Download docx - Warid internship report

Warid telecom private limited

SUBMITTED

TO

DR. LIAQAT ALI

(PRINCIPAL HAILEY COLLEGE OF COMMERCE)

BY

WAJEEH-UR-REHMAN

ROLL # 923

SECTION: D(AFTERNOON)

HAILEY COLLEGE OF COMMERCE

UNIVERSITY OF THE PUNJAB

Internship Report : Warid Telecom 1

LETTER OF TRANSMITTAL

Dr. Liaqat Ali,

(Principal)

Hailey College of Commerce,

University of the Punjab,

Lahore.

Dear Sir,

It is a great honour for me to present you the internship report as required for the

completion of B.com (hons) degree programme.

The staff of the Warid Telecom has been very Co – operative with me in

providing information regarding the procedures and processes in practice. Due to

certain constraints and legal formalities, I have not been able to gather all the facts

and figures about the organization. Yet, the report is a comprehensive one,

containing a lot of information. The practical work during the internship period has

been are working and enlightening experience.

Yours truly,

Wajeeh-ur-Rehman

8th Semester


All the praise is for Allah, the most merciful and beneficent, who blessed me with the knowledge, gave me the courage and allowed me to accomplish this task.

May His Mercy and Peace Be Upon all His messengers including my Mild

Tempered Lord, the Sovereign of (scared) Madina, who brought the last and

final message from Him to a mankind.

I am especially indebted to all my teachers for instilling in me enough

knowledge to be able to carry myself efficiently during my internship.

Secondly, I am bound to thank all the staff of Warid Telecom, especially

Mr.Zahid Manzoor(manager Tradefinance) , Mr.Kashif Rehman (A.M

Treasury),Mr.Saim Ahmad ( AM. Budgeting and cost control), Mr.Tahir

Matloob (Finance) ,Mr.Touqeer Zafar (senior Financial Analyst).In particular

their inspiring guidance, remarkable suggestions, constant encouragement,

keen interest, constructive criticism and friendly discussion help me to learn

and enabled me to complete this report efficiently.

I’m also really thankful to my parents & my family, who are my first teacher in this world


Executive Summary

Internship was my first step in practical life, through which I learnt a lot and it has aided me

in being well equipped with valuable experience that would help me once I enter the

professional life after the completion of my studies. Internship offered to me was of 4 weeks

in finance department which was later extended to 6 weeks so i can complete my project of

budgeting reconciliation. During the month of Aug and Sep 2010, I worked in Warid

Telecom as an internee. My association with this company was being a part of the Finance

Department. It was a great experience for me and it helped me in realizing where my

potential lies. What I learnt at Warid Telecom over the weeks was how to get along with the

people that I have to work with everyday, building confidence and improving my skills. I

tried to remain to the point, in writing the report. Brief history, management, organizational

structure of Warid Telecom and my work at EFU Building, Head Office Jail road Lahore.

Suggestions for improvement/Recommendations are also given in it.

Moreover, particularly being a student of Finance & Accounts it is necessary for me to get

practical knowledge of the managerial & financial activities of the organization. So I have

tried my best to learn a lot about financial activities. I have made all possible efforts to

summaries the broad history and working of the organization.

This work is a collection of my observations and experience during the internship period and

afterward This internship has also prepared me for my future career in Finance so this

internship has helped me a great deal. The experience has taught me responsibility, teamwork

and how to handle problems occurring. Even though the nature of work was quite basic as an

internee, nevertheless I got to see what practical life is. This internship overall has been a

great experience. This report gives a profile of Warid Telecom and an insight into the

Finance department where I was assigned to work. This report also reflects my learning

and experiences at Warid Telecom along with my responsibilities and the tasks that I

performed. Last part of the report consists of some recommendations and suggestions that I

have given.


PREFACE

For the students of B.COM (Hons) the six weeks internship is a golden chance to

develop and ensharp the capability and skill of administration and management in

the practical environment of different organizations. In the context, I select Warid

Telecom (Private Limited Company). This report shows and will guide the readers to

have an idea about maintain accounts, its operations and the practices followed

today in Pakistan. My reasons for doing the internship program in WARID is to get

firsthand knowledge about Finance activities and improve my business life, because

Warid is one of the best organizations indeed.

I tried to remain to the point, in writing the report. Brief history, management,

organizational structure of Warid Telecom and my work at Efu building, head office

jail road Lahore. Suggestions for improvement are also given in it.

Moreover, particularly being a student of Finance & Accounts it is necessary for me

to get practical knowledge of the managerial & financial activities of the organization.

So I have tried my best to learn a lot about financial activities. I have made all

possible efforts to summaries the broad history and working of the organization.

This work is a collection of my observations and experience during the internship

period and afterward. The sources of my information for the preparation of this report

also include the written notes, literature on banking, and verbal discussion with staff

members, senior students and my fellows.

Internship Program is a conventional constituent is part of total spectrum of B.COM

(Hons). The information contained in the report is based on my personal observation,

practical working and interviews with the staff during my internship training.

In the end, I would like to say that nothing is perfect in this world. Yet we must put all

endeavours to reach near the line of perfection.



TABLE OF CONTENT PAGE#

1. INTRODUCTION 4-9

1.1 HISTORY OF BUSINESS

1.2 INTRODUCTION TO BUSINESS

1.3 NATURE OF BUSINESS

1.4 ABOUT WARID

2. MISSION STATEMENT/OBJECTIVES 10-12

2.1 MISSION STATEMENT

2.2 VISION

2.3 CORPORATE VALUES

2.4 ORGANIZATIONAL BEHAVIOUR

2.5 POLICES

2.6 FINANCIAL OBJECTIVES

1) LONG TERM OBJECTIVES2) SHOTRTERM OBJECTIVES

3. ORGINAZATIONAL STRUCTURE & STRATEGY 13-23

3.1 MESSAGE FROM THE CHAIRMEN

3.2 BOARD MEMBERS & MANAGEMENT TEAM

3.3 AFFINITY PARTNERS

3.4 ORGANIZATIONAL CHART

3.5 ORGANIZATIONAL DEPARTMENTALIZATION

4. WARID IN TELECOM MARKET 24-39

4.1 MARKET OVERVIEW4.2 WARID OFFERINGS

4.2.1 ZEM PREPAID4.2.2 WARID POSTPAID4.2.3 GLOW

4.3 PRODUCTS AND SERVICES

1


LIFE KA NETWORK

INTRODUCTION & BACKGROUND

HISTORY OF THE BUSINESS

Cellular mobile Telecommunication services were introduced in Pakistan in 1990.six

operators currently provide this service and their subscriber base as of December

2010.

Paktel is regarded as the Founder of the Mobile Industry in Pakistan. Paktel was

granted a license in 1990 to operate a cellular system across Pakistan and has

improved its network capacity from time to time.

INTERODUCTION TO BUSINESS

Warid Telecom launched in Pakistan on 23rd May 2005 but its pre launch operations

started working six months before the Launch this shows the planning masters took

enough time studying Pakistan’s Market and is well equipped to serve in the field of

service based cellular industries in Pakistan.

NATURE OF BUSINESS

Warid Telecom is a private limited registered company. Having registered trademark.

The total investment is debt-equity based with the ratio of 40:60. Means the 40% of


the total investment is loan based and the other 60 % is equity based. The company

have license to sell MOBILE GSM connection and provide of all kinds of mobile

connection services to run business

About Warid

Warid Telecom is a joint venture between Abu Dhabi Group & SingTel Group. Abu

Dhabi Group entered into a strategic alliance with Singapore Telecom. Subsequent

to this transaction in July 2007, Telecom giant SingTel acquired 30% percent equity

stake in Warid Telecom, Pakistan, for US$758 million. This partnership is part of a

strategy to support Warid Telecom’s continued growth and to enhance its market

position.

Abu Dhabi Group, one of the largest business groups in the Middle East and the

single largest foreign investor in Pakistan. It has diversified business interests,

offering strong financial resources and extensive management expertise that result

in commercial success for several institutions.

SingTel’s investment in mobile operations include, Advanced Info Service (AIS) –

Thailand, (21.4%), Bharti Telecom Group – India (30.5%), Optus Telecom –

Australia (100%), Globe Telecom – Philippines (44.5%), Pacific Bangladesh

Telecom (PBTL) - Bangladesh (45%), Telkomsel – Indonesia (35%) and Warid

Telecom – Pakistan (30%).

Abu Dhabi Group

Warid Telecom takes pride in being backed by the Abu Dhabi Group, one of the

largest business groups in the Middle East and the single largest foreign investor in

Pakistan. It has diversified business interests, offering strong financial resources and

extensive management expertise that result in commercial success for several

institutions.

The Abu Dhabi group's major investments are in the following sectors:


Oil and gas exploration

Banking and financial services

Automotive

Hospitality services

Property development

Telecommunications

The Abu Dhabi Group is led by His Highness Sheikh Nahayan Mabarak Al Nahayan.

His Highness is the Federal Minister for Education of the United Arab Emirates and

He is the Chairman of Warid Telecom‚. The Abu Dhabi Group's other successful

investments in Pakistan include Bank Alfalah, United Bank Limited, Taavun, Wateen

Telecom and Raseen Technologies.

Some Major Investments Wholly owned properties and

companies

Bank Alfalah Limited Dhabi Enterprises Leasing

United Bank Limited Dhabi Contracting

Alfalah Insurance Company Limited: Dhabi Drilling Offshore Rig Operations

Alfalah Exchange Company Abu Dhabi Vegetable Oil Company

Iranian Sanden Industries PJS Co Nama Development

J.C. Maclean and Co Le Royal Meridien Hotel‚ Abu Dhabi

Al Jazira Management Mall Al Ain Palace Hotel

National Telesystems and Services

(NTS)

Neo Pharma LLC

AD Group consists of:

1) Abu Dhabi co. for wire and wireless communications./Baghdad-Iraq

2) Al-Najmy co. for Internet, Security, alarm and monitoring systems./Baghdad-Iraq


3) Al-Breamy co. for Mechanical, petrochemical and Medical trading./Baghdad-Iraq

4) Al-Baz co. for Broadcasting, Auditorium and voice systems./Baghdad-Iraq

5) AD Geophysical co. for geophysical services./Baghdad-Iraq

6) Eurowall co. for pre fabricated buildings and constructions./Baghdad-Iraq

7) Al-Jazeera Al-Arabia factory for steel wire fabrications./Baghdad-Iraq

8) IBL co. International Business Link L.L.C./ Dubai-UAE

9) Al-Omary Brothers co. for General Trading /Jebel Ali-Dubai-UAE

10) AD co. for general trading./Calgary-Canada

SING TEL

Serving both the corporate and consumer markets, the SingTel Group is committed

to bringing the best of global communications to customers in the Asia Pacific and

beyond.

