Chapter 1INTRODUTION TO REPORT1.1 Back ground of study:Students of Business Administration are required to undergo the internship program of six to eight weeks in any national or international organization. So it is the academic requirement to justify the BBA program. Being the student of business administration it was an essential need. it is the better for any student to join well known organization to enhance his/her knowledge ,skills and attitudes thats why I decide to join the well reputed organization that is TIP(Telephone industries of Pakistan) thats makes the fruitful for me as finance manager in the future . The TIP Haripur Hazara was incorporated as a private limited company in the public sector 1952 to produce telecommunication equipments in Pakistan. The company is a joint venture of M/S Pakistan Telecommunication Company limited (PTCL) and M/S SIEMENS AG Germany. The management is vested in a board of directors (BOD) having 8-members including the chairman by the Government of Pakistan while 2-members are nominated by M/S SIEMENS AG Germany The study of the industrialization of the country is unique and interesting one where the primary motives behind the establishment of the new industries were not the general well being of the country and the masses but safeguarding of the political interest , nepotism and money making of the Governments in this process of industrialization during the last 50years many medium and large scale industries have been established most of these industries failed in the long run when they had to face competition from the private investors , some major reason behind the failure of these industries were the managerial inefficiency lack of a check and balance system and corruption .One such industry established in 1952 as a private limited company in the public sector.

1.2 Objective of report:This study attempts to: Provide an overview of the TIP; Analyze TIP management structure/system; Analyze TIP financial statements; Appraise the organizations performance; Recommend policies/measures for making the organization more viable.

1.3 Purpose of study:Purpose of the study was to convert the knowledge gained in the internship into theoretical form.This study attempts to: Provide an overview of the TIP; Analyze TIP management structure/system; Analyze Tip Personnal & Administration Department Appraise the organizations performance; Recommend policies /measures for making the organization more viable.

1.4 Scope of study: This work is an effort to introduce the Telephone Industries of Pakistan in terms of its recent and past performance. This can be very useful for those interested in knowing about the organization in terms of its history and performance.The performance has further been analyzed by using different techniques. This analysis gives a true picture of the organization and shows its strengths and weaknesses. The people interested in this organization can make a true image of the organization in their mind by reading it. It can also be helpful for the management of TIP who can easily know about their strengths and weaknesses.The opportunities for the organization and the threats it faces have also been discussed and these have been used to make the recommendations for the improvement of the performance. These recommendations can be very helpful for the top managers of the organization to remove the defects and to improve the performance.1.5 Methodology of the Study:For the collection of data and the other relevant material used to write this report, the following primary and secondary sources/methods have been used.

a. PRIMARY SOURCES1 Personal observations 2 Interviews3 b. SECONDARY SOURCESFollowing secondary sources for data collection have been used for this report.1. TIP Annual Reports2. Brochures.3. Factory's Articles and Memorandum of Association4. Internship Reports and assignments written on TIP in the past5. InternetDuring the period of internship, I studied the history and the background of the Telephone Industries of Pakistan in detail, side by side with the information, which I gathered during the daily routine work by personal observation. In this work, I came across on problems, which were not defined in the previous works. So in order to clear my doubts; I visited the concerned persons in all the departments. I took the help of interviews with different people at TIP to get the necessary information about the management structure and functions and present and past performance of TIP.After reviewing the answers from the interviews and on the basis of personal observation, I have developed my findings about the organization and have given the recommendations for the improvement of performance.

1.6 limitation of report:Limitation of study is just because of following reasons. Focus on work Lack of time Some internet secrecy work 1.7 Scheme of report:This report has been divided into six chapters, which are in the following order.Chapter 1 Introduction of Report Chapter 2 Introduction of Telephone Industry Of PakistanChapter 3 Product Line & DepartmentsChapter 4 Ratios Analysis

Chapter 5 SWOT & Critical AnalysisChapter 6 Conclusion & Recommendation

Chapter 2

INTRODUCTION OF TELEPHONE INDUSTRY OF PAKISTAN2.1. History and Overview of TIP: Telephone Industries of Pakistan, an ISO certified company, the only local manufacturing company in telecommunication sector in the real sense. As a subsidiary to PTCL; it is engaged in providing high tech manufacturing and installation services for last 50 years. Its contribution towards the growth of telecommunication in the country is most significant. Even today when more multinational companies have entered into telecom sector its contribution is 50% to the total installed network of PTCL. It is equipped with state of the art technologies and unmatchable product quality. Located at Haripur Hazara (NWFP), 80 kilometers north-west of Islamabad, Telephone Industries of Pakistan (Private) Limited (TIP) was incorporated as a private limited company in 1953. The company is presently engaged in manufacturing and sale of Telephone Sets, Telephone Exchanges and allied equipment, Energy Meters and providing services for installation and commissioning of exchanges. The Authorized Capital of the company as on June 30, 2003 is Rs 1,000 million, whereas, the issued, subscribed and paid up capital is Rs 909.309 million. The two shareholders of the company are Pakistan Telecommunication Company Limited (PTCL) and Siemens A.G of Germany with 70% and 30% shareholdings respectively. The management of the company is vested with a Board of Directors having eight members including the Chairman and Managing Director, who are appointed by PTCL (GoP) while two out of eight members are appointed by Siemens A.G, Germany. The Federal Ministry of Information Technology and Telecommunication, Government of Pakistan is the administrative ministry for the company. TIP began its production in 1954 with an annual capacity of 7,000 Telephone sets and 7,000 line units of F-1 type Strowger system of exchanges. It continued with changes of technology to build Electromechanical types of Exchanges (EMD). The production capacity was increased in different phases according to the requirements of the country2.2 Mission of TIP A bright communication future of Pakistan. TIP commitment is a commitment to the pursuit of meaning life. It is meaning to put quality and meaning to its work and its products. Commitment is what character is made of, and commitment is what quality is all about. This commitment to quality permits to all aspect of TIP'S product, its R&D, its service and people and is expressed in daily action. 2.3 Objectives of TIP To provide quality products at low price to country To fulfill the needs of the county for communication equipment To provide products To provide after sale service to its customers A sound communication system in all organizations of Pakistan To make research for modern telephone equipment and produce them at low cost To enter international market and compete international firms. To provide skilled labor in this field Increase the revenue of Government Building new skilled workers.2.4 CEO Message:We will work to ensure a greater understanding by key stakeholder for innovative telecom manufacturing and others TIP products. We will continue our contributions for finding new solution in telecomm sector and other sectors of manufacturing.2.5 Nature of Organization:TIP is well known and distinguished industry of its own nature in the south east Asia region in the field of production telephone and other equipments such as energy meters , tools making , plastic circuit board PCB etc , the industry (TIP) has a key role to the development in the field of telecommunication Although China has capture the whole market but yet it cannot compete with TIP especially in telephone sets , its telephone sets are very durable , thats why its demand is more as compare to China . We can say that Tip is leader especially in the market of telephone in Asia. 2.6 Production of TIP: Self reliance in communication industry is judged through its local production TIP through its constant efforts developed into a complex of multitude technologies by getting technical knowledge , training and experience from SIEMENS Germany in the field of supporting technologies such as ; Telephone sets Tool designing Tool making Fire Alarm for exchange Drop wire Energy meters PCB (plastic circuit board)

2.7 Competitors: Carrier Telephone Industry of Pakistan. Hawaii telecom of China. ZTE of China. Nokia Siemens Network (NSN) Alcatel etc.

