INTERNSHIP REPORT ON PAKISTAN TOBACCO COMPANY

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PREFACE
If we mull over the significance of internship program then we will be able to bare the facts that internship enhance ones practical loom towards work and provide maximum chances for learning, which will obviously help out candidate in the practical fields. The intention at the rear about internship program is that the students can analyze, observe, feel, examine the organization environment and equip themselves with the tools to face the ever shifting challenges in the organizations. In short internship plays a pivotal role in the future sensation & stir of the candidate. This Report is specially meant for the student of MBA . It is concerned to a brief study of the marketing operations, Function, Tasks and Services of Pakistan Tobacco Company. In preparation of this Report is have tried my best to provide all Possible information about the operation, function and tasks of Pakistan Tobacco Company in brief and comprehensive form. It also includes a brief department worked during internship. I have also tried my best to use simple and easy words and language. This report is an anthology of my views pertaining to Pakistan Tobacco Company operations & practices. In my view it is a credible and comprehensive compilation of facts. In this report I wrote principally on the issues pertaining to job duties & responsibilities, operations & practices and its future prospects with some recommendations. When the time came to give this information a convenient shape I was confronted with a dilemma of what to put in. One leeway was to include all details with explanation & second preference was to point out some worthy issues with some details. Last solution looked more practicable to me therefore I opt for second solution i.e. to present some relevant feasible details. These details entail information about management philosophy, practices, and functions, strong and weak areas of Pakistan Tobacco Company. I take this opportunity to express my gratitude to all who helped me in the preparation of this valuable report.

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DEDICATION
I dedicate my work to my most respectable parents and teachers whom prayer made me able to have such an opportunity of working in the Pakistan Tobacco Company and get experienced

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ACKNOWLEDGEMENT
All praise to Almighty Allah, the most merciful and compassionate, who give me skills and abilities to complete this report successfully I am grateful to my parents who are always been a source of encouragement for me throughout my life and from start to the end of this report I am thankful to all my staff members so Pakistan Tobacco Company. I found every one very co-operative and helpful for providing me the Theoretical as well as practical knowledge about the function and operation of the Pakistan Tobacco
Company.

I like to express our gratitude to Ali Raza (Area Manager),Gulsher (TMO) and the whole Pakistan Tobacco Company team that helped me by providing all the needed information i needed to complete this report. I express my greatest gratitude to my kind-hearted Supervisor Fahad who was the Person who made me able to write this report, His enthusiasm shows the way forward to me to achieve this success and who kept me in high spirit through his appreciation. He helped me a lot each time I went up to him.

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Table of Contents
Internship Report On..................................................................................................................2 PAKISTAN TOBACCO COMPANY.......................................................................................2 Role of RCE (Regional Communication Executive)...............................................................31 PROJECT SKYWALKER.......................................................................................................32 One to One Communication.....................................................................................................32 Types of One to One Communication......................................................................................32 PURPOSE OF STARTING PROJECT SKY WALKER.......................................................35 SKY WALKER STRUCTURE HIRERICHY.........................................................................35 Roles of BAs............................................................................................................................37 SUPERVISOR ATTACHMENT.............................................................................................38 AREA MANAGER (SKY WALKER PROJECT) ATTACHMENT..................................39 REGIONAL MANAGER (SKY WALKER PROJECT) ATTACHMENT........................40 DEPARTMENTS OF PAKISTAN TOBACCO COMPANY................................................42 HUMAN RESOURCE DEPARTMENT.................................................................................44 EH&S DEPARTMENT............................................................................................................45 SECURITY DEPARTMENT...................................................................................................45 ENGINEERING DEPARTMENT...........................................................................................45 PEST ANALYSIS....................................................................................................................47 FINANCIAL ANALYSIS........................................................................................................49 RATIO ANALYSIS.................................................................................................................55 Conclusion................................................................................................................................62 RECOMMENDATIONS..........................................................................................................63 APPENDIX...............................................................................................................................65

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EXECUTIVE SUMMARY
One of the great pleasures of writing the project is acknowledging the efforts of many people whose names may not appear on the cover but whose hard work, cooperation, friendship and understanding were crucial to the production of this report. To get the first hand knowledge, one should put itself in practical and natural environment. This is the utmost purpose of internship, which we supposed to do for at least six to eight weeks. Pakistan Tobacco Company is a well-reputed multinational organization. PTC uses state of art technology in every department. It is great prestige and honour for me to work in an environment, which has utilized our energies to fullest. Being internee here I have learnt a lot, and environment here was friendly and conducive for learning. This introduction is regarding to report, which consists of Background of study, Purpose of Study, Scope of Study, Methodology of Research. During my 6 weeks of intern ship, the aim of my struggle is to know about the market and its difficulties. I have been attached with different PTC's officers, from whom I learned market exposure ,management, structure hierarchy and market knowledge. I also have been attached with salesman and SPs. This internship report carries all information about Pakistan Tobacco Company and my internship working areas.

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WHAT IS TOBACCO?
The tobacco plant is in the same botanical family as tomatoes, potatoes, peppers or eggplants. An adaptive species, it can be grown economically from 50 Northern to 40 Southern latitude. Tobacco is a green, leafy plant in warms climates. After it is picked, it is dried, ground up, and used in different ways as,

Cigarette Pipe or Cigar Chewing Tobacco (smokeless tobacco or chewing tobacco) Snuffed Tobacco (sniffed through the nose)

More than 100 countries grow tobacco. China grows the most, then the USA, Brazil, India, Zimbabwe and Turkey. Tobacco thrives in poorer soils, providing farmers with a welcome alternative crop. In many cases, it provides a higher income than any other smallholder crop. It integrates well into environmentally friendly crop rotations, benefiting subsequent crops like maize. (source internet)

HISTORY OF TOBACCO
Tobacco has a long history in the America. The Indians of Mexico engravings show tobacco use. These drawings date back to somewhere between 600 to 900 A.D. tobacco was grown by Americans Indians before the Europeans came from England, Spain, France and Italy to North America. Native Americans smoked tobacco through a pipe for special religious and medical purposes. They did not smoke every day. Tobacco was given to Christopher Columbus as a gift from the Americans Indians. The tobacco was later taken back to Europe where it began to be cultivated all over the country. John Rolf was the first European to cultivate a successful commercial crop in Virginia in 1612.

Tobacco in 1800s:

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Many people had begun using small amounts of tobacco. Some chewed it. Other smoked it occasionally in a pipe, or they hand-rolled a cigarette or cigar. On the average, people smoked about 40 cigarettes a year.

First commercial cigarettes:

The first commercial cigarettes were made in 1865 by Washington Duke on his 300-acre farm in Raleigh, North Carolina America.

Tobacco in 1960:
In 1960s it was recognized as health hazard by the doctors. Soon after the Cigarette companies were required to print surgeons warning on packs of cigarettes. In 1969 tobacco advertisement was banned on TV and Radio. But it did not take effect till 1971. In 1964, there were 70 million smokers in the United States, and the tobacco industry earned $8 billion a year. Pall Mall was the leading brand of cigarette in the United States for the 1st half of the 60s, and then Winston-brand cigarettes led until the 70s.

Tobacco in 1970s:
Cigarettes have become the most heavily advertised product by this decade, with Winston, Pall Mall, Marlboro and Kool being the leading brands. In 1972, Marlboro became the best selling cigarette in the world, and subsequent introduced Marlboro lights, which many mistakenly saw as a safer cigarette. Cigar consumption increased as well, with Americans using 9 billion a year. A British study sales bring in more money than it costs in health problems and disabilities.