With significant operations in Singapore and Australia (through wholly-owned

subsidiary SingTel Optus), the Group provides a comprehensive portfolio of services

that include voice and data services over fixed, wireless and Internet platforms.

In Singapore, SingTel has had more than 128 years of operating experience and has

played an integral part in the development of the city as a major communications hub

in the region. In Australia, Optus serves more than six million customers. It has

driven the competition as the challenger brand and led the way in technological

innovations and breakthroughs.

Over the years, SingTel has grown to be a global player with a strong regional

heritage. With one of the most extensive and advanced Telecommunications

infrastructure, the Group offers unparalleled reach in Asia and beyond.

SingTel's highly developed international network provides direct connections from

Singapore to more than 100 countries. It is a major investor in many of the world's


most sophisticated submarine cable and satellite systems. The Group is the second

largest satellite operator in the Asia Pacific.

SingTel also operates a pan-Asian chain of world-class data centers, providing a

suite of managed hosting telco solutions branded EXPAN. Data centers are located

in Australia, Hong Kong, Japan, Korea, Taiwan and Singapore. Through marketing

alliances, EXPAN is also available in eight other markets including China and India.

SingTel’s ability to support multi-national corporations (MNCs) on a cross-border

basis is anchored by its extensive network of SingTel Global Offices (SGOs). Found

in 37 cities in 19 countries and territories across Asia Pacific, Europe and the United

States, the SGOs provide MNCs with a single point of contact.

The Group's other major investments in the region include Advanced Info Service

(AIS) in Thailand, the Bharti Telecom Group in India, Globe Telecom in the

Philippines, Pacific Bangladesh Telecom (PBTL) in Bangladesh, Telkomsel in

Indonesia and Warid Telecom in Pakistan. Together, the Group has around 172

million mobile customers in eight markets. This is the largest multi-market mobile

customer base in Asia outside of China.

SingTel employs about 19,000 people worldwide and had a turnover of S$13.15

billion (US$8.41 billion) and net profit after tax of S$3.78 billion (US$2.42 billion) for

the year ended 31 March 2007.


2

LIFE KA NETWORK


Mission/Vision Statements

Mission Statement

“Warid Telecom's stated mission is to be the leader in innovation and services”

Company’s Vision

"To become the leader in national communications arena with a strong international

presence”

“To be the national communication provider with a strong International presence”

Corporate Values


Organizational behavior

Warid Telecom is a commercial organization and only profit is not its

objective.

Warid Telecom is working as a private company with the direct foreign

investment.

Warid Telecom is a large organization having a large number of employees at

middle level, lower level and non managerial level.

Policies

Warid Telecom believes in working with strategic partners and employees for long

term relationships. As a consequence of the above Warid Telecom is looking for the

following to deliver its vision:

Strategic vendors and partners to assist in rolling out these services in a timely and

efficient manner with a focus on turnkey solutions and premium propositions. Strong

partners to assist in launching these services and creating effective sales &

marketing/business development opportunities for all the operationally and financially

gain. Consultants and experts to help deliver the vision. Well rounded employees

who wish to become part of this adventure.

FINANCIAL OBJECTIVES


Honesty

Communicating Truthfully

Integrity

Our pride

Compassion

we listen, we care, we feel

Fairness

Our pledge to practice

Promise

keeping

we promise - we deliver

Respect

Respect-what we owe, care, what we gain

The basic goal of any firm is to earn money or generate profits on its investment.

Warid Telecom has clear strategies to maximize profits by selling more. Company is

working well according to its plans and strategies and has been very successful to

achieve all its financial goals. It’s expanding day by day and the financial status of

the company is improving constantly.

Warid Telecom, had acquired over1350,000 customers since the network went live

on 23 May. The GSM/GPRS network was built from scratch, starting on 23 October

004, and at launch covered 28 cities, Warid is attracting an average of over 10,000

new customers daily.

Company’s financial objective is to increase profit by using the selling technique of

more selling to maximize profit. The company not only wants all the financial benefits

but its wants to serve people and by charging less. The more the people get use to

of that, the more profit could be earn by the company.

SHORT TERM OBJECTIVES

As the company is new the short-term objectives are as follows:

1. Improve quality

2. Satisfy customers

3. Increase outlets

4. Provide all the advertised features

5. Work according to the strategies to achieve goals (SHORT TERM)

LONG TERM OBJECTIVES

Company’s long-term objectives are as follows:

1. Work with Government to cut prices and provide better quality

2. Control inflation in the country

3. Set standards for the market and involve Government in it

4. Network in whole Pakistan


5. To achieve all the financial benefits by serving people

Work according to the strategies to achieve goals (LONG TERM)

The Warid New Look

An evolution that strengthens the Warid identity while keeping the customers in

focus:

o Use of a more contemporary font & style to give a more approachable image

o This new logo encompasses the expanding reach of Warid not just in Pakistan

but in an international footprint

o With our strengthened GPRS/EDGE network we would empower our customers

to create their own life style networks

Old Look

New Look

3


LIFE KA NETWORK

Organizational structure & Strategy

Message from the Chairmen

His Highness Sheikh Nahayan Mabarak Al NahayanChairman


“By the grace of Allah‚ we have completed four successful years of Warid Telecom Pakistan and are beginning an exciting fifth one. In these three years since Warid Telecom has launched in Pakistan, our organization has gone from its conceptual infancy stage to a challenger, and finally are moving forward to become a force. We have expanded in every way possible.

In our fifth year, we will continue to expand and take our network and subscribers to the most dominant levels of Pakistan. We wish to make this year a new era for ourselves and the country, a time when Warid Telecom will become the primary service provider for all communication needs. We will spare no effort, cost or determination to ensure that Warid Telecom becomes a company to serve the people of Pakistan most effectively.”

Board Members

Mr. Bashir Tahir

Chief Executive, Dhabi Group & Advisor to HH Sheikh Nahayan Mabarak Al Nahayan

Mr. Tahir is a career banker since November 1962, and was previously the CEO of Union National Bank. He has over forty years experience in finance and over the past 12 years has applied it into advising and leading private equity and buyout ventures for the members of the UAE royal family and their co-investors. Mr. Tahir is a pioneer for encouraging the collaboration of the various family offices of the ruling families in the region to help form what is now known as the Abu Dhabi Group.

Mr. Tahir represents the interests of HH Sheikh Nahayan Mabarak Al Nahayan through his board memberships as well as actively monitoring and advising the portfolio companies.

Mr.Pervaiz A.Shahid

Board director


Mr. Parvez A.Shahid is a Pakistani national with a vast experience of more than 30 years in the banking sector. Currently he Is eExecutive In-charge of Strategic Planning Division, bank Alflah and authorized power of attorney holder of Warid Telecom (private) Limited.

Mr. Lim chuan poh

Board director

Mr Lim, joined Singtel in October 1998. He was appointed EVP in feburary 2006. In October 2006, Mr Lim assmed the position of CEO (international). He is responsible for SingTel`s regional associates and supports the growth objectives of Singtel`s business groups through strategic investments in the region.

Mr. Quah kung yang

Board director

Mr. Quah is presently the vice-president (business management), International group in singtel, overseeing new investment oppertunites as well as existing investments in the region.

Management Team

Mr. Muneer Farooqui


Chief Executive Officer

Mr. Muneer Farooqui has served as CEO of Warid Telecom International

Limited, Bangladesh for over four years. In view of his dynamic work

experience in Telecom secotr and proven leadership in various capacities

where his last assignment was CEO of Warid Telecom, banglades, he has

been assigned to undertake his responsibilities as CEO of Warid Telecom

(pvt) limited, Pakistan, to optimize and lift the business performance of the

company from its current level and ensure a potential niche for the company in

the local Telecom industry.

Mr. Tariq Gulzar

Chief Financial Officer

Mr. Tariq Gulzar brings with him a combined professional and industry

background gained from over 15 years of experience in assurance, internal

audit, accounting, risk management and general consulting in Telecom and

media industries. Mr. Gulzar is a fellow chartered accountant (Pakistan), a

certified public accountant (Colorado, USA) and a certified Internal Auditor

(New York, USA).

Mr. Shahzad Rauf

Chief Strategy & Operations Officer


Mr. Shahzad Rauf joined Warid Telecom in march 2005. Prior to joining the

company, Mr. Rauf was a founder and CEO of WebLight Productions Inc.

providing B2B e-commerce supply chain management solutions for the food

industry. He also have over 10 year experience of finance and information

technology departments of public sectors in USA.

Mr. Muhammad Irfan Chaudhry

Chief Technical Officer

Mr. Irfan joined Warid Telecom in November 2004. He has got 15 years of

local and international cellular experience gained by working in operations,

projects, planning, performance and services departments of multinational

operators and vendor.

Before joining Warid Telecom, he has worked with Ericsson, Cingular

Wireless USA and Paktel. He is a Engeneering University Lahore graduate.

Affinity Partners

Warid is one of the world's largest mobile operators, with over 18 million subscribers

in Pakistan alone and millions more to come. We offer cutting edge products like

Blackberry, and innovative services like Caller Tunes, 123 FREE, and enterprise


solution packages. More importantly to you, our great range of price plans and

special offers attracts thousands of new customers everyday.

We already have under mentioned companies as our proud affinity partners.

BANK ALFALAH CREDIT CARD

BANK ALFALAH BRANCHES

MCB Credit Cards

4B TELECOM

VIVA TELECOM

MOBILE ZONE

NOBEL COMMUNICATION


http://www.bankalfalah.com/

http://www.mcb.com.pk/

http://www.4bgroup.com/

http://www.viva.com.pk/

http://www.mobilezone.com.pk/

Organization Structure (Organization chart)


BEC

CEO

Advisor

CSO

GM

RMC

Assistant. Manager

Divisional Manager

CCOCIO

Assistant. Manager

Assistant. Manager

Z.S.M

B.C.M

ORGANIZATIONAL DEPARTMENTALIZATION

Warid Telecom (Pvt).Ltd head office is in EFU House on Jail road, Lahore. Warid has the

maximum number of Sales and customer Service Centers countrywide, backed by two state

of art Contact Centers of international standards that are equipped with the right facilities to

ensure real-time online services. Their highly trained and well-groomed team of Customer

Service Executives provides round the clock support. Warid has setup corporate lounges,

with a customer-friendly environment to provide personalized care to our corporate clients.

Furthermore, an extensive network of franchises, kiosks and mobile units ensure easy and

convenient accessibility.

Different division, departments and functionaries working in head office are:

1. Finance

2. Human Resources

3. Marketing

4. Sales & Customer services

5. Administration

6. Products & Services

7. Procurement & Logistics

8. Legal Affairs

9. Engineering & Information Technology

10. Audit & Risk Services

11. Quality Assurance

12. International Business

13. Public Relations

14. Operations and Project Management

15. Govt. Relations


FM

Finance Department

Finance department of Warid Telecom is accountable for all the issues related to

financial transactions no matter it is managerial accounting or financial accounting.

