persons selected for the post of sales executive, company provides them necessary training and tells the sales executives about the company, product, target market, customers and competitors.
Outlook of Sales Persons
1. Very handsome and young
2. Smiling face
3. Always in good dressing
4. Full knowledge about product and competitors
5. Convincing power
How they Work
After getting the training sales executives go to persons having business like Medical store, Pan shops, schools and General stores and meet them, communicate with them, check their psyche. Their interest, their financial level, introduce themselves, tell them about the company and about the package of the company and convince the customers to open the PCO of Global Telecom by telling them the main features of the company.
In the branch office of Global Telecom there are three sales executives but now Global Telecom has closed the booking to new PCO's and sales executives are working as an unit sale executives.
SALES PROMOTOIN DEPARTMENT
PURPOSE
Purpose of this department is providing promotional material to customers and display banners and billboards on roads. This department has a store in which the department keeps all type of promotional material.
MATERIAL IN THE STORE
There are two type of material in store:
1. Promotional material
Like banners, bill boards, brochures, stickers, key chains, calendars, diaries and code.
2. Material for office use
It includes stationery like photostat pages, print papers, letter pad, writing pads, pencils, fax roles and carbon papers etc.
FUNCTIONS
1. Purchasing the material for office use and keep it in store.
2. If there is any fault in computers and photostat machine then repair it.
3. To verify purchase bills and prepare receiving report and submit it in concerned departments.
4. Since company provides mobiles phones to its staff, if there is any problem in mobile sets than rectify the fault.
5. Issuing the material used in office to different departments.
6. Issuing the promotional material to customers.
7. Sales promotion department also provides visting cards to employees.
HOW THE MATERIAL IS RECEIVED BY STORE
Store receives material against the calling. The excess quantity of material is not received.
HOW THE MATERIAL IS STOCKED
Promotional and material of daily use in office are stocked separately. Banners, stickers, key chains, telephone indexes are kept on shelves where as the bill boards are kept in separate rooms.
HOW THE MATERIAL ISSUED
When a customer opens a PCO then CSD (Customer Services Department) write to the Assistant Manager (Sales Promotion) to issue the Promotion material to the following IDN.
After this Assistant Manager fills a requisition and store incharge promotional material to customer.
While different departments get material like pencils, pens, printing papers, carbon papers, writing pads by filling a requisition.
There are two copies of requisitions of which one copy is taken by Assistant Manager (Saels Promotion) other copy is given to that Department which issues the material.
DUTIES OF SALES PROMOTION MANAGER
1. Sales Promotion Manager gives suggestions to Country Manager (Sales & Marketing) about increasing the unit card sale of the company.
2. He gives ideas about the designing of calling botths and billboards.
3. He helps the Country Manager (S&M) to conduct exhibitions and seminars in different colleges and restaurants to introduce the Global Telecom.
How the record of miscellaneous expenses is maintained
The daily expenses like tea bags, milk and other expenses are written by the Admin Officer on a register and attach all the bills with the register at teh end of the month her prepares a bill of monthly expenses and by attaching all the vouchers he send the bill to Accounts Department and after the approval of Country Manager Accounts, Accounts Department issue the cash of monthly expenses.
Admin Executive pays the daily bills form his pocket and receive the cash at teh end of month and it has created lot of problems for Admin Executive.
CUSTOMER SERVICES DEPARTMENT
PURPOSE
The purpose of this department to provide services to customers of Global Telecom.
If customers have any type of complaint about hte set or facing any other like line fault, battery fault and set fault then they complained to CSD.
WORKING SCHEDULE
The staff of CSD works in two shifts:
First Shift 9.00 a.m. to 2.00 p.m.
Second Shift 2.00 p.m. to 10.00 p.m.
Purpose Of Two Shifts
The purpose of two shifts is to increase the efficiency of serving the customers.
Customers can complain, get cards and faults can be rectified from 9.00 a.m. to 10.00 p.m.
FUNCTIONS
1. Entering the complaint of customer and referred teh complaint to the related department.
2. Providing unit cards to customers.
3. Keeping the whole record of each customer in a separate file.
4. Paying the security to customer if he wants to close the PCO.
5. As teh separate card payphone no. is allottted to each customer and PTCL send telephone bills of customers to Global Telecom, CSD checks the bills against each IDN to avoid from wrong billing.
6. All the amount of unit cards initially paid to CSD and then this department sends this amount to Accounts Department.
How this Department works
Customer Services Executives and Unit Sale officers' work under the supervision of Manager CSD.
Customer Service Executives receives the calls of customers and they listen the problem of customer and write following things in a paper.
1. Time of call
2. IDN of customer
3. Who has attended the call?
4. What kind of complaint
5. Line fault complaint
7. Or complaint of battery down's
8. Whether customer wants unit cards.
If there is any complaint about technical fault then CSD refer this complaint to Technical Department.
But if they need unit cards then CSD send unit sale officers to give cards to customers.
Responsibilities of Unit Sale Officers
There are 8 unit sale officers of Global Telecom in Lahore City and each unit sale officer has a specific area to which he is responsible to give unit cards to the customers.
As the customer calls for unit cards, unit sale officer go to the site and gives the customer unit cards.
Every unit sale officer has a motorbike and a mobile phone, mostly customers call on mobile and unit sale officer to to the PCO of the customer to give him unit cards.
Criteria for Issuing Unit Cards
Every unit sale officer has a voucher book, which consists of following things:
1. IDN of customer
2. Name of customer
3. Voucher No.
4. No. of Cards
5. Price of card
Each voucher has three copies when card is issued to customer, one copy of voucher is given to customer, one copy is given to CSD which is attached in hte file of customer and one copy remains in voucher book.
How record of Daily sale of units is maintained
Each unit sale officer prepares a daily unit transaction that includes following things:
1. Name of unit sale officer
2. No. of cards sold by unit sale officer
3. Sr. No. of cards which he sold
4. Total amount of cards
Finally each unit sle officer signs the transaction and gives this to CSD with the amount of cards.
Responsibilities of Manager (CSD)
1. To observe the performance of Unit sale executives and Customer Service Executives.
2. To give suggestions to C.E.O to improve the services.
3. To see the important documents.
TECHNICAL DEPARTMENT
PURPOSE
Purpose of this department is to rectify the faults, which come in PCOs and process of PCO completed with the efforts of this department.
IMPORTANCE
This department plays a very important and main role in all card payphone companies.
Similarly Global Telecom knows the importance of this department and it is the largest department in Global Telecom. As the quality policy of Global Telecom is to provide best services to customers and this task cannot be achieved with out the cooperation of this department.
RESPONSIBILITIES OF GENERAL MANAGER
(OPERATIONS & HR)
1. GM supervises the Technical all the departments especially the Technical department.
2. If service and associate engineers do not rectify faults then GM personally goes to PTCL office and use personal relations to rectify the faults in very little time.
3. He also uses personal relations to issue the Demand Note, Advice Note and feasibility report.
4. If PTCL send wrong bills then it is the duty of GM to write letters to PTCL authorities and tell then about over billing e.g. during my internship PTCL send wrong bills to some IDNs to Global Telecom and GM sent letter to DE (Phones) and mentioned them about over billing.
5. Cases of permanent closing, shifting and change of ownership are deal by the GM.
6. GM checks the reports prepared by technical department and send the detail of activation, installation of lines, issuing of demand notes, detail of new applications for telephone connections to C.E.O.
Main Responsibilities of GM (Operations & HR)
If Technical Department facing any problem to rectify the faults and PTCL staff delay the faults then GM meet to teh main authorities of PTCL to rectify the faults.
Other Responsibilities
1. Global Telecom has no separate department of Human Resource, so GM is doing the extra duty of hiring employees for Global Telecom.
2. He also fixes salaries of employees at the time of selection.
3. When country managers want to give bonus to their staff then the approval of GM is necessary to give them bonus.
Duties of Assistant Manager (Tech.) & Manager (Tech.)
1. Assistant Manager (Technical) & Manager (Technical) observe the performance of associate and service engineers and tell them about the faults.
In big cities Manager Technical and Assistant manager both supervise the Technical department but in small cities, Assistant Manager Technical works as a Manager Technical.