2.8 Service provide by TIP:TIP only provides service for installation and commissioning of exchange.2.9 Division as in terms of Units: TIP has been divided into following groups.a) Finance DepartmentThe finance department deal with the purchasing an sales receipts and payments and the income and expenditure b) Personal & H.R The personal and H.R department deals with employees and worker recruitments to retirement policy thats includes the selection placement, training and development salaries and wages and the welfare policies among the many other . the basic purpose of both division is to run an organization most successfully.c) General product Division :General product Division has its own manager under whose supervision all departments works. In this division energy meters, telephone sets, drop wires. PCB are made.The General Manager works under the supervision of the M.D and board of Directors and controls the whole division.This department also makes arrangements for the sale of the goods produced by the production department. The quality of the products produced by the production department is checked and controlled by Quality Assurance Department. The Finance department of this division provides funds for the purchase expenses. Salaries wages and other allowances are also paid to workers and employees by this department. Personnel section keeps track of the activities of the staff in the department and handles different administrative matters related to the department. This department also controls annual reports of employee's welfare activities and the records related to medical facilities.

d) digital switching division:The most important department of TIP produces permanent and the containerized exchanges. Digital switching division performs functions under the G.M who is responsible and report to the managing director. There are different department such as: sales department deals all the matters related to the sales and services. Production department handle the matters related to the production of exchanges and the quality assurance department assures that the production meets the standard. The personnel department handles the matters related to employees and the finance department deals with the financial problems.2.10 Branches & Offices:The branches and offices of TIP are in big cities of Pakistan.a) Head office :Head office of TIP is in Haripur Hazara.b) Regional Offices Karachi Islamabad Lahore 2.11 Code of Ethics:Because of the right may not always be obvious we must be guided in our every action by a set of well-define value , governing our decision So the employees of TIP are order to abide the rules , which are restricted and obey the lawful orders and direction given by the management.2.11.1 Timing & attendance Starting Time: 6:00Closing Time: 14:00 Lunch Break: 11:00 11:30 2.11.2 Dress codeA) For Employees & worker:All employees are order to wear neat and clean. There is no any hard and fast rule for dressing but not unethical.B) For Executives:No any formal dress i.d necessary for managers or executives but the dress which shows seniority respect like shalwar suit with waistcoat.2.12 Organizational Chartsa) Function Departments

b) Top management

Chapter 3 PRODUCT LINE & DEPARTMENTS3.1 Product line:TIP as a Telecom Equipments Manufacturer delivered high quality, hi-tech products and services. TIP provided its customers a One-stop manufacturing solution for quick turn-around, high quality and cost competitive Electronic, Mechanical and Electro-mechanical components and assemblies by using their own broad variety of manufacturing resources. TIP is one of the most qualified, expanding manufacturing source in Pakistan using high quality latest technology of CNC machines, and high qualified, skilled and hardworking experienced labors up to 2000. All the setup of TIP is an advanced system accordingly to the standards of International standards and produces high quality leading and professional types of products and services. All these products are inspected in every step and then presented to the market. TIP offers the following products and services:1. Telephone.a. Telephone Set-210b. Telephone Set-240c. Telephone Euro Set-802.d. Master Set Telephone M-113e. DTMF Steno Phonef. CLI Telephone Set2. Telephone Exchangesa. Automatic Public Exchanges (Systems) & Telephone Setsb. Digital Public Exchanges EWSDc. Digital Mobile Exchangesd. Subscriber Trunk Dialing Equipment.e. Private Manual Branch Exchanges.f. Private Automatic Branch Exchanges.g. Terminal Equipment (Telephone Sets)

3. Telephone Drop Wire.4. Training of Telecom Technicians and apprentices:a. Telecom Apprenticesb. Electronics Apprenticesc. Mechanical Apprentices5. Production of Electrical Energy Meters

DEPARTMENTS3.2 Personal &Administration Department: The personnel section of TIP is concerned with the planning, organizing directing and controlling of the recruitment and selection, development, compensation, maintenance and separation of human resources to accomplish organizational as well as individual objectives. The personnel section deals with the policies and procedures of personnel selection while administration section deal day-to-day operationalization of personnel policies.Personnel section make policies for the selection of personnel, therefore, job description is the main for the administration work there are graduate engineers, which are the main requirement of the TIP for clerical job, TIP require matriculates of scale-5. The procedures for selection so simple in which applications are send to the administrative officer who put them in the specified categories to make them feasible for interview purposes. They issue letter to the candidate then selection committee sits for the selection of their own departments jobs. Normally, the selection committee consists of the head of departments. After selection, the candidate is sent for medical examination. If he has cleared that test physically, they send him to the superintendent of police for verification. Finally, the candidate is capable for the job, therefore, on appointment letter with all of the details about work, salary/wages and other necessary briefings is send to him, that appointment letter must be approved by the General Manager of Telephone Industries of Pakistan. Whenever, any department wants any staff then, administrative officer call the explanations from that department, about that vacancy and then advertised it in newspapers. The grade-17 employees are selected on the all Pakistan basis.Personnel section not only make policies for selections but it also define disciplinary procedures for TIP when a mans character is not according to the codes of conduct or either he misconduct then, the TIP takes the disciplinary actions against him/her. West Pakistan Industrial and commercial Employment ordinance of 1968-15 (3) deals with the disciplinary procedures. Misconduct in following acts;

i.Willful in subordination or disobedience to a lawful and reasonable order of a superiorii. Theft, fraud or dishonesty in connection with the employees business or property.iii. Willful damage/loss of employers goods/propertyiv. Taking or giving bribe or any illegal gratificationv. Habitual absence with leave or absence without leave for the more than ten daysvi. Habitual late attendancevii. Striking or insisting others to strike etc.The method of action against these grievances depends upon these three necessary witnesses;a) The time of that misconductb) The date of that misconductc) The place of that misconductThe inquiry officer gives him a charge sheet. At first time, it is only mentioned that on such date, place & times you do this misconduct etc. And informed him to follow the procedures otherwise, they will be punished or reported to the concern department. The inquiry officer is not responsible or allowed to punish but simply forward the report along with his remarks that what or not the charges against a man have proved the final decision about punishment is only taken by the General Manager. The main or extreme punishment is dismissing but others are as follows;a) Fineb) With holding of increment or promotion for a specified period not exceeding more than one yearc) Reduction to lower post or distiller without any payment of compensation without any noticeThe procedure for any of the above punishment is as follows;a) They write a letter to the concerned man about above punishment whichever is applicable on him/herb) The dismissal letter s only issued with the approval of competent authorityc) The personnel and administration section also deal with promotional policy and procedures.The promotions made on the basis of;i. Seniority cum fitnessii. Length of services prescribediii. Shouldering of high responsibilityiv. Availability of a higher postIf there is no higher post available but a man is eligible for the promotion, then, up gradation is given to him by it we mean that the grade not the post in increased with all the facilities of that higher grade is given to that man.At the age of 60 years, department bring a notice to the General Manager that he will be retired. The general Manager issues a letter of retirement to that man.In case of death of any worker, TIP sends a letter of sympathy to his family and always pays the insurance as soon as possible.A man on job also takes leaves for different occasions. There is well-defined system about the leave e.g. a man hired on job at 18-12-1998, and at the date of 18-07-2002, he want leave for 210 days from 19-7-2001. If he can attend 16 days of month than, he get 4 leaves month. If a man wants leave from 31-07-2001 to 01-08-2001, then, the four 4 leaves of the next month will be dismissed.