Finance department of Warid Telecom deals with issues related to Financial

Accounting, Fixed Assets, Accounts Payable, Tax Returns, General ledger

maintenance and treasury control. So, finance department is divided in two divisions

according to matters dealt.

Financial Accounting Division

Financial accounting means reporting of the financial position and performance of a

firm through financial statements issued to external users on a periodic basis.

Financial accounting divisions of Warid Telecom consist following sections.

Operations Section

Financial accounting related to operations. Operations include the financial issues

related to franchises operations.

Fixed Assets Section

Fixed assets division of Warid Telecom looks after the fixed assets of Warid

Telecom. Fixed assets are very important for every organization because fixed

assets tell the worth of the company.

Accounts Payable Section

Accounts payable division of Warid Telecom looks after the liabilities to be paid.

Account payable is very important for better credit rating of a company.


General Ledger Section

General Ledger division is responsible for developing T-accounts which specify

detail of each account separately.

Treasury Control Section

Treasury control section looks after the finances, controls the budgets and

investments made by country from treasure. It includes all maters related to Trade

finance and import functions.

MANAGERIAL ACCOUNTING

The process of identifying, measuring, analyzing, interpreting, and communicating

information for the pursuit of an organization's goals.

The key difference between managerial and financial accounting is that managerial

accounting information is aimed at helping managers within the organization make

decisions. In contrast, financial accounting is aimed at providing information to

parties outside the organization.

In Warid Telecom this division deals with the accounts management and co-

ordinates with the financial accounting division.


4

LIFE KA NETWORK

Warid in Telecom Market


Market Overview Of Mobile Companies in Pakistan

The Pakistan market has nearly 97 million subscribers as of Nov2009 (PTA

data).The growth slowed down in 2009 but has picked up again gradually. See more

about the recent competition among mobile network providers.

For those interested in the change from last year, the chart below shows the market

share of mobile phone companies of Pakistan, as of September 2008. Compared

with July, the market share changed little. Mobilink lost 1% share (35%), picked up

by Zong which is cash rich and has a ready-to-invest attitude.

The ARPU in Pakistan remains low and is not projected to go up. The year 2008 was

marked by changes in SIM sales and registration process, enforced by PTA, the

government regulator.


http://telecompk.net/wp-content/uploads/2007/03/pkmms-1109.

http://telecompk.net/wp-content/uploads/2009/08/pkmm-jun09.

http://telecompk.net/wp-content/uploads/2008/11/pkms-0908.

Now let’s review some recent history. At 2006 year end the total subscribers were

48.2 million. In June 2007 the total mobile users reached over 63 million. Based on

numbers published at PTA website for 2007, the total number of subscribers

(technically it is the number of SIMs issued) was 76.6 million, a tele density of

nearly 49%. In 2007 the average growth rate was about 2.5 million new subscribers

each month! After second half of 2007 it seemed as if the growth had slowed down

but overall it was fine. One remarkable achievement was by Zong (formerly Paketl)

which launched very successful campaigns towards 2007 end completed rebrand

launch in April of 2008. See this chart for a breakdown of market share by mobile

companies at the end of Q1 of 2007.

Here’s a brief description of the top mobile companies in Pakistan.

At the top is Mobilink, the Pakistani unit of Egypt-based Telecom

company Orascom. It has been operating in Pakistan since 1994.

Subscriber share is 35% at the end of Sep 2008.


http://www.mobilinkgsm.com/

http://www.mobilinkgsm.com/

Ufone, a wholly owned subsidiary of Pakistan Telecommunication

Co. Ltd (WARID), is now under the control of Etisalat group of

UAE. It has 21% of subscriber share and added the most lines (2.4 million) from

2006-07. For those in Pakistan it is the one company where they can easily invest

locally.

Warid, owned by the Abu Dhabi group of the United Arab Emirates

and sister of Wateen group is number 4 with 18% market of

subscribers. Recently it sold 30% share to SingTel.

Norway’s Telenor, a recent entrant with about a billion US dollar

investment in Pakistan has been doing well, based on its recent

earning report. It has about 20% of the market share. Telenor stock is listed in the

Oslo stock market (TEL) and in US(TELNY.PK).

CM Pak )Zong brand(, formerly Paktel, was the latest target of foreign

acquisition. After it got acquired by China Mobile it was rebranded as

Zong and launched one of the most successful and aggressive campaigns. Within a

matter of few months, Zong has achieved a 6% market share.

Pakistanis Send 106 Billion Text Messages a Year

According to PTA report of December 2009, a total of 106 billion text messages were

sent across the 5 cellular networks in Pakistan in 2009. If you assume 95 million

subscribers on average, it comes to 93 messages per person per month.


http://paktel.com/gsm/

http://telecompk.net/?s=cmpak

http://www.telenor.com.pk/

http://www.waridtel.com/

http://www.ufone.com/

http://www.ufone.com/

http://www.waridtel.com/

http://www.telenor.com.pk/

http://paktel.com/g

The average numbers for Pakistan are not very high when compared with some of the other

top countries but the actual distribution across various segments and demographics varies

very significantly. For instance, the youth tends to rely more on text messages.


http://telecompk.net/wp-content/uploads/2010/08/sms-pakistan-2009.

http://telecompk.net/wp-content/uploads/2010/08/sms-world-mashable.

Warid Offerings

Warid puts a great focus on development of its products according to the customer demand

and satisfaction. In recent year Warid has introduced Glow and made a greater impact in the

market.

Warid Telecom offers three main products that are

1. Zem Prepaid

2. Warid Postpaid

3. Glow

Zem Prepaid

Zem prepaid is a service for which customer has to pay in

Advance for which he/she is going to use. Enjoy a prepaid

convenience that is backed up by the promise of service, service & more service. Not only it

is simple to use but it also offers a host of revolutionary products & features that will forever

change the way you communicate.

Zem prepaid offers two major type of services.

Voice based

Text based

Voice based Services

Voice related services include communication services which are associated with the transfer

of voice. When Warid started its services there were two leading GSM cellular companies,

one was Mobilink and the other was Ufone. Mobilink was the main market leader and Ufone

was the successor in Pakistan. Then the main challenge for Warid was to attract customer

towards it with the help of such services that will be exciting and attracting enough to move

customers from the competitors.


Text Based Services

Zem also provide many text packages so that u can text on any network with the cheapest rates any time any where. Also multi media messages (MMS) on the cheaper rates then any other network.

Warid introduced various call packages with cheaper rates for each type of customer according to there need. So every customer can switch to calling plan that suits him the best.

Calling plans:

Warid had introduced three calling plans Zem 1 second, Zem LCR 30 second, Zem 60 Sec.

Each package is offering different call rates and sms plans.

Charges Zem1 Second

Zem Lowest Call Rate 30 Seconds

Zem60 Seconds

Airtime

Friends & Family (On-Net) 0.02 0.49 0.75

Friends & Family (Off-Net) - 0.75 -

On-Net (Warid to Warid) 0.03 0.75 1.25

Off-Net (Landline) 0.04 0.85 1.75

Off-Net (Other Mobile) 0.05 0.85 2.25

Messaging

SMS

On-Net (Warid to Warid) 0.50 0.50 0.50

Off-Net (Other Mobile) 1.00 1.00 1.00

International 5.00 5.00 5.00

MMS 3.00 3.00 3.00

VAS

Value added services

Mobile Internet Re. 1.00/Unit

Re. 1.00/Unit Re. 1.00/Unit

Zem Talky 0.99/30sec 0.99/30sec 0.99/30sec

Zem Talky International 3.00/30sec 3.00/30sec 3.00/30sec

Warid Menu Services 2.00 2.00 2.00

Warid Phone book Backup Rs. 115/Year

Rs. 115/Year Rs. 115/Year

Mobile Downloads


Ringtones 2.00 2.00 2.00

Wallpaper/Logo/Animation/Picture Messages

2.00 2.00 2.00

Caller Tunes Subscription 10/Month 10/Month 10/Month

Caller Tunes Tone Assignment 10/Song 10/Song 10/Song

Caller Tunes IVR (105) Charges 5/Minute 5/Minute 5/Minute

Funstore (555) 5/Minute 5/Minute 5/Minute

Other Charges

FnF Addition 9.00 9.00 9.00

FnF Deletion 2.00 2.00 2.00

Call & Sms Packages:

Hourly Package

Make unlimited calls to On-net (Warid

to Warid) numbers for Rs. 3+ tax .

Warid Minute Package

Koi bhi number … Koi Bhi Network Rs.

1.20/min …

Voice Craze

Enjoy 150 minutes of talk time and 50

minutes of talky messages – every

week !

Buy Zem Prepaid

Order Warid prepaid connection

and we will deliver it to you .

SMS Craze

The only SMS, MMS & Mobile

Internet package in Pakistan

infiNite Craze

All Night Free Calls to 5 FnF

Numbers & SMS/MMS to any

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Warid PostpaidWarid post paid connection is associated with Royalty. Post paid subscription is also called a

billing connection. In this type of a connection, you can avail the services of cellular

connection first and pay the usage at the end of the month. On consistent and regular payment

and high usage pattern you could win yourself the opportunity to enjoy exclusive loyalty and

frequent user facility provided by Warid Telecom. Keeping in mind our brand philosophy,

Warid postpaid is a name that depicts class and sophistication. Warid postpaid that defines

commitment and satisfaction to the customers.

Like zem prepaid Warid postpaid is also offering both voice related services and text based

services.

Calling Plans

Warid postpaid when launch was called “ Zahi Postpaid”. Zahi means royalty. And it was

offering 5 calling plans to the mobile users. These plans were after re launch, zahi postpaid

was replaced by its generic name that was Warid postpaid. Warid also revised tariffs for the

postpaid calling plans. Now the Warid postpaid calling plans are:


Post Paid Packages:

Upgrade yourself with the new Warid postpaid Enjoy unlimited calls 24/7 on your 5 FnF

numbers

Rs.500 line rental

Pay 3 months line rent in advance & get the Warid announces a value offer for its postpaid

Fourth months line rent free. Subscribers.

Bill payment via Scratch card Bill by Email

(Bill payment is as easy as 321) Now you can receive your bills through email


Glow Feel Free

Warid brings you an exciting new prepaid brand which

is as different from others as you are. GLOW empowers you to make choices in

service and style. You take the call on how you make your calls. The best quality

network gives you what you really want. Total control!

Warid have introduced glow 1.0 with the great rates on the best network.