2. They receive the complaints of customers from CSD and tell the service and associate engineers about the faults.
3. They prepare reports about the activation, daily faults, pending faults, line installations and number of sets issued to customers in a specific week, month and in a year.
4. Assistant Technical & Manager Technical also goes in field to rectify the faults in a short time.
Difference between Service & Associate Engineers
The duty of both is same because both go in field to rectify the faults. The difference is only that Associate Engineers have more experience then Associate Engineers.
Duties of Service & Associate Engineers
1. They goes in field, trace the lineman of related exchange and rectify the faults.
2. If there is a minor set fault then Service and Associate Engineers rectify the fault themselves on site of hte customer.
3. They issue the Demand Note, Advice Note of NTC, Shifting and permanent closing from the PTCL office.
4. Associate & Service Engineers work in completing the process of PCO.
5. If there is complicated fault set then they give the case to Lab. Incharge.
Responsibility of Lab. Incharge
Lab. Incharge checks the telephone set, observe the fault nd then rectify the fault.
Types of Faults
There are two types of faults:
1. Line fault
2. Set fault
Types of Set Faults
1. Hardware fault
2. Software fault
Hardware Fault
Fault in battery, in receiver or in wire of set is called hardware fault.
Software Fault
A program is installed in set and it displays different options on the screen of set adn if there is any fault in program then such fault is called software fault.
How this Department Works
The work of this department starts when customers wants to get the connection of Global Telecom.
The staff of Technical Department follows all the procedure involves in the process of telephone connection. Customer Services and Technical Departments both are inter-related with each other. Customer enters his complaint in CSD after entering the complaint Customer Service Department refers the complaint to Technical Department.
Distribution of Lahore City
Technical Department has divided the Lahore city into two parts:
North and South
There is almost equal number of exchanges in both parts.
Old Lahore city is named as north area.
While new Lahore city is known as sourth area.
Workign Shifts Of Technical Department
Technical Department works in two shifts to rectify the more and more faults in a day.
* First shift 9.00 a.m. to 2.00 p.m.
* Second shift 2.00 p.m. to 10.00 p.m.
Area Given to Service & Associate Engineers
Technical Department has allotted the exchanges of specific area to each Engineer and he is responsible to rectify the faults of that particular area.
Procedure of Rectifying hte Complaints
Technical Department is dependent of CSD and it gives teh Performa of complaints to Manager Technical and the next day Manager Technical gives that Performa to Engineers. They check the IDNs and by seeing the nature of fault they go in; field and follow the lineman of PTCL of that exchange and they recover the line fault, if there is any fault in set they send the set to teh Lab. of Global Telecom.
The Lab. incharge checks the nature of fault of the set and rectify it. After rectifying the faults, Service Engineers and Associate Engineers give the report to Manager Technical, if faults not rectified they tell the reason of not rectifying the fault.
Reports Prepared by Technical Department
Technical Department prepared following reports.
1. Daily Fault Report
Daily fault report shows the number of faults comes in a day and indicated the nature of fault, the fault of which exchange whether fault is rectified or not and why the fault is not rectified.
Assistant Manager observes the daily fault report and he can easily check the number of faults comes in a day and the performance of Technical Department.
2. Annual Fault Report
Annual fault report shows the number of faults in a year and faults which are rectified and which area not rectified. The purpose of this report is same like Daily fault report, the difference is only that it covers the report of one year.
3. Weekly Report
Weekly report shows the total number of faults, faults which are rectified and which are pending in a specific week.
The reasons of pending faults are also written by Technical Department on weekly report. It shows the detail of activations of NTC (New Telephone Connection), activation of shifting, line installed of NTC and line installed of shifting cases in week.
4. Weekly Status (Activations & Line Installations)
There are two things, which are mentioned in this report Activation & Line installations in a week.
5. Annual Status (Grafits / MTL 2000)
As Global Telecom has been using two type of sets and status shows how many Grafit and MTL sets are issued in specific year.
All these reports are checked by Manager Technical and Assistant Manager Technical and G.M. (Operations & HR).
Technical Department displays the weekly status and reports at teh end of the week nad G.M checks the faults, pending faults, installations, activations and shifting cases of the week. Monthly and annually reports are sent to C.E.O and in this way he can checks the performance of Technical Department.
ACCOUNTS DEPARTMENT
Country Manager controls accounts department and his subordinates are recognized by the designation of Accounts Executive.
CSD send all the cash received from unit sale Executives and other cash to Accounts Department.
Accounts Department is also responsible to issue salaries to employees.
All the bonuses, miscellaneous expenses are recommended Coutnry Manager (Accounts).
Accounts Department also arranges the monthly and annually audit of all hte departments of the whole country.
MIS DEPARTMENT
The purpose of this department is to check all the PCOs of the country.
HOW IT WORKS
This department has teh network connected to each exchange and when customers use the unit cards then as the units drop from PCO they also drop from MIS department.
ADVANTAGES OF MIS DEPARTMENT
1. This department used a device known as LPU (Line Protection Unit) in exchange and by using this device no on can use the line of PCO corruptly.
2. Because of this department Global Telecom can check the average unit card sale of each customer.
3. When PTCL send bills to Global Telecom then this department compares the bills with the record of each customer and company can avoid from over billing.
4. Recently this department starts the website of Global Telecom in which we can get all the important in formations about Global Telecom.
HOW THE RECORD OF EACH DEPARTMENT IS MAINTAINED
Each Department maintained his record in files. When G.M. (Operations & HR) and Country Manager (Sales & Marketing) or other persons send any document or letters then one copy of particular document is send office files and on time of need they can easily
PERSONNEL DEPARTMENT
Personnel and Administration department is a very important department in Global Telecom. The number of functions being performed by Personnel and Administration department are much to any other department. The Personnel and Administration department consists of the following:
An Administration Manager, one Assistant Manager, six clerks and peon.
CHIEF EXECUTIVE
MANAGER ADMINISTRATION
ASSISTANT MANAGER ADMINISTRATION
CLERK
CLERK
CLERK
CLERK
CLERK
CLERK
PEON
HIERARCHY TABLE OF PERSONNEL AND ADMINISTRATION DEPARTMENT
FUNCTIONS
Personnel and Administration department performs a number of functions the most important of them are enlisted.
1. Prepares employee's personnel record.
2. Appointment record of the employees.
3. Attendance of the employees.
4. Issuance of warnings, show cause notices, charge sheets and termination letters.
5. Over time control management.
6. Recording the efficiency and adjustment of the employees.
7. Administration department adopt the safety measures for assets and employees.
8. Preparing the promotion cases of the employees.
9. Discovering, developing, checking and maintaining sources of labour supply.
10. Interviewing, testing and investing applications for employment.
11. Leave records of the employees.
12. Increment record of the employees.
13. Maintenance record of vehicles.
14. The manager of this department advises management concerning unions relations and represents management in handling complaints and grievances of employees.
15. The personnel manager is responsible for developing and maintaining a program orienting the training of new employees.
16. Billing of overtime, contracts, bankers record of workers for annual increments is also done through this department.
17. Preparation of Government returns.
18. The wages system is also controlled via this department.
19. Salary and contribution in the social security, done through this department.
20. The cases like group insurance, death cases and records of:
i) Leaves
ii) Annual progress
iii) Attendance
are also kept by this department.
PERSONNEL POLICIES
The personnel policies of the company are as under:
i. Recruitment
The company gives advertisement in newspapers for vacant posts and then the interviews are arranged under the Managing Director's guidance by the Administrative Officer for the lower level and upper level employees, so that the process of recruiting could be easily handled.
ii. Selection
The selection of candidates is made purely on merit basis and according to the set criteria.
iii. Training
The new employees are trained by the senior staff and department head.
The Administrative Officer selects the new employees of lower level.
MOTIVATION AND BENEFIT OF EMPLOYEES
1. Kinds of Bonus
Global Telecom give two type of bonus to there workers. Custom bonus is given to worker according to 1972 policy of Government and another bonus is available to worker after completion of financial year. They are two in number.
2. Employees Old Age Benefits
This is pension type benefit given after retirement through Government department. It is deducted 5% from employees salaries. Company give 5% to Government department.
3. Over Time
Over time is paid to the worker at the double rate.