3.2.1 Compensation & Benefit: The compensation programmed of TIP consists of two type of compensation;

a) Direct compensation including salary and wagesDirect compensation includes salary and wages of the employees and the workers. The payroll section of finance and personnel department deals with direct compensation. The salaries and wages are awarded on the basis of the Basic Pay Scale- 2001.b) Indirect compensation comprises of number of schemes the payroll section of finance and personnel department deals with direct compensation.The TIP offered following indirect compensation to its employees including; i. Medical facilitiesii. Social securityiii. Employee old age benefit institutioniv. Education grantv. Education assessment/accommodationvi. Housing schemevii. Accident compensationviii. Insurance ix. Hajjx. Retirement awardxi. Child birthxii. Special allowancexiii. Canteen

Different functions performed by the personnel and administration department are:

3.2.2 Promotion: The personnel and administration section also handle the promotional policies and systems. The promotion will be on the basis of i Seniority cum fitness ii. Length of service prescribed iii. Shouldering capability of high responsibility iv Availability of a higher post. If there is no superior post available but an employee is qualified for the promotion, then, the "Move-over" is granted to him, meaning that the grade not the post is improved and all the facilities of that superior grade are given to that employee.

3.2.3 Recruitment & Selection:

TIP is a manufacturing industry therefore it needs the services of engineers and the skilled labor force. The process for the selection of labor force and the clerical staff is very simple it is usually based on the reference or recommendation of existing employees. TIP also has its own training department from which student can be selected for the appropriate jobs. The basic education is needed for these candidate mostly S.S.C or intermediate. the candidate after the interview and the demo work selected. Grade 15 or the above employees are selected inside the concerned departments and dealt by the central P&A division.

3.2.4 Training & Development:

Usually workers and clerical staff dont know their job description and capable of doing assigned task because of new environment and the work place therefore new employees need training. TIP after selection of employees and worker, under grade 16 provide training them through attaching them with the experienced workers of concerned department there is no specific time period for training and development. Usually the first three to four months are considered as the training and development period. The period can be shorten and extend keeping in view the time and capacity of employee. Following training programs are offered in TIP1. Apprenticeship programs 2. Computer training

3.2.5 Social Security & Welfare Fund: a) Social Security According to the provision of Social Security regulation all employees whose wages are up to Rs.6000/- pm (inclusive of all allowances) is covered, irrespective of their designation, position or nature of work. TIP also contributes in the social security fund to provide facility to the eligible workers for their well being. The contract employees of telephone industries of Pakistan use the medical facility and other benefits that may apply.

b) Welfare Fund The welfare fund is reserved in the welfare fund budget for allowing economic help to the small paid employees/workers. There is a board to distribute this endowment. The fund allowed to an individual who remains on leave without disburse due to illness or due to family problems. The welfare fund is also permissible in purchase of medicines, which are not sheltered under the medical policy and are deducted from the statement of employees/workers. The board consists of Chief Engineer (production), Executive Personnel and Executive Administration.

3.2.6 Retirement of Employee: P & A department maintain the record of the employees service, which contain the date of birth, joining and the retirement dates of the workers and employees. As a worker reaches the age of 60, the department sends a notice to the GM that employees are near the retirement age. GM then issues the retirement letter. In case of casualty of any worker, TIP sends a letter of sympathy to his relatives and also the insurance as soon as possible.

3.2.7 Disciplinary Policy: Personnel department not only makes policies for selections but it also defines disciplinary rules for TIPs employees. When a man's character is not according to the codes of conduct then TIP takes the disciplinary actions against him or his Property.

3.3 Finance Department: After the initial development work of the organization is complete and the human resources necessary to execute these plans. Available to perform their tasks, the next most significant factor for the organization is the capital or the financial resources. Financial resources are very essential for the realization of the organizational plans. With the availability of finances the human resources will quit the organization as the organization won't have anything to pay them as compensation or a reward of their work. The accessibility of raw material and other required inputs of the production can also be guaranteed only with the availability of financial resources. At TIP, each division has its own separate department to arrangement of the financial matters of its departments.

3.4 Accounts Department: To keep record of the financial transactions the accounts department plays a vital role in any organization. It performs the check and balance system and also keeps record of transactions. Telephone industries of Pakistan have its accounts department working under Finance department accounts department has further sub sections as following;

3.5 Costing Section: Costing section is the most important section because the act of this Office may affect the profit/loss of the business. A small inaccuracy in cost computation may upset the result and demonstrate adverse picture of economic position of the organization. A vast arrangement of attention on the branch of Cost Accounting is required for calculating the cost of products, because the removal of any cost factor may lead to failure of organization. There are two segments of costing office: 1. Internal Accounting Value Section. 2. Cost Calculation Section

I.A.V. (Internal Accounting Value) Section The major function of this Section is to keep the records of the raw material purchased locally or from abroad. T.I.P is purchasing different types of parts in bulk from different vendors. For such massive purchases it is not probable to workout price of each article by taking into account all additional expenses incurred on each item until they arrive at the T.I.P. Stores.

Cost Calculation Section Cost calculation section calculates the prices of all the local manufactured marts. It also calculates the price of Work in Progress and finished parts lying at different position in different departments.

Accounting Cycle of Foreign Invoice:a. On receipt of advance copy of Invoice:-Say FOB value Rs.25000/-

1. General Journal Entry

DateDescription RefDrCr

Goods in transit a/c25000

Supplier a/c25000

B. On payment to suppliers:-

General Journal EntryDateDescriptionRefDrCr

Suppliers a/c25000

Cash a/c25000

b. Payment of other charges:

Income Tax, Custom Duty, Excise Duty, Insurance, Transportation etc.Interim account operate for the booking of other charges

General Journal EntryDateDescriptionRefDrCr

Interim a/c27000

Cash a/c27000

c. On receipt of goods in TIP:General Journal EntryDateDescriptionRefDrCr

Store a/c55000

Goods in transit a/c25000

Interim a/c30000

d. Issuance of material for productionGeneral Journal EntryDateDescriptionRefDrCr

Consumption a/c55000

Store a/c55000

At the end of each financial year, costing office conducts annual stock taking of local manufactured parts foreign ordered parts and material lying in the store or on the shops in different manufacturing position and purchase/material in the respective stores. The store department notes down the balance quantity of each item on the store ledger card and prepares list of items laying in the store on the date of stock taking from ledger card send to Costing Office (C.O)This section multiplies the balance only with the unit price available in this section and reconciles the result in the balance of store ledger, this section checks out the receipts and issue of each item and prepares discrepancy booking note, because the stock-taking result must be agreed with the financial ledger. At the end of each year this section reconcile stores balances with the financial ledgers and prepares financial schedules of accounts and get it checked by External Auditors.3.6 Commercial Department (sale)The basic aim of all the (profit) organization is the earning and the increase of profit. The only means of earning profit for the organization is to sell the goods and services produce. This profit is used to run the operations of the organization and to expand the business for this purpose the sales or marketing department is one of the most important departments in any organization The main function of the Sales Department is to receive purchase orders from the customers and arrange the supply of equipment to them. PTCL is the major customer of TIP products. In addition to PTCL, TIP also sells its products to other Government organization, Armed Forces and National Radio & Telecommunication Corporation (NRTC) HARIPUR, Carrier Telephone Industries (CTI) Islamabad and other private parties. TIP charges profit margin from all the customers.

