Final Report NTC

8/14/2019 Final Report NTC

1/55

ACKNOWLEDGEMENTACKNOWLEDGEMENT

Thanks to Almighty Allah for giving me knowledge, power

and strength to accomplish this task. We learned a lotwhile doing this project and this will certainly help me in

our forth coming life. Many friends of me helped me

during this project but I have no claim of perfection but

have tried my level best to accomplish it. With a deep

sense of gratitude I extend my thanks to my teachers and

administration of Allama Iqbal Open University who

provided me this opportunity to learn practically, who

helped me in all the phases of this project. We are also

very thankful to the Management of NTC for supervision

and help during the times of difficulties.

In the end I would like to thank all of my teachers andfriends for their support and encouragement. Finally my

special thanks to my family for their never ending support

during this time period.

May Allah help me for applying that I have learned during my

internship.

LIST OF CONTANTSLIST OF CONTANTS

1


2/55

ParticularsParticulars

PagePage

1 Introduction

8

2 Objectives of Studying the Organization 10

3 Overview of the Organization 11

3.1 Brief History

3.2 Nature of the Organization

3.3 Business Volume

3.4 Number of Employees

3.5 Product Lines

4 Organizational Structure 20

4.1 Main Offices

4.2 Comments on the Organizational Structure

5 Structure of the Finance Department 22

5.1 Number of employees working in Finance Department

5.2 Finance & Accounting Operations

6 Functions of the Finance Department 31

6.1 Accounting system of the organization

6.2 Finance System of the organization

6.3 Use of Electronic data in decision making

6.4 Mobilization of Funds

6.5 Generation of Funds

6.6 Sources of Funds

2


3/55

6.7 Allocation of Funds

7 Critical Analysis 43

7.1 Financial Analysis (ratio analysis, horizontal & vertical analysis of

the organization of the last five years)

7.2 Organization analysis with reference to the industries listed on the

stock exchange

7.3 Behavior of the studied organization in allocation of various funds

to different assets

7.4 Future prospects of the organization

8 Shortfalls/weaknesses of the Finance Department

57

8.1 Critical analysis of the management patterns of the organization

with reference to financial operations, weak areas that need to be

improved

9 Conclusions & Recommendations for improvements

59

10 References & sources used

11 Annexes

62

A). Number of Employees at NTC

B). NTC Organizational Chart

C). NTC Finance Wing Organizational Chart

3


4/55


5/55

EXECUTIVE SUMMARYEXECUTIVE SUMMARY

National Telecommunication corporation was established on 1st

January 1996 vide Pakistan Telecom (Re-Organization) Act 1996 to

provide Telecommunication services to GoP departments formally

carried out by Pakistan Telecommunication Corporation. NTC to

meet the present demand of current era realize changing

environment. The telecommunication usage is increasing

worldwide at a faster pace and at the same time, analog

microwave system is facing out with digital media. NTC Data

Network for E-governance/ commerce has started functioning with

a number of services ISP, intranet and certain value added

services. The corporation is also shouldering certain significant

Government projects chiefly PAKSAT, and education intranet,

Moreover, the corporation has successfully established its MIS

department, which has now started NTC in house billing.

Financially NTC showing improvement its operating expenses have

been kept minimum level by properly analyzing requirements and

streamlining functions. Emphasis is given on preventive

maintenance plan, to keep the vital assets of NTC in proper

working condition. Efforts are made to keep the corporation lean,

new induction of essentially required staff is made only.

The corporation is fully alive about the training and development

of its staff. Finance and Administration functions are also beingmanned through professional qualified staff to run the corporation

on true corporate lines.

Telecommunication sector in Pakistan is pioneer to experience the

open market competition. All business activities and strategies

revolve around the consumer needs and goals are set to meet

5


6/55

demands to the best of their satisfaction. It understood that quality

of service and tailor made products, matching to different

customers needs, at competitive rate, will be the hallmark of

success.

6


7/55

INTRODUCTIONINTRODUCTION

The new era of telecommunication in Pakistan has brought several

challenges with it, despite of the advantages it has made visible for the

consumers. The most important being the challenge to keep intact thesecurity requirements of the GoP (Government of Pakistan) and to

protect the new players in this field from the conventional practices of

the incumbent operators to protect their market share. To overcome

these challenges GoP established National Telecommunication

Corporation (NTC) in January 1996 under the Telecom Reorganization

Act 1996.

The main objective was to have an infrastructure independent of all

other operators that can be used for the purpose of government

communication and as an alternative support for the operators entering

the market.

Progress From start to date: The ongoing infrastructure

development journey for NTC began in 1996 when it was created with

few local exchanges and analog microwave. However, today NTC has

developed its own infrastructure to an extent where it can be called an

independent IT and telecom operator capable of meeting the challenges

of the deregulated environment and meeting the objectives for which it

was created. NTC started its operations in 1996 with only 5 local

exchanges all over Pakistan and an analog microwave link not capable

of supporting the digital transmission. To carry out its operations, it was

mainly dependent on PTC infrastructure and used its transit network,

international gateways, transmission network, IN platform etc. to carry

out its operations. The copper network in the access provided to NTC

was not sufficient to cater for its subscriber base and meet the required

quality of service parameters. NTC had no arrangements for direct

7


8/55

interconnect with cellular operators as a result it had to pay substantial

part of its revenues to PTCL for 3rd party termination. Data services

being essential demand of NTC customers could not be met due to non

availability of infrastructure. Billing of NTC customers was carried out

through PTC initially and through Pakistan Computer Bureau. The mainchallenge for NTC at that time was to reduce this dependency on other

operators to minimum as soon as possible to fulfill its obligations and to

sustain itself in the deregulated environment in which PTC was to be

privatized. The main focus in the initial years was to develop its own

basic infrastructure that included optical fiber transmission backbone,

transit network, billing system and multi services data network (MSDN)

beside expansion of its switching network to un-served areas to cover

as much of its subscriber base as possible. It purchased 2 fibers from

PTC in the main optical fiber backbone and equipped it with 622 Mbps

SDH system. It expanded its exchanges in different cities to gain access

to its customers along with laying of copper cable. These exchanges

were converted into transit exchanges to provision long distance

services on NTC network and to have direct interconnects with cellular

and other operators. The establishment of NTC MSDN was a major

milestone, achieved in 2001 which enabled NTC to provide multiple data

services such as dialup, DSL, Web hosting and internet etc. to its

customers. Another milestone achievement in National history is in

placement of Pakistan education & Research Network (PERN) project.

The project is providing 155 Mbps international connectivity to 59

universities connected all over Pakistan. The billing system was

developed in first 4 years which made it possible for NTC to do its own

billing.