4. Special Allowances
Following allowances are available for workers.
Allowances 150/-
Aatta 50/-
Cost of living allowance 100/-
House Rent 80/-
(Salaries upto 2000)
House Rent 120/-
(Salaries upto 2000-2500)
House Rent 160/-
(Salaries upto 2500-3000)
TAXES AND ZAKAT
Income tax is deducted from the salary of the employees whose total income is taxable. This deduction is made under section 50 of the income tax ordinance 1979 called as deduction of tax at source Zakat is also deducted from the salary of the employes who have to pay the Zakat.
INCREMENTS
Every year some increments are sanctioned to some employees. However increment may not be sanctioned to the employees who misconduct or create disturbance for the management.
UNION AND LABOUR LAWS
UNION
A Labour Union is elected every year by the employees. The union consists of one President, Vice President, General Secretary, Finance Secretary, Propaganda Secretary and Joint Secretary. The Union takes above part in all activities. It arranges functions at important occasions. It also conversate with management for employee problems. All disputes are selected through Union. There are three Union in Global Telecom.
1. Electrical labour union. 2. Global Telecom worker union.
3. Global Telecom mazdoor union.
LABOUR LAWS
Labour laws applicable in the country are also applied in Global Telecom. All benefits are granted to the employees which are enforced by the Government of Pakistan and Government of Punjab. All factory rules and regulations are adopted by management and other authorities.
MARKETING PROCEDURES
Marketing procedures are very crucial for the success of any company. Marketing is the business function that identifies current unfulfilled needs and wants, defines and measures their magnitude, determines which target markets the organization can best service and serve and decide on the appreciate products, services and programmes to sever these markets. Thus marketing serves as the link between a society needs and its pattern of industrial response. Marketing is important to the industries in several ways. There is no concept of survival in the world of competition with out marketing of the products. The marketing mix is designed by the proper specifications of four variables, product, price, placement and promotion to hit the target markets and against competitors.
POLICIES
There does not seem to be a well organized marketing department in the company. It appears that it is still being run and its products put into the market without benefit of the push that proper marketing can provide. The policies in Global Telecom has no definite structure and exists in the shape of layman implementations. When we discuss the pricing policy of Global Telecom they are selling there products on the cost of plus margins base. When they introduces a new products in the market they get the price so that they can manage there brake even. When developing a new product marketing explain every step necessary for the development of new product.
PRICING AND PRICING STRATEGIES
Pricing is a quantitative and qualitative figure. Once the product is developed its price can be determined. The nature of the pricing and its importance to buyer can be made adjusting that price to meet unique circumstances in the market place. In economy theory price is value expressed in term of rupees. In business pricing is the amount of money which is needed to acquire in exchange some combined assortment of a product and its accompanying services. Price is that factor which is very sensitive and largely effected by environmental pressure such as slump in demand recession, competitors action, it is the core of business activities as it provides inflow to the company sufficiently above than its cost, if determined according. Pricing is effected by various factors like objectives change over time multiple product and marketing objectives. Management should decide upon the objectives of pricing before determining the price itself. In case of Global Telecom when the product is to be priced instructions are given to the sales manager to conduct a thorough survey of the prices of competitors products in the country. Management of the Global Telecom set prices that satisfy customers and dealers. The main objectives of company while setting a price is to earn maximum profit. Achieve target return on investment. Maintain or improve a share of market, or meet competition.
PRICING STRATEGIES
Pricing policy of Global Telecom is very much comprehensive that is why a fair increase in sale is observed. The management of Global Telecom set its prices according to requirements of the prevailing conditions. Company adopt that policy which is suitable according to the situation. Company penetrate the market which means company is offering at a lower price which are prevailing in the market so to earn profit in the long run. The demand of the company products is overfull. The main reason for this is due to quality differentiation.
DISTRIBUTION PROCEDURE
The distribution of consumer product begins with the producer and ends with the ultimate consumer. Even before a product is ready for its market, management have to determine what methods and routes will be used for its destination. The physical distributor activities required to support the movement of the goods and the means by which the cooperation of intermediaries within the channels can be obtained.
In Global Telecom, 50% of company sales are in Lahore, Faisalabad, Peshawar, Karachi, Rawalpindi and remaining 50% all over the country. Dealers come to factory, pay the amount of goods and take the goods. All this procedure is handle by sales department.
CHANNELS OF DISTRIBUTION
A channel of distribution may be defined as an organized network of agencies and institutions which in combination performs all of the activities required to link producers with users and users with producers in order to accomplish the marketing task.
All the organizations which produces different varieties of products, sell them in the market by different means of transport. These means may be organization itself or private Global Telecom has distributor in big cities of the country. The company penetrate the mark through the distributors. The Global Telecom of distributor is as follows:
Company ‑‑ Distributor ‑‑ Retailer ‑‑ Customer
NAME AND ADDRESS OF THE DISTRIBUTOR
KARACHI
HYDERABAD
SUKKUR
KHANPUR
RAHIM YAR KHAN
BAHAWALPUR
MULTAN
CHEECHA WATNI
SAHIWAL
OKARA
PATTOKI
LAHORE
MURIDKE
GUJRANWALA
GUJAR KHAN
RAWALPINDI
KHARIAN
JHELUM
RAWALPINDI
FAISALABAD
MANDI BAHAULDIN
GOJRA
SHEIKHUPURA
BAHAWALNAGAR
BUKKHAR
D.I.K.
SIALKOT
ABBOTABAD
MANGORA
JHANG
QUETTA
RABWA
BHALWAL
PASRUR
SADIQ ABAD
BURIWALA
CHISHTIAN
LAYYAH
NAWAB SHAH
PROMOTION STRATEGIES
"People won't buy your product if they have never heard of it."
PROMOTION
One of the four major variables with which the marketing manager works - is communicating information between buyer and seller - to influence attitudes and behaviour, the sale manager promotion job is to tell target customers that the right product is available at the right place at the right price Global Telecom management also believes in it and want to make promotion on every occasion but its limited resource allocation to the promotional activities does not allow to arrange a proper communication process with its customers. The promotion mix constitute following parts
- Advertising
- Sales promotion
- Personal selling
- Publicity
For every company to be attractive for its potential customers the best and suitable promotion mix is inevitable. The promotional mix of Global Telecom is as under:
SALES PROMOTION
Company is using sales promotion in attracting the customer. The sales promotion consists of stickers, calendars and posters. This strategy is used to attract the customers.
OUTDOOR MEDIA
Global Telecom is using outdoor media maximum in its promotional medias. The outdoor promotional activities include following items.
- Billboards
- Painted bulletins
Billboards ae used on the roads of potential customers locations and painted bulletins on the road sides to persuade the customers. The company participated in promotional activities during the wills world cup.
SALES APPEALS/SLOGAN
The promotional activities increase the company's sale and it includes these type of slogans or sales appeals for persuading the customers.
"For Whisper Cool Comfort"
"Efficient Slim Stylish"
"For Ease Elegence and Cool Environments"
"Innovation In Design and Comfort"
ADVERTISING
Advertising of Global Telecom products in T.V media was very rare and now company is trying to allocate special allowances for T.V commercials. Because T.V is the most suitable and expensive media for commercials for an organization growth.
COMPARATIVE BALANCE SHEET
FOR THE YEAR 2000, 2001, 2002
(Rupees in thousands)
2000 2001 2002
Share Capital and Reserves
SHARE CAPITAL
Authorised
5000,000 (2000, 500,000)
Ordinary shares of
(2000 : Rs.100/-)
(2001 : Rs.10/-)
(2002 : Rs.10/-)
Each 50000 50000 50000
Issued subscribed and paid up 33120 33120 33120
GENERAL RESERVE 50000 50000 50000
UNAPPROPRIATED PROFIT/LOSS (19655) (24690) 2429
------- ------- -------
63465 58430 55549
LONG TERM LOANS 26772 12369 17343
Continued.......