Call Rates

Call rates (Rs.) Weekdays Weekends

Peak Off-Peak Peak Off-Peak

GLOW GANG 0.45 FREE* FREE* FREE*

On-net 0.79 0.69 0.69 0.69

Off-net 0.89 0.89 0.89 0.89

UNLIMITED SMS BUNDLES

GLOW Unlimited SMS Bundles

Exclusive of taxes

Enjoy 250 SMS at Rs.2.99/day

Enjoy 700 SMS at Rs.6.99/week

Glow 2.o

Keep Glowin….

After The success of Warid Glow 1.0 Now, Warid brings you an electrifying prepaid brand,

which is as unique as you. Loaded with exciting new features, Glow introduces you to a

world where you define your own style. You choose how to make the best use of our

incredible services. Finally, a high quality network gives you what you really want- Complete


Control!

Call 10 Glow Gang Friends with Glow 2.0 (5 off-net & 5 on-net numbers)

Any number, Any network for just Rs. 0.61/30sec.

Glow 2.0 Services

Mobile fun

Social networking

Mobile internet

Go global

Sms bundles

Fuel

Night and weekend package

Sports

Music

Call Rates

TariffWeekdays Weekends

Peak Off-Peak Peak Off-Peak

Glow Gang Friends

(5 favorite off-net numbers)Rs. 0.61 Rs. 0.61 Rs. 0.61 Rs. 0.61

Glow Gang Friends

(5 favorite on-net numbers)Rs. 0.61 Rs. 2.99/call Rs. 0.61 Rs. 2.99/call

On-net (Warid to Warid) Rs. 0.75 Rs. 0.75 Rs. 0.75 Rs. 0.75


Off-net (Warid to Other

Mobile Networks & Landlines)Rs. 0.85 Rs. 0.85 Rs. 0.85 Rs. 0.85

Glow 2.0 Gang:

Favorite 5 off-net & 5 on-net numbers

On-net: To all other Warid numbers

Off-net: To all other mobile networks & landline numbers

Weekdays: Monday to Friday

Peak hours: 8am to 11pm

Off-Peak hours: 11pm to 8am

Weekends: Saturday & Sunday

Peak hours: 5pm to 11pm

Off-Peak hours: 11pm to 5pm

Glow SMS Bundles

Unlimited texting in the World of Glow

Send unlimited SMS to any number, any time, on all networks in Pakistan.

250 SMS @ Rs. 2.99+tax/day

700 SMS @ Rs. 6.99+tax/week


PRODUCTS AND SERVICES

Warid presents a wide selection of value added services that ensure you well manage your

life via your mobile phone & express yourself effectively. The world of Warid Value Added

Services has unlimited options of not only communication, but also convenience,

entertainment & personalization. These services comprise a myriad of options from

entertainment to utility based services. You think of it and we have it! Keep exploring & stay

amused!

Caller Tunes - Song Search

Search for your favourite song, and

set it as your CallerTune!

VOW )Videos on Warid(

Enjoy FREE entertaining videos on the

go.

786 Islamic Services

Dial 786 from your Warid number and

listen to Quranic Ayat, Hadith,

Namaz...

Warid Call Block 9211

Warid is proud to launch Warid Call

Block 9211 service that instantly

makes you get rid of those annoying

calls

Surf @ Twilight

Enjoy the unlimited freedom of

mobile internet.

Warid SMS Email

Now get your e-mails on your mobile

via SMS.


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Warid Comedy Corner

Ab hasso dil khol ke !

Bill Payment via ATM

Warid offiers Bill Payment & prepaid

TopUp via ATM

IM Over SMS!

Let your fingers do the talking !

International Top-up

Send balance to Warid prepaid users

in Pakistan ...

DUA Service

Allah(SWT) says “Call on Me; I will

answer your DUA ”

Missed Call Alerts

Enjoy Miss Call Alerts now on your

prepaid numbers ..

Prepaid GPRS Bucket

If you love surfing, Warid offers you a

package that will keep you

connected ..

Facebook Mobile Texts

Convenience you never imagined !

Youth Blog Zone

Write Share & Inspire !

Warid Music Club

Now carry your favorite music with

Upload Photos @ Facebook

Snap, Send, Share !

Love Meter

When yOu are in Love, you can’t fall

asleep because reality is better than


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Recharge Me

Stay in touch, even at low balance

Warid FunStore

Now gift to friends & spread the joy !

Zem Gup Lagao

Gup Lagao-Dost Banao Sir Zem Kay

saath

Balance Share

Out of cash? But never out of

balance!

Pocket PCO

Now your business is truly in your

pocket

Warid Sports Station

Never miss out your favorite game

Friend Finder

Find your friends location instantly on

your mobile...

Mobile Games

Turn your phone into a gaming zone

with Zem mobile games

Place Finder

Find places instantly on your

mobile….


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talky zoom

5

LIFE KA NETWORK

Learning As a Student Intern In

Warid Telecom


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My Workings in Departments

Trade finance

Planning & Budgeting

Budgeting & Cost control

Trade Finance

saa'International trade' is the exchange of goods and services across international

boundaries or territories.”

International trade can be defined as either the buying (importing) or selling

(exporting) of goods or services on a global basis. In most countries, it represents a

significant share of GDP. While international trade has been present throughout

much of history its economic, social, and political importance have been on the rise

in recent centuries, mainly because of Industrialization, advanced transportation,

Globalization, Multinational corporations, and outsourcing. In fact, it is probably the

increasing prevalence of international trade that is usually meant by the term

"globalization."

International trade is also a branch of economics, which together with International

finance, forms the larger branch of International economics.

Methods Of Payment

There are four methods of payments in the international trade which are as under.


1. ADVANCE PAYMENT:

In this case importer pays the exporter in advance & gets goods & services

later. (No obligation on Bank)

2. DOCUMENTARY CREDIT )LETTER OF CREDIT(

It constitutes a definite undertaking of the bank to pay the exporter provided that

the exporter presents the documents which comply with the terms & conditions

of the LC.

3. COLLECTION

The exporter (Principal) present documents to his bank (Remitting Bank), who

send the documents to an importing country’s bank (Colleting Bank) to deliver

documents against payment or acceptance to Importer (Drawee). URC 522

(Universal Rules for Collection 522) governs the rules of collection. (no

obligation on Bank)

4. OPEN ACCOUNT

In this case exporter trusts the importer and sends the goods / services in

advance & get paid later (no obligation on bank).

LOW HIGH


RISK

EXPORTER

ADVANCE PAYMENT

LETTER OF CREDIT

COLLECTION

OPEN ACCOUNT

RISK

IMPORTER

HIGH LOW

WHEN DOCUMENTARY CREDIT USED

There is doubt about importer solvency / ability to pay for goods or

services delivered

There is concern about the stability of the political, economic or legal

system of the country of import

There is possibility of foreign exchange restriction may account in the

country of import. (IRAN)

Govt. regulations may require the use of letter of credit to settle certain /

all international transaction.

The importer is concerned about the exporters ability to perform under

sales agreement.

ADVANTAGES / DISADVATAGES OF DOCUMENTARY CREDIT

ADVANTAGES FOR EXPORTER:

Has an undertaking of settlement from a bank (not dependent on importer)

Settlement upon shipment rather than delivery


Possible to control over goods (Transport document not in the name of

importer)

Possible access to bank finance

DISADVANTAGES FOR EXPORTER:

Expensive compared to other method of settlement.

Require greater effort & accuracy in documents preparation.

Require detailed knowledge of UCP 600 ( the rules govern the operation of

documentary credit)

Often subject to specific detailed conditions.

ADVANTAGES FOR IMPORTER:

Can set conditions in credit that may be adhered to before settlement is

made.

Ability to specify when, how & where the goods are shipped by incorporating

the date of shipment, mode of transportation & port of discharge in LC

conditions.

Banks will not make settlement unless correct documents are presented.

Possible access to bank finance.

DISADVANTAGES FOR IMPORTER:

Expensive compared to other method of settlement.

Require detailed knowledge of UCP 600 ( the rules govern the operation of

documentary credit)

Utilization of bank credit loan

Delay in receipt of documents compared to open account.

DOCUMENTARY CREDIT CYCLE 10 BASIC STEPS


Before issuance of letter of credit exporter issues proforma invoice & forward to

importer which contains the following details.

Price

Quantity

Description of goods / services

Insurance

Transport Details

If importer happy with the terms of pro forma invoice he issues a purchase order &

the two parties enter into a sales agreement. Now we move towards the 10 basic

steps involved in normal DC transaction.

Step 1:

Importer applies to the issuing bank to issue a LC.

Step 2:

The issuing bank checks that the application is complete, precise and satisfies internal credit approval.

Step 3:

The issuing bank issues documentary credit subject to UCP 600 (Universal Customs Practices)

Step 4:

The advising bank advices the LC to the exporter.

Step 5:

The beneficiary examines the terms & conditions of the documentary credit.

Step 6:

The beneficiary ships the goods & complete the documents required under LC.


Step 7:

The nominated bank checks that the documents comply with the terms in the credit. If they comply settlement may be made. Documents than sent to the issuing bank.

Step 8:

The issuing bank examines the documents that the documents comply with the terms of credit.

Step 9:

The documents comply the issuing bank reimburses the nominated bank within 05 working days as per UCP 600 rules. Nominated bank makes settlement to beneficiary if not done so.

Step 10:

The issuing bank releases the documents against payment to the applicant. The applicant now collect the goods.

LC OPENING DOCUMENTS

L/C ADVICE

DEBIT AUTHORITY

IB-8 FORM


PROFORMA INVOICE

LC DRAFT (MT-700)

INSURANCE POLICY

MARINE ENDORSEMENT (IF REQUIRED)

ENDORSEMENT OF SHIPPING DOCUMENTS

Airway bill

Commercial invoice

Packing list

Insurance advice

SHIPPING DOCUMENTS:

Endorsement letter

Copies Of Airway Bill

Copies Of Commercial Invoice

Demand Slip For Import Duties (From Cargo Company)

Duties Schedule (Made By Warid Against Duties Schedule)

LC Payment Terms

1. ON SIGHT

2. ON Draft 30 ,60 , 90 DAYS

A bill of exchange is issued for 30 , 60 or 90 days draft. Always 2 bill of exchange

are issued so if 1st is lost the 2nd can be use.

Debit invoice is then issued by bank against the B/E payment.

3. On PAC, FAC


PAC : )PROVISIONAL ACCEPTANCE CERTIFICATE(

Provisional acceptance means in respect of implementation phase, a PA means a

milestone indicating either the buyer accepts the test completion report, or that

commercial launch for the implementation phase has occur , whichever is earlier.

FAC: )FINAL ACCEPTANCE CERTIFICATE(

Final acceptance means a milestone indicating either buyer accepts the supplied

solution and that all acceptance criteria have been met or 60 days from passed from

the date of last Provisional acceptance. Whichever is earlier.