8


9/55

OBJECTIVES OF STUDYING THE ORGANIZATIONOBJECTIVES OF STUDYING THE ORGANIZATION

The purpose of the study is to make sure this publication

understandable to its readers by giving the overview of the organization

in detail it is also descriptive in nature through which one can

understand the working of a government owned corporation i.e.

National Telecommunication Corporation. During the internship special

emphasis has been given to the Finance Department of NTC. The main

objectives of studying NTC are as follows:

i). Studying the functions/affairs of the finance department.

ii). To see how strategic decision are made in a practical setting.

iii). To observe the task and authority relationship, existing in the

organization

iv). To relate the theoretical concepts with the practical framework.

v). To analyze the structure of the finance department with respect to

number of employees and finance and accounting operations.

vi). To study the overall structure of organization.

vii). To practically see the funds, managements, mobilization of funds,

generation of funds, and allocation of funds.

9


10/55

OVERVIEW OF THE ORGANIZATION

7.1Brief History

National Telecommunication Corporation (NTC) was established on

January 01, 1996, vide Pakistan Telecommunication (Re-organization)

Act, 1996 to undertake the telecommunication business in respect of

the government departments formerly carried on by the Pakistan

telecommunication corporation (PTC). The business was transferred to

the Corporation w.e.f. January01, 1996, gradually under the Pakistan

Telecommunication (Re-organization) Act, 1996. From this date the

corporation, took over the properties, rights, assets, obligations and

liabilities of PTC as specified in the Vesting Order issued by Ministry of

Communication. Government of Pakistan Gazette Notification No.1209

(I)/95 dated December 31, 1995; the Corporation commenced its

business on January 01, 1996. The corporation was engraved of PTC and

the assets equivalent to Rs. 5,143 billion were transferred to NTC.

Statement showing the details of Assets and Liabilities taken over at the

incorporation is presented at that time is at Annex-15.1

7.2 Nature of Organization

As per section 41 (3) of Pakistan Telecommunication (Re-

organization) Act, 1996, the Pakistan Telecommunication Authority

(PTA) has granted a license to the National Telecommunication

Corporation for the provision of telecommunication services within

Pakistan to the Armed Forces, Defense Projects, Federal Government,

provincial Government or such other Governmental agencies or

Government institutes as the Federal Government may determine and

during the exclusivity period of the Pakistan Telecommunication

Company Limited (PTCL) specified in section 39, of the aforesaid Act,

10


11/55

the NTC shall not sell its capacity on the telecommunication system to

any person other than such Government agencies.

Basically NTC is a Government owned corporation in which financial

practices exhibit it as a true public sector corporation. NTC is adeveloping organization and most of its processes & operations are in

the phase of being re-engineered. As far as the decision making is

concerned, right now, top-down decision making approach is being

followed. In administration its own Standard Operating Procedures

(SOPs) are followed

7.3 Business VolumeNTC has annual business volume of about Rs.300 billion. It is pertinent

to mention here that from the business volume point of view, Islamabad

Region (out of five NTC regions i.e. Islamabad, Peshawar, Lahore, Quetta

& Karachi regions) is generating about 37% of total revenue while

Lahore region contributes 26 % and other regions are generating

remaining 37% of total revenue. Following are the major sources of its

revenue:-

Fixed line connections.

Media (MW, DRS, OFS, PCM, Carrier) services.

Internet, MSDN services.

PTV Transmission.

Services for Mobile operators.

Gateway services for International communication.

Services for PERN project

Being public sector clientele, NTC has to face a great deal of difficulties

in recovering dues from different Government departments. However,

its revenue section is leaving no store unturned to come up with flying

colors.

11


12/55

NTC business volume is likely to touch the zenith when most of the

embassies will be provided telecommunication facilities by NTC. In this

regard, Director NTC region Islamabad is trying its best to shift all those

connections installed for embassies through NTC network. It is pertinent

to mention that currently PEMRA has granted licenses to 50 new TV

channels, thereby, it will call far usage of NTC infrastructure to facilitate

their transmission.

7.4 Employees Profile

Presently, total numbers of employees working in NTC are 3003. Detail

description is provided at Annex-15.2 at the end.

7.5 Product Lines

NTC being a service oriented organization is offering following product

lines:-

Fixed Line Connections

As the name implies, the services of telephone connections beingrendered to NTC valued subscribers through cables come in the

category of fixed line connections. It is a major source of NTC revenue.

Telephone Billing Trend

12

1151.651642.97

1968.942345.8 2610.51

0

50010001500200025003000

RupeesinMillion

2001 2002 2003 2004 2005


13/55


14/55

the approval of the Authority. The Authority shall grant its approval in

accordance with the policy directives of the Federal Government. To

establish, operate and maintain the following services, subject to

getting approval of the Authority regarding tariff/pricing structure and

submission of detailed technical plan in respect of each service:I. Card Pay Phone Service and

II. Voice Mail Service; and

III. Centrex and Digital Services; and

IV. Data, E-mail and Internet, Value Added Services like LAN & WAN;

and

Intelligent Network Based Services such as:

V. Premium Rate Service (0900 Prefix Numbers)

VI. Virtual Private Network (VPN)

VII. Tele-voting

VIII. Automatic Alternate Billing

IX. Calling Line Identification Service

X. Free Phone Service (0800)

XI. Universal Access Number (UAN) Service.

In the event of a new telecommunication system becoming available

and if the Licensee plans to establish such a system, the Licensee shall

obtain prior written approval of the Authority. The Authority shall grant

its approval in accordance with the policy directive of the Federal

Government. The Authority may impose any further conditions on the

Licensee in furtherance of its functions.This license is valid for the whole territory of Pakistan other than the

Northern Area and the territories that lie in Azad Kashmir

The authority, Shall, at the request of the Licensee, investigate and if

appropriate, take action in respect of any relevant matter notified by the

Licensee to the Authority as being a possible infringement of the

14


15/55


16/55

PERN

Pakistan Educational and Research Network (PERN) will provide state-of-

the-art backbone to 56 universities in public and private sector to

interconnect the universities with institutions the world over, to enable

the students to access the sources of knowledge all around the globe

through Internet and to standardize their respective curricula. This

project has already started delivering services. This project is partly

financed by PTCL and is being done with their collaboration. IT

education is being extended to school level by providing personal

computers to 94 schools in the country where the student will be

trained in working on PCs in networking environment.

16


17/55

Jamshoro

TandojamNawab Shah

D.I.Khan

Topi

Khairpur

Legend

ATM Switches 03

Universities on OF 16Universities Online 11

Universities on DXX 22

Universities on DRS 17

Universities on VSAT 01

Khuzdar

Abbottabad

E3Backb

one

E3Backb

one

PAKISTAN EDUCATION & RESEARCH NETWORK (PERN)

Pakistan has entered into space at its first communication satellite

PAKSAT has been moved on 17th December 2003 to its GSO slot at 38-

degree east.