Tobacco in 1980s:
The 1980s was a time of health awareness. However, tobacco still pervaded society. In superman 2, Lois Lane (then a role model for teenage girls) begins smoke Marlboro Lights. Philip Morris purchased 22 exposures of the brand in the movie.

Tobacco in 1900s:

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FDA declares nicotine a drug in 1955. Under age sale was prohibited.

Tobacco in 2000s:
Tobacco faced different bans and restriction by government and anti Smoking lobbies. (source internet)

BRITISH AMERICAN TOBACCO

British American Tobacco has been in business for more than 100 years, trading through the turbulence of wars, revolutions and nationalizations as well as all the controversy surrounding smoking.

HISTORY OF BAT
The business was formed in 1902, as a joint venture between the UKs Imperial Tobacco Company and the American Tobacco Company founded by James Buck Duke. Despite its name, derived from the home bases of its two founding companies, British American Tobacco was established to trade outside both the UK and the USA, and grew from its roots in dozens of countries across Africa, Asia, Latin America and continental Europe. British American Tobacco's brand strategy differentiates it from its competitors and underpins its approach to product development. The Group continues to build a focused, segmented and differentiated brand portfolio and allocates resources to a full range of brands deployed in the key industry areas that offer the most robust source of volume and profit growth. The Group continues to invest in its four global drive brands - Dunhill, Kent, Lucky Strike and Pall Mall, which account for 26 per cent of global volumes and grew by 16 per cent in 2008. Vogue, Viceroy, Rothmans, Kool, Benson & Hedges, 555, Peter Stuyvesant, and John Player Gold Leaf are also part of the Group's international brand portfolio, playing a key strategic role in the different regions where the Group does business.

WHAT IS BAT TODAY ?

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Today, British American Tobacco is the worlds most international tobacco group with its brands sold in more than 180 international markets. With over 300 brands in the portfolio, the Group makes the cigarette chosen by one in eight of the worlds one billion adult smokers. The Group holds robust market positions in each of its regions and enjoys market leadership in more than 50 markets. Bats global market share is about 16%. Almost 90000 people are working for BAT worldwide and it pays some $13 billion a year to government through taxes.

INTERNATIONAL BRANDS OF BAT

Kent Dunhill Lucky strike Pall Mall Vogue Viceroy Rothmans Kool Benson & Hedges 555 Peter Stuyvesant Silk Cut

PAKISTAN TOBACCO COMPANY

From being the first multinational to set up its business in Pakistan in 1947 and beginning operations out of a warehouse near Karachi Port, we have come a long way. From being just a single factory operation to a company which is now involved in every aspect of cigarette production, from crop to consumer, we have evolved and grown with Pakistan. However, what is significant about these 62 years is the effort that Pakistan Tobacco Company has demonstrated in the development of the country. By being instrumental in the campaign for modern agricultural and industrial practices, we have helped in the development and progress of the agricultural and industrial sector in the

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country. We have been supporting and contributing to various causes of national interest. Educating growers in the latest techniques and technology in agriculture, a forestation and free health care in designated areas are but a few examples. Throughout these 62 years, our continuous investment in people, brands, technology, innovation and the communities in which we operate has borne fruit in many ways. We are deemed as a partner of choice by many, our Environmental, Health and Safety standards are a source of inspiration for local companies, our industrial relations practices have led and influenced local practices, and as a result of all these, our managers are highly valued and sought after people in the Pakistani corporate world based on the training and exposure we give them from very early on in their careers. Suffice it to say that the history of the Pakistan Tobacco Company is closely linked with the development and history of the areas in which we operate. Be it corporate practices, social investments, advancements in agricultural techniques, or establishing new ways of marketing and distribution, we have always been instrumental in establishing the benchmarks against which others are measured.

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MISSION & VISION STATEMENT

VISION

1 st Choice for everyone

MISSION
To transform PTC to perform with he speed, Flexibility and Enterprising spirit of anInnovative consumer focused Dare to be Different

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MAJOR PLAYERS IN PAKISTANS MARKET

The major players involved in the manufacture of finished goods are as following. Pakistan tobacco company Lakson tobacco company Mardanwala International cigarette Industry

Of these firms Pakistan tobacco company is the market leader with Lakson tobacco company in second place.

PRODUCT
PTC has always considered it-selves a consumer-focused company. They aim to offer aproduct that excels in all aspects and exceeds the expectations of the consumer. In this section, you will find the story of our brands and their origins. PTC has particular emphasis on its five national drive brands.

Benson & Hedges:

In 1873, Richard Benson & William Hedges started a partnership in London. From the very start, the idea was to make Benson & Hedges a style statement, which is why the business started from Londons fashionable West End. PTC launched Benson & Hedges in Pakistan in March 2003. Made with the finest hand picked golden Virginia tobacco from across three continents, the brand is packed with perfection to seal its freshness. The objective of introducing this brand is to establish the locally manufactured B&H Lights as the most preferred offer amongst consumers, in the premium lights segment and to add image to the B&H family by offering a wider product range. It was launched in the three metros of Karachi, Lahore and Islamabad/ Rawalpindi.

JOHN PLAYER GOLD LEAF:

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The story of John Player Gold Leaf has to start from the story of its founder, John Player. An enterprising businessman, John Player started a small tobacco selling business in 1877 and turned it into a thriving cigarette company, John Player and Sons.

With a distinct lifebuoy and sailor trademark, John Player Gold Leaf has an identity entrenched in sailing and maritime adventure. Thus staying true to John Players very first big brand -Players Gold Leaf Navy Cut cigarettes. Gold leaf is the key value and volume contributor for PTC. It remains the most aspire brand in Pakistan. From 2000, the brand is showing continuously growth.

Capstan:
Capstan has a rich heritage, originating in Britain in the 19th century. The brand was created under the auspices of W.D. & H.O. WILLS at Bristol and London. Capstan has grown by leaps and bounds to become the fastest growing brand of Pakistan Tobacco Company (PTC) in the year 2001, recording a staggering growth rate of 104%, overtaking sales volume of the major competitive brand in the early part of the year, and consistently outselling it throughout.

Gold Flake:
Gold Flake, like many of our brands, also boasts its origins at W.D. & H.O. WILLS where it was a premium brand around the end of the 19th century. Launched in 1982, in a 'soft cup' packaging, the brand took off when it was repositioned in the value for money segment and later a 'hinge lid' variant was introduced in 2000. Gold Flake is PTCs largest brand in volume terms and is also a significant contributor towards the value share. A highly successful pack design change in 2004, soon after the new pack was

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lunched in the market and Gold Flake smokers accept the new design of the pack, at this point an aggressive promotion in the market that would ensure the maximum exposure of competition smokers to the new pack. There are three new variants were added into the family; Gold Flake 14HL, Gold Flake 10HL and Gold Flake 10SC, in order to offer the consumers a wider choice.

Wills King:
WILLS takes its name from the heritage of one of the original Imperial Tobacco Company families: the Wills Brothers of London. Wills is also a well known brand in Pakistan.

Embassy:
The third leading volume brand in Pakistan is most popular in the Punjab where it enjoys a leading position due to its equity and loyalty. Embassy continued its growth in the year 2001fortifying its position in the market. The brand registered a growth of 3% over 2000. Major focus during the year remained on the introduction of more consumer relevant packaging variants. In the 3rd quarter of 2001 the brand family was extended with the introduction of Embassy filter 16ss pack followed by Embassy kings 14HL variant. With the launch of these variants, the family now offers more choice to its consumer at affordable price.