3.6.1 Stores Section: Telephone industries of Pakistan is a manufacturing concern so to production departments required different type of parts and raw material. TIP purchases raw material and parts in bulk quantity so that production function can run smoothly. Because of huge raw material inventory TIP set up store section that keeps record of the inventory. Purchase of raw material and parts is the responsibility of purchase department. TIP manufactures those components that can be produce in the factory. Purchase of parts is also made because of economic benefits instead of producing these parts. Some parts require specialized equipment that is costly and are not available in the factory. TIP therefore prefers to buy these parts from the markets where these parts are available at low cost. All these production materials are needed on the daily basis as the manufacturing goes on and their requirement is not periodic i.e. just once in a year or in a period. These materials are a1so not easy to acquire through just-in-time supply system. So, there is a need to keep an inventory of those materials, which is used on regularly basis. For this reason stores have been established under a Stores Department at TIP. The Store department has the following sub-stores:1. Raw Material Store 2. Part Store 3. Oil Store 4. Overhead Store. 5 Stationary & Overhead Store6 Machine Parts Store7 General Tools Store8 PCB Store3.6.2 Sales Procedure:Sales Department of TIP receives formal orders from PTCL, for the supply of the equipment. On the receipt of formal order, sale department prepares quotation and submit the same to PTCL Head Quarter Islamabad for the issuance of firm order. Despite these formal direct orders TIP also participates in any tenders competing with other firms.The Quotation consists of the following items:1) Cost of the equipment2) Sales tax3) Transportation charges4) Packing charges5) Insurance charges.After acceptance of the quotation PTCL issues firm order. On the receipt of firm order, sale department starts supply of the material if required material is already lying in TIP stores as finished products otherwise production department as well as purchase department are requested to procure / produce required goods within the specified time. Sale department dispatches the equipment to the consignee on advice notes.The following detail is available on the advice note:1) Name and address of the consignee2) Advices Note No. and Date3) Details of the equipment4) Mode of dispatchCustomers other than PTCL are treated as Private Parties. It has sales offices in Islamabad, Lahore, Karachi, Peshawar and Quetta. Sale procedure is same for all the customers as in case of PTCL Purchases order TIP claims 50% advance of order value, which is flexible against claim of supplied equipment

3.7 Book Keeping Section: Book keeping is the record-keeping part of accounting system. It means to record and sum up the business activities having financial effects in a set of books called books of accounts.

3.8 Books of Account: The accounting books that are being used are as follows: i. Cash bookii. Purchase bookiii. Sales bookiv. Bank bookv. General ledgervi. Subsidiary ledger

In these books the original entries are posted by the book keepers. entries in thses books made through the bank voucher cash payment and received vouchers. the sales book is maintain with the help of invoices. General ledger is also prepare and correctly maintain in this section. Record keeping in TIP is based on the double entry system where every transaction have dual effects one is called debit and second is credit which is the best system considered in the accounting system.

3.9 Payroll Section:

Payroll section deals with the salaries and wages of the employees and performs different function such as: i. Preparation and Payment of monthly salaries. ii. Calculation and Payment of monthly allowances of workers iii. Payment of T.A D.A advances iv. Compensation of medical advances. v. Payment of all indirect reimbursements. vi. Payment of overtime of workers. vii. Payment of vehicle advance.

Payroll office keeps personal files of every one employee and worker. All documents relating to employees and workers are kept in this record. Whole record of each employee since his joining till retirement is available in his personal file.

3.9.1 Payroll Work Procedure: Main purpose of the payroll division is to prepare the salaries, wages and other various payments i.e. i. Allowances to workers & bonuses ii. Medical bills iii. TA/DA bills iv. Advances v. Welfare payments vi. Education grants vii. Workers participation fund etc. Making revitalization of advances, income tax, electricity bills and other found etc. from the salaries, wages and allowances is also the job of pay roll section.

Payroll office conducts this work in the following manner:

a) Wages

Wages are paid to workers after 15 days. There are two categories of workers: Fix rate workers Piece rate workers

1. Fix Rates Workers Fix rate workers means that their hourly or daily wage is fixed at certain amount. They are mainly the workers of overhead shops such as maintenance shop drivers and labors of different shops. As mentioned above that their wage rate is fixed at hourly or daily basis the supervisors and timekeepers keep record of their presence at the work place and prepare the individual record after 15 days they send this report to the payroll office where the wages prepared according to the timekeepers record and made the voucher and payment is made through cash department.

2 . Piece rates workers:-

Piece rate workers are being paid the wages on the basis of their efficiency rate (which is determined on the basis of their performance). Payment procedure for piece rate workers is quite different, as they are paid their wages accordingly their efficiency rate. The efficiency rate is determined on the basis of their previous performance of the last two payments.For example:Time allowed=01 hrPieces to be make=1,000Pieces produced=1,500Excess production = 500 piecesIn this case the worker has earned 15% efficiency and his rate per hour increase.

b) Salary

The employees appointed on monthly payment basis are paid salaries as per their appointment letters. On joining their job, salaries are prepared at the end of month and sent to banks for crediting to their personal accounts as per their requests. 3.9.2 Allowances:Pay roll office makes monthly payment of allowances. The following allowances are allowed to workers at presentlya) Conveyance Allowance = Rs. /per month (45 % of Basic Scale)b) Factory pay = Rs.750/per monthc) C.L.A = Rs.30% of pay per monthd) Special Incentive Allowances = Rs.1375/per monthe) Special Additional Allowances = Rs. 1250/- per monthg) Milk/butter allowances = Rs.25/per attendance3.10 Cash Office: -The main function of this office is to arrange all the cash payments and payments by the cheques for the items daily sanctioned by the competent authorities.

3.11 Production Department:After the agreement of human and financial resource and the planning of the companys mission and objectives the stage is set for the production of the product (in manufacturing concern).For a manufacturing firm the production department is a very important department can realize and fulfill the company mission and objectives in a true sense. The production department helps the firm in the making and successful implementation of the production plans.As telephone industries of Pakistan (TIP) is a manufacturing industry, all of its upon the performance of this department.The production department of TIP is working competently and performing hard to meet the necessities of the market, keeping in view the resources of the telephone industries of Pakistan. It has get in touch with the Sales Department to make the standard products available at time. TIPs workshops are fully set and are equipped with the latest and state of the art machines. Workshops can perform the task in efficient manner. There is also a system for on the job training of technical personnel, so that they are able to work with the new technology using the complicated machinery.