Media Services

It is fact that media is the back bone in any communicational set up.

NTC has its own telecommunication infrastructure & it provides

following types of media services like Microwave Media, DRS media, OFS

media, PCM media and Carrier media.

Services for Mobile operators

17


18/55

Since NTC has its huge telecommunication set up all over Pakistan,

therefore, it provides following types of services for mobile operators:-

I. Installation of dishes & antennas on its towersII. Provision of power supply

III. Space provision for installation of their equipment at NTC

premises

Gateway Services for International Communication

NTC also facilitates its subscribers for international dialing. For this

purpose, NTC established its own International Gateway at Karachi.

ORGANIZATIONAL STRUCTUREORGANIZATIONAL STRUCTURE

NTC organizational structure is attached at Annex-15.3

10.1Main offices

Following is the brief list of NTC main offices:-

Serial

Main office Location

1. NTCHeadquarters

F-5/1 Islamabad

2. Chief Engineeroffice

Jinnah Super Islamabad

3. RHQs Islamabad Green Tower Blue Area Islamabad4. RHQs Peshawar The Mall Peshawar Cantt5. RHQs Lahore 6-Race Course Road Lahore6. RHQs Karachi Airport Exch. Building, Near Wireless Gate,

18


19/55

Karachi7. RHQs Quetta House No. 21-C, Jaffer Khan Jamali Road,

Quetta

8.2 Comments on Organizational Structure

NTC organizational structure has been framed for better monitoring &

control of NTC installations & its assets (financial, human, equipment &

material). In addition to prevailing feed back control, there exists a

prevailing practice of even feed forward control by implementing

fortnightly maintenance of each station which is possible through this

organizational structure because as per NTC standing operating

procedures, on occurring of a fault, intimation be given to all concerned,

however, if it persist then action can be taken by concerned Divisional

Engineer within one hour, if the situation is not being over come then

involvement by concerned Regional Director within four hours, if the

fault not rectified then Director (M&O) may involve within eight hours,

if it still persists then involvement by Chief Engineer(development)

within twelve hours. However, if all above efforts have no fruitful results

then involvement by Chairman within twenty four hours. The wholeefficiency & effectiveness of this monitoring & control lies in NTC

organizational structure.

19


20/55

STRUCTURE OF THE FINANCE DEPARTMENT

Finance is fundamental molding factor in office administration and the

running finance is like blood circulation for any organization. The

employees services have to pay, expenses of building, equipments,

furniture and other related expenditures which have been incurred.

Finance department follows the government rules and regulation in its

financial decisions. NTC being a self-financing corporation have its own

rules and regulation. As the NTC is statutory corporation so it has rules

and regulation authorized by government. The persons related to these

different sections have different responsibilities and they perform

different functions. These responsibilities and functions are as follows.

This department is headed by Member (Finance). Director (Finance &

Corporate Affairs), Director (Revenue) and Director (Budget & Accounts)

work under supervision of the Member Finance (BPS-20). Detailed

organizational chart of NTC Finance Department is placed at Annex-

15.4

9.1 Number of employees in finance department

20

MemberFinance

Director Finance&Corporate Affair

Director(B&A)

Director Revenue


21/55

Presently, there are 146 employees working in Finance department

through out the organization. They are active, energetic & enthusiastic

possessing high qualification and vast finance & accounting knowledge

experience to work in a competitive environment. Following is the break

up of staff working in finance department:-

Grade / Scale Finance Employees

BPS-17 & Above 26

BPS-01 to BPS-16 120

Total 146

9.2 Accounting & Finance Practices

NTC Accounts are maintained on double entry system on the basis of

GAAP (Generally Accepted Accounting Principles).

Drawing and Disbursing Officer

All the Regional Directors are authorized to open and operate NTC bank

account for official transactions with the approval of the Members

(Finance)/Chairman. The Regional Director is declared DDO and will

open their account in the nearest National Bank of Pakistan. The

account is jointly opened by taking one person from technical staff and

other from finance.

Authority to sanction Expenditures

Financial concurrence prior to the sanction of the expenditure for

purchase of stores items, durable goods, creation of posts, civil works,

supplies contract and house rent subsidiary obtained as prescribed in

the Delegation of Administrative and financial powers. The expenditures

are incurred against specific budgetary allocation and amount released.

The NTC Management Board shall do any re-appropriation from the

provision of the budget. Expenditure on procurement up to Rs.10,000/-

may be made through temporary advance to an officer of not less then

BPS-17. He should conduct proper market survey and collect spot

21


22/55

quotations (at least three) and purchase the items at lowest available

rates. Items involving cost up to Rs.2,500/- may be purchased without

collecting quotations. The officer making the purchases shall certify that

the purchase was made at the lowest rates available in the market on

the back of the bill. For procurement involving cost above Rs.10,000/-and up to Rs.100,000/- limited sealed quotations may be called. Three

officers including Divisional Accountant shall open the quotations. A

comparative statement is prepared and after approval of the competent

authority an order shall be placed to the lowest bidder. Purchases

involving cost of Rs.100,000/- and above shall be made after inviting

bids through open tenders. The specification for items to be procured

should be generalized to allow the participation of maximum bidders. If

two or less quotations are received both in limited and open tenders the

item should be re-tendered. In case of an operational emergency the

foregoing procedure may be substituted by recommendations of a

Purchase Committee comprising of three officers including the Divisional

Accountant. The Committee should survey the market, obtain three

quotations, recommend the lowest quotation, obtain approval of the

Competent Authority and make the purchase. All Payments shall be

made through cross cheque. Incurring of expenditure without or in

anticipation of budgetary release is not permissible unless concurred by

the competent authority.

GP Fund Accounts

GP Fund accounts of NTC employees are centrally maintained at the HQ.All GP Fund payments including G .P Fund advances are approved at the

Headquarters. For payments from GP Fund, authority will be issued to

the concerned DDO for release of payment to the individual. GPF

contributions of the Regional and Divisional staff will be deducted at

22


23/55

source from the releases of the respective Region/Division. For

regulations issued separately are followed.

Payments

All payments supported by payment vouchers are made through

crossed cheque. Payment vouchers are properly prepared bearing

account head, particulars of payment, bill number and amount in figures

and in words. Income tax at source is deducted in accordance with

Income Tax Ordinance. For internal control, one official prepares a

voucher after 100% checking of the supporting documents and

verification of all conditions in the bill. The voucher then be checked

/audited by another officer and be approved by the competent authority.

In case of voucher for payment against supplies, following are needed:-

I. Original invoice of the supplier.

II. Supply order document.

III. Inspection report.

IV. Store receipt note.

V. Approval of the competent authority.

Once the payment has been made the invoice bill of the supplier is

stamped PAID.