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STRUCTURE HIRERICHY OF PTC

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ROLE OF RM

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To develop and implement a Regional Trade Marketing and Distribution plan in line with the National Plan keeping into account the National objectives of the brand, volume and value share. These objectives are to be pursued and achieved through the most effective and efficient utilization of material and human resources. Besides this he is also to proactively act as a Sharper for making his region ready for the new regime of marketing in the Wake of New Marketing Standards. The Regional Managers Report to the Head of Trade Marketing and Distribution.

Four Pillars of PTC:

Growth..............................................................In terms of Value and Volume Production..................................................................Of high quality products Responsibility...................................Prove to work in a controversial industry Winning Organisation....................................One team one dream all for one

Introduction with the Regional Office Staff :

Mr. Naeem Bhatti................................................................Sales Promotion Co-ordinator Mr. M. Naeem.......................................................................Contingent Fund Accountant Mr. Masood....................................................................................................Data Analyst

Resources :
Multan Region is further divided into four Areas. Each area has an Area Manager who reports to the RM. These areas are: Multan...........................................................................................................Ali Raza (AM) Sahiwal..............................................................................................Ahmad Ahsaan (AM) Bahawalpur...............................................................................................Asghar Ali (AM) DG. Khan................................................................................ Sajid Zarar(Area Incharge) Volume and Shares: National Regional 1523.00 518.00 34.04% 33.35% 32.09% 00.51% Total Industry Volume per Month (Million Sticks)......................5814.00 Total Volume of PTC (Million Sticks)..........................................2254.00 Market Share PTC.......................................................................38.77% Market Share LTC.......................................................................38.28% Market Share Others (Mardanwala Brands)...............................20.96% Market Share ITB (Imported/Smuggled Brands)........................01.99%

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Share of PTC Brands (Own Volume): Dunhill (Premium Category)..

National

Regional 00.10% 28.90% 13.00% 4.00% 40.00% 14.00%

Benson & Hedges (Premium Category).....................................00.10% John Player Gold Leaf (High Category)......................................17.90% Capstan Original (Medium Category).........................................12.00% Wills (Kings and International) - Medium Category....................04.00% Gold Flake (Low Category).........................................................48.00% Embassy (Low Category)............................................................18.00%

ROLE OF AM
To develop and implement Trade Marketing and Distribution Plans and Strategies for the area, in line with companys trade marketing and distribution strategies on brands, volume, market / value share and coverage objectives to achieve the overall mission.

ROLE OF TMO & AREA TEAM

To assist the AM in the implementation of all assigned TM&D activities in the area in the most efficient and effective way. Team members also carry out actions to achieve SOP and merchandizing objectives along with the distributions human and financial resource management.

TRADE MARKETING & DISTRIBUTION (TM&D):

TM&D Mission:
Reach our target customers in the most efficient and effective way by becoming benchmark Suppliers to the trade within strategic channel in every market where we do business.

Critical Success Factors (CSFs):

There are six critical success factors for the TM&D team and each factor has its own specific activities: 1. 2. Strategy and Planning Supply Chain Management 3. Resource Management

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4.
Marketing)

POP

Management

(Retail

5. 6.

Account Management Information Management

AREA STRUCTURE & DISTRIBUTION SETUP

Area Manager TMO

Vehari

TMO
Khanewal

TMO
Multan

TMO
Kabirwala

TMO
Muz. Garh

SALESMAN ATTACHMENT (DSD & VDSD)

Role of Salesman:
Salesmen reports to Field Sales Officer. Matriculate, preferably Intermediate degree holder with good communication and selling skills. The core responsibility of salesman is to get order from the outlets and to deliver the stock requirement in line with the TM&D instructions. Salesmen build excellent business relations with the shopkeepers to get optimum benefit from trade. Salesmen deliver stocks to the outlets by following the Nine Steps of Call. Moreover, sales team is also responsible for providing after sales service in case of any complaint.

NINE STEPS OF CALL

It is important for each Trade Marketing representative to understand and value the NINE STEPS of call as one of the critical tool to accomplish their roles. These steps provide a logical

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sequence to the functions, a representative must perform during every outlet visit to ensure that they meet their requirements and the call time is optimized. 1. 2. 3. 4. 5. 6. 7. 8. 9. Preparation Approach Stock Check Presentation Close In-store marketing/merchandizing Consumer Contact Administration Evaluation

SALES TARGET TO THE SALESMAN

Sales targets are assigned to the salesmen on the basis of the Sales Operational Plan (SOP) given to distributors by the section TMO.

CUSTOMER RELATIONSHIP MANAGEMENT

Salesmen usually have very good relations with the trade, which they have developed overtime. The important factor is achieving the portraying behaviour, guiding the retailer in his business/investment, informing them about company upcoming plan like promotions, budgets, shortages, etc. Moreover, the regularity of a salesman is very critical in developing good relations with a particular retailer. Most of the salesmen even have family terms with many of retailers which add to their best performance.

MAJOR DOCUMENTS OF DISTRIBUTION

SD 20: (Stock Register)
As per the legal requirements of Govt. of Pakistan, Stock Register (SD-20) is maintained by the distributors on daily basis. This document is maintained by all the distributors of Pakistan Tobacco Company Limited indiscriminately. It Shows: SKU wise sales volumes Split of DD, VDD, WS and Village Wholesales Total stock available at month start Stock received during the month On hand stock (at day/month end)

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Scheme-sale is also recorded separately during the promotion/TO.

SD 9: (Annual Marketing Information Register)

This document is also maintained by all the distributors of Pakistan Tobacco Company Limited. It tells: Market volume/universe/coverage Village coverage and productivity Secondary sales volumes Accumulated sales trends and brand wise sales trends Competition activities Own promotions and activities Stock procurements

TRADE-MARKETING OFFICER ATTACHMENT

Role Profile of TMO
To develop and execute a territory Trade Marketing and Distribution Plan that meets brand, volume, merchandizing and promotional objectives for TMO focused outlets, through the most efficient and effective utilization of time and materials in order to achieve area trade marketing objectives. Other important dimensions of TMO's job are: Distribution Management Merchandizing Selection and Placement Cycle Activity Execution Administration of Record and Stock TMO-200 Outlets Visit SP Management FSO Management Wholesale Management On Job Training of Field Force Promotion Communication Development of Good Relations with Trade Market Intelligence

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Planning and Execution of all Activities Relating to TM&D etc.

Journey Planning
It is also called monthly activity plan of TMO which is approved by the area manager. These monthly activities are divided into following main objectives: TMO-200 outlets SP contact DSD contact Rural area visit Whole sale visit Overall distribution/distributor management

DISTRIBUTION STRUCTURE

TMO

SP - U

DISTRIBUTOR

SP - R

Accounts Department

FSO

Godown

Urban Salesmen (DSDs)

Rural Salesmen (VDSDs)

Distributor Resource Deployment:

Effective Resource Deployment and Proper Management is one of the Critical Success Factor of TM&D plan for TMO. It is TMOs responsibility to effectively manage human and financial resources of a distributor and to utilize these resources in the best interest of PTC in the most

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efficient way to achieve the set goals/targets. It also includes activities like target market coverage plan through rationally prepared salesmen beats.

Route Shipment Planning:

TMOs send the distributors lifting plan to the area office considering the estimated requirement of the month. Then Warehouse Executives prepare and communicate route shipment plan to TMOs keeping in view the SOP and available resources. Goods are generally sent to the distributors on receipt of one day advance payment. It is TMOs job to ensure remittance, one day prior to the planned route shipment date.