(Rupees in thousands)
2000 2001 2002
CURRENT LIABILITIES
Short term finances 135482 117749 150178
Current maturity of long
term loans 12000 20800 72000
Finance lease -- -- 636
Creditors, accrued and
other liabilities 51849 86622 87624
Due to associated
under‑takings -- 993 1890
Taxation 968 1356 1650
Dividends 1418 368 3518
-------- -------- --------
201717 227888 252696
CONTINGENCIES AND COMMITMENTS
-------- -------- --------
291954 298687 327191
======== ======== ========
(Rupees in thousands)
2000 2001 2002
PROPERTY AND ASSETS
Fixed Assets at cost
less accumulated depreciation 38949 37143 36704
LONG TERM INVESTMENT 134 134 139
CURRENT ASSETS
Stock in trade 124587 144275 172007
Trade debts unsecured 67300 45638 39789
Due from associated
undertakings -- 438 437
Loans and advances unsecured 1319 2292 2702
Deposits, prepayments and
other receivables 52594 65582 59543
Cash and bank balances 7071 3185 15870
-------- -------- --------
252871 261410 290348
-------- -------- --------
291954 298687 327191
======== ======== ========
COMPARATIVE PROFIT &
LOSS ACCOUNT
FOR THE YEAR 2000, 2001 and 2002
(Rupees in thousands)
2000 2001 2002
Sales 193623 271261 330005
Cost of Sales 157615 221227 268692
-------- -------- --------
Gross Profit 36008 50034 61043
Administrative and general expenses 12332 14196 14904
Selling and distribution expenses 2816 5713 11061
Liquidated damages 6662 6010 857
-------- -------- --------
21810 25919 26822
-------- -------- --------
Operating Profit 14198 24115 34221
Other Income 766 1352 1552
-------- -------- --------
14964 25467 35773
Financial charges 22872 29146 33582
-------- -------- --------
(7908) (3679) 2119
Workers participation fund -- -- 110
-------- -------- --------
Profit/Loss before taxation (7908) (3679) 2081
Taxation 968 1356 1650
-------- -------- --------
Profit/loss after taxation (8876) (5035) 431
Loss brought forward (10779) (19655) (24690)
Transferred from general reserve -- -- 30000
Profit available for
appropriation (19655) (24690) 5741
Appropriation
proposed dividend @ 10%
(2001, 2002 Nil) -- -- 3312
-------- -------- --------
Unappropriated profit/
accumulated loss carried
forward to Balance Sheet (19655) (24690) 2429)
======== ======== ========
CASH FLOW STATEMENT
FOR THE YEAR 2000, 2001 and 2002
(Rupees in thousands)
2000 2001 2002
SOURCES OF FUNDS
Net profit/loss before
taxation (7908) (3679) 2081
Items net involving movement
of funds:
Depreciation 4571 4414 4146
Amortization -- -- 533
Profit on disposal of
fixed assets (210) (358) (510)
-------- -------- --------
FUNDS GENERATED FROM OPERATIONS (3547) 377 6250
FUNDS FROM OTHER SOURCES
Sale of fixed assets 312 660 1691
Insurance claim -- 95 --
Deposits, prepayments
and other receivables -- -- 6039
Short‑term loans from
financial institutions -- -- 32430
Leases -- -- 2239
Creditors, accrued and
other liabilities -- 35338 1002
Due to associated undertakings -- 428 897
Trade debts -- 21251 5849
Due from associated undertakings -- -- 0001
Long‑term loans 5172 -- --
-------- -------- --------
5484 57772 50148
-------- -------- --------
TOTAL FUNDS GENERATED 1937 58149 56398
======== ======== ========
Continued......
(Rupees in thousands)
2000 2001 2002
APPLICATION OF FUNDS
Acquisition of fixed assets 1782 3005 2756
Leased Assets -- -- 2665
Dividend paid 1259 1050 162
Loan and advances -- 973 410
Repayment of long term loans 2400 5603 8626
Taxation 965 968 1356
Due from associated -- 27 --
Undertakings
Deposits, prepayments and
other receivables -- 12988 --
Increase in stocks -- 19688 27733
Security deposits -- -- 5
Short term finance -- 17733 --
-------- -------- --------
62035 43713
-------- -------- --------
Net increase/decrease in 3886 12685
Cash and Bank Balance
======== ======== ========
PATTERN OF HOLDING OF
SHARES HELD BY THE
SHAREHOLDERS
AS AT 30-06-2002
No. of Shareholding Total
Share Shares
Holders Held
686 Holding from 1 to 1000 159580
89 Holding from 1001 to 5000 207150
13 Holding from 5001 to 10000 94020
27 Holding from 10001 to 50000 682410
17 Holding from 50001 to 900000 1352790
2 Holding from 100001 to 150000 215670
2 Holding from 150001 to 200000 353080
1 Holding from 200001 to 250000 247300
---- -------
837 3312000
---- -------
Categories of Shareholders No. Shares Percentage
Held
Individuals 822 2712130 81.8880
Investment Companies 1 103350 3.1205
Insurance Companies 5 111990 3.3813
Joint Stock Companies 5 274470 8.2871
Financial Institutions 4 110060 3.3231
------- ------- -------
837 3312000 100.000
======= ======= =======
RATIO ANALYSIS
PROFITABILITY RATIOS
2000 2001 2002
1. Gross Profit Ratio
G.P / Sales x 100 18.60% 18.44% 18.50%
2. Operating Profit Ratio
O.P / Sales x 100 7.33% 8.89% 10.37%
3. Sales Profit Margin
before tax
PBT / Sales x 100 -4.08% -1.36% 0.63%
4. Sales Profit Margin
after tax
PAT / Sales x 100 -4.58% -1.86% 0.131%
5. Expense Ratio
O. Exp / Sales x 100 11.26% 9.55% 8.12%
6. Earning Power
EBIT / Total Assets 0.05125 0.08526 0.109333
TEST OF LIQUIDITY
2000 2001 2002
1. Current Ratio
Current Assets /
Current Liabilities 1.343 1.265 1.20
2. Working Capital
Current Assets -
Current Liabilities 51154 33522 37652
3. Quick Ratio
Current Assets - Inventories/
Current Liabilities 0.681 0.567 0.490
EFFICIENCY RATIOS
2000 2001 2002
1. Working Capital Turnover Ratio
Cost of Sales /
Net working Capital 3.08 6.6 7.14
2. Inventory Turnover
Cost of goods sold /
Inventory 1.265 1.53 1.56
3. Asset Turnover
Sales / Total Assets 0.663 0.900 1.009
4. Receivable Turnover
Sales / Net Receivables 1.60 2.38 3.22
times times times
Average Collection Period
360 / Receivable Turnover 225 151 112
days days days
5. Fixed Asset Turnover
Sales / Fixed Assets 4.97 7.30 8.94
TEST OF SOLVENCY
1. Debt Equity Ratio
Debt / Equity 3.60 4.11 4.89
2. Proprietory Ratio
Shareholder's funds /
Total Assets x 100 25% 22% 19%
HORIZONTAL ANALYSIS
COMPARATIVE INCOME STATEMENT
For the years ended June 30, 2000, 2001 & 2002.
2000 2001 2002
(Rupees in thousands)
Sales 193623 271261 330005
Less Cost of Sales 157615 221227 268962
------ ------ ------
Gross Profit 36008 50034 61043
------ ------ ------
Admn. & General Expenses 12332 14196 14904
Selling & distribution Expenses 2816 5713 11061
Liquidated damages 6662 6010 857
------ ------ ------
Total operating expenses 21810 25919 26822
------ ------ ------
Operating profit (Loss) 14198 24115 34221
Other Income 766 1352 1552
------ ------ ------
14964 25467 35773
Financial charges 22872 29146 33582
------ ------ ------
(7908) (3679) 2191
Workers Profit Participation
Fund -- -- 110
------ ------ ------
Net Income (Loss) before
taxation (7908) (3679) 2081
Income Tax 968 1356 1650
------ ------ ------
(8876) (5035) 481
====== ====== ======
Increase (Decrease)
2000-2001 2001-2002
Amount % age Amount % age
Sales 77638 40.09 58744 21.66
Less Cost of Sales 63612 40.36 47335 21.58
------ ------ ------ ------
Gross Profit 14026 38.95 11009 22.00
------ ------ ------ ------
Admn. & General Expenses 1864 15.12 708 4.99
Selling & distribution
Expenses 2897 102.88 5348 93.61
Liquidated damages (652) (10.00) (5153) 85.74)
------ ------ ------ ------
Total operating expenses 4109 18.84 903 3.00
------ ------ ------ ------
Operating profit (Loss) 9917 69.85 10106 41.91
Other Income 586 76.50 200 14.79
------ ------ ------ ------
10503 70.19 10306 40.47
Financial charges 6274 27.43 4436 55.22
------ ------ ------ ------
Workers Profit Participation
Fund
------ ------ ------ ------
Net Income (Loss) before
taxation 4229 -- 5760 --
Income Tax 388 40.08 294 21.68
------ ------ ------ ------
3841 -- 5466 --
======= ======= ======= =======
HORIZONTAL ANALYSIS
COMPARATIVE BALANCE SHEET
June 30, 2000, 2001 & 2002.