Payments of salaries are made on the basis of pay authority issued by

the Finance Division. Taxes, utility bill, rent etc, be paid on the basis of

actual and on due date.

Receipts

All receipt including telephone revenue and payment in lieu of

leased/speech circuits were deposited in the Revenue Account

maintained with the National Bank of Pakistan, Marriott Hotel Branch,

Islamabad till the subsidiary revenue account is opened at the regional

level. The cheques, Bank drafts, payment orders etc. should be

deposited in the revenue account within 24 hours of the receipts. No

23


24/55

unit or an individual is authorized to receive or collect the revenue in

cash. Neither any withdrawal can be made from the Regional Revenue

Accounts. For the time being pre-deposits advances shall also be

deposited in the main revenue account within 24 hours from the

receipts of the cheques, Bank drafts, payment orders etc. The procedurefor revenue accounting and Pre-Deposit works is formulated separately.

Preparation of Ledgers/Accounts

In accordance with the budgetary head of accounts all payments are

recorded in the subsidiary ledgers, detail heads and then in control

accounts at the end of the month. The following registers are

maintained for accounting record:

a. Separate pay order register for payment of salar ies to officers

and staff.

b. House rent subsidiary payment record register.

c. Indoor/out door medical payment registers.

d. Util ity b il ls payment register showing per iod, amount, meter

reading etc.

e. Rent payment register.

f. Suppliers register.

g. Contingency payments register.

h. Repair and maintenance with respect to each type of f ixed asset

i.e. individual building and machine wise etc.

i. Maintenance of vehicles shal l be recorded in their respective

logbooks, which are invariably being audited at the end of every

month.

Tax Deduction at SourceIncome tax deducted at source is deposited with Government

treasury within 7 days of the deducted from all types of

payments (if comes under taxable limits) in accordance with

the rates prescribed in the Income Tax Ordinance. Schedule of

deductions from salaries showing name and designation of

24


25/55

employee and detail of his each type of deduction including

G.P. fund and group insurance, Benevolent Fund and Income

Tax is sent to the Finance Division by 5 th of every month. The

amount against G.P contributions is deducted at source and is

deposited in the central GPF A/C. The respectiveDivision/Region deposits other deductions in the respective

heads of A/C in the Government treasury before the 7th of the

ensuing month.

Preparation and Submission of Cash Accounts

Cash account is prepared in accordance with the budgetary

release/expenses incurred. The following documents are attached with

the cash account:

a. Statement showing both bank and cash opening balance, payments

during the month and likewise closing balance.

b. Bank statement.

c. Bank reconciliation statement.

d. Outstanding temporary advances l is t. The l is t o f outstanding

advances must show name (s) of the concerned offic ial and date

when advance was drawn.

e. Outstanding TA/DA advances.

f. Original Vouchers.

Closing of Books

Books are closed at the end of every month and cash accounts with

specified statements are sent to Finance Department by 5th of every

month directly by the concerned Director and Divisional Engineers. The

D.Es who are delegated the powers of DDO by their Directors should

also send a copy of the cash account to their Directors for review and

financial control. Cash account of the Directors office is prepared and

sent separately on due date.

Taxation

25


26/55

No provision is made in accounts for taxation for first three years

because the income of the Corporation is exempt from income tax

under section 41(18) of the Pakistan Telecommunication (Re-

organization) Act, 1996 for a period of three years from the date of its

establishment, but presently it is paid @ 35% as levied by Central Boardof Revenue.

Fixed Assets Depreciation & Capital Expenditures

All Fixed Assets except freehold land is stated at cost less accumulated

depreciation. Freehold land and capital work in progress are stated at

revalued amount and cost respectively. Depreciation on operating fixed

assets is charged to income using the straight-line method. Full years

depreciation is charged on additions during the year, while no

depreciation is charged on deletions during the year. Major renewals

and improvements are capitalized. Minor repairs and renewals are

charged to P & L Account.

Short Term Investments

Short-term investments are stated at lower of cost or market value.

Stores and Spares

Useable Stores and spares are valued at cost and charged to income on

first-in-first-out basis while items considered obsolete are carried at nil

value. Items in transit are valued at cost plus other charges paid

thereon.

Revenue

Revenue is recognized when earned.

Markup, Interest and Other Charges

Markup, interest and other charges on long-term loans are capitalized

up to the date of commissioning of the respective asset acquired out of

26


27/55

the proceeds of such long-term loans. All other markup, interest, profit

and other charges are charged to Profit & Loss Account.

Foreign Currencies

Assets and liabilities in foreign currencies are translated into rupees at

exchange rates prevailing at the balance sheet date except those

foreign currency liabilities for which exchange risk cover has been

obtained from the Economic Affair Division, Government of Pakistan,

which are translated at the agreed rates. Transactions in foreign

currencies are translated into rupees at the rate ruling the date of

transaction. All exchange differences are charged to profit and loss

account.

Budget Surplus

As per section 41(7), (8) & (9) of the Pakistan Telecommunication (Re-

organization) Act, 1996, National Telecommunication Corporation shall,

in respect of each financial year, prepare its own budget and submit it

for the approval of the Federal Government before the first of June every

year. The budget statement shall specifically state the estimated

receipts, current and development expenditure for the next financial

year.

Capital Reserve

This represents revaluation surplus resulting from the revaluation of

land & building of Pakistan Telecommunication Corporation a per Vesting

Order clause (IX).

27


28/55

FUNCTIONS OF FINANCE DEPARTMENTFUNCTIONS OF FINANCE DEPARTMENT

1.3 Accounting system of the organization

Normally, in Government owned organizations, cash based

accounting system is practiced. In contrast to this system,NTC is following accrual based accounting system meeting the

requi rement of GAAP (generally accepted accounting

principles). Whenever a transaction occurs, it is recorded in

respective books of accounts regardless of cash effect of

transaction. Thus NTC has made its Accounting practices and

operations according to International Accounting Standards

(IASs). Major books of accounts are cash book cum general

ledger, local purchase register & store register. Basically, the

source of f inal accounts is monthly cash account of each

region. Final accounts are prepared centrally.

10.2Financial system of the organization

NTC has to manage its assets and operations, and for this

purpose funds (finances) are required. Short-term

requirements like working capital needs and long term funds

requirements for purchase of f ixed assets, l ine and wire

(intention works) establishment of new exchanges has to be

met with. Short-term financial needs are met from NTC own

resources. NTC generates revenue on monthly basis. Short

term financing is provided out of these revenues. As for as

long term financing is concerned, in the past NTC has been

depending on the Government for assistance. But now NTC

depends on i ts own resources. And i t solely depends on

internal resources. This is a great advantage for NTC that it is

saving huge amount of interest.