Documents attached with PAC/FAC:

Payment request sheet as per service/purchase order

Commercial invoice

Sales tax invoice

Annexure -- details

Amendment in LC:

In case of any amendment in L/C a message of amendment is sent to the bank by

the company. Bank charge an amount and issue a debit invoice after the

amendment is made in L/C.

Telex Charges

Ordinary L/C AMD Commission

FED CHARGE

L/C MARGIN:

100% margin of L/C is taken by the bank in start. It can be also be more or less as

the case maybe. At the time of payment margin is returned and then we make the

payment.

Margin reconciliation is done at the end of every month.

IMPORT ON CONTRACT BASIS


Documents:

Contract of two companies

Approval note for the contract from higher authorities

Purchase requisition

Purchase order

Pro forma invoice

Registration of bank contract

Request for establishment of import contract

Import contract registration

Retirement Note by bank after receiving required documents.eg (commercial

invoice, B/L etc)

Debit approval from importer

Debit authority given to importer bank

Swift message sent to exporter

Amendment in import Contract

If any amendment is required in the contract a request letter is send to the bank for

amendment.

Eg .

Enhance the amount of contract by US $626.32 making total value of contract US

$ 9937.37 all other details as per beneficiary pro forma invoice.

Banks accepts the request and do amendment as required by the client. All other

conditions remain the same.

NOTE -:


We can delay the payment in contract on mutual agreement. Its not necessary to

pay on specific date as in L/C. That is because both companies have good relations

b/w them.

Addendum:

Internal document agreement

Once a major contract is made after that every time we purchase we can do

amendments in the existing contract.

E.g increase the price , quantity, change payment terms etc.

Addendum is issued on which signatures of both company witnesses are made

After that notice of approval for the addendum is issued and signed by the higher

authorities like CEO, CFO, BOP, CSO.

Purchase order is then sent to exporter.

Planning & Budgeting:

Planning and budgeting department is concerned with preparation of budgets and

making forecasts for coming years to help in decision making and planning in the

present.

Forecasting is “The process of analyzing current and historical data to determine future trends”

Planning is a tool which helps management in its attempts to cope with the

uncertainty of the future. It starts with certain assumptions based on the

management's experience, knowledge, and judgment. These estimates are

projected into the coming months or years using one or more techniques such as


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Box-Jenkins models, Delphi method, exponential smoothing, moving averages,

regression analysis, and trend projection. Since any error in the assumptions will

result in a similar or magnified error in forecasting, the technique of sensitivity

analysis is used which assigns a range of values to the uncertain factors (variables).

A forecast (which indicates what 'might' happen) should not be confused with a

budget (which shows what 'ought' to happen) .

Eg.

Stock analysts use various forecasting methods to determine future stock price

movements, earnings, etc. Economists use forecasting techniques in order to

determine future economic trends.

Most people view the world as consisting of a large number of alternatives. Futures research evolved as a way of examining the alternative futures and identifying the most probable. Forecasting is designed to help decision making and planning in the present.

Forecasts empower people because their use implies that we can modify variables now to alter (or be prepared for) the future. A prediction is an invitation to introduce change into a System

FORECASTING METHODS

All forecasting methods can be divided into two broad categories: Qualitative and

Quantitative. Many forecasting techniques use past or historical data in the form of

time series. A time series is simply a set of observations measured at successive

points in time or over successive periods of time. Forecasts essentially provide future

values of the time series on a specific variable such as sales volume. Division of

forecasting methods into qualitative and quantitative categories is based on the

availability of historical time series data.


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QUALITATIVE FORECASTING METHODS

Qualitative forecasting methods are based on educated opinions of appropriate

persons

1. Delphi method: forecast is developed by a panel of experts who anonymously

answer a series of questions; responses are fed back to panel members who then

may change their original responses

- very time consuming and expensive

- new groupware makes this process much more feasible

2. Market research: panels, questionnaires, test markets, surveys, etc.

3. Product life-cycle analogy: forecasts based on life-cycles of similar products,

services, or processes

4. Expert judgments. by management, sales force, or other knowledgeable

persons

QUANTITATIVE FORECASTING METHODS

TIME SERIES FORECASTING METHODS

Time series forecasting methods are based on analysis of historical data (time

series: a set of observations measured at successive times or over successive

periods). They make the assumption that past patterns in data can be used to

forecast future data points.

1. Moving averages (simple moving average, weighted moving average): forecast is

based on arithmetic average of a given number of past data points


2. Exponential smoothing (single exponential smoothing, double exponential

smoothing): a type of weighted moving average that allows inclusion of trends, etc.

3. Mathematical models (trend lines, log-linear models, Fourier series, etc.): linear

or non-linear models fitted to time-series data, usually by regression methods

4. Box-Jenkins methods: autocorrelation methods used to identify underlying time

series and to fit the "best" mode.

Forecasting In Different Sectors

Financial Forecasting

Financial Forecasting describes the process by which firms think about and prepare

for the future. The forecasting process provides the means for a firm to express its

goals and priorities and to ensure that they are internally consistent. It also assists

the firm in identifying the asset requirements and needs for external financing.

Telecommunications forecasting

All telecommunications service providers perform forecasting calculations to assist

them in planning their networks. Accurate forecasting helps operators to make key

investment decisions relating to product development and introduction, advertising,

pricing etc, well in advance of product launch, which helps to ensure that the

company will make a profit on a new venture and that capital is invested wisely


Manufacturing Forecasting

The manufacturing challenge is to deliver the best possible service with the forecast

information they can reasonably expect. The long term solution to the problem of

sales forecasting is to increase flexibility and reduce lead times to the extent that you

are able to react faster than your customers. The forecast then becomes much less

important except as a long range or strategic planning tool.

Budgeting

“Establishing a planned level of expenditures, usually at a fairly detailed level. A company may plan and maintain a budget on either an accrual or a cash basis”.

Business budgeting is one of the most powerful financial tools available to any small-

business owner. Put simply, maintaining a good short- and long-range financial plan

enables you to control your cash flow instead of having it control you.

The most effective financial budget includes both a short-range, month-to-month plan

for at least one calendar year and a long-range, quarter-to-quarter plan you use for

financial statement reporting. It should be prepared during the two months preceding

the fiscal year-end to allow ample time for sufficient information-gathering.

Many financial budgets provide a plan only for the income statement; however, it's

important to budget both the income statement and balance sheet. This enables you

to consider potential cash-flow needs for your entire operation, not just as they

pertain to income and expenses. For instance, if you'd already been in business for a

few years and were adding a new product line, you'd need to consider the impact of

inventory purchases on cash flow.

There are thee main budgeting techniques:

Incremental budgeting Zero-based budgeting Flexed budgeting


Incremental Budgeting

The incremental approach to budgeting combines the costs identified from the

previous accounting period with percentage additions. These percentage additions

are utilised to cover two key areas which include cost increases as a result of

inflation or higher purchases costs and predictions associated with increases in costs

and income as a result of business volume predictions.

A key limitation of the incremental budgeting system is the manner in which

percentages are added in a blanket fashion resulting in the likelihood of higher

overall costs in the long-term. This may then also result in a business having to

increase its sale prices to a level that is no longer competitive.

Zero-Based Budgeting

Zero-based budgeting system requires budgeting to commence with the assumption

that every cost has a zero base. Next, each item relating to expenditure is worked

through and decisions are made as to whether the purchase is completely essential.

Then different purchasing options associated with the specific item are explored as a

means of ensuring the item is obtained as cost-effectively as possible.

One of the main limitations of the zero-budgeting system is that it can take an awful

lot of time to work through each individual cost in this manner. However, it is fair to

add that utilising this approach will then provide an extremely useful database

containing valuable, time-saving information for the years to come.

Flexed Budgeting

As with zero-based budgeting, the flexed budgeting system gives its name away in

the title as it involves 'flexing' the normal budget. The benefits of flexed budgeting


are that it is likely to be considerably more accurate as the budget is adapted to suit

various external changes. Within this approach managers are able to provide key

information resulting in an achievable budget, pessimistic budget and optimistic

budget.

Through undertaking the process of flexed budgeting, managers are better able to

make important decision relating to risk and expenditure, having gained a wider

perspective on best and worst outcomes.

Budgeting & Cost Control

The major Tasks in this department are:

Business case Evaluation

Decision making For approval of budget

Variance analysis Using ERP

Whenever budget is required for any new project an approval note is sent to the

budgeting and cost control department for approval. Here the project is evaluated

with the help of past records and it is calculated that weather this project will give

benefit to the organization or not. If its more costly and cannot generate revenues

within 6 months the project is canceled.

Duties:

Week 1

Mr. Zahid Manzoor (Manager Trade Finance )


My Internship Started in Trade finance department. Where I learn about international trade.

In Warid only import activities are performed. I got a chance to study many import cases.

L/C opening procedures. Shipment and other documents preparation. Also I worked on an

import case with Manager Trade Finance. Trade Finance activities

L/C Opening Procedures

Preparation of Import documents

Endorsements

Preparation of LC draft

Week 2

Mr. Kashif Rehman (Asst. Manager Treasury )

Here I studied about IC (import contracts). How they are made, what documentation is

used, and how Import on contract bases are done.

Contract Management

Shipment record maintenance

L/C margin reconciliation

Local trade Documentations (Sim card Purchases)

Week 3 & 4

Mr. Tahir Matloob (Manager Budget & cost control ) .

I was assigned a project by my manager that was to reconcile the budget of marketing

department.

Budget review

Budget Reconciliation

Monthly and Annually

Variance Analysis

Week 5


Mr. Saim Ahmad (Asst. Manager Budget & cost control )

Whenever any new project is about to start the budget approval is necessary. So approval

notes are issued to see weather the project would be beneficial for the organization or not.

In budgeting and cost control dept we have to evaluate the cases and give approval of

budget.

Studied Business cases

Evaluation Of cases

Approval Recommendations

Week 6

Mr. Touqeer Zafar (planning and budgeting)

In the last week of my internship my working was research based. I was assigned to prepare

a complete report on forecasting and budgeting techniques. Also I had to present my work.

Forcasting methods & Techniques

Prepared detailed project report on Forcasting & budgeting

Accomplishments:

Finally, internships are an important part of the academic program, as they provide us with

the practical experience during our academic career. I am very grateful that I received an

internship at Warid Telecom as it was a great learning experience on how a multinational

company works and further improved my skills of team working and critical decision making.

New knowledge acquired

Trade Finance activities


L/C Opening

Preparation of Import documents

Contract Management

Budget Review

Budget reconciliations

Account maintenance

Business case evaluation

Decision Making

Forcasting & Budgeting

How Experience impact your career

Finance in a Multi National company is best place to learn Finance basics and practices due

to its dynamic nature. No doubt experience as an internee in Finance department of

multinational cellular company like Warid Telecom would serve as step stone to better

career in the field of accounting and Finance. Experience such as Trade finance activities,

Letter of credit opening, budgeting, variance analysis, account maintenance, participating in

Legal discussions and meeting with Professionals would be very helpful for my future

assignments as a student as well as a Finance professional.