Urban & Rural Coverage:

Urban coverage through the DSDs is usually planned on twice or thrice weekly service. But the rural coverage is generally made on twice or once weekly basis.

Merchandising Selection and Placement:

Merchandising process starts with the availability of funds/budget. To merchandize an outlet following criteria must be followed: Selection by TMO or recommendation by field staff 50 meter clause implementation High visit frequency/percentage of ASU 30 Selection of material in-store/on-store Good retailer behaviour and relations with PTC staff Retailer agreed on written contract for safety, protection & maintenance of

merchandising material.

DRP (Distributor Resource Plan):

The arrangements to carry out the decided route plan. TMOs manage and monitor the stock lifting of distributors to avoid any deviation from the route plan, regularly. Also appropriate measures are taken to carry out the route plan with cent percent accuracy.

SALE PROMOTER ATTACHMENT

Role of Sales Promoter:
Sales Promoters report to the section Trade Marketing Officer. The core function of SP is Communication of product and promotion both. Out of Stock tracking/topping up, display, merchandising maintenance, consumer contacts, market intelligence, demand Generation, POP, etc are other important aspects of sales promoters job. We learned and performed sales promotion activities with the Sales promoters of Bahawalpur and Multan Areas in the markets of local and in other rural markets

Sales Promotion Activities:

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We participated in the implementation and execution of promotional activity Capstain Original in the Bahawalpur and in Multan. Brand Activities = = Capstain Original Trade & Consumer Promotion.

PROMOTION OBJECTIVES
To accelerate brand growth To strike Morven Gold's and Red & White consumer

Temporary POP Placement: (Point of Purchase)

Temporary POP means the temporary merchandising material placed at sale points/outlets to communicate the brand or promotion. Commonly used Temp POP material includes: Posters Stickers Buntings Wobblers Mobiles Shelf Talkers Sun Shades etc.

These are allocated to SPs with certain guidelines of placement. Temporary POP material is always positioned inside or outside the outlet at prominent places to get maximum attention of the consumer. .

ATTACHMENT WITH SPC

We spent our full day with Mr. Naeem Bhatti

Role of SPC
Sales Promotion Co-ordinator reports to the Regional Manager. The role is to develop and execute promotion plans through TMOs, TMEs, HoReCas and key accounts, in line with the promotion strategy in conjunction with the cycle planning process and to ensure maximum benefit out of BTL muscle and advancement of communication objectives as part of cycle plan implementation.

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Promotion Planning and Execution:

SPC plans promotion with the co-ordination of the regional marketing team keeping in view the available budget, objectives and type of promotion required. After the finalisation of promotion mechanics the cycle plan for execution is made. Suppliers are asked to provide quotations. On receipt of POS, instructions are cascaded for the implementation and execution. TM&D team fully participates in the communication of the promotion. Prior to communicate promotion in the market all SPs, FSOs and salesmen are briefed accordingly, all aspect of promotion/offer are re-discussed for better understanding to the field force.

Ware House Executive Attachment

We visited Ware House located at Bahawalpur and Multan

Role of Warehouse Executive:

Ware house executive is accountable for the supply chain management of stocks from area warehouse to the distributor. Warehouse executives other responsibilities are inventory control, system administration, route planning, record maintenance and stock management as per Supply Chain guidelines. The function of warehouse is to provide right product, at right time, in right quantity in an efficient manner to satisfy customers. Warehouse Executive is assisted by Warehouse In-charge and an Excise Officer in the routine operations. Area warehouses are controlled by Production & Supply Chain Department.

Remit Plus:
Local distributors are also called remit plus. They get the stock on the same day of remittance of invoice value in collection account of bank on their own arranged transport. PTC pays them the agreed ICA per M. Transport expenses (ICA) are claimed on monthly basis.

Collect Plus:

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Stock is provided to the collect plus distributors on the next day of remittance on PTC arranged transport. Route plan is forwarded to all markets every month. If distributor fails to remit the invoice amount in the bank one day prior, the company will not be responsible for providing the stock on company arranged transport. In that case, missed routes transportation will be the responsibility of distributor.

Supply Chain:
PTC supply chain consists of the following departments in the same mentioned sequence:

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Supply Chain

Seed/Leaf Department

Production Department Material Management Department Primary Manufacturing Department Stick Manufacturing Department

Factory Warehouse Area Warehouse Distributor Warehouse

Supply to Wholesale and Retail

Sales to End Consumers

SAP (System Application Product):

System application product is a highly advanced computer based programme. It is only used by few multinational companies in Pakistan. PTC head office, factories, regional offices, area offices and ware houses are interlinked with this programme. It facilitates the monitoring of all the activities relating to finance, budget, production, supply, merchandising, etc. in the most efficient and accurate way. The use of SAP in warehouse operations is as:

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ADMINISTRATIVE OFFICER ATTACHMENT

Role of Administrative Officer:
To maintain and up-keep office records & returns according to the specified standards and retention schedule. To ensure data security and safety as per Company set guidelines. To carry out all the necessary secretarial works (i.e. letters, returns, telephone/fax, photocopy etc). And to support all the routine activities of Regional Office.

Other Major Responsibilities:

Office Staff Administration (Peon, Security Guard, Sweeper) Assist RM in completion of every day assignments Equipment maintenance Premises maintenance

EH&S Overview - (Environment, Health & Safety):

EH&S Symbol:
The symbol of EH&S is based on the Leonardo da Vinci drawing called Petruvian Man, which shows the symmetry of the human body. This image is often used to indicate health and environment awareness. BAT has adapted it by showing the globe behind the figure to represent BAT's global business.

PTCs EH&S Policy to:

Provide and maintain safe and healthy working environment including use of cleaner technologies and safe systems of work for all its employees and non company personnel on company premises.

COMMUNICATION CO-ORDINATOR ATTACHMENT

We spent full day with Cc Mr. Jahanzaib at Bahawalpur and M,r. Ahad Khakwani at Multan

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Role of Communication Coordinator:

Cc is responsible for back check of BAs. He is to check the 20% consumer contacts as well . He also manages the tour plan and Beats of BAs. Other tasks are as and BVS-4 Activity Planner of BAs BAs Contact Report Tracker Monthly brand wise report Total CC Summary FCP of BAs CC back check CC pitch Back Check of Log Books

There are 9 BAs are working in Bahawalpur and 17 BAs in Multan market working on BVS-1

RCE (Regional Communication Executive) ATTACHMENT

I spent full day with RCE Mr. Fahad Gillani at Multan

Role of RCE (Regional Communication Executive)

RCE ensures 100% implementation of cycle instruction in-line with cycle brief given by HO. The responsibilities of RCE are as following.

Resource Management:
CC (Communication Coordinator) BAs (Brand Ambassador)

Target of Consumer Contacts:

Ensure the 100% target achievement

Quality Consumer Contacts:

20% consumer contacts are checked by Communication Coordinator of RCE.

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Third party has been hired to have a back check of consumer contacts. Slab system been maintained and the incentive to Brand Ambassadors is given on Good Quality Contacts Percentage.

PROJECT SKYWALKER
RCE told us about project Skywalker and for the completion of our project he attached us with Contact Plus team for 3 weeks.

One to One Communication

One to One communication consists of direct connections with carefully targeted individuals consumers to obtain an immediate response and to build customers relationships. Direct marketers communicate directly with consumers on one to one basis. One to one communication is a medium or marketing channel for marketing the products that contains no intermediaries

Types of One to One Communication

There are seven types of one to one communication which are as following. 1. 2. Personal selling Telephone marketing Direct mail marketing Catalog marketing Direct response television marketing Kiosk marketing

3. 4. 5. 6.