28


29/55

Current Assets Management

Working capital is the lifeblood of every business, by working

capital we means cash, inventories and marketable securities

etc. By net working capital we mean current assets minus

current liabilities. Working capital management aims at using

the monetary resources (cash) in a productive manner so that

these resources may not remain idle. NTC makes its best

efforts to optimally uti l ize the funds so that it could earn a

reasonable return. Funds Management Section in NTC strive

its best to make the idle funds product ive. In NTC Head

quarters staffs GP fund and CP fund Account are maintained

separately. Monthly deduction from the staff salary is made

and this amount is invested in various schemes of National

Savings. Most of the funds are invested in defense saving

certificates. The profit on these certificates is reinvested.

Cash is drawn from the bank as per daily needs. No additional

cash is drawn. At the end of the day the balance of cash

becomes zero. The eff iciency of the funds management

section is judged from the fact that cash is deposited with the

bank for 10 days, one week and even for two days. In this

way interest on this money is not lost.

As for as the investment in inventories is concerned, it is

ensured that only a reasonable level of stock/inventories

should be maintained so that the heavy costs related with theinventory are avoided since its establ ishment. Its current

assets include stores and spares, stores imprest control

account.

Fixed Asset Expenditure

29


30/55


31/55

assets (buildings, equipment, office furniture, l ine & wire,

apparatus & plant e tc.) most of the expenditure is incurred on

lying of underground network. As a growing organization, NTC

has to spend a huge amount of money as establ ishment of

new exchanges in different cities of the country, generallybefore selecting various projects; the incremental cash flows

associated with the project are analyzed. But as for as NTC is

concerned, this exercise is not carried out. Since NTC serves

the national cause, it undertakes such projects, which are

vital to the nat ional interests. The needs of the nat ional

Institutions are analyzed and best efforts are made to fulfill

these needs. Revenue budgeting is a lso important . The

routine (day to day) expenditures are provided for in the

budget, Revenue budgeting includes wages , Rent, Repairs and

renewals, etc. Such expenses wil l benefit NTC for one year

(maximum). Budgeting is carried out for the period of one

year; however budget estimates are revised at the end of the

financial year. Budgeting is flexible in NTC as against Zero-

based budgeting. Budgeting based on Historical records is

practiced in NTC. Previous figures of expenditures are taken

as a base for the current year, this year requirements are

matched with the previous years actual experience and then

budget estimates are prepared.

2.3 Use of Electronic Data in Decision Making

NTC is in the phase of adopting paperless environment by

connecting its different departments through Intranet. At

present , NTC Headquarter and Regional Headquarters

Islamabad have already been connected through Intranet

using Oracle (Database), while other main offices are likely to

31


32/55

be connected in a year to come. This connectivity helps a

great deal in fast decision making & timely availability of data

& information vital for decision makers. Since the introduction

of Intranet, the operations of NTC have witnessed remarkable

time efficiency commensurate with its environment. The timecost has been marginally decreased making the organization

time conscious & giving it mileage & competitive edge.

10.4 Mobilization of Resources

Since NTC is a developing organization, it needs to expand its

set up through out the country to meet the ever increasing

demand of public and private sectors. NTC is investing huge

funds in building its own infrastructure, so that its

dependence on PTCL network is minimized. Finance

department is playing a key role in util ization of funds to

those projects which have greater net present value (NPV).

For this purpose, extensive financial analysis is carried out at

NTC HQs level and inflows / outflows of these projects are

plotted against the t ime l ine. Similarly, efforts are being

made to recover the outstanding dues from public sector

organizations so that these funds could be invested in

profitable ventures.

10.5 Generation of Funds

There is hardly any organization in the world which relies on

equity f inanc ing to meet the monetary requirement of

projects. It is fact that most of transactions in the world are

credit transactions. NTC is no exception to it. To manage the

long term financial requirements, NTC has to generate funds

from external sources. The operations of NTC are financed by

its equity up to some extent which helps in maintaining a

sound debt to equity ratio. For long term borrowing, NTC has

32


33/55

to go to commercial banks (e.g. National Bank of Pakistan,

Muslim Commercial Bank, The Bank of Punjab etc.) through

Ministry of Finance Government of Pakistan. Like public sector

corporations, it can neither issue debentures to pubic in order

to raise funds, nor can it issue share capital to general public.PTCL & OGDCL are public l imited companies l isted on stock

exchanges, therefore, they can issue share capital to masses,

while NTC being state owned corporation, can not do so. Since

the Government has some strategic interest in NTC thats why

its ownership can not be transferred to general public in the

form of shares.

10.6 Sources of Funds

NTC has following two major sources of funds: -

I. Internal sources of Funds

Followings are the internal sources of funds

a) Fixed line connections.

Fixed l ine connect ion inc ludes telephone revenue f rom

installation of telephone lines (one time cost) and usage of

telephone billed on monthly basis. Following table shows the

region wise telephone revenue trend.

TELEPHONE REVENUE (Region Wise)

33

Actual Budget Actual

2003-2004 2004-2005 2004-2005

Avg Customers 66966 75772 75709

1000000 12

Islamabad 793.70 842.88 833.93

Lahore 527.53 591.04 594.24

Karachi 481.82 562.65 573.42

Peshawar 160.67 179.82 179.76

Quetta 70.63 84.96 90.10

TOTAL 2,034.35 2,261.35 2,271.45

Region


34/55


35/55

to provide internet services to its esteemed subscribers,

MSDN internet carries handsome revenue. NTC has its own

gateway at Karachi which is proving carrier service to other

operators for international communication. PERN is providing

helpful services to facilitate the education sector. Followingtable shows the various revenue sources

NTC REVENUE SOURCES

h) Interconnect ServicesInterconnect revenue is sharing on usage of media.

35


2003-2004 2004-2005 2004-2005

Telephone 2 ,0 3 4 .3 5 2 ,2 6 1 .3 5 2 ,2 7 1 .4 5Circuits 5 5 1 . 4 6 2 2 9 . 9 3 2 0 8 . 7 0

PTCL 490.85 172.38 168.37

Others 60.61 57.55 40.33

Co-location 3 1 . 8 9 5 1 . 3 9 5 0 . 4 8MSDN 6 0 . 6 1 9 8 . 6 9 8 5 . 2 0

Intranet 49.07 49.57 41.82

Internet 11.54 49.12 43.38

Dial-Up 0.58 1.01 1.32

ADSL 10.96 28.75 23.23

Intl.Bndwth - 19.36 18.83Miscellaneous 1 9 . 6 9 1 5 . 3 7 4 0 . 4 2International 1 8 . 1 1 2 3 1 . 9 1 2 3 0 . 0 6Interconnect 2 5 4 . 7 7 2 7 8 . 2 4 1 6 . 5 1

T O T A L 2 ,9 7 0 .8 8 3 ,1 6 6 .8 8 2 ,9 0 2 .8 2Miscellaneous revenue Include Rs. 22 million sale of assets at Lahore

Account


2003-2004 2004-2005 2004-2005

Domestic 190.14 259.15 16.51

PTCL 181.66 220.95 -

Local Incoming 109.77 197.16 -

NWD Incoming 70.13 21.97 -

WPC Incoming 1.76 1.82

Mobile 8.48 38.20 16.51

International 64.63 19.09 -

APC 46.09 19.09

Miscellaneous 18.54 - -

TOTAL 254.77 278.24 16.51

Account


36/55

II. External sources of Funds

Followings are the external sources of funds

Loan can be obtained directly from Government of

Pakistan

Loan can be obtained by commercial banks.