2000 2001 2002
(Rupees in thousands)
Fixed Assets Tangible
Fixed Assets 38949 37143 36704
Long‑term security deposits 134 134 139
Current Assets
Stock in Trade 124587 144275 172007
Trade Debts 67300 45638 39789
Due from associated undertakings -- 438 437
Loans & Advances 1319 2292 2702
Deposits, payments &
other Receivables 52594 65582 59543
Cash and bank balances 7071 3185 15870
------ ------ ------
Total Assets 291954 298687 327191
------ ------ ------
Stockholder's Equity
Issued subscribed &
paid‑up capital 33120 33120 33120
General Reserves 50000 50000 20000
Unappropriated Profit/
Accumulated Loss (19655) (24690) 2429
------ ------ ------
63465 58430 55549
------ ------ ------
Continued.......
2000 2001 2002
(Rupees in thousands)
Liabilities
Long‑term Loans 26772 12369 17343
Liabilities against +
lease assets -- -- 1603
Current Liabilities
Short‑term finances 135482 117749 150178
Current maturity of L.T.L 12000 20800 7200
Finance Lease -- -- 636
Creditors, accrued &
other liabilities 51849 86622
Due to associated undertakings -- 993 1890
Taxation 968 1356 1650
Dividends 1418 368 3518
------ ------ ------
Total Liabilities 228489 240257 184018
------ ------ ------
Total Liabilities & Equity 291954 298687 327191
======= ======= =======
Increase (Decrease)
2000-2001 2001-2002
Amount % age Amount % age
Fixed Assets Tangible
Opening Assets (1806) (4.64) (439) (1.18)
Long‑term security
deposits -- -- 5 3.73
Current Assets
Stock in Trade 19688 15.80 27732 19.22
Trade Debts (21224) (32.00) 5850 (12.70)
Due from associated
undertakings -- -- -- --
Loans & Advances 973 73.77 410 17.89
Deposits, payments &
other Receivables 12988 24.69 (6039) 9.00
Cash and bank balances (3886) 54.96 12.685
------ ------ ------ ------
Total Assets 6733 2.31 28504 9.54
------ ------ ------ ------
Stockholder's Equity
Issued subscribed &
paid‑up capital -- -- -- --
General Reserves -- -- 300000 60.00
Unappropriated Profit/
Accumulated Loss (5035) -- 27119 --
------ ------ ------ ------
(5035) (7.93) 2881 4.93
------ ------ ------ ------
Continue......
2000 2001 2002
(Rupees in thousands)
Liabilities
Long‑term Loans (14403) 53.80 4974 40.21
Liabilities against +
lease assets -- -- 1603 --
Current Liabilities
Short‑term finances (17733) 13.09 32429 27.54
Current maturity of
L.T.L 8800 73.33 13600 (65.38)
Finance Lease -- -- 636 --
Creditors, accrued &
other liabilities 35766 68.98 1899 21.17
Due to associated
Undertakings
Taxation 388 40.88 294 21.68
Dividends (1050) (74.05) 3150 855.98
------ ------ ------
Total Liabilities 11768 5.15% 56239 23.41%
------ ------ ------ ------
Total Liabilities & Equity 6733 2.31 28504 9.54
======= ======= ======= =======
VERTICAL ANALYSIS
COMPARATIVE INCOME STATEMENT
For the years ended June 30, 2000, 2001 & 2002.
2000 2001 2002
Amount % age Amount % age Amount % age
(Rupees in thousands)
Sales 193623 100.00 271261 100.00 330005 100.00
Cost of Sales 157615 81.4 221227 81.6 268962 81.5
------ ------ ------ ------ ------ ------
Gross Profit 36008 18.6 50034 18.4 61043 18.5
------ ------ ------ ------ ------ ------
Admin. &
General Expenses. 12332 6.4 14196 5.2 14904 4.5
Selling &
Dist. Expenses 2816 1.5 5713 2.1 11061 3.4
Liquidated damages 6662 3.4 6010 2.2 857 0.3
------ ------ ------ ------ ------ ------
Total Operating Exp. 21820 11.26 25919 9.56 26822 8.13
------ ------ ------ ------ ------ ------
Operating Profit 14198 7.3 24115 8.9 34221 10.4
Other Incomes 766 0.4 1352 0.5 1552 0.5
------ ------ ------ ------ ------ ------
14964 7.7 25467 9.4 35773 10.8
Financial charges 22872 11.8 29146 10.7 33582 10.2
------ ------ ------ ------ ------ ------
(7908) (4.1) (3679) (1.4) 2191 0.7
Worker's profit
participation fund -- -- -- -- 110 0.03
------ ------ ------ ------ ------ ------
Profit/(Loss) before
tax (7908) (4.1) (3679) (1.4) 2081 0.6
Taxation 968 0.5 1356 0.5 1650 0.5
------ ------ ------ ------ ------ ------
(8876) (4.6) (5035) (1.9) 431 0.1
====== ====== ====== ====== ====== ======
COMPARATIVE BALANCE SHEET
June 30, 2000, 2001 & 2002.
2000 2001 2002
Amount % age Amount % age Amount % age
(Rupees in thousands)
Assets
Fixed Assets 38949 13.3 37143 12.4 36704 11.2
Long term Security
deposit 134 0.05 134 0.04 139 0.04
Current Assets
Stocks in Trade 124587 42.7 144275 48.3 172007 52.6
Trade Debt 67300 23.1 45638 15.4 39789 12.3
Due from associated
undertakings -- -- -- -- 437 --
Loans & advances 1319 0.5 2292 0.8 2702 0.8
Deposits, prepayments 52594 18.0 65582 22.0 59543 18.2
Cash & Bank Balances 7071 2.4 3185 1.1 15870 4.9
------ ------ ------ ------ ------ ------
Total Assets 291954 100.00 298687 100.00 327191 100.00
------ ------ ------ ------ ------ ------
Stockholder's Equity
Issued, subscribed
and paid‑up capital 33120 11.3 33120 11.1 33120 10.1
General Reserves 50000 17.1 50000 16.7 20000 6.1
Unappropriated
P/L A/c (19655) (6.7) (24690) (8.3) 2429 0.7
------ ------ ------ ------ ------ ------
Total Stockholder's
Equity 63465 21.7 58430 19.6 55549 17.0
------ ------ ------ ------ ------ ------
Continue.......
2000 2001 2002
(Rupees in thousands)
Liabilities
Long‑term Loans 26772 9.2 12369 4.1 17343 5.3
Liabilities against
Lease -- -- -- -- 1603 0.5
Current Liabilities
Short‑term Finances 135482 46.4 117749 39.4 150178 46.0
Current maturity of
long‑term liabilities 12000 4.1 20800 7.0 7200 2.2
Finance Lease -- -- -- -- 636 0.2
Creditors, accrued &
liabilities 51849 17.8 86622 29.3 87624 27.4
Due to associated
undertaking -- 993 1890
Taxation 968 0.3 1356 0.5 1650 0.5
Dividends 1418 0.5 368 0.1 3518 1.2
------ ------ ------ ------ ------ ------
Total Liabilities 228489 78.3 240257 80.4 271642 83.0
------ ------ ------ ------ ------ ------
Total Liabilities +
Stockholder's Equity 291954 100.00 298687 100.00 327191 100.00
------ ------ ------ ------ ------ ------
COMMENTS
PROFITABILITY RATIO
1. Gross Profit Ratio
The first calculated ratio is gross profit ratio. This ratio is computed by substracting cost of good sold from sales and putting the difference over sales. This ratio shows the average spread between the cost of good sold and the selling price. Gross profit is the difference between net sales and cost of good sold. The difference between the cost of good sold and the net sales is of major importance because it represent the gross margin on net sale. Gross margin should be large enough to cover the operating and other expenses.