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7.

Online marketing

1. Personal Selling
Personal selling involves two ways personal communication between sales people and individual customers, which can be face to face, by telephone, through video or web conferences, or by other means.

2. Telephone Marketing
In telephone marketing, telephone is used to sell directly to consumers. It has become major direct marketing communication tool. Telemarketing provides many benefits, including purchasing convenience and change in product service information.

3. Direct mail marketing

Direct mail marketing involves sending an offer, announcement, reminder, or other item to a person at a particular address. This kind of marketing is through singles mailings that include letters adds samples. Direct mail has proved successful in promoting all kinds of products, from books, magazines subscriptions, clothing, foods and industrial products.

4. Catalog Marketing
A kind of marketing through print, video or electronic catalogs that are mailed to selected consumers, made available in stores presented online or providing through hand.

5. Direct Response Television Marketing

Marketing via television, including direct response television advertising and home shopping channel.

6. Kiosk Marketing
Some companies place information desks and ordering machines called Kiosk which can be in stores, airports and other locations.

7. Online Maeketing
Online marketing is a very good communication tool by which companies advertise their Product through internet and through online marketing buying and selling are also takes place.

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IMPORTANCE OF ONE-TO-ONE COMMUNICATION

The importance of one to one communication is very vast. Now a days, companies are using one to one communication to reach carefully targeted consumers more efficiently and to build stronger, more personal one to one relationships with them.

Tobacco Bans:
According to printing rule SRO 1219(1)/2008 health warning took place on the front of cigarette Packs and it would have prominent colour contrast. Other tobacco bans are as follows, All kind of ATL activities. Limitations in BTL activities. 50 meter Clause Consumer Promotions All kind of on-store such as Fascias, Tube-shades, Banners etc. Consumer contacts with incentives Branded key chains, lighter other promo-material which could motivate the

tobacco smoking.

Smoking has been suppressed in hotels, restaurants and public places. Promotion health warning took place on the front of cigarette packs. ATL activities were restricted. On-store merchandising & consumer promotion were banned. While consumer contacts were given the limitations were supposed to be done any incentive.

IMPORTANCE OF ONE-TO-ONE COMMUNICATION IN DARK MARKET

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After the restrictions imposed by local Government and WHO on advertisement of cigarettes, in this dark market where all the ATL activities are banned so cigarettes companies have only one option to advertise their product through one to one communication. Through the one to one communication you can easily transfer your message into consumer mind. In the dark market where every type of promotional activities ATL are banned and BTL are limited so in this scenario cigarette companies can hire the Brand Ambassador for their brand promotional activities. Now a days there is a trend towards more narrowly targeted and focus on specific consumers, so in this scenario one to one communication can play a very vital role in smoking industry to capture the end consumers.

PURPOSE OF STARTING PROJECT SKY WALKER

After the restrictions imposed by the Government on advertisement of cigarettes as mentioned above so, in this dark scenario PTC got only one option to advertise their brands through one to one communication with end users.

Overview of Skywalkers Project

PTC hired field force from third party named Contact Plus and HRSG for the Skywalkers project. For the Skywalkers project, there are 52 Brand Ambassadors working in Multan and 9 supervisors are supervising them. These 9 supervisors daily report to AM Multan and on daily basis AM (Project Skywalker) report to RM (Project Skywalker). For the implementation of plan RM (Project Skywalker) coordinates with RCE (PTC). The purpose of Skywalkers project is to give awareness to the people about the repositioning of brand Capstain (original). PTC cut off the price of Capstain and 52 Brand Ambassadors make consumer aware about the new price.

SKY WALKER STRUCTURE HIRERICHY

RCE (PTC)

RM (Sky walker)

Coordinator AM (BWP) AM (Multan) AM (Veharri) AM (Sahiwal)

CC Internship Report BAs

Supervisors 35 BAs

Schedule of project Skywalker

1st week----------------------------------BAs 2nd week---------------------------------Supervisor 3rd week

First two days----------------------------AM (project Skywalker) Last three days--------------------------RM (project Skywalker)

BAs Attachment
As per induction plan we spent our 1st week with BAs. we visited many areas of Multan with BAs. During internship period we fully participated in the consumer contact exercise of BVS-

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4(Capstan original) brand. we learned that it is a very healthy exercise to gain attention of the end consumer.

Roles of BAs
BA daily report to team supervisor. It is the duty of every BA to achieve the target of consumer contacts. BA---------------------------------------target of 30 consumer contacts daily There are 52 BAs are working in Multan.

Consumer Contacts:
This terminology is used where one-to-one contact with the consumer of competition brand is made. The consumer of competition is offered an own brand of same value/profile for trial. To convince the contact and to generate trial, keeping in view the high prestige of brand and company, below are the few steps guided to perform in the same manner: Introduce yourself and company Mention best known brands Ask if the contact has time and willing to talk Find out if the contact has purchased cigarettes for self consumption or

for others Then tell the consumer about the brand.

Documents of BAs:
Swap sheet Tracker sheet

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Route plan Data book

Other responsibilities of BAs

Route riding Pack swapping Target Achievement Trade relationships Pack selling Quality of 121 & motivation

SUPERVISOR ATTACHMENT
As per induction plan we spent our 2nd week with Supervisor who leads a team of 6 or 7 BAs. Supervisors daily report to AM of Skywalker Project. we visited many areas of Multan with Supervisor and learned about how to manage the stock, how to make supervisor report, checks and control and field force management.

Roles of supervisor
Supervisor is responsible for back check of BAs. He is to check the 20% consumer contacts as well. He also manages the tour plan and Beats of BAs. Other tasks are as Activity Planner of BAs BAs Contact Report

Tracker

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Monthly brand wise report FCP of BAs Checks & Control Stock Management

There are 9 supervisor are working in Multan.

AREA MANAGER (SKY WALKER PROJECT) ATTACHMENT

As per induction plan we spent first two days of 3rd week with Area Manager Mr. Javaid of Skywalker Project. We visited many areas of Multan with AM and learned how to control the field force, checks & controls and how give report to RM. AM follows the FCP which he receives from PTC. AM of Skywalker daily report to Regional Manager of Skywalker Project. Roles of AM (Skywalker Project) AM is responsible for check of the Supervisors team as per fix plan. The other tasks of AM are as Team management Reporting Checks & Controls

Market surprise Visits

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REGIONAL MANAGER (SKY WALKER PROJECT)

ATTACHMENT

As per induction plan we spent last three days of 3 rd week with Regional Manager Mr. Munir Ahmad of Skywalker Project. He told us about field force management, team building and motivation, and resource over view. RM reports to contact plus head office on daily bases.

Resource Deployment
There are three steps involved in resource Deployment which are as following Hiring Training

Deployment

Resource overview
The total resource is based on reporting. There are three types of reports that RM receive.

Daily Progress Report

Every AM send this report to RM about its daily Progress it includes Quantity of Exchange Packs Supervisor Progress

Weekly Progress Report

Every Supervisor sends this report to RM on weekly basis it includes Supervisor Overview Detail of supervisor Visits

Monthly Progress Report

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Every Supervisor make the report of BAs and send this report to RM after every month it includes BAs Productivity BAs attendance sheet

Turn Over Management

Consumer engagement is very tough job so thats why some employees left their job due to work load so it is the duty of AM and RM to motivate their subordinates regularly and by offering performance based bonuses to reduce the turnover.

Rate of turn over

There is very minute percentage of turnover which is only 5%.