The decision whether to rely on external sources or internal

sources depends on the current f inancial posit ion of the

organization and liquidity analysis carried out from time to

time.

10.7 Allocation of Funds

For proper utilization of funds, it is foremost important thatfinancial resources must be diverted to correct usage so that

the output can be had as per expectations. For the allocation

of funds, NTC has a separate department named budget &

internal control. Director (Budget & Internal Control) can take

the decision after analyzing the projects which quali fy for

allocation of funds. Every month, projects requiring funds are

reviewed so that the funding requirement can be met in an

amicable manner. Basically, routine expenditures or revenue

expenditures are financed on the basis of historical data while

capital expenditures are allocated on the basis of estimates

prepared by highly skilled personnel having in-depth relevant

knowledge & expertise in the respective field. It is ensured

36


37/55

that funds allocated are not diverted to some other purpose.

Further, at Regional Headquarters level, funds received from

NTC HQs are further distributed among divisions under the

auspicious of Assistant Director (Finance) on the basis of

periodic divisional requirements.

In fact, region-wise or branch-wise budget is not prepared in

NTC. However, demands are seeking from all regions i .e.,

Islamabad, Peshawar, Lahore, Karachi and Quetta and all

branches/sections in NTC HQs to carries out budgeting in NTC.

Practice adopted by NTC management is that usually budget

prepared on the basis of chart of account. In the Budget

amount allocated to the all heads of accounts individually as

appeared in the Chart of Accounts. For example, if funds are

required to any region or branch in any specific head with

proper justification i.e. head of vehicle or Apparatus & Plant

(A&P) etc. after approval/f inancial concurrence from the

Management, the Budget Sect ion wi ll i ssue sanction of

Allotment of Funds and the Payment section releases the said

amount in that particular head and at the year end actual

expenditure wil l be calculated and comparison for amount

Allocated to that Head of Account and Actual expenditure

incurred will be carried out.

37


38/55

CRITICAL ANALYSIS

When the NTC was born, in the beginning str ict f inancial

controls were exercised. Hard efforts were made so that this

newly born organization may stand upon its own feet. Highlyeducated and professional management tried their best to

generate the f inancial resources so that NTC could work

independently. At the t ime of establ ishment of NTC some

loans (liabilities) were also transferred to NTC along with the

assets. It was the major challenge for the management to

retire the debt and manage the assets in an efficient way so

that these assets could generate enough revenue to make the

NTC profitable.

11.1Financial Analysis

Ratio Analysis

We will carry out financial Statement analysis of NTC as well

as horizontal analysis. The tools of analysis are f inancial

ratios.

Debt to Equity ratio

I t means that in year 2002 the profits have increasedresulting in low debt to equity ratio.

38


39/55


40/55


41/55

As far as return on investment in concerned it has shown decline. Return

on equity also shows the same trend it has decreased from 0.26 to

0.20 over the five years.

INTERPRETATION OF HORIZONTAL & VERTICAL

ANALYSIS

When we compare the figure of revenue for four years we come to know

that the largest source of revenue i.e. the rent of M/W circuits shows a

declining trend i.e. from 82% to 51%. However the telephone revenue

has been increased significantly over the four years. If we see the

break-up of revenues of NTC we ascertain that highest revenue comes

from the rent of microwave circuits. Telephone Revenue is the largest

source of income. Break up of revenues in percentages is as under: -

Horizontal Analysis

When the horizontal analysis of last five years is conducted from

financial statements, it clearly shows that capital reserves remain the

same, while long term loans are decreasing, employee retirement

benefits are increasing which is a good sign. NTC trade debts have

decreased due to better financial management policies. Short term

investments have increased because surplus reserves are invested.

However, NTC revenue & profit is decreasing due to severe competition,

while, financial charges decreased.

Vertical Analysis

41


2003-2004 2004-2005 2004-2005

Telephone 2 ,0 3 4 .3 5 2 ,2 6 1 .3 5 2 ,2 7 1 .4 5Circuits 5 5 1 . 4 6 2 2 9 . 9 3 2 0 8 . 7 0Co-location 31 . 8 9 51 . 3 9 50 . 4 8MSDN 60 . 6 1 98 . 6 9 85 . 2 0Miscellaneous 19 . 6 9 15 . 3 7 40 . 4 2International 18 . 1 1 2 3 1 . 9 1 2 3 0 . 0 6Interconnect 2 5 4 . 7 7 2 7 8 . 2 4 16 . 5 1

T OT A L 2 ,9 7 0 .8 8 3 ,1 6 6 .8 8 2 ,9 0 2 .8 2

Account


42/55

From the vertical analysis point of view, it is clear that share of capital

reserves are increasing due to initiation of development projects. P&L

Account is increasing because it accumulates. Operating fixed assets

are increasing. Operating costs increased & profit decreased due to

competition.

From the horizontal & vertical analysis it can be concluded that since

NTC is a Govt own corporation & most of its subscribers are Govt.

departments & Defence offices, which remain reluctant to pay their

dues & many of NTC receivables result as bad debts. However, its

financial management is leaving no stone to negotiate with its

subscribers to extract their pending dues. Since NTC has monopoly torender telecommunication facilities to all Govt. departments, hence,

despite of all these problems, its financial ratios are exhibiting positive

sign. Moreover, all this show that NTC financial position is strong & will

further strengthen in future.

11.2 Organization Analysis With Reference To the

Industries Listed On The Stock Exchange

When we compare National Telecommunication Corporation with its

industry competitors, we come to know that NTC has monopoly because

as per section 41 (3) of Pakistan Telecommunication (Re-

organization) Act, 1996, the Pakistan Telecommunication Authority

(PTA) has granted a license to the National Telecommunication

Corporation for the provision of telecommunication services withinPakistan to the Armed Forces, Defence Projects, Federal Government,

provincial Government or such other Governmental agencies or

Government institutes as the Federal Government may determine and

during the exclusivity period of the Pakistan Telecommunication

Company Limited (PTCL) specified in section 39, of the aforesaid Act,

42


43/55

the NTC shall not sell its capacity on the telecommunication system to

any person other than such Government agencies. Hence the question

of industry analysis does not arise.