3.12 Purchase Department:For a production oriented industry, the department of purchase has a great importance. The reason is that no firm can get all the raw material and the equipment used in production process by itself and without taking the help of any external supplier or manufacturer. The raw material and the equipment not extracted and produced internally is purchased from the external suppliers and the producers. In order to ensure the in time availability of the materials used and the smooth working of the purchase process, a purchase department is necessary.TIP is a production-oriented company and it has a well-organized purchase department to support its production.TIP makes purchases of the raw material and components mostly from within the country but as all the materials and components are not available within the country, some are imported from outside. These materials are usually imported from the sharing partner Germany along with the U.S.A, Italy, France and Turkey etc.The aim of purchase is to get technically most suitable, easily available materials, parts and components on cheaper rates without compromising on qualities by quickest means, under very rigid Govt. policies within restrictive resources.Keeping in views the above aims and goals, the purchase department of TIP comprising of engineers and Associate engineers, makes it possible to buy a right type of material at the right price from the right source of delivery at the right place.Purchases are made at TIP by the following three ways: i. By calling tender ii. By calling quotation iii. By cash.

3.12.1 By Calling Tender

In this purchase method, an order is drafted by the order section mentioning the requirements of the company on the basis of the reports of the production and the stores departments. This draft order is then presented before a committee comprising the following members:a) Deputy General Manager (DGM) /Assistant General Manager (AGM), the head of ordering departmentb) Deputy General manager (Planning, Procurement, and stores.c) Deputy General Manager (Finance and Personal).

3.12.2 By Calling QuotationIf the amount of material required is less than Rs.50, 000, the quotations are invited from the registered firms. The quotation committee consists of the following officersa) Assistant General Manager (Plam1ing, Procurement and Stores).b) Executive (Budgets, Accounts, Payroll)c) Executive (Quality Assurance Department).3.12.3 By CashCash -purchases are generally made for small quantity and for urgently required material by the stores. After approval from the concerned committee, the following committees will make cash purchases.

1).For The Purchase Cases Above Rs. 50,000a) Assistant General Manager (AGM) of the concerned division.b) Executive (Budget/Accounts/Tax).c) Assistant General Manager (Quality Assurance Department)

2).For The Purchase Cases Below Rs. 50,000a) Assistant General Manager (Planning, Procurement and Stores)b) Executive (Budget/Accounts/Tax).c) Executive Quality Assurance Department (QAD).

ssChapter 4FINANCIAL STATEMENT ANALYSIS

FINANCIAL STATEMENTS ANALYSIS Financial statements are organized mainly for the use of investors, creditors and for managerial decision making. They provide support to the managerial decision but the information provided in the financial statement is not complete and not show the certain result. However, the information provided in the financial statements can be use in making decision after calculation the ratios and constructing results. Ratios can be calculated by establishing a reasonable relationship between balance sheet items and profit and loss accounts. It also helps us for measuring the end result from the operation of that firm. This analysis also helps us in determining the strengths and weakness of a firm. Or in other words we can say that financial analyses are done for the purpose of identifying the financial strength and weaknesses of an organization.The ratios simply mean one number expressed in terms of another. A ratio is a statistical yardstick by means of which relationship between two or various figures can be compared or measured (Advanced Accounts by M.A Ghani

4.1 Liquidity Ratios Analysis:Liquidity ratio provides information about a firms ability to meet its short term financial obligations. They are particular interest to those extending short-term credit to the firm.

4.1.1 Current Ratio: Current ratio measures the short term liquidity position of the companies. It measures the extent of the current assets to cover the current liabilities. It is the ratio of current assets to current liabilities.2:1 is considered as standard ratio, however low ratio like 1:1 is also considered good. This ratio is a general and quick measure of liquidity. It represents the margin of safety or cushion available to the creditors. It is also an indicator of strength of working capital of the companies.

Liquidity Ratio AnalysisCurrent Ratio = Current Assets / Current Liabilities

Particular2012201120102009

Current Assets1,483,288,4221,558,828,599319,884,935369,907,949

Current Liabilities1,492,653,2791,669,788,171444,900,5273,210,545,822

Ratio0.990.930.720.11

Comments:Current ratio shows the firm ability to meet short term obligation. Although ratio is improving but not at a standard rate which is not sufficient to meet its short term obligations. Firm has to make improvement in reducing its liabilities.

4.1.2 Acid Test RatioThe liquidity refers to the ability of a firm to pay its short term obligation as and when become outstanding. The quick ratio/acid test ratio is very helpful in measuring the liquidity position of a company. It measures the business capacity to pay off current obligations straight away and is more exact test of liquidity than the current ratio.

Acid Test RatioAcid Test Ratio = Quick Asset / Current Liabilities

Particular2012201120102009

Quick Assets1,323,369,8751,406,709,904178,341,041

Current Liabilities1,492,653,2791,669,788,171444,900,5273210545822

Ratio0.880.840.40

Comments:Quick ratio is used to test quick response to its short obligations by deducting inventory from current assets. By deducting the inventory quick ratios do not improve to the level which is benchmark for a standard organization. Main reasons are the increase in liabilities by taking short term loans from banks and other creditors and not paying them at due time.

4.1.3 Working Capital Ratio: Working Capital RatioWorking Capital Ratio = Working Capital / Current Liabilities

Particular2012201120102009

Working Capital-9,364,857-110,959,572-125,015,592

Current Liabilities1,492,653,2791,669,788,171444,900,5273210545822

Ratio-0.0062-0.066-0.11

Working capital ratio helps to know whether a business has sufficient short term assets to meet its short term liabilities. The formula for calculating working capital ratio is:

Comments:Organization is facing the problem of not having order for supply of finished goods. Due to which currents assets lying with organization are declining and reducing the working capital ratio. To improve this ratio organization must make decisions to improve current assets and reduce current liabilities.

4.2 Leverage Ratios: Financial leverage ratios provide an indication of the long term solvency of the firm. Unlike liquidity ratio that are concerned with short term assets and liabilities, financial leverage ratios measure the extent to which the firm is using long term debt.4.2.1 Debt Ratio: The ratio of total debt to total assets, generally called the debt ratio, measures the percentage of funds provided by the creditors. The proportion of a firm's total assets that are being financed with borrowed funds. The debt ratio is calculated by dividing total long-term and short-term liabilities by total assets. The higher the ratio, the more leverage the company is using and the more risk it is assuming. Assets and liabilities as found on a company's balance sheet are:Debt Ratio Debt Ratio = Total Debt /Total Asset

Particular2012201120102009

Total Debt2,436,552,7182,505,120,8971,784,340,7324387694822

Total Asset1.848,252,5841,925,633,4471,517,561,1891,504,597,402

Ratio 1.311.301.182.91

Comments:Company debts are increasing due to non-availability of supply order. Due to over-drafting, long term debts have increased. With the passage of time fixed assets either depreciated or have been sold which decreased the amount of total assets.