Team Building & Motivation

Team Building:
There are two ways to build team; 1. 2. Take reference from the existing field force Team can be build by; Hiring Training Deployment

Motivation:

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Target achievement allowances Presence allowances Bonuses

Field Force Management

Field force managed according to this hierarchy BAs RM Report Supervisor Report AM Report

DEPARTMENTS OF PAKISTAN TOBACCO COMPANY

MATERIAL MANAGEMENT DEPARTMENT
This department knew as MMD. Flowing are the main sections of MMD. Prime function of dept. is providing quality material for production. Local Purchase builties). (Purchase sundry & miscellaneous items, on Behalf of company) Traffic (Provide transport for factory and clearing

Reclaiming (Resale, auction of remaining items). Godown

(In time supply of finished good to Zone For market)

LEAF DEPARTMENT
The tobacco is received from leaf go downs from the various places. One type of tobacco is imported and the other comes locally. Lamina is received in the form of cases and the stem is received in the bags. Both are used in manufacturing of cigarettes. From the Leaf Reception Room, this tobacco is sent to the primary manufacturing department

PRIMARY MANUFACTURING DEPARTMENT

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This is known as PMD. The bale of tobacco is converted into blend in this department. This department creates differ types of blend with different ratios. The stem and lamina of the tobacco are treated into blend in this department. The required moisture is added into tobacco and flavors are added into this. Flavor mixing is known as casing process. The ready tobacco is known as Cut Tobacco. This is stored in cut tobacco store. In addition, through Automatically 90seconds are taken to fill a machine. According to Product Steward Policy, we shall design our products and processes in conformance the principles of sustainable development for the betterment to the environment and society.

SECONDARY MANUFACTURING DEPARTMENT

This department is further divided into two departments. Cigarette Making Department. Cigarette Packing Department.

CIGARETTE MAKING DEPARTMENT

In this department, the cut tobacco is filled in the cigarettes. The filter rods come from the Filter Rods Department and they are combined to prepare the cigarettes. There are different types of cigarette making machines high and low machines. Tow Loga Machines, which have a capacity of manufacturing 850 cigarettes per minute and one machine, which have a capacity of manufacturing 8000 cigarettes per minute and two machines, which have 7500 capacities per minute. Eight Mark-8 machines running in this department, which have capacity of manufacturing 2000 cigarettes per minute. Loga machine run 24 hours.

CIGARETTE PACKING DEPARTMENT

The cigarettes come in the ready form to be packed here in his section. Deferent machines are used for the purpose. The material management department provides the packing material required in this department. The cigarettes are first packed in packets, and then these packets are put into the outer, which are further packed in the big cartons known as the CBCs. From the packing department, the cigarettes are transferred to the shipping godowns from where they are shipped out of the factory. According to the speed, there are four types of packing machines running in the Cigarette Packing Department. GDX2, which have capacity of 380 packets per minute. Another machine is a soft Cup his capacity 160 or 180 packet per minutes.

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HUMAN RESOURCE DEPARTMENT

This department is also known asEMPLOYEE RELATION DEPARTMENT. Department deals with the employees of the FACTORY. Flowing are the main functions. Maintains industrial relation between Labor management and Employer. Binomial agreement relation between Labor management and Employer. Maintain worker services record. Worker Training & Promotion. Legal obligation on behalf of Labor and management.

QUALITY DEPARTMENT
Quality excellence is the foundation for every management, and key for GOAL of CUSTOMERS SATISFACTION. Consistently provide product and services that meet the her job right the first time. quality expectations of customer. Actively pursue ever-improving quality through programs that enable each employee to do his or

INFORMATION TECHNOLOGY DEPARTMENT

This department is also known as Management Services Department. It connects all offices and factories of the company with one computer network function. Following are the some functions of the IT department:

IT risk analysis Backup cycle IT system standing instruction System development methodology Request for system modifications Fixed assets movement Email access policy-MEEG (Managed External Email Gateway). Internet browser access request/policy IT logs

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EH&S DEPARTMENT
This department is known as Environment Health and Safety Department. This department provides and maintains safe and healthy working environment including use of cleaner technologies and safe system of work for all its employees and non-company personnel on the company premises. Pay due regard to all impacts of its activities on the physical environment. Comply withal applicable national laws, regulations, and BAT (British American Tobacco) policy pertaining to environment health and safety. Establish procedures for regularly assessing and reviewing the EH&S impact of its present and future activities. Adopt a pro-active role to continually identify cost-effective measures, which it can take to safeguard the health and safety of its employees, non-company personnel on company premises, the neighboring communities and the physical environment.

SECURITY DEPARTMENT
To ensure that the company property, assets, material & information are protected from loss, criminal activity, fire damage and other forms form of waste. Thus ensuring that men are working under congenial environment without any fear, terrorism and sabotage activities are the functions of the security department. There are seven permanent employees and 44 are on contract basis. The contract is with the Phoenix Company

ENGINEERING DEPARTMENT
All goods must be checked physically by counting/weighing/ measuring. All receipts form outside sources other than imported spare will be inspected ensuring that their quality is according to the specification. All goods received from outside sources must be detailed on Goods Receiving Register immediately on the day of receipt. This register forms the only record of goods within the factory an interim period until the goods are inspected and finally G.R. sheeted. G.R. Register will therefore, always be stored overnight in the safe in shift Managers Office/Main Engineering Office along with Engineering Stores keys. In the event of goods being short, excess or damaged as compared to delivery Challan / invoices, an endorsement will be made in red against the items on the G.R. Register and the suppliers will be advised accordingly

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STORE RETURNS
New or useable machine spares received from Factory Departments should be accompanied by Store Return (R 15). New or useable must be recorded on Store Return for new and used spares respectively to enable correct valuation by the system for used spares i.e. 10% of the value of stock. For new and reconditioned items the Finance Department will report values. Training and development We recognize that getting the right start is crucial to building a successful career. This is how we approach your early training and career development Managerial skills Business Awareness Performance Appraisal

MARKETING DEPARTMENT
The consumer is at the centre of our business. Marketing in the tobacco industry requires skills beyond the demands of other products. The ability to differentiate our marketing initiatives, to manage productive and profitable relationships with our key accounts, to integrate strategies above and below-the-line and to innovate while always marketing responsibly are the fundamentals of the marketing challenge

SWOT ANALYSIS OF COMPANY

STRENGTHS
Continuous learning and improvement. Sustainable growth. Environmental standards achievement. Market leadership in the world. Being beneficial to the community (Corporate Social Responsibility) Diversified workforce and environment. Technologically advanced machinery and equipments. Good salaries packages. Focus on health and safety on the company premises.

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Training and development of its employees.

WEAKNESSES
Salaries difference between workers who work more and the one who put minimum efforts. Technological advancement would decrease the workforce and unemployment will increase. Very minimum marketing as compare to its competitors. Workers are always under threat because of downsizing. Improper distribution of work

OPPORTUNITIES
Greater opportunity of promoting lower brands in rural region. PTC has the potential to further improve the cost reduction method. Create a better work environment in GLT department because of more hazards in this department. Lowering the downsizing will create a good image in the eye of regulatory authorities and government. Focus on its key brands i.e. high growth like Gold Flack this years growth was around 27%. Export of premium brands

THREATS
Some of its competitors are also producing high quality brands like Marlboro by Lakson. Internationally some countries are continuously promoting anti-smoking slogans like the ban of smoking in Bhutan in 2002. Better marketing campaigns by rivals. Their well-established brands are highly copied by some local manufacturer. The political, economic situation is not stable in Pakistan. Limitation of their product, Decline in tobacco growth

PEST ANALYSIS
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Pakistans political situations have always been in fluctuation. Even then PTC is long since contributing in the countrys wealth in terms of taxes and providing employment to hundreds of people. Although it is never denied that tobacco is hazardous to health but PTCs aim is not to create more customers but to provide quality of tobacco to those who are already addicted. Marketing Standards: PTC has long accepted that smoking is risky. Its business is not about persuading people to smoke; it is about offering quality brands to adults who have already taken the decision to smoke.