11.3 Behavior of the Studied Organization in

Allocation of funds to different assets

When we critically analyze the various assets and their annual returns, a

big picture comes before us. At present, NTC assets are in the form of

exchanges, buildings, MW Circuits, transmission media etc. Now having

a birds eye view of revenue record, it is revealed that the greater return

on investment is achieved from media services. Here the rate of return

is about 20 % which is greatest in figures as compared to other assets,

while exchanges are providing not more than 11 % return on

investment. NTC has made long term investments in Defence Saving

Certificates. The major source of NTC invested funds is from employee's

contributory provident fund (CPF) while GPF is invested in banks on daily

basis. Rate of return on long term investments is not more than 10 %

right now due to access supply in the market.

11.4 Future prospects of organization

Being aware of the new technologies, demand for new services and

converged network NTC is in the process of upgrading and expanding its

network. Migration from conventional TDM network to IP based Next

Generation Network has been planned and being implemented. The 622

Mbps optical fiber backbone not able to meet the requirement of

bandwidth hungry applications is being upgraded to 10 Gbps DWDMbased technology.

To improve the efficiency ERP solution has been planned and under

process of implementation. To gain access to NTC users efforts are being

made for frequency allocation and as a stop gap arrangement virtual

WLL connections are being provided to NTC subscribers. To provide

43


44/55


45/55

NTC is fully geared up to meet the new challenging environments in the

competitive era after the deregulation and deployment of NGN is a

major step in that direction. NGN technology delivers the technological

flexibility that will dramatically reduce costs and satisfy the

requirements for voice and data convergence. NGN protects existingnetwork investments while ensuring that operators are able to cost-

effectively deliver new services. NTC is planning to deploy multi services

access platform capable of providing POTs, XDSL, PRIs, IP Phone &

other cost effective and value added services to the end users.

IP Cloud

MGCP

H.248

SIP

H.323

POTs

ISDN-PRIs/BRIs

TDM

Network

Media/Trunk

Gateway &

Signalling

Gateway

Access

Gateway

SoftSwitch

IP Core

RouterMedia/Trunk

Gateway

SS7

E1E1

XDSLIP Phone / SIP

terminals

SIP

Implementation of Next Generation Network

DWDM

NTC DWDM network consists of 80 DWDM and 112 SDH nodes equipped

with different flavors of SDH data rates and various ring structures. The

network has been designed in such a way that 8 Lambda's will be

readily available for loading of any type of wavelength supported

services especially keeping in view of new emerging technologies like IP

45


46/55

over DWDM to handle the imminent bulky demand of IP traffic.

Moreover, the plan is also underway to digitize the Pakistan largest

analog microwave network (covering most of the rural area) which will

intersect the DWDM network at various sections to provide a solid base

for the extension of telecom services to deprived area's of Pakistan. Thisplan will provide a redundant network in case of emergency situation

and would also play a significant role in the reduction of digital divide.

This natural blend of two FDM technologies (in glass and air) at

intersecting points would certainly facilitate NTC optimum bandwidth

utilization.

VIDEO CONFERENCING

NTC has undertaken this challenging project which is directly related to

overall objectives of IT Action plan and the concept of e-Governance.

NTC has deployed state of the art hardware and designed a scalable

network by means of which fast, reliable, secure and real time access

will be possible between the top Federal and Provincial Government

officials for better and closer communication without physical

displacement.

With Video Conferencing System deployed, Federal and Provincial

government officials and ministers can do telecasting from NTC offices.

The video conferencing system possesses the scalability to include the

remaining Federal ministries' and their respective sub-offices in other

cities to accommodate future requirements.

Video Conferencing Studios

Considering the fact that most effective conferencing system is one

which meets customer's communications needs initially video

conferencing studios in Islamabad, Lahore, and Karachi have been

designed. A special consideration is given to following parameters;

Conferencing setup and services

Audio and video requirements

46


47/55

Information sharing needs

In the present competitive environment, NTC wishes to facilitate its

subscribers by introducing latest IT & Telecom services at affordable

rates, ensuring Quality of service. Our network design and infrastructure

is scalable and flexible to the extent that it can and will continue tosupport emerging technologies and services. NTC is in constant pursuit

of achieving customer's satisfaction in present as well as in future.

FUTURE of MSDN

NTC has established a Multi-Services Data Network (MSDN) project for

providing various data services including multi-media applications to

Govt and semi-Govt organizations in federal / provincial capitals and

other major cities of the country. MSDN is performing a multi-role action

in meeting the bandwidth requirements of government & allied

departments. The basic philosophy of the said network is to provide

connectivity for Internet / Intranet and also be able to support Value-

added services. Govt. of Pakistan is actively deliberating on launching

its E-Governance program to promote information technology. Exchange

of data information between ministries and their regional offices and

access of information by the public is an essential element for its

success. NTC Multi-Services Data Network will act as backbone to

provide required connectivity.

The main objectives for implementing MSDN is to provide dedicated

platform for all governmental e-enabled activities, data connectivity for

other organizations like SBP, NBP, AGPR, NAB etc., ISP setup for

government and semi-government organizations, video conferencing

facility, intercity connectivity etc. Information from the network will be

accessible through a variety of information-handling devices, such as

PCs, interactive TVs, telephones, or future devices that combine the

attributes of all three, as well as through wireless devices such as

pagers, wireless phones, personal digital assistants (PDAs), and future47


48/55

broadband devices. NTCs Multi-Services Data Network is designed in

such a way that 06 High-End ATM Core Network Switches in Islamabad,

Lahore, Karachi, Faisalabad, Peshawar & Quetta are interconnected

using Optical Fibre SDH backbone on 34 Mbps(E3) while more than 30

Access Network Nodes are spread all over the country. They areconnected to the nearest ATM Node either on 34 Mbps (E3) or on

multiple of E1s. Moreover NTC is in the process of establishing its own

transport media of 10 Gbps(DWDM) on both sides of Indus River (on

existing MAIN & ALTERNATE routes) between Peshawar & Karachi. The

MSDN backbone will be shifted on new media soon after its completion.

The second core technology being used is Packet over Sonet (PoS)

Juniper M-20 routers for exclusively routing IP traffic between three main

cities Islamabad, Lahore and Karachi. MSDN is a secure, well managed

& state of the art technology network. A complete ISP setup is

established at Islamabad while Internet and Intranet services are being

offered all over the country. MSDN basic services include Dialup, ISDN,

DSL, Intranet circuits, Web Hosting and E-Mail etc. Future services

include Value Added Services like Personal Web Space, SMS Gateway,

WAP Gateway, Fax Gateway Unified Messaging System for Voice,

Electronic Telephone Directory Services, Roaming Internet Access

facility, VPNs, Retrival of E-mail on PSTN (EWSD platform) telephone

connection (text to speech translation), Information about E-mail on

telephone line, Dial-out on internet (VoIP) etc.