Gross profit ratio of Global Telecom was 18.60% in the year 2000, 18.44% in the year 2001 and 18.50% in the year 2001 and 18.50% in the year 2002. The trend shows that there is minor fluctuation and management of Global Telecom have good control over the cost of production. Its cost of good sold are in conformity with sales and there is no major changes in the cost of production. The trend of Gross profit to sales show that it is not large enough to cover the operating and other expenses. Cost is increasing according to increase in volume of sales and decrease according to decease in volume of sales.
2. Operating Profit Ratio
The second profitability ratio is operating profit ratio. This ratio goes beyond gross profit margin and consider the company's ability to cover administrative and selling cost which require cash outlay's and depreciation which a company must ultimately allow for. It is computed by dividing net operating profit by sales like gross profit margin the net operating margin tells a financial manager about the impact of price decrease and cost increase on profit. Net operating margin of Global Telecom was 7.33% in the year 2000, 8.89% in the year 2001 and 10.37% in the year 2002 shows an increasing trend. The reason of operating profit increased is general and administration selling and distribution expenses. This increasing trend shows that company management is controlling its operating expenses.
3. Sales Profit Margin Before Tax
The third profitability ratio is sales margin before tax. This measure is figured by dividing profit before tax sales. The sale margin before tax is more meaningful because we can use before tax margin to tell what % drop in sales revenue would eliminate before tax profit.
Sales profit margin Before tax of Global Telecom was -4.08 % in the year 2000, -1.36% in the year 2001 and 6.3% in the year 2002. Sales profit margin trend shows a healthy sign as it is increasing from year 92 to 94. The financial charges of Global Telecom are increasing and company also contributed to worker profit participation fund but the increase profit is due to increase in sales. Company with have more profit in the coming years with and increase in sales.
4. Sales Profit Margin After Tax
The fourth calculated ratio is sales profit margin after tax. This measure is figured by dividing profit after tax by sales.
The sales profit margin after tax of Global Telecom was -4.58% in the year 2000, -1.86% in the year 2001 and 0.131% in the year 2002. Sales profit margin after tax is showing healthy sign as there is an increasing trend in profit from 2000 to 2002 and this is also due to increase in sales. The percentage of tax on profit is same for all years which is 0.5%. There is no difference in tax rate in any year.
5. Expense Ratio
The fifth calculated ratio is operating expense ratio. There is an important relationship between operating expense items in relation to sales should reflect the ability of management to adjust expense to changing sales condition.
The operating expenses of Global Telecom were 11.26% in the year 2000, 9.55% in the year 2001 and 8.12% in the year 2002. This trend shows that operating expenses in relation with sales are decreasing and this decrease is a positive sign for the management of company.
The reason behind this is that they are improving their policies to control additional operating expenses. They are making expenditures for improving sales and reducing their fixed operating expenses by increasing sales.
6. Earning Power
The sixth calculated ratio is earning power. It is calculated by dividing total assets into taxes. The best measure of profitability is earning power. It shows management ability to use the firm assets to generate earning on its invested capital. It indicates how profitability a company is operating before to proportions of debt and equity used to finance it. Company earning power was .5125 in the year 2000, 0.8526 in the year 2001 and 0.109333 in the year 2002. Company management should concentrate on those activities which are helpful for company to increase its earning power. Because if company will increase efficiency it will be result in more profit for company. Company will be able to able to invest more in assets. By increasing the earning power the company will be in a position to attract investor.
TEST OF LIQUIDITY
1. Current Ratio
The first calculated ratio in test of liquidity is current ratio. The current ratio consist of current assets divided by current liabilities. The current ratio is the most widely used measure of business liquidity. It indicates the extent to which the claims of short term creditors a firm most pressing claims can be met by assets that are due to become cash within now year or less. Current ratio gives a crude measure of current liquidity. It indicates the degree of safety with which short term credit may be extended to the business by current creditors.
Global Telecom current ratio was 1.343 in the year 2000, 1.265 in year 2001, and 1.20 in the year 2002. The trend shows that ratio is not satisfactory. Global Telecom is more depending upon external sources for their working then on their internal resources. There is increase in company creditor and payables that makes the balance adverse. Global Telecom is maintaining lower inventories due to less need and it workly mostly on cash bases than or credit. Increase in 2002 is due to increase in cash and bank balance and increase in credits and liability of the company.
2. Working Capital
The second calculated ratio in test of liquidity is working capital. Working capital represent the volume of current assets financed from long term sources. It is that part of current assets that will stay with the firm.
The working capital of Global Telecom was 51154 in 2000, 33522 on 2001, and 37652 in 2002. The working capital of company is decreasing and it is not a positive sign for company.
3. Quick Ratio
The third calculated ratio in test of liquidity is quick ratio. The current ratio includes in asset that requires the firm's operation to continue in order to convert it into cash. This asset is inventories. The quick ratio removes this least liquid of current assets to indicate how liquid the firm would be if operations were to have abruptly. Quick ratio of Global Telecom was 0.681 in 2000, 0.567 in 2001 and .490 in 2001.
The trend shows that quick ratio are not satisfactory. This is due to less quick assets which are decreasing gradually.
Another reason for adverse effect is due to inventories. Increase in cash and Bank balance are not enough to recover this adverse effect. It is not a positive sign for company. The firm must take steps to improve its liquidity to cover its immediate needs.
EFFICIENCY RATIOS
The efficiency ratios are of prime importance to executive management. This ratio allow top management to analyse performance results and pinpoint the sources overtime can alert management to fund amental changes in business activities, such as deterioration in productivity resulting from less efficient equipment. Efficiency rate can also be of great importance to investor trying to determine the fundamental soundness of the firm and as a way of anticipating changes in the firm's performance.
1. WORKING CAPITAL TURNOVER
Ratio
The first calculated ratio in efficiency ratios is working capital turnover ratio. It indicates the velocity of the utilization of net working capital. This ratio represents the number of times the working capital is turned over in the course of a year and is calculated as follows
Cost of Sales
WCTR = --------------------
Net working Capital
Net working capital = Total Current assets ‑
Total current liabilities
Working capital turnover ratio of Global Telecom was 3.08 in the year 2000, 6.6 in the year 2001 and 7.114 in the year 2002. This ratio is showing that in the year 2000 company is inefficient in utilizing the working capital. It is showing the efficiency with which working capital is being used by the company. In 2001 and 2002 the company used its working capital more efficiently than previous year.
2. Inventory Turnover
The second calculated ratio in efficiency ratios is inventory turnover. Which is get dividing cost of good bold by inventory is reflected in increased sales or in an desirable buildup of slower-moving goods. It indicates the number of times the stock has been turned over during the period and evaluates the efficiency with which a firm is able to manage its inventory.
The most commonly used ratio relates costs of goods sold to ending inventory. This ratio indicates the velocity of conversion of stock into sales inventory turnover of Global Telecom was 1.265 in 2000, 1.53 in the year and 1.56 in the year 2002. This ratio shows an increasing velocity but it is not high. The reason behind this increase is that company is blocking its funds in keeping the inventory. This is due to bad business and it is not a positive sign for company because it reduces company's profit. For reducing accumulation of inventories company must increase its sales.
Company investment in inventories costing it loss of investing some where else earn profit.
3. Asset Turnover
The third calculated ratio is asset turnover ratio. This is broad measure which reflects the amount of investment needed to support operation. Since such investment must come from the firm's creditors and its owners. This is also an important measure of how productivity the invested capital is used.
For Global Telecom, asset turnover was 0.663 in the year 2000, 0.900 in the year 2001. This ratio indicates the company utilization of total assets. Ratio shows an increasing trend but this increase is not sufficient for Global Telecom. It is not good for company.
The reason behind this is that company is investing in current asset but they are not properly utilize it.
The company must improve its policies in order to utilize its assets properly to increase profit.