Economical
As a company it understands that its roots are firmly embedded with the nations, it has been the part of industrial development in the country. Pakistan tobacco has maintained its growth momentum during the years scaled new heights with the achievement of millstone and made progress in the every facets of its business. PTC has contributed RS 26,472 m in year 2007 in the form of government levies and taxes which is the indicator of how PTC is contributing in the economic development of the country along with the job creation and installation of advanced and sophisticated machinery and equipments.

Sociological
PTCs marketing is not designed to sell smoking. It is marketing in a long established, mature product category, where people already know what the basic product is. There would be no commercial sense in trying to market to informed consumers who do not want the product. Its marketing is about its brands: retaining the loyalty of the consumers to the brands, and winning consumers from competing brands. Wherever British American Tobacco markets, its takes the greatest care to ensure that its advertising and promotion complies with local laws, regulations and voluntary agreements. As a company with long international traditions and roots, PTC is also sensitive to local customs and cultures. It is working with other companies in the tobacco industry to establish a common basis for clearly understood conduct, which would set the baseline for acceptable tobacco marketing worldwide. Following are the key features of the Voluntary Code of Conduct: No TV/Radio advertising of the products before 2130 hrs.

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 No advertising designed to appeal specifically to minors (<18 years of age). No advertisements in the magazines and newspapers, which are directed principally towards minors. No models under 25 years of age to be used to promote the products. No promotional events of particular appeal to minors. Celebrities not to be used for promotional purposes.

Technological
IT is the backbone of every business; with out it concept of successful business is becoming impossible in modern business environment.

Process Technology:
System Application Program (SAP) SAP the world leading ERP system.

FINANCIAL ANALYSIS

Balance Sheet Non Current Assets property plant & Equipment Investment in Subsidiary Company Long Term Loans Long Term Deposits and Prepayments Current Assets Stockintrade Stores and spares Trade debts

2009 5,952,108 5,000 7,310 19,915 5,765,367 218,375 1,684

2008 5,599,758 5,000 9,244 41,172 4,059,063 190,646 2,666

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Loans and advances Short term prepayments Other receivables Cash and bank balances

48,598 72,483 88,147 47,874 6,242,528 12,226,86 1

65,917 105,728 246,675 69,172 4,739,867 10,395,04 1 2,554,938 1,053,393 739,133 836,939 4,324,704 10,354 572,397 303,183 5,210,638 10,395,04 1

Share Capital & Reserves Share Capital Revenue Reserves Non Current Liabilities Retirement Benefits Deferred Taxation Current Liabilities Trade and other payables Accrued interest / markup Short term running finance Income tax liability

2,554,938 1,705,296

1,109,847 5,037,469 27,659 1,300,837 490,815 6,856,780 12,226,86 1

Profit and Loss Account 21,666,52 Net turnover Cost of sales Gross Profit Selling and distribution expenses Administrative expenses Other operating income Other operating expenses Operating profit Finance income Finance cost Profit before income tax Income tax expense Profit for the year 5 13,442,06 6 8,224,459 2,246,014 1,100,814 226,499 514,665 4,589,465 102,826 43,802 4,648,489 1,626,083 3,022,406 18,872,49 5 11,595,73 6 7,276,759 1,933,364 928,358 60,551 615,458 3,860,130 59,600 26,013 3,893,717 1,361,422 2,532,295

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HORIZONTAL ANALYSIS FIRST CALENDE YEAR OF DATA LAST CALENDER YEAR OF DATA Balance Sheet Non Current Assets property plant & Equipment Investment in Subsidiary Company Long Term Loans Long Term Deposits and Prepayments Current Assets

2008 2009 200 2009 5,952,10 8 5,000 7,310 19,915 2008 5,599,75 8 5,000 9,244 41,172 9 106 % 100 % 79% 48% 200 8 100 % 100 % 100 % 100 %

5,765,36 Stockintrade Stores and spares Trade debts Loans and advances Short term prepayments Other receivables 7 218,375 1,684 48,598 72,483 88,147

4,059,06 3 190,646 2,666 65,917 105,728 246,675

142 % 115 % 63% 74% 69% 36%

100 % 100 % 100 % 100 % 100 % 100

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% 100 Cash and bank balances 47,874 6,242,52 8 12,226,8 61 69,172 4,739,86 7 10,395,0 41 69% 132 % 118 % % 100 % 100 %

Share Capital & Reserves 2,554,93 Share Capital Revenue Reserves 8 1,705,29 6 2,554,93 8 1,053,39 3 100 % 162 % 100 % 100 % 100 Non Current Liabilities Retirement Benefits 1,109,84 Deferred Taxation Current Liabilities 5,037,46 Trade and other payables Accrued interest / markup Short term running finance Income tax liability 9 27,659 1,300,83 7 490,815 6,856,78 0 12,226,8 61 4,324,70 4 10,354 572,397 303,183 5,210,63 8 10,395,0 41 116 % 267 % 227 % 162 % 132 % 118 % 100 % 100 % 100 % 100 % 100 % 100 % 7 836,939 739,133 0% 133 % % 100 % 100 %

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Profit and Loss Account 21,666,5 Net turnover Cost of sales Gross Profit Selling and distribution expenses Administrative expenses Other operating income Other operating expenses Operating profit Finance income Finance cost Profit before income tax Income tax expense Profit for the year 25 13,442,0 66 8,224,45 9 2,246,01 4 1,100,81 4 226,499 514,665 4,589,46 5 102,826 43,802 4,648,48 9 1,626,08 3 3,022,40 6 18,872,4 95 11,595,7 36 7,276,75 9 1,933,36 4 928,358 60,551 615,458 3,860,13 0 59,600 26,013 3,893,71 7 1,361,42 2 2,532,29 5 115 % 116 % 113 % 116 % 119 % 374 % 84% 119 % 173 % 168 % 119 % 119 % 119 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 %

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VERTICAL ANALYSIS FIRST CALENDE YEAR OF DATA LAST CALENDER YEAR OF DATA Balance Sheet Non Current Assets property plant & Equipment Investment in Subsidiary Company Long Term Loans Long Term Deposits and Prepayments Current Assets Stockintrade Stores and spares Trade debts Loans and advances Short term prepayments Other receivables Cash and bank balances 2008 2009 2009 5,952,108 5,000 7,310 19,915

2008 5,599,758 5,000 9,244 41,172

2009 48.68% 0.04% 0.06% 0.16%

2008 53.87% 0.05% 0.09% 0.40%

5,765,367 218,375 1,684 48,598 72,483 88,147 47,874 6,242,528 12,226,861

4,059,063 190,646 2,666 65,917 105,728 246,675 69,172 4,739,867 10,395,041 2,554,938 1,053,393

47.15% 1.79% 0.01% 0.40% 0.59% 0.72% 0.39% 51.06% 100.00 % 20.90% 13.95%

39.05% 1.83% 0.03% 0.63% 1.02% 2.37% 0.67% 45.60% 100.00% 24.58% 10.13%

Share Capital & Reserves Share Capital Revenue Reserves Non Current Liabilities Retirement Benefits Deferred Taxation Current Liabilities Trade and other payables Accrued interest / markup Short term running finance Income tax liability