FUTURE of PERN

48


49/55

Pakistan Education & Research Network (PERN) previously known as

Educational Intranet project is successfully implemented by NTC in

collaboration with Higher Education Commission (HEC) and Pakistan

Telecommunication Corporation Limited (PTCL). Presently 59 Universities

/ Degree awarding Institutes in Public & Private sector are on-linethrough this project whereas 59 more Universities / Degree awarding

Institutes will be up in next phase of the project. President of Pakistan

General Prevaiz Musharraf inaugurated the project in December 2002.

The purpose of PERN is to make the Universities / Degree awarding

Institutes accessible to each other and to the Internet for data exchange

and retrieval of information from the Internet.

The major objectives of PERN are

a) To establish a country-wide data communication platform to

interconnect universities to promote quality education, computer

literacy and better opportunities for students / instructors in

collaborative research and development environment.

b) Provision of International bandwidth on sharing basis for Internet

access from a centralized location.

c) An access platform for interconnection of universities/educational

institutions with the Virtual University.

PERN network has been designed in such a way that university /

institute is connected / linked with the nearest exchange of NTC / PTCL

using OFS, DXX, DRS & VSAT as a Last Mile in accordance with its

technical feasibility. 03 Point of Presence (PoP) / core nodal points are

established at Islamabad, Lahore and Karachi. The nodal points are

acting as a hub for cluster of universities / institutes in their region.

Routers at the university / institute premises provide connectivity with

access routers from the nearest node. The 03 core nodes are

interconnected on E3 while access nodes are connected with main nodal

point on multiple E1s and universities are connected on multiple of E1s

49


50/55

with nearest exchange. The bandwidth up-gradation for each university

is also in planning phase.

WIRELESS LOCAL LOOP (WLL)

NTC CDMA phone is an alternate to NTC landline with an added

advantage of enhanced services. Its the wireless telephony revolutionbased on CDMA 2000 Technology that combines the best features of

both mobile and landline. Its the only service that allows freedom from

all sorts of telephonic hassle .This unique and innovative service is

the beginning of a new era in connecting people. Go ahead and

experience this new exciting service, specially designed keeping in mind

the needs of our designated subscribers.

SHORTFALLS OF FINANCE DEPARTMENTSHORTFALLS OF FINANCE DEPARTMENT

Finance department is working quite firmly and fairly but yet there are

some gray areas which lead towards the shortfalls/weaknesses of the

operations there.

12.1Critical analysis of the management patterns of the

organization with reference to financial operations,

weak areas that need to be improved

50


51/55

Following are the points to be considered as the weaknesses of

operations:

Fund Management & utilization

Some of non-developmental projects which have been initiated don'tyield the desire level of profits. NTC management may keep an eye for

controlling such non developmental expenditures.

Training for Finance staff

Presently, there is no training facility for finance staff to up-date their

knowledge about accounting and financial practices so that staff could

be meet future needs / demands.

Non resolution of disputes with PTCL

NTC finance wing has yet not been succeeded to resolve the issues with

PTCL relating to balance of GPF for PTC period prior to 1996 of all those

NTC employees who were working in PTCL, before the formation of NTC.

Further there still persist the disputes between NTC & PTCL over the

possession of NTC vesting assets.

Non development of NTC own complete infrastructure

The present NTC infrastructure was accrued to NTC as a result of Re-

organization Act. Since NTC has not made serious efforts to establish /

flourish its own infrastructure on war footing, therefore reliance on PTCL

networks is a huge revenue loss for NTC.

51


52/55

FINDINGS & RECOMMENDATIONS

Following is the brief list of findings and recommendations:-

FINDINGS

i). At present a great number of employees are either on contract or

deputation.

ii). Round about 20% posts in finance department are vacant.

iii). Most of staff in finance department is newly appointed therefore;

no proper training has so far been arranged.

iv). Computer training has not been imparted to all staff of Finance

department.

v). Now-a-days there are two ways of transfer of funds i.e. from

Headquarters to regions and Regions to Headquarters. From

Headquarters Cash is remitted for expenditure in Regions where as

deductions from salaries of staff on account of G.P.F, C.P.F, Q.Loans,

etc. are remitted to Headquarters and hence pay bank charges

twice.

52


53/55

vi). After its establishment, NTC pace for development of its own

infrastructure is slow & in many cases it has yet to rely on PTCL

because pays a huge sum to PTCL for use of equipment

vii). Although the telecommunication industry in Pakistan is swiftly

growing, and despite of its own infrastructure, NTC has yet notstarted its own mobile service in Pakistan.

viii). There is slackness in Working capital management in NTC.

RECOMMENDATIONS

Based on findings, recommendations are laid down as under:-

i). Contract employees may be regularized because it will have a multidimensional effect including soother ness & satisfaction in contract

employees as well as their dedication with job & organization will

further flourish.

ii). Deputation policy is discouraged because deputationists have less

interest in long term prospects of the organization and they try to

reap short term benefits. In this regard, permanent/ regular

employees may be hired, especially in the technical side, so that

the advantage of fresh knowledge about advancement in

technology could be utilized. At present the officers working as

regional heads (regional directors) are deputationists, mostly from

Armed forces, which may be avoided. Furthermore, at this level

personnel may be hired on contract basis and the extension in

contract period may be conditional and solicited after evaluation of

their past performance and achievements.

iii). Round about 20% vacant posts in finance department should be

filled without any delay.

iv). Newly appointed finance staff be given proper training.

53


54/55

v). Since we are moving through an era of Information Technology,

therefore, Computer training may be given to all staff of Finance

department working in NTC.

vi). In order to escape from twice deduction of bank charge because of

two way transfer of funds, it is proposed that funds may betransferred from Headquarters after deduction of amount of

deductions.

vii). Attention might be given to convert government telephone from

PTCL to NTC to increase the revenue.

viii). In order to survive in a competitive environment, NTC may

flourish its infrastructure on war footing so that its reliance on PTCL

should be minimized and it could attain 100% revenue.

ix). NTC may launch its mobile service to capture the market and get

its share from the market.

x). Working capital management in NTC needs to be improved.

Negotiations with the Govt. departments may be carried out to

recover the receivables. Bank loans be either avoided or obtained at

reasonable cost, keeping in view the capital needs of the

organization.

54


55/55

Extracts from

NTC FINANCIAL

STATEMENTS

Final Report NTC

Documents

Transcript of Final Report NTC