4. Receivable Turnover
The fourth calculated ratio is receivable turnover. The receivable turnover is computed by dividing net receivables into net sales. It indicates the number of times receivable are turned over during a year. A related ratio is average collection period sometimes called number of days sales in account receivable. The average collection period is an important ratio because it indicates to management the quality of its receivable, the wisdom of its credit granting policies and the effectiveness of its collection policy.
Receivable turnover of Global Telecom was 1.60 times in the year 2000, 2.38 times in the year 2001 and 3.22 times in the year 2002. Ratio shows that management of company is not properly collect its debts from the debtors. Less cash in flows and bad debts also increase due to low rate of receivable. This ratio indicate that liquidity position of company is adverse.
This ratio shows that company has to borrow for its need and this will result in profit decrease and increase in worthless expenses. The average collection period of Global Telecom was 225 day in 2000, 151 days in 2001 adn 112 days in the year 2002. This ratio measures the quality of debtors. Management must improve its collection policy in order to stabilize its decrease working capital and cash requirement.
5. Fixed Asset Turnover
The fifth calculated ratio is fixed asset turnover. This ratio shows how efficiently the assets of the company are being utilized. It indicates utilization of company's assets. Fixed asset turnover is computed by dividing fixed asset into net sales. Fixed asset turnover of Global Telecom was 4.97 in the year 2000, 7.30 in the year 2001 and 8.94 in the year 2002. This ratio shows an efficient utilization of company's assets. Sales are increasing at a faster rate than investment in fixed assets. The reason behind this is due to decrease in the value of fixed assets. This decrease may be due to depreciation company must maintain its fixed assets along with increase in sales.
TEST OF SOLVENCY
1. Debt Equity Ratio
The first calculated ratio is debt equity ratio. This ratio is simply the amount of total debt divided by the amount of shareholder equity. It indicates the relationship between the external equities of outsiders funds and internal equities or shareholders funds.
It is determined to ascertain soundness of the long term financial policies of the company. It throws light on the general financial strength of the company. The debt equity ratio of Global Telecom was 3.60 in the year 2000, 4.11 in the year 2001 and 4.89 in the year 2002. Ratio shows the long term solvency position of company is better due to large share of shareholders and there is less to the creditors. This ratio shows an increase in debt which is positive sign for creditors and there tendency to lend more credit to the company.
2. Proprietory Ratio
The second ratio calculated is proprietory ratio. This ratio relates the shareholders funds to told assets. The ratio indicates the long term or future solvency position of the business. Shareholder's funds include equity share capital plus all resources and surplus items. Total assets include all assets including goodwill. This ratio shows the soundness of the capital structure of company.
Shareholder's Funds
Proprietory Ratio = -------------------
Total Assets
The proprietory ratio of Global Telecom was 25% in the year 2000, 22% in the year 2001, and 19% in the year 2002. This ratio shows a decreasing trend year to year which is not good. Ratio indicate that company's financial position is going down. Risk for creditor is increasing. The reason behind this is that company invested more in current assets. The company must improve its proprietory position. Because it is necessary to attract investor to invest in the company.
HORIZONTAL + VERTICAL ANALYSIS
In 2002, there is increase in sales as compared to 2001, but percentage increase is less as compare to previous year.
Cost of sale is increasing and decreasing simultaneously with the increase and decrease in sales.
The gross profit also decrease and increase with the decrease and increase in sales.
The general and administration expenses are decreasing as compared to previous years that is a very good situation for the company.
Selling expenses are increasing with a greater speed as the increase in sales. It is not a healthy sign.
With respect to years and sales, operating expenses are decreasing that causes some increase in the operating income.
There are more other incomes as compared to past years but same increase in other incomes as compared to sales volume.
There are more financial charges as compared to previous years, but financial charges are decreasing with respect to sales.
The tax rate is same all the years. It means a constant rate of tax by the government.
If we compare fixed assets with the previous year, fixed assets are reducing but if we compare it with total assets there is less decrease in the percentage of fixed assets.
There is more investment in current assets by the company in 2002 as compared to 2001.
The position of total equity is satisfactory. It is iproving in 2002 as compared to 2001. In 2002 reserves are also reducing as compared to 2001.
There were more liabilities in 2001 as compared to 2002. That is a good sign for the company.
TRAINING PROGRAMME
I selected Global Telecom for my internship, which is necessary during two year MBA programme. The Global Telecom was established in 1999 as a partnership concern and started making simple types of tools machine tools and attachment. The head office of the company is situated at Lahore. Global Telecom mainly deal with engineering products. This is one of the companies of Lahore on which people of Lahore are proud of, due to high standard products of Global Telecom. Global Telecom is a fine eample of hard work devotion to field and timely action taking which are necessary for a company to be leader in field.
I worked in head office of Global Telecom for eight weeks in different departments of the company including Finance department, Purchase department, Administration department, Sales department and Production department. During my internship I worked in these department under the supervision of manager of these department. The staff at Global Telecom was very cooperative and provide me every information. I have very carefully analyzed various departments of Global Telecom. Though to get information was very difficult task but I manage it. There are many reasons why I selected Global Telecom. First of all it was one of the best company of the Pakistan, secondly the company is now a days passing through the worse period of its life and I was really interested in reasons of the decline of the company. Another reason for selection of the Global Telecom was that I want to learn things about the manufacturing company process. Although eight weeks training is a very short period to study of any organization but I learned a lot due to co‑operative officers. The working hours in Global Telecom are from 9 A.M to 5 P.M with one holiday a week. I worked in different department of Global Telecom during my internship. Management gave me schedule for each department where I worked for eight weeks.
FIRST AND SECOND WEEK
Finance Department
I worked in finance department during first 10 days of internship under the supervision of Manager Accounts. The management of Global Telecom has mixed up the account and finance department in way that finance department are also performed and controlled by the accounting department. There is no specific distinction being made in the Global Telecom for the Accounting and Finance department. Infact there exists a mixture of both performing the function collectively. This department is headed by the Chief Executive who controls the manager accounts. Under the supervision of manager accounts there are two accountants, two assistant accounts two cashier and three clerks in this department.
During my internship in this department I learnt about the different functions of finance department. I learnt about the major functions of keeping the record associated with accounting for manufacturing and non manufacturing activities. I learnt also about bank reconciliations, ledger and subsidiary ledger which is necessary for management to know the sales figure, cash position, needs for the funds, cost of sales, administration expenses, financial expenses and other marketing expenses.
Mr. Jamil Ahmed who is manager accounts in this department is a very co‑operative person. He told me about annual report. He told me that accounting department is responsible to collect data and prepare financial statement i.e, balance sheet, income and retained earning statement or profit and loss accounting and statement of the change in financial position. Finance department is also responsible for the analysis of the change in the working capital and the preparation of annual accounts is also carried out by this department which are for the public limited companies, a necessity to be published under the companies ordinance and under the company act.
Under the guidance of manager accounts I could be able to do financial analysis which is necessary to know the exact position of company. Manager accounts also told financial policies of company that are concerned with the problems of providing and handling capital that is required for the business.
THIRD WEEK
Purchase Department
After finance department, I worked in purchase department. The purchase department play a vital role in any company life. The importance of the purchase department can easily be appreciated as it provided all the raw material and other requirement of the factory. Purchase department in Global Telecom is controlled by Chief Executive. There is one purchase manager and three clerks.
In this department purchase manager is very co‑operative. He told me the different functions that purchase department perform. To the purchased of raw material and supply the first responsibility of the purchase department is to locate the sources of supply and to select the best and most reliable sources. Purchase manager negotiate with purchase contractors arrange for the delivery data and follow up the purchase order to see that the goods are received at the data wanted. In some case the manager may contract for each order separately or each project that is planned in the production. He told me that all the purchases of the company are made by purchase officer.