2,554,938 1,705,296

1,109,847

739,133 836,939

0.00% 9.08%

7.11% 8.05%

5,037,469 27,659 1,300,837 490,815 6,856,780 12,226,861

4,324,704 10,354 572,397 303,183 5,210,638 10,395,041

41.20% 0.23% 10.64% 4.01% 56.08% 100.00

41.60% 0.10% 5.51% 2.92% 50.13% 100.00%

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% Profit and Loss Account 21,666,52 Net turnover Cost of sales Gross Profit Selling and 5 13,442,06 6 8,224,459 distribution 2,246,014 1,100,814 226,499 514,665 4,589,465 102,826 43,802 4,648,489 1,626,083 3,022,406 1,933,364 928,358 60,551 615,458 3,860,130 59,600 26,013 3,893,717 1,361,422 2,532,295 10.37% 5.08% 1.05% 2.38% 21.18% 0.47% 0.20% 21.45% 7.51% 13.95% 10.24% 4.92% 0.32% 3.26% 20.45% 0.32% 0.14% 20.63% 7.21% 13.42% 18,872,49 5 11,595,73 6 7,276,759 100% 62.04% 37.96% 100% 61.44% 38.56%

expenses Administrative expenses Other operating income Other operating expenses Operating profit Finance income Finance cost Profit before income tax Income tax expense Profit for the year

RATIO ANALYSIS
LIQUIDITY RATIO

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CURRENT RATIO
CURRENTRATIO=CURRENTASSETS/CURRENT LIABILITIES

CURRENT RATIO (TIMES)

2009 6242528/6856780= 0.91

2008 4739867/5210638= 0.90

IN 2009, FOR THE PAYMENT OF 6856780 (C.L), COMPANY CURRENT RATIO IS 0.91 AT 6242528 CURRENT ASSETS. IN 2008, FOR THE PAYMENT OF 5210638 (C.L), COMPANY CURRENT RATIO IS 0.90 AT 4739867 CURRENT ASSETS.

QUICK RATIO

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QUICK RATIO=CURRENT ASSETS-INVENTORY/CURRENT LIABILITIES QUICK RATIO (TIMES) 2009 0.87 2008 0.87

IN 2009,MOST LIQUIDATE ASSETS OF COMPANY IS 0.87 TIMES OF 6856780(C.L). IN 2008,MOST LIQUIDATE ASSETS OF COMPANY IS 0.87 TIMES OF 5210638 (C.L)

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ACTIVITY RATIO AVEARAGE COLLECTION PERIOD

AVEARAGE COLLECTION PERIOD=RECIEVEABLE/ AVRG. PERIOD 1.46 4.70 IN 2009,FOR THE COLLECTION OF RECIEVEABLE ,THE REQUIRED TIME IS 1.46. IN 2008,FOR THE COLLECTION OF RECIEVEABLE ,THE REQUIRED TIME IS 4.70. COLLECTION 2009 SALES/360 2008

RECIEVEABLE TURNOVER RECIEVEABLE TURNOVER=SALES/RECIEVEABLE RECIEVEABLE TURN OVER 2009 245.79 2008 76.50

TOTAL ASSET TURNOVER TOTAL ASSET TURNOVER=SALES/TOTAL ASSET TOTAL ASSET TURN OVER 2009 1.77 2008 1.81

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PROFITIBILITY RATIO GROSS PROFIT MARGIN

GROSS PROFIT MARGIN=GROSS PROFIT/ SALESX100 GROSS PROFIT MARGIN 2009 37.95% 2008 38.55%

IN 2009, GROSS PROFIT MARGIN IS 37.95% WHILE IN 2007,GROSS PROFIT MARGIN IS 38.55%. GROSS PROFIT MARGIN DECREASE BY 0.06% ACCORDING TO LAST YEAR(2008).

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NET PROFIT MARGIN

NET PROFIT MARGIN=NET PROFIT/SALESX100 NET PROFIT MARGIN 2009 0.13% 2008 0.13%

IN 2009,NET PROFIT MARGIN IS EQUAL TO THE LAST YEAR2008.

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RETURN ON INVESTMENT
RETURN ON INVESTMENT=NET PROFIT AFTER TAX/TOTAL ASSETS RETURN ON INVESTMENT 2009 0.24% 2008 0.24%

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Conclusion
Pakistan Tobacco Company is part of a growing industry and the trends in the sales for the five years studied have been positive. As said earlier the company is enjoying a major share of the market through most of its brand being the market leader. Thus the company did not let go of the opportunity of the trends in the market growth and started invested in new and improved capital. The major competitors of the company are importing their finished goods stock from their operations in other countries and are well-established companies too. PTC still enjoys the control over the local market, but todays customer is more price conscious and if PTCs competitors give competition through improved production facilitates and reduction in costs PTC might not be able to transform to low cost production facilities in short span of time. Thus for the last six years PTC has been investing in new tangible assets. To do so the company has been taking advantage of long term loans and leasing. This has led to an increase in companys financial expenses. The company also had to take short term loans to run day to day expenses as most of its operative income is unstable and cannot be reliable for day to day expenses. The need for short term financing also escalated due to increased financial expenses as a result of long term borrowing. Thus short term financing also resulted in an increase in financial charges. The company on the whole is a good venture for investing as it is showing a potential for growth in the future. The investment into fixed assets during the previous years has lead to a growth in sales. Thus as the firm comes out of its long term financing burden the interest expense for long term financing will decrease. The company is also gaining reputation in South Asian markets and with growth in production it will also be able to explore international markets. Thus the growth in the markets catered by the company when will go international the sales revenue of the company will grow significantly. But from an investors point of view the most important thing to be considered is that the company is part of a highly taxed industry. This taxes and duties will always take away a major part of companys income. On the other hand the company is also an attractive prospect for financing institutions. The company has taken advantage of the long term debt to grow and the investment from the company has shown positive results. Thus the investment and growth are synonymous for the company. Therefore this puts the company in a good position to be able to pay back its long term obligations. As the company decides to go

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international in its operations the need for further growth will be very essential. Thus financial institutions can keep their eye of PTC for long term financing with a high assurance for timely payback of principal and interest payments.

RECOMMENDATIONS
1.
To get the exact feedback, it should be the duty of Brand Ambassadors to fill up

feedback forms on the spot for regular users of capstain. Feedback forms should be having MCQs regarding repositioned capstain.

Pakistan Tobacco Company

Feed Back Form ---------------------------------------------------------------------------------------------------------

2. basis.

Training sessions should be conducted on the topic of trade relationships on schedule

3.

Motivational level of consumers could be increased by sending them thanking letters.

Through this process accuracy of Brand Ambassadors can also be checked.

4.

Sales pitch of brand Ambassadors should be in a language according to particular

locations. 5. To avoid fake entries, honesty plays a vital role so, Brand Ambassadors honesty can be

raised by following these points.

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Give financial benefits Predefined career path To cover up the loss that PTC is facing from illegal brands, they should train their brand Ambassadors on quality assurance, so that they should know about original and illegal brands

6.

PTC should make outlets in different areas which only sell capstain original. For this a

person should be hired who act as a retailer and Brand Ambassador for the company.

7.

To promote the brand, company should provide T-shirts to retailers and in response

retailers will be motivated to sell the company brand.

8.

For attracting the consumers there should be placed beam lights which shows the brand

image on the floors.

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APPENDIX
1. Internship Letter

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