6


LIFE KA NETWORK

Financial Ratio & Analysis

Ratio Analysis


Description Year 2009 Year 2008

Operating

Gross Profit margin

Operating profit Margin

Net Margin

%

%

%

36.30

18.15

15.45

43.70

24.67

(4.26)

Performance

Return on Assets

Return on Equity

Debtors Turnover

%

%

Times

5.94

9.28

4.90

(2.06)

(2.71)

5.35

Levarage

Debt:Equity

Leverage

Time interest Earned

Ratio

%

Time

16:84

35.66

15.43

15:85

27.92

(5.26)

Liquidity

Current

Quick

Times

Times

1.50

1.36

1.81

1.58

Valuation

Mp to BP

P/E

Book value

Dividend payout ratio

Dividend yield

Times

Ratio

Rs

%

Ratio

.88

9.63

19.49

83.6

8.7

2.01

(70)

19.19

-

-

Activity Raitio

Average collection period

Average payment period

Total asset turnover

Days

Days

24

425

.38

29

291

.48

ARPU US$p/

m

1.83 2.5

Ratio Analysis


Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a

quick indication of a firm's financial performance in several key areas. The ratios are

categorized as Short-term Solvency Ratios, Debt Management Ratios, Asset

Management Ratios, Profitability Ratios, and Market Value Ratios.

Ratio Analysis as a tool possesses several important features. The data, which are

provided by financial statements, are readily available. The computation of ratios

facilitates the comparison of firms which differ in size. Ratios can be used to

compare a firm's financial performance with industry averages. In addition, ratios can

be used in a form of trend analysis to identify areas where performance has

improved or deteriorated over time.

Because Ratio Analysis is based upon Accounting information, its effectiveness is

limited by the distortions which arise in financial statements due to such things as

Historical Cost Accounting and inflation. Therefore, Ratio Analysis should only be

used as a first step in financial analysis, to obtain a quick indication of a firm's

performance and to identify areas which need to be investigated further.

Liquidity

Liquidity PositionThe liquidity position of the company continues to suffer since a setback in FY08.

This trend has been witnessed despite increasing current assets, as current liabilities

grew more sharply. The short term borrowings of the company have been mounting

for the last few years and this has contributed to the current trend of the current ratio.

It may be noted that the company holds large amounts of cash and bank balances

compared to the other companies in the business. This may provide an edge to the

company over its competitors .


Current Ratio

2009 2008

Current

asset

÷

Current

liabilities

54,220,241÷36,086,322

=1.50

36,086,322÷36,086,322

=1.80

The current ratio is one of the most commonly cited financial ratios. Current ratio

measures the firm’s ability to meet its shirt term obligations.

Current ratio has shown a negative trend by 0.30.This is due to 164.68% increase in

current liabilities and 136.91% increase in current assets. This shows that liquidity of

WARID has decreased. . Standard for current ratio is generally 2 times. The more

predictable a firms cash flow, the lower the acceptable current ratio. Because

WARID is in a business with a relatively predictable annual cash flow, its current

ratio of 1.50 should be quiet acceptable.

Quick Ratio

2009 2008

Current Assets-

inventory ÷ Current

liabilities

=Quick Ratio

54,220,241-

5142843÷36,086,32

=1.36

39,603,406-4979351÷

21,913,959

=1.58


The Quick (acid-test) ratio is similar to the current ratio except that it excludes

inventory, which is generally the least liquid current asset.

Quick ratio has shown a negative trend of 0.22 times. This is due to increase in

current liabilities by 164.68% and 136.91 in current asset. Inventory value has also

risen. This has caused the quick ratio to fall this year. A quick ratio of 1.0 ore greater

is generally accepted, but as with current ratio, what value is acceptable depends on

the industry .

Although the liquidity stance of the company is fairly satisfactory at the moment, but

a continuation of the current negative trend may spell trouble for the company.

Activity Ratio

Average collection period

2009 2008

Account Receivables

÷ Average Sales per

day

=ACP

3895152÷162298

=24days

5270547÷181743

=29days

ACP or average age of accounts receivable is useful in evaluating credit and

collection policies. The average collection period is meaningful only in relation to

firm’s credit terms.

ACP has improved to 24 days in FY09 as compared to 29 days in FY08.

Improvements in these areas have played a major role in WARID revival in FY09

after facing a loss in FY08


Average Payment Period

2009 2008

APP

=Account Payable÷

Average Purchase per

day

36,086,322÷84909

=425days

21,913,959÷75306

=291days

The average payment period or average age of payables is useful in evaluating that

how much a firm uses its payables in its financing activities.

APP has shown a positive trend by 134 days in FY09. This is due to meaningful changes in

the payment procedures adopted by the finance section of WARID.

Total Asset Turnover

2009 2008

TAT

Revenue ÷

Total Assets

59,239,001÷154,048,079

=0.38

66336042÷137447852

=0.48

Total asset turnover indicated the efficiency with which the firm uses its assets to

generate sales.

WARID’s turns over its assets 0.38 times in FY09 which is 0.10 times less than last

year. This is due to increase in total asset by 112.08% and decrease in sales by

10.7% .


Generally the higher a firm’s total asset turnover, the more efficiently its assets have

been utilized. This measure is used by the WARID management for keeping an eye

on the operational activities of the company that how well its assets are being

utilized.

Debt

Debt Ratio

2009 2008

Total Liabilities

÷ Total Assets

=Debt Ratio

103058165÷154,048,079

=66.90%

91856400÷137,447,852

=62.83%

The debt ratio measures the proportion of total assets financed by the firm’s creditor.

The higher the ratio, the greater the amount of other people’s money being used to

generate profits.

Debt ratio of WARID has shown a very positive trend in FY09. Debt ratio has almost

increased by 4.07%. This is due to increase in asset and decrease in liabilities.

The value of 66.90% indicated that WARID has financed more than half of its assets

with the debt .

Debt: Equity

2009 2008

Debt

÷Equity

16:84 15:85


Debt: Equity ratio is a measure of a company's financial leverage calculated by

dividing its total liabilities by stockholders' equity. It indicates what proportion of

equity and debt the company is using to finance its assets.

The debt equity ratio has shown that debt has increased and equity has decreased

by 1 percent each. A high debt/equity ratio generally means that a company has

been aggressive in financing its growth with debt. This can result in volatile earnings

as a result of the additional interest expense.

Debtors’ Turnover

2009 2008

DT 4.90 5.35

Debtor's turnover ratio shows how long people normally take to pay a firm for

purchases on average. This ratio is beneficial when more than one period is

calculated.

This ratio of WARID has shown a positive trend of 0.45 due to effective collection

policies.

Leverage

2009 2008

Leverage 35.66

%

27.48%

The higher the ratio the greater the firm’s degree of indebtedness and the more

financial leverage it has. It has increased by 8.18%.


Time Interest Earned

2009 2008

EBIT÷Int

erest

=TIE

14,020,917÷

908679

=15.43

)4,462,616÷(

848406

)=5.26(

Times interest earned ratio, sometimes called the interest coverage ratio, measures

the firm’s ability to make contractual payments. The higher its value the better able

the firm is to fulfill its interest obligations. Time Interest Earned ratio has also

increased to 15.43% in FY09 as compared to -5.26 in FY08. WARID has certainly

shown a tremendous improvement in its ability to make contractual interest

payments.

Profitability Ratio

Gross Profit Margin

2009 2008

Gross Profit ÷

Sales

=GPM

21,506,719÷59,239,001

=36.30%

28,989,173÷66,336,042

=43.70%

The gross profit margin measure the percentage of each sales Rs remaining after

the firm has paid for its goods. The higher the gross profit margin, the better.

We can see that gross profit margin of WARID has declined in FY09. This is mainly

due to reduction in gross profit by 25.81%. This decrease is due to less revenue by

10.7% and increase in cost of services by 1.03%.


Operating Profit Margin

2009 2008

Operating Profit ÷

Sales

=OPM

10,754,387 ÷59,239,001

=18.15%

16,365,672 ÷66,336,042

=24.67%

The operating profit margin measures the percentage of each sales Rs remaining

after all costs and expenses other than interest, taxes and preferred stock dividend

are deducted.

We can clearly see that OPM of WARID is showing a negative trend. Although

operating expenses that decreased by 14.82% OPM is still shown a decline of

6.52%. This is mainly due to reduction in gross profit by 25.81%. This decrease is

due to less revenue by 10.7% and increase in cost of services by 1.03%.

Net Profit Margin

2009 2008

Net Profit ÷

Sales

9,151,185 ÷59,239,001

=15.45%

)2,824,890 (÷ 66,336,042

)=4.26%(

The net profit margin measures the percentage of each sales Rs remaining after all

costs and expenses including interests, taxes and preferred stock dividend, have

been deducted. The higher the firm’s Net profit margin the better the firm is.

WARID has made a remarkable effort in coming to state of profitability after facing

severe losses in FY08. Increase of 19.71% speaks for itself.


This is mainly due to positive increase in other operating income and changes in the

VSS which are almost reduction of 99.%

Earning Per Share

2009 2008

Earning available for

common stock holder

÷ Total outstanding

common stock shares

9,151,185 ÷51,000,000

=1.79

)2,824,890 (÷ 51,000,000

)=0.55(

The firms EPS is generally of interest to present and potential stockholders and

management. EPS represents the number of Rs earned during the period on behalf

of each outstanding share of common stock.

We can clearly see an incredible increase in EPS by 2.34PRS.

Return on Total Assets

2009 2008

Earning available

for common stock

holder ÷ Total

Assets

9,151,185÷154,048,079

=5.94%

)2,824,890 ÷(137,447,852

) =2.06%(

Return on total asset often called return on investment (ROI), measures the overall

effectiveness of management in generating profits with its available assets. Higher

the firm’s return on total asset, the better it is.

We can see that ROA has shown a significant increase of 8% in FY09.

This is mainly because of increase in Net profit by almost 423.95% .

Return on Common Equity


2009 2008

Earning available for

common stock holder ÷

Common Stock Equity

=ROE

9,151,185÷986119

=9.28%

)2,824,890÷(1042395

) =2.71%(

The return on equity (ROE) measures the return earned on the common

stockholders’ investment in the firm. Generally, the higher these returns, the better

off are the owners.

We can clearly notice the ROE has dramatically increased by 11.99%.

This is mainly because of increase in Net profit by almost 423.95% .

Market

Market Price to Breakup Value

2009 2008

Market Value ÷

Book Value

=MP/BP

17.24÷19.49

=0.88

38.64÷19.19

=2.01

The market/book ratio provides an assessment of how investor views the firms’

performance. It relates the market value of the firm’s share to their book value.