I learnt during my training in this department that there is no middle man or one party is included for the purchase of raw material. I learnt that selection of vendors is made by keeping in view the following factors:
- Reputation of the vendor
- Financial strength of vendors
- Vendors working ability
FOURTH AND FIFTH WEEK
Administration Department
After purchase department I was shifted to administration department. Personnel and administration department is a very important department in the Global Telecom. The number of functions being performed by administration department are much to any other department. Administration department consists of administration manager, one assistant manager, six clerks and peon. I worked under the supervision of assistant manager is very co‑operative person. He told me about the various functions that administration department perform. During my training in this department I learn about how the appointment record, employee's personal record is maintain and how the performance of employee's is monitored. This department also deal with issuance of warnings, show cause notices, charge sheets and termination letters. I learnt how Global Telecom recruit new employees. What rewards they give to their worker. So that worker are more efficiently do their job. Staff of this department is very co‑operative like in other departments of Global Telecom. I learnt about the reasons, Global Telecom discharge their employees. This section also prepare the promotion cases of the employees, also maintain leave records of employees, increment record of employees, and maintenance record of vehicles.
Manager of this department advises management concerning various relations and represent management in handling complaints of employees. I learnt how billing of overtime, contracts bankers record of worker for annual increments prepare and also preparation of Government returns. The wages system is also controlled via this department.
SIXTH WEEK
Sales Department
After administration department I was shifted to sales department. In Global Telecom each product has its own sales record section. There are assistant manager for each product line, who work under the guidance of sales managers. Every sales section has several clerks. During my training in this department I learnt how company sell different products.
They organize distribution channel. I also learnt about the sales procedure. Sales advice is received from the executives by the sales manager. Sales advice one copy is kept as a record in the sales department. Sales advices are sent to dealers of the Global Telecom. They deposit the money in the bank and payment information is received from the respective banks. Delivery order is prepared for that order and posting is made in sales ledger. The stock account is prepared from the stock registered and then summary is prepared. Sales department staff is very co‑operative and they are working like a team and using all techniques to increase the sale of Global Telecom.
During my training in this department I was sent to various workshops of Global Telecom. During my visit to these shops I learnt about the procedure of manufacturing various products.
The staff of this department is very co‑operative and they provide me valuable information about the products. In short we can say that, in Global Telecom continuous improvement in the product is necessary object.
PROBLEMS
Global Telecom is facing a number of problems. Following are the problems which company is facing:
1) Global Telecom is facing major problem that is the lack of marketing department there does not seem to be a well organized marketing department in the company. They are depending on their old belief that they can survive in the environment which is very competition oriented. Company is seems to be rigid in the company sense that the top management does not seems to be market oriented.
2) Another important problem is Finance. Finances are vital for a firm to run and also survive in longrun. When we look at the balance sheet of the company we says that this is the item which was constantly decreasing.
3) Another important problem there are no specific and well defined distributions selling recruitment. There are no standard layout for above mention areas and most decisions are taken by management.
4) High financial charges is also a crucial problem.
5) Global Telecom is also facing the problem of cost of goods manufactured.
6) There does not seems to have well defined objectives and are trying to achieving the objectives enlisted in memorandum and articles of association.
7) Another problems which Global Telecom is facing that they are investing in the current assets instead of investing in the fixed assets. The trend in Global Telecom is purchase of raw material and to invest in the short term finances which are not even secured.
8) Lack of target setting system in Global Telecom is also a hurdle to their prosperity.
9) Another problem is that decisions are taken at top level and lower and middle level are not involved in decision making.
10) The sale volume of Global Telecom is decreasing day by day.
11) Global Telecom did not possess to pay their current liabilities in the short time.
12) There are people working in the Global Telecom for last twenty years and they are getting nothing out of their twenty years experience. No incentives for workers. For production there are no incentives and due to this reason people working in the company are not the best.
13) Another problem Global Telecom is facing that they are taken too much short loans. In fact a company runs on the long term loans but they are not able to get long term loan and are relaying on the short term loans with high rate of return.
14) Another problem is to produce too much items with no finances in their pocket.
15) Introduction of new technology in the Global Telecom was at sometime the most important policy but now it seems to be prohibited.
16) People working in the factory are not satisfied with working condition in Global Telecom.
17) No exporting efforts has been made. No attempt is taken to keep the graph of sales high.
18) There does no seems a well organized computer department in Global Telecom.
19) Lack of advertising is another problem of company.
20) Huge amount of stock is laying down in godown which is another hurdle on the smooth operation of Global Telecom.
21) Another important problem Global Telecom is facing is production problem. According to the analysis of the capacity of Global Telecom and actual what they are producing it is quite evident that they are unable to fully utilize it.
22) Global Telecom is not recruiting educated, trained people.
23) Lack of required motivational level in the company.
24) I get the feeling that the company is being run on the old fashioned proprietorship style. The administration and management style is not keeping with the modern trends.
25) The most important factor which can be called only problem the Global Telecom is facing is the management problem. The management has done nothing for the improvement of the company.
SUGGESTIONS
The company can be prosperous if the following suggestions may be followed:
1) First of all I think a marketing team should be assembled to work on the promotion of products.
2) Establishment of the advertising department is a prime need of the company because it is most effective weapon for marketing product.
3) The steps should be taken to improve the production and first they should start producing new products in huge quantity.
4) The pay scales of the workers should be revised.
5) Educated people should be recruited.
6) Short term financing should be reduced to minimum level.
7) The firm should make a plan for the whole organization and quantitative objective must be set and given to each department.
8) The work load on the officers of the company should be lessened so that they could perform their duties whole heartedly and responsibilities should be given to them.
9) If Global Telecom get the management which is willing to change then there seems no problem in Global Telecom prosperity.
10) Global Telecom should try to do get the long term loans.
11) There should be incentive system for the workers in factory.
12) Product manager should be appointed for each different product. In this way more focused attention will be given to every product.
13) Operating and administrative expenses should be controlled.
14) Excess production machinery should be disposed off.
15) New markets should be located especially for Global Telecom other products.
16) Efforts should be made to export goods.
17) Foreign goods sales taxes smuggled goods and domestic duties are not factors unique to Global Telecom these conditions prevail in the market and affect all local producers. If competitors such as PEL can flourish while facing these problems that it mean that reason for Global Telecom failure are to be found elsewhere and above factor are not the cause.
18) A comprehensive market research should be conducted to analyse the situation so that all flows short comings and weaknesses are identified in product quality.
The most important thing is that the change always comes from inside. Therefore if Global Telecom want to again get there lost status then the management should be devoted to improvement.
PREFACE
During the two years education of business administration at department of business administration, University of the Punjab, every student is required to complete 8 weeks internship programme at a reputable organization to know the basic tools and requirements of practical field of business.
Being a student of business administration, I completed my internship programme at Global Telecom for many reason. First of all it was one of the best company of Pakistan. Secondly company is now a days passing through the worse period of its life and I was really interested in reason of decline of the company. Thirdly I want to learn things about the company manufacturing process. I have try my best for many thins for this firm and to give them suggestion which can be very helpful for Global Telecom in regain there lost image. This report has seven parts:
1. Introduction to the organization
2. Management of the organization
3. Production facilities of Global Telecom
4. Marketing mix
5. Financial analysis
6. Training programme
7. Recommendations
Further I have try my best to make a report which not only prove helpful for the company but also for the other companies in the manufacturing field. I have very carefully analyzed various departments of Global Telecom. Though to get information was very difficult task but I manage it. I have also very carefully manage the financial statements of company and after analysis I have gave the recommendations for the improvement.
It is not sufficient to know every thing about the organization during 8 weeks and management of organization has top secrets and confidential so this report may include some suppositions about the organization.
I hope that this report will be very helpful to Global Telecom. I wish all the best to Global Telecom in future.
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ACKNOWLEDGEMENT
"All praises are for the Almighty Allah".
My deepest and whole‑hearted appreciations are for those who helped me in the development of this assignment. Many people each in special and valuable ways have earned my gratitude.
I am greatly thankful to my respectable and honourable Professors with whom I ever have a spiritual relations.
I have taken the honour to praise my teachers including all those whose guidance and encouragement is including in writing this internship report.
It is my great pleasure to mention the experienced skilled most cooperative and nice personalities at Global Telecom, where I completed my Internship period and I wish to have a chance to work with them. Those are;
- Mr. Jamil Ahmad
Manager Accounts
- Mr. Rashid Ahmad Butt
Manager Public Relation
- Mr. Habib ullah Rana
Manager Engineering
including managers of different departments of Global Telecom and all those who cooperated with me.
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LIST OF CONTENTS
Particulars Page No.
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