4.2.2. Debt to Equity Ratio: Indicates relationship between external equities and internal equities or shareholders funds. Debt to equity ratio indicates the proportionate claims of owners and the outsiders against the firms assets. The purpose is to get an idea of the cushion available to outsiders on the liquidation of the firm. However, the interpretation of the ratio depends upon the financial and business policy of the company.Debt to Equity Ratio Debt Ratio = Total Debt /Total Equity

Particular2012201120102009

Total Debt2,436,552,7182,505,120,8971,784,340,732 4387694822

Total Equity(588,300,134)(579,487,450)(1,872,497,213) (1,705,948,420)

Ratio(4.14)(4.32)(0.95)(2.57)

Comments:As equity is not increasing due to loss to company and debts are increasing which decreases the required debt to equity ratio. Company can improve this ratio by decreasing its debt.

4.2.3. Total Capitalization Ratio: The capitalization ratio measures the debt component of a company's capital structure, or capitalization (i.e., the sum of long-term debt liabilities and shareholders' equity) to support a company's operations and growth. Long-term debt is divided by the sum of long-term debts and shareholders' equity. This ratio is considered to be one of the more meaningful of the "debt" ratios and delivers the key insight into a company's use of leverage.Total Capitalization RatioTotal Capitalization Ratio=Long term debt/Long term debt+ Shareholder Equity

Particular2012201120102009

Long term debt943,899,439835,332,7261,339,440,205 1,177149000

Capital Employed355,599,305255,845,276(533,057,008)

Shareholder Equity(588.300.134)(579,487,450)(1,872,497,213)(1705948420)

Ratio2.653.26-2.51

Comments:Long term debts are increasing and capital employed is decreasing which resulted in the decline of the required ratio. To make improvement in this ratio company has to pay long term debts or increase equity capital so that the employed capital increases.

4.3. Profitability Ratios:Profitability ratios offer several different measures of the success of the firm at generating profits.4.3.1 Net Profit Margin Ratio: NP ratio is used to measure the overall profitability and hence it is very useful to proprietors. The ratio is very useful as if the net profit is not sufficient, the firm shall not be able to achieve a satisfactory return on its investment. This ratio also indicates the firm's capacity to face adverse economic conditions such as price competition, low demand, etc. Obviously higher the ratio, the better is the profitability. But while interpreting the ratio it should be kept in mind that the performance of profits is also seen in relation to investments or capital of the firm and not only in relation to sales.

Net Profit MarginNet Profit margin ratio = Net Profit / Net Sales*100

Particular2012201120102009

Net Profit(110,982,797) 106,435,395 (166,548,795)(434185660)

Net Sales 69,659,09877,570,737136,398,467229314018

Ratio-159.32137.21 -122.10-180

Comments:Company has no orders for supply of goods or services. Due to competition in telecommunication sector many companies entered into this field and also the taste of people changed and they shifted from fixed line telephones to mobile phones. This demand and supply situation decreased the sale of this organization. Expenses are increasing due to inflation but revenue is still declining and all the profitability ratios are declining.

4.3.2 Return on Assets: Measure of a companys profitability, ROA measures the return on assets.Return on AssetsReturn on Assets = Net Income / Assets*100

Particular2012201120102009

Net Profit-110,982,797106,435,395-166,548,795(434185660)

Assets 1,848,252,5841,925,633,4771,517,561,1891504597402

Ratio-6.005.52-10.97-28.85

Comments:Due to decline in total sales, return on assets declines as illustrated above

4.3.3 Do Pont Return on Assets Ratio:Return on Assets Do Pont is a financial ratio that shows how the return on assets depends on both asset turnover and profit margin. The Do Pont method breaks out these two components from the return on assets ratio in order to determine the impact of each on the profitability of the company. This ratio helps to show up the impact of changes in asset on turnover and profit margin.

Return on AssetsReturn on Assets = Net Income / Assets*100

Particular2012201120102009

Net Profit-110,982,797106,435,395-166,548,795(434185660)

Assets 1,848,252,5841,925,633,4771,517,561,1891504597402

Ratio-6.005.52-10.97-28.85

Comments:Total assets are either constant or declined but with decrease in net profit this ratio decreased. To make improvement in this either increase net profit or reduce expenses.

4.3.4 Return on Equity RatioThis ratio is more meaningful to the equity shareholders who are interested to know profits earned by the company and those profits which can be made available to pay dividends to them. Interpretation of the ratio is similar to the interpretation of return on shareholder's investments and higher ratio is better.

Return on Equity RatioReturn on Equity = Net Profit / Total Equity*100

Particular2012201120102009

Net Profit-110,982,797106,435,395-166,548,795(434185660)

Total Equity(588,300,134)(579,487,450)(1,872,497,213) (1705948420)

Ratio18.86-18.368.89-25.45

Comments:Company net loss decreased during this period resulting in net equity loss increase.

4.3.5 Gross profit ratio: Indicates to what extent the selling prices of goods per unit may be reduced without incurring losses on operations. It reflects efficiency with which a firm produces its products. As the gross profit is found by deducting cost of goods sold from net sales, higher the gross profit better it is. There is no standard GP ratio for evaluation. It may vary from business to business. However, the gross profit earned should be sufficient to recover all operating expenses and to build up funds after paying all fixed interest charges and dividends.

Gross Profit RatioGross Profit ratio = Gross Profit / Net Sales*100

Particular 2012201120102009

Gross Profit-150,460,197-179,232,437-121,592,017(49475202))

Net sales69,659,09877,570,737136,398,467229314018

Ratio-215.99-231.05-89.14-21.57

Comments:Company may make improvement in its profit by entering into private sector.

4.3.5 Fixed Assets Turnover RatioThis ratio measures the efficiency and profit earning capacity of the concern. Higher the ratio, greater is the intensive utilization of fixed assets. Lower ratio means under-utilization of fixed assets. The ratio is calculated by using following formula.Fixed Assets Turnover RatioFixed Assets Turnover Ratio = Net Profit / Fixed Assets*100

Particular2012201120102009

Net Profit-110,982,797106,435,395-166,548,795(49475202)

Fixed Assets40,295,58942,136,27529,543,59231050605

Ratio-275.42252.59-563.73-159.33

4.4 Common size analysisThe use of common size analysis makes comparisons of firms for different sizes mush more meaningful. Common size analysis means that in this analysis result to be show in percentage all the items from the assets side of balance sheet will be divided by the total assets for example if the cash is Rs 20,000 and the total assets are Rs. 100,000 then the cash will be shown in common analysis as 20% of assets. A small change in amount can results in a very substantial percentage change. This is the analysis where total assets are divided by all balance sheet items, and all income statement items are divided by net sales or revenue is called common size analysis. Common size analysis gives analyst a view of firms financial trend and to see the changes in the financial conditions. As common size analysis gives us relative percentage of an item with respect to total, so the growth or decline in various items of balance sheet and income statement cannot be detected from common size percentages. It has the following two types:4.4.1 Horizontal analysisHorizontal analysis compares each amount for a selected base year or we take each item o base year as 100% and compare with other items.