MPvBP has shown that investor’s faith on WARID has decline even though after

having a great recovery WARID must continue in this trend. Investor are not ready to

pay even the book value of the share, while in FY08 they were ready to pay 2.01

times more than book value and in FY09 they are ready to pay only 0.88 of the book

value.


Price/Earnings Ratio

2009 2008

MP ÷ EPS

=P/E

17.24÷

1.79

=9.63

38.64)÷0.55(

)=70(

The price/earnings (P/E) ratio is commonly used to assess the owner’s appraisal of

share value. The P/E measures the amount that investors are willing to pay for each

Rs of a firm earrings. The level of this ratio indicated the confidence that investor

have in the firm’s future performance. The higher the P/E ratio the greater the

investor confidence.

Book Value per Share

2009 2008

Common Stock Equity ÷

Number of Outstanding

Shares

=bv

986119000÷51,000,000

=19.49

1042395000÷51,000,000

=19.19

We can clearly notice that BV has increased by 0.30%. This is due to increase in

stock holder equity in FY09 by 1.03%.

Dividend


2009 2008

Dividend 1.50 --

In FY08 WARID faced the loss and no dividend were paid. In FY09 WARID posted a

net profit of Rs 9.15 billion in FY09 against last year's net loss figure of Rs 2.83

billion.

Overall Dividend declared was Rs 7650 billion. Although Rs 1.50 is not significant as

compared to dividend offered by WARID in financial years before FY08 but keeping

in view current trends in sector it is rational enough.

Dividend Payout Ratio

2009 2008

Dividend per share ÷ EPS

=DPR

1.50 ÷ 1.79

=83.60%

--

Dividend Payout Ratio shows percentage of earnings paid to shareholders in

dividends.

In FY08 WARID faced the loss and no dividend were paid. In FY09 WARID posted a

net profit of Rs 9.15 billion in FY09 against last year's net loss figure of Rs 2.83

billion.

Dividend Yield


2009 2008

dividend per share ÷

MPS

=DY

1.50 ÷ 17.24

=8.70

--

A financial ratio that shows how much a company pays out in dividends each year

relative to its share price. In the absence of any capital gains, the dividend yield is

the return on investment for a stock.

Last year WARID faced a loss and no dividend was paid and consequently no

dividend yield. In FY09 WARID showed a dividend yield of 8.70.

Market Capitalization

2009 2008

MC

RS(m)87,924 197,064

Market capitalization/capitalization (often market cap) is a measurement of size of a

business enterprise (corporation) equal to the share price times the number of

shares outstanding (shares that have been authorized, issued, and purchased by

investors) of a public company.

WARID’s Market capitalization is facing a downward trend which is very alarming for

the management. This is due to the fall in the market price of WARID’s share in

FY09.

Company size is a basic determinant of asset allocation and risk-return parameters

for stocks and stock mutual funds. The term should not be confused with a


company's "capitalization," which is a financial statement term that refers to the sum

of a company's shareholders' equity plus long-term debt.

Average Revenue Per User (ARPU):P

Until recently, the mobile operators in Pakistan enjoyed handsome ARPUs; however,

for the last couple of years especially after the global trend, the domestic ARPUs

have been falling sharply. Today, the overall all telecom industry's ARPU stands at

2.48 US$ per month.

In 2008 Average revenue per user of Warid Telecom was 2.5 US$ p/m which is in

2009 decrease to 1.83. this also shows Decline in profitability of warid telecom.

In trend analysis we done two types of analysis, these are

1. Horizontal Analysis

It is conducted by setting consecutive balance sheet, income statement or statement

of cash flow side-by-side and reviewing changes in individual categories on a year-

to-year or multiyear basis .


A comparison of statements over several years reveals direction, speed and extent

of a trend(s). The horizontal financial statements analysis is done by restating

amount of each item or group of items as a percentage.

2. Vertical Analysis

Like horizontal analysis this can also done for balance sheet and income statement.

Here we assign 100% value to any key item of balance sheet or income statement

and then see portion of other items in this percentage.

INCOME STATEMENT2008 2009 Remarks

( Rupees in thousand)

Revenue 66,336,042 100% 59,239,001 89.30% Worse

Cost of Services )37,346,869( 100% )37,732,282( 101.03% Worse

Gross Profit 28,989,173 100% 21,506,719 )74.19%( Worse

Operating Expenses )12,623,501( 100% )10,7523,32( )85.18%( Better

Operating Profit 16,365,672 100% 10,754,387 )65.71%( Worse


Other Expenses/Income

)20,828,288( 100% 32,665,30 115.68% Better

Profit/(loss) Before Tax

)4,462,616( 100% 14,020,917 414.19% Better

Tax 1,637,726 No tax paid tax credit given due to loss

)4,869,732( Tax paid due to profit

Worse

Profit/(loss) After Tax )2,824,890( 100% 9,151,185 423.95% Better

Earnings / (loss) per share – basic and diluted

Rs.(0.55) 100% Rs.1.79 425.45% Better

Horizontal analysis

We have taken FY08 as our base year for the horizontal analysis of WARID

Income statement items and there trend in current year and their reason are discussed as follows in detail:

VERTICAL ANALYSIS

2008 2009 Remarks


Revenue 66,336,042 100% 59,239,001 100%

Cost of Services )37,346,869( 56.3% )37,732,282( 63.70% Worse

Gross Profit 28,989,173 43.7% 21,506,719 36.30% Worse


Operating Expenses )12,623,501( 19.0% )10,7523,32( 18.1% Better

Operating Profit 16,365,672 24.67% 10,754,387 18.2% Worse

Other Expenses/Income

)20,828,288( 31.4% 32,665,30 5.51% Better

Profit/(loss) Before Tax

)4,462,616( 6.73% 14,020,917 23.67% Better

Tax 1,637,726 2.47% )4,869,732( 8.22% Worse

Profit/(loss) After Tax )2,824,890( 4.26% 9,151,185 15.45% Better

INTERPRETATION OF INCOME STATEMENT ITEMS

REVENUE

The reason for decrease in revenue by 10.7% is because of decrease in domestic revenue. International revenue of WARID has increased while the domestic revenue of WARID has fallen due to competition and other economic conditions of the country.

Revenue is exclusive of excise duty amounting to Rs 8,611,191 thousand (2008: Rs 7,631,695 thousand).

International revenue represents revenue from foreign network operators for calls that originate outside Pakistan and it has been shown net of interconnect cost relating to the other operators and Access Promotion Charges aggregating to Rs. 10,886,794 thousand (2008: Rs 7,758,176 thousand).

COST OF SERVICES

Cost of services has shown an increase of 1.03% which is mainly due to increase in inflation rate causing the fuel and power prices to jump up and Foreign operators cost and satellite charges have also shown a remarkable increase.

OPERATING EXPENSES


ADMINISTRATION AND GENERAL EXPENSES

Operating expenses have shown a decline in FY09 by 14.82% which is an significant improvement. This is mainly due to reduction is expenses like Salaries, allowances and other benefits , Repairs and maintenance, Printing and stationery, Travelling and conveyance, Technical services fee, Research and development and Other expenses.

SELLING AND MARKETING EXPENSE

In the decrease of Operating expenses selling and marketing expense has not played any significant role rather these expenses have risen in FY09.

OTHER EXPENSES AND INCOMES

OTHER OPERATING INCOME

Other operating income has shown an increase of 7.82% which has played as major role in this FY09’s net revenue.

FINANCE COST

Finance cost of WARID has risen in FY09 by 7.14%. this rise in finance didn’t brought any major change in the overall position because the reduction in charges was the major cause of this year positive balances.

TAXATIONWe can clearly see WARID haven’t paid mostly tax in FY08 because of Declining profits in that FY.But in FY09 WARID made a profit and had to pay the taxes.