Common size (horizontal) analysis of balance sheetFIXED ASSETS2009201020112012

Plant, property and equipment100%95.6%135.7%129.7%

Long term investments100%105.8%29.44%29.44%

CURRENT ASSETS

Stores and spare parts100%59.3%295.3%209.4%

Trade debts100%76.5%278.2%341.9%

Stock in trade100%74.8%84.1%88.4%

Bank balances100%86.4%157.7%73.5%

Share capital and accumulated loss

Issued subscribed and paid up100%000

Share allotment deposit100%000

Accumulated loss100%106.3%56.7%57%

Liabilities

Pension and other staff benefits schemes100%106.9%55.6%62.7%

CURRENT LIABILITIES

Short term loans100%100%110.7%107.3%

Deposits100%110%163.1%147.7%

Creditors100%184.9%(220%)206.7%

Accrued liabilities100%41.63%50.5%48%

Advance payments100%96.4%137.8%117.1%

7T.I.P INTERNSHIP REPORT

4.4.2 Trend Analysis of Income StatementThe trend analysis of the income statement shows the performance of an organization and capability to meet the expenses. It also shows the future trend of organization. When we see the trend analysis of Telephone industries of Pakistan it comes into our knowledge that TIP continuously suffering from loss. Why TIP going into loss it can be seen in the following table:

Trend analysis of income statementHead of income statement

2009201020112012

Sales100%59.4%33.8%30.3%

Cost of goods sold100%92.5%92.1%78.9%

Gross (Loss)/profit100%245.7%362.2%304.1%

Other income100%65.5%133.8%171.5%

Other operating expenses100%82.4%82.1%240%

Finance cost100%87.1%90.3%89.6%

(Loss)/profit before taxation100%38.2%24.5%25.5%

(Loss)/profit for the year100%38.3%24.5%25.5%

The above trend analysis shows that the cost of goods sold in 2012 is 78.9% which is less than the cost of goods sold of 2011 that was 92.1% thats why the company bear less gross loss in 2012 as compare to 2011. The amazing trend is the operating expenses with increase of 240%% which shows the TIP is not controlling the operating expenses.Telephone industries of Pakistan also incurring cost in respect of finance its cost is also increasing continuously which must be noticed by the management of organization and take the measure to reduce theses non-productive cost .the cost of goods sold and the sales relationship also demand attention. Administrative cost and finance cost increasing trend is cautious and demands serious attention from the management policies and it will be in the best interest of the organization.4.4.3Vertical analysisVertical analysis compares each amount with a base amount selected from the same year. Simply, we compare the items of balance sheet or income statement vertically by taking on item as 100%.

Common size (vertical) analysis of balance sheet (Assets side)ASSETS2009201020112012

Cash and bank balances2.40%4.22%30.29%14.72%

Stores and spare parts0.45%0.26%1.04%0.77%

Loose tools0.22%0.14%--

Stock in trade12.01%8.91%7.89%8.65%

Trade debts5.35%4.06%11.64%14.91%

Loans and advances1.71%1.73%--

Trade deposits and short-term prepayments0.39%0.04%30.0541.18%

Other receivables1.14%0.88%--

Plant, property and equipment2.06%1.94%2.182.18%

Tax refund due to Government0.85%0.75%--

Long term investments73.29%76.94%16.86%17.56%

Long term advances0.06%0.03%--

Interest accrued0.01%0.04%--

TOTAL ASSETS100%100%100%100%

Chapter 5SWOT & CRITICALANALYSIS5.1 SWOT Analysis: SWOT analysis is the management technique to measure the organizations Strengths Weaknesses Opportunities Threats This analysis helps the organizations management to get the position where the organization is standing and what will be the future position of the firm.Strengths:TIP is a private limited company in public sector so Govt. can intervene in its financial as well as managerial problems. Good will is an important resource for any organization and TIP has a well established good will because of its quality production and brilliant performance records in the history. The main strength of any company is its skilled labor force and highly experienced and qualified management which is committed to work. TIP is a company blessed with these gifts. It has many devoted people who are sincere in the well being of this organization and are ready to face any challenges to bring it out of trouble TIP is the organization well known for: Its good quality products Long life of the products TIP has got the advantage of vast technical and infrastructure resources which provide a good opportunity for its expansion. TIP is equipped with modem technology. It can manufacture almost all kind of tools and machinery of common use. Easy availability of spare parts. The two shareholders of the company i.e. Pakistan Telecommunication Corporation Limited (PTCL) and Siemens AG of Germany are well established organizations with efficient management and technical staff. They can provide managerial and technical assistance to this firm.Weaknesses: TIP has nothing to do with the fraud deductions while an organization is run by the people and if the management is corrupt than organization nothing can done, this is the big weakness of the TIP is that it is not a privatize organization rather it is a semi Govt organization. Bureaucratic style of management is a big hurdle in the way of development. The employees are not given a chance to participate in decision-making process, which creates frustration among them. Most of the employees and workers are appointed on contract basis, which needs to be revised after every three months. Due to this uncertainty of the job, they don't develop interest in the organization. The regular workers on the other hand are very careless because there is no check on their performance. TIP has been affected badly by the downsizing policy of the government. During VSS (Voluntary Separation Scheme) in 1998, most of the skilled people left the organization (nearly 1200 employees). There is also stories absolute corruption of top level management. Even a simple job takes time to complete because of the formalities and lengthy procedures it has to follow. Labor union of TIP is also ineffective because it doesn't represent all the employees and the temporary workers are not given participation in the union at all.

Opportunities Pakistan is a big market with a population of more than 140 million people. Most of the people living in villages still do not have the facility of telephone. With the expansion of PTCL service areas, TIP has an opportunity to sell its products for installation in these areas. With the introduction of chord less and mobile technologies, the conventional telephone sets are becoming less popular. Even in these conventional desk mounting sets, many new features have been introduced. TIP can enter these areas to expand its product line and to capture new markets. TIP has the production facilities available for almost all the electrical appliances as the energy meters, air conditioners, ovens, refrigerators etc. but it is producing much lesser than its capacity and potential. It has an opportunity, therefore, to expand its business in these areas. TIP has an opportunity to sell its products in the foreign markets if they are properly designed and marketed.Threats Government of Pakistan is planning the privatization of PTCL and TIP will also be privatized with it. SIEMENS of Germany having 30% shares in TIP will be the most probable buyer. As TIP is the only Tele-communication equipment manufacturing company of Pakistan, the deal will badly affect the country. The market share for the production of military telecommunication equipment has finished due to the establishment of NRTC (National Radio and Telecommunication Corporation). TIP loses tender due to its high cost of production, which is a serious threat to the company. All these foreign companies import installation equipment from their home countries which affects TIP as its products go unsold. Smuggled goods from China and other countries having latest technology and beautiful designing at much lower rates and are also posing a threat to the company's business. Invasion of foreign companies in the field of telecommunication in Pakistan has adverse effects on the firm's business like Z- TEL, ALCA TEL. There is working Carrier Telephone Industry in Islamabad is big competitor and big threat to the TIP. One serious threat to the company is its declining sales due to the bad economic conditions of country.