Balance Sheet

Horizontal analysis2008 2009 Remarks

) Rupees in thousand(

Equity and liabilities

Share capital and reserves

Authorized capital

11,100,000,000“ A” class

ordinary shares of Rs 10 each

111,000,000 100% 111,000,000 100% Same

3,900,000,000 “B” class


39,000,000 100% 39,000,000 100% Same

Issued, subscribed and paid up capital

51,000,000 100% 51,000,000 100% Same

Revenue reserves

–Insurance reserve

1,683,074 100% 1,683,074 100% Same

–General 30,500,000 100% 30,500,000 100% Same


reserve

–Un-appropriated profit

14,705,300 100% 16,206,485 110.21% Better

Total 97,888,374 100% 99,389,559 101.53% Better

Non-current liabilities

Payable to PTA against WLL license fee 1,768,839

100% -- -- Better

Long term security deposits from

customers – non-interest bearing

951,618

100% 990,055 104.04% worse

Deferred taxation

590,000 100% 2,379,000 403.22% Worse

Employees’ retirement benefits

14,240,062 100% 14,142,099 99.31% Better

Deferred government grants

95,000 100% 1,061,044 1116.89% Worse

Total 17,645,519 100% 18,572,198 105.25% worse


Current liabilities

Trade and other

payables

21731667 100% 26,114,171 120.166% Worse

Current portion

of payable to

PTA

-- 100% 1,953,971 195397100% Worse

Taxation 182292 100% 368,180 201.97% Worse

Total 21,913,959 100% 36,086,322 164.68% Worse

Contingencies and commitments

Total Liabilities and Owner s Equity

137,447,852 100% 154,048,079 112.08% Worse

Assets

Non-current assets

Property, plant and equipment

82,800,178 100% 77,730,763 93.88% Worse

Capital work–in–progress

7,892,823 100% 9,836,588 124.63% Better

Intangible assets

3,149,063 100% 3,320,670 105.45% Better

Long term investments

3,607,439 100% 5,607,439 155.44% Better

Long term loans 394,943 100% 3,332,378 843.76% Better


97,844,446 100% 99,827,838 102.03% Better

Current assets

Stores and spares

4,954,085 100% 5,201,991 105.00% Better

Trade debts 13,366,216 100% 10,760,974 80.51% Worse

Loans and advances

888,309 100% 590,061 66.43% Worse

Accrued interest 315,817 100% 821,027 260% Better

Recoverable from tax authorities

1,383,766 100% 1,059,608 76.57% Worse

Other Receivables

1,641,617 100% 698,270 42.54% Worse

Short term investments

10,344,379 100% 21,017,790 203.18% Better

Cash and bank balances

4,545,145 100% 11,906,448 261.96 Better

Total 39,603,406 100% 54,220,241 136.91% Better

Total Assets 137,447,852 100% 154,048,079 112.08%


VERTICAL ANALYSIS

2008 2009


11,100,000,000“ A” class


111,000,000 100% 111,000,000 101.03% Worse

3,900,000,000 “B” class


39,000,000 100% 39,000,000 )74.19%( Better

Issued, subscribed and paid up capital

51,000,000 52.10% 51,000,000 51.31% Better

Revenue reserves

–Insurance reserve

1,683,074 1.72 1,683,074 1.69% Better

–General reserve

30,500,000 31.16% 30,500,000 30.69% Better


–Un-appropriated profit

14,705,300 15.02% 16,206,485 16.31% Worse

Total 97,888,374 71.22% 99,389,559 64.52% Better

Non-current liabilities

Payable to PTA against WLL license fee

1,768,839 10.02% -- Better

Long term security deposits from customers – non-interest bearing

951,618 5.39% 990,055 5.33% Better

Deferred taxation

590,000 3.34% 2,379,000 12.01% Worse

Employees’ retirement benefits

14,240,062 80.70% 14,142,099 76.15% Better

Deferred government grants

95,000 5.38% 1,061,044 5.71%

Worse

Total 17,645,519 12.84% 18,572,198 12.06% Better

Current liabilities

Trade and other

payables

21731667 99.17% 26,114,171 72.37% Better


Current portion

of payable to

PTA against

WLL license fee

-- 1,953,971 5.41% Worse

Taxation 182292 0.83% 368,180 1.02% Worse

Dividend payable

-- 7,650,000 21.20% Worse

Total 21,913,959 15.94% 36,086,322 24.43% Worse

Contingencies and commitments

Total Liabilities and Owner s Equity

137,447,852 100% 154,048,079 100%

2008 2009

Assets

Non-current assets

Property, plant and equipment

82,800,178 84.62% 77,730,763 77.86% Worse

Capital work–in–progress

7,892,823 8.07% 9,836,588 9.85% Better

Intangible assets

3,149,063 3.22% 3,320,670 3.33% Better

Long term 3,607,439 3.69% 5,607,439 5.62% Better


investments

Long term loans

394,943 0.40% 3,332,378 3.34% Better

97,844,446 71.19% 99,827,838 64.80% Worse

Current assets

Stores and spares

4,954,085 12.51% 5,201,991 9.60% Worse

Trade debts 13,366,216 33.75% 10,760,974 19.85% Worse

Loans and advances

888,309 2.24% 590,061 1.09% Worse

Accrued interest

315,817 0.80% 821,027 1.51% Better

Recoverable from tax authorities

1,383,766 3.49% 1,059,608 1.95% Worse

Other Receivables

1,641,617 4.15% 698,270 1.29% Worse

Receivable from Government of Pakistan

2,164,072 5.46% 2,164,072 4.00% Worse

Short term investments

10,344,379 26.12% 21,017,790 38.76% Better

Cash and bank balances

4,545,145 11.48% 11,906,448 22.00% Better

39,603,406 28.81% 54,220,241 35.20% Better

Total Assets 137,447,852 100% 154,048,079 100%


Financial Analysis

Liquidity Position

The liquidity position of the company continues to suffer since a setback in FY08.

This trend has been witnessed despite increasing current assets, as current liabilities

grew more sharply. The short term borrowings of the company have been mounting

for the last few years and this has contributed to the current trend of the current ratio.

It may be noted that the company holds large amounts of cash and bank balances

compared to the other companies in the business. This may provide an edge to the

company over its competitors .

Both current and quick ratios have shown a negative trend by 0.31 times and 0.22

respectively. Standard for current ratio and quick ratio is is generally 2 times and 1

times respectively.

Although the liquidity stance of the company is fairly satisfactory at the moment, but

a continuation of the current negative trend may spell trouble for the company.

Profitability Position

WARID posted a net profit of Rs 9.15 billion in FY09 against last year's net loss

figure of Rs 2.83 billion. Earnings per share have also increased to Rs 1.79 from


(0.55). WARID has recovered from the state of loss although the overall telecom

sector consumer base is showing a declining effect. It is mainly due to effective

marketing strategies adopted by the company.

Although WARID maintained its market share in the fixed line, there was a decrease

in revenues by 10.7% mainly due to substitution impact of mobile expansion.

With increase in profit, the WARID also managed to increase its net cash flows to Rs

16.81 billion compared to last year decrease in net cash flows of Rs 16.24 billion

which is a significant recovery of almost double. Considering the cash requirements

for restructuring and development plan, the company declared a final dividend of Rs

1.50 per share for the financial year ended June 30, 2009. The total revenue for FY

2008-09 stood at Rs 59.24 billion against Rs 66.34 billion of FY 2006-07. The

decrease in revenue was mainly in the domestic segment due to competition and

reduction in tariffs. However, WARID is making all efforts to boost revenue by

improving customer service and launching new services to turn around the situation.

Leverage PositionThe debt equity ratio has shown that debt has increased and equity has decreased by 1

percent each.

The debt ratios showed an increasing trend in the FY09. The debt to asset ratio of the

company had declined considerably in FY07 and FY08, increasing again in FY09 by almost

30% from 27.48% in FY08 to 35.66% inFY09. It is important to note that the company

maintains a largely unleveraged capital structure, with the current trend in debt ratios bought

about largely by changes in current liabilities of the company.

This was brought about mostly due to increase in current liabilities of the company in FY09.

The absence of the dividends payable portion of current liabilities in FY08 and its coming

back online in FY09 was an important contributor to the trend.

Time Interest Earned ratio has also increased to 15.43% in FY09 as compared to -5.26 in

FY08. The higher the value the better the firm is able to fulfill its obligation related to interest

payable. WARID has certainly shown a tremendous improvement in its ability to make

contractual interest payments.


Activity PositionInventory turnover is improved. And if take a glance of other activity ratios we

come to find that Average Collection Period and Average Payment Period have

also shown a very positive trend for WARID in FY09 as compared to FY08. ACP

has improved to 24 days in FY09 as compared to 29 days in FY08. Similarly APP

has shown a positive trend by 134 days in FY09.

Improvements in these areas have played a major role in WARID revival in FY09

after facing a loss in FY08.

RETURN ON OPERATING ASSETSAfter facing a negative return in FY08, WARID has made a splendid effort to utilized

its assets effectively to generate positive outcome. This has only been possible due

to the efficient and effective Capital Management Policies. But on a whole if we

make an analysis with the help to the diagram we can clearly see that return is

decreasing gradually, which is very alarming for the organization.

WARID should make major changes in its capital management structure and there is

a lot of space for improvement.

Market Value vs. Break up ValueMarket value of WARID was at peak in FY06.But in FY07 is fall down significantly..

We can clearly see in FY07 the market value of WARID share is facing a downward

trend. This is mainly due to profitability of the organization and the amount of

dividend paid.


7

LIFE KA NETWORK


THEORIES IMPLEMENTATION

SWOT ANALYSIS


SWOT analysis is specifically the study of Strength Weaknesses Opportunities and Threats,

out of which Strength and Weaknesses are internal factors whereas Opportunities and Threats

are external factors.

The SWOT analysis conducted for this assignment is of the new emerging Telecom

Company named as Warid Telecom. Warid Telecom launched in Pakistan on 23rd May 2005

but its pre launch operations started working six months before the Launch this shows the

planning masters took enough time studying Pakistan’s Market and is well equipped to serve

in the field of service based cellular industries in Pakistan.

Strengths:

Compatible Prices.

Variety of tariff plans

Best Vendor Selected

Customer Focused Services

Experienced higher Management

Easy access to customers

Working on staff development strategies

Higher Pay structures

VAS ( Value added services, including extra features)

Effective marketing strategy

Weaknesses:

Network issues (signals fluctuation problem)

Coverage Issues (city coverage is a big issue)

Delayed activities

Difficult to convert the customer of the other companies user

Opportunities:

A developing market

Mergers, joint ventures or strategic alliances

Could develop new products

Decline of major competitors

Technologically better environment


New launches

Expansion of network coverage area

Better Marketing Promotions

Needs to develop competitive edges

Employee Recognitions programs:

Threats:

Emerging companies in market

Unstable political conditions

New companies in market

High public expectations

Low prices of competing brands

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LIFE KA NETWORK

Conclusion and Recommendations

Conclusion And Recommendations

The mobile industry has seen phenomenal growth over the year. This growth is not new to

the industry, as previous years have shown substantial growth as well. This growth is a

direct result of the increased competition in the mobile industry, resulting into better

services at reduced rate. Furthermore, this has favorably affected our economy as a whole,

generating revenues for the government, through direct and indirect taxation and creating


employment opportunities for the people. The mobile industry of Pakistan is considered by

a majority of prospective employees as the best industry for a job.

Although the mobile industry has seen substantial growth over the years, many observers

feel that the industry may become saturated and will show lower growth rates as a result of

increased taxation and the general economic conditions of Pakistan. Although the concerns

may be valid to some extent, but with PTA, introducing the 3G platform in the coming years

and a major part of our population still without mobile connectivity, especially in distant

villages, there is still optimism that the mobile industry will not become saturated and there

is still place for competition in the industry.

Few years back Telecom sector was on its boom but now as there are 5 operators in the

market its hard to survive. The industry is going down now all the networks are trying to

maintain there position not going for any sort of expansion. With some improvement at

higher level including advisor to CEO, much has improved this year in Warid Telecom market

rating. Still Its not so promising. Warid Telecom has potential to capture good market and to

give tough time to the competitors. According to the financial conditions of Warid they

should try to maintain there position in the market and bring innovative ideas to attract the

customers. But to do so they have to take following steps to overcome there weaknesses

and avail new opportunities to Gain greater market share and high industrial growth.

Recommendations

Warid is offering cheap rates for prepaid and postpaid customers as compared to its

customers but the main area they are lacking is the way they communicate to the

customers.


Extra ordinary costs should be reduced.

Proper budget should be allocated for each departments.

Focus on International Trade

Network should be enhanced to more cities.

There should be consistency in Brand ambassadors, colors, graphics in there print

and electronic adds to create strong brand recognition.

More regional departmentalization should be there, so as to create strong presence

in and market analysis at regional level.

More staff should be hired in some departments specially in Finance and HR to meet

the requirements.

There should be more decentralization and the employees should be encouraged for

there ideas.

Compensation and benefit plans should be revised, as it can be used as a very

important tool for employee motivation.

9


Appendex

Internship Completion certificate

Letter Of Authorization

Copy of annual financial statements

Balance Sheet

Income Statement

Cash Flow statement

Statement of changes in equity

FINANCIAL STATEMENTS






BIBLIOGRAPHY

Web ResourcesCompany’s website- www.waridtel.com

Magazine Business Economy

Google.com

Economic Survey of Pakistan

Businessrecorder.com

Security and Exchange Commission of Pakistan

Yahoofinance.com

ReportsPTA Reports

Books Managerial Finance by Lawrence Gitman

Articles

Dawn Newspaper

Daily Times Newspaper

Business recorder Newspaper

Flare Magazine