5.2 CRITICAL ANALYSIS:5.2.1 Lack of Motivation:Motivation refers to forces that energizes, direct and sustain a persons efforts. Lack of appreciation, performance appraisal, no participation in decision-making, absence of employee counselling, nepotism and unequal distribution of work results is greater level of de-motivation. Boss is always right concept if regularly employed results in trying down the creativity, suggesting ability of employees and lowers the employees involvement in decision making.Some of the reasons of low motivational level in TIP are:1. Centralization of authority:Centralization refers to the situation in which a significant number of job activities and a maximum amount of authority vested with some hands.Centralization in large organization like TIP affects the duties and responsibilities of manager, as his tasks and responsibilities increase. He is unable sometime to concentrate on important matters and operations. There by affecting the overall performance of the organization.

2. Ceiling Effect:Ceiling is another flaw, which persist and affect the employees motivation level for the job. This has resulted in a substantial increase in the employees dissatisfaction. This problem remains in practice even if the staff members undergo training and acquire some additional qualification. They can never become a part of the line hierarchy. For instance an Associate Engineer cannot move upward in the hierarchy even if he gets Master Degree in Business Administration. For instance an account assistant cannot move upward in the hierarchy whatever qualification and experience he gets.3. Hiring: Nepotism brings forward a major flaw in the hiring of individuals. When nepotism comes into practice it results in de-motivation among the employees. Beside this it also results into the job dissatisfaction affecting the quality of work and performance that eventually affects the overall performance of an organization. In addition, this practice of nepotism has also been observed in the appointment of officers. An inappropriate person is appointed to a certain post; it adversely affects the quality of work and eventually the overall performance of TIP. This situation becomes worse when inappropriate individuals are appointed on sensitive posts.5.2.2 Lack of job analysis and Evaluation:For the successful achievement of goals, each organization has specific outlines for the jobs and commitments concerned with job. Every organization, at the time of recruitment, defines job description and job specification. The question arises, whether job analysis and job evaluation process is present or not. Job evaluation is the process of using information in job analysis to systematically determine the balance of each job in relation to all jobs with in the organization. Both the job analysis and evaluation ensures the performance of duties and responsibilities according to the job description by matching with job specification.Considering the case of TIP, job analysis as well as evaluation process is not practiced that result in unequal distribution, de-motivation, boredom, and burden on some employees among the same hierarchy of line managers. In the absence of these, there is no performance of line managers. In the absence of these, no performance appraisal can be given to specific line/staff member. It is the case in TIP that many of the employees suffered because of the workload and burden. This also creates dissatisfaction and decrease the level of motivation when performance appraisal is given on the expense of others work hard.Although the goals and objectives are assured to achieve, but still it shows the lack of efficiency and proficiency of the top-level management5.2.3 No Job Rotation:Like any other professional organization, job Rotation is vital for the smooth operations of TIP. Job rotation is the process of moving workers from one job to another rather than requiring them to perform only one simple and specialized job over the long term. The main objective behind job rotation is to expand their skills, knowledge or abilities that in the absence of the concerned employees, any other person would carry out his work. In specific case of TIP job rotation is missing that creates bourdon and delays, consequently affect in the organization to operate smoothly. Especially in the staff, in the absence of a concerned person even a routine job is not performed. Very rarely the job enlargement practice is made but still it also wastes the time of the manager or supervisor to guide a staff member for a job not related to him.5.2.4 Internees/Trainees Training Program:Today almost every organization welcomes internees and trainees. Reason being that these organizations may get inexpensive help in their operations and office. It increases the image and introduces the organization in the new emerging market, by educating and training them. Training is an art of making other people work and to extract as much work as imposable especially from temporary employees/trainees. The lack of professional training and evaluation of the trainees/internees leave an empty room in the training program of TIP. Instead of having facility and spending a lot of money on the training program the evaluation of the program is not merely considered an important job. An effective training program increase the goodwill and provide best opportunity of getting help not only in office work but also in their future recruitment, so that to get benefit of the training program.Many organizations have specialized programs for the trainees/internees instead of increase in their cost of the personnel and Human Resource Department. However on the other hand it is beneficial by getting work done for free or with a very low stipend cost. TIP is also providing this opportunity to the fresh or the students who are still studying and doing their internships as their degree requirements. TIP not only gives opportunity to the internees/trainees to get employ in TIP but also provide help the selection committee and lesson the cost of recruitment.

Chapter 6 CONCLUSION & RECOMMENDATIONSTIP should have a proper system to deal with the fraud corruption by the upper management so that these types of events can never be happen again. As soon as possible TIP should start its on fully fledged marketing department as it is age of marketing and competition. Telephone industries of Pakistan we found that telephone industry of Pakistan have old, machinery and insufficient workers. With the passage of time new technologies are brought in the market and the organizations which adopt new and better technologies have cost of production much lower than the other firms having old technologies. There is need for Telephone Industries to install new machinery and overhaul old machinery to work properly. It should also give training to its unskilled workers to become profitable for the organization. This is very necessary for the long term survival of the organization.The analysis of TIP tells that there are some basic problems with the organizational design, human resource, R&D and some other departments, which should be removed immediately for the successful working of the organization. The details are given as under:

Finance Department: Main draw backs are the non-availability of modern technology and well educated persons in this department. Management has not hired the professional staff since 1988. Even the software packages are used in this department is Excel and FoxPro although Quick book and Peach tree are available in market. It is recommended that management should focus on professional staff as well as modern techniques and soft wares to be used in finance field.

HR department: HR department is not familiar with HRD techniques. There is no one having degree of Human Resource Management. People working in this organization are not motivated so the staff is dysfunctional. It is recommended that management should use latest HRD technique.R&D:This is the era of Telecom and electronics but professional working in R& D are not properly trained. Their deficiency makes this organization unable to achieve it required objectives in the market place.Product ion Department: Machinery used in this organization is mostly outdated only one or two shops use the latest technology. Main production of TIP is Telecommunication equipment. This organization is not moving with the world leading organizations in innovation so it is behind in telecom sector. It is recommended that TIP adapt s the latest telecom technology to compete with world.Marketing Department: This organization has no plans to introduce its products on electronic media due to which a huge population of this country is not familiar with its products. For future success, electronic media is power full tool to make customer s for any innovated product.

REFERENCES

Books Fundamentals of Financial Management (13 edition) by James C. Van HorneReports Umer Akhtar 2011. An Internship Report on TIP. Haripur, Hazara University, Department of Administrative Sciences.

Waqas Ali , Internship Report on TIP. Hazara University.

Financial report, Telephone Industries of Pakistan, 2012, 2011, 2010, 2009

Internet http://www.ptcl.com.pk http://www.pakistaneconomist.com/ http://www.zumbeel.net/beta/news/details.php?rev_param=6808 http://www.tip.org.pk www.alibaba.com/member/ajtip.htm

Appendix

52T.I.P INTERNSHIP REPORT