PAKISTAN TELECOMMUNICATION COMPANY LTD. CONTENTS Board of Directors 2 3 4-5 8-9 10 11 12 13-15 18-19 20 21 22 Condensed Interim Financial Statemen ts Condensed Consolidated Interim Financial Statements
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PAKISTAN TELECOMMUNICATION COMPANY LTD.
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CONTENTS
Board of Directors 2
3
4-5
8-9
10
11
12
13-15
18-19
20
21
22
23-25
Condensed Interim Financial Statements
Condensed Consolidated Interim Financial Statements
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PAKISTAN TELECOMMUNICATION COMPANY LTD.
Naguibullah MalikChairman PTCL Board
Secretary (IT & Telecom Division)
Ministry of Information Technology
Government of Pakistan
Islamabad.
Abdulrahim A. Al Nooryani
Chairman & Chief Executive Officer
Etisalat International Pakistan L.L.C
Executive Vice President (Contracts & Administration)
Etisalat, UAE.
Mushtaq Ahmad BhattiMember (Telecom)
Ministry of Information Technology
Government of Pakistan
Islamabad.
Khurshed Ahmed JunejoAmbassador
Embassy of Pakistan
Abu Dhabi, UAE.
Salman SiddiqueSecretary (Finance)
Ministry of Finance
Government of Pakistan
Islamabad.
Abdulaziz A. Al Sawaleh
Chief Human Resources OfficerEtisalat, UAE.
Fadhil Al AnsariExecutive Vice President (Engineering)
Etisalat, UAE.
Abdulaziz H. TaryamGeneral Manager (Northern Emirates)
Etisalat, UAE.
Dr. Ahmed Al JarwanGeneral Manager/eRE
Etisalat, UAE.
Farah QamarCompany Secretary
Board of Directors
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Walid IrshaidPresident & Chief Executive Officer
Muhammad Nehmatullah Toor S.E.V.P (Finance) / CFO
Syed Mazhar HussainS.E.V.P (HR / Admin & Procurement)
Sikandar NaqiS.E.V.P (Corporate Development)
Naveed SaeedS.E.V.P (Commercial)
Muhammad NasrullahChief Technical Officer (C.T.O)
Tariq SalmanS.E.V.P (Business Zone North)
Abdulla Yousef S.E.V.P (Business Zone South)
Hamid FarooqS.E.V.P (Special Projects)
Javed MushtaqChief Information Officer (C.I.O)
Management
Farah Qamar
Bankers Allied Bank Limited
Askari Bank Limited
Bank Alfalah Limited
Bank Al Habib Limited
The Bank of Punjab
Citibank, N.A.
Dubai Islamic Bank
Faysal Bank LimitedHabib Metropolitan Bank Limited
MCB Bank Limited
Meezan Bank Limited
National Bank of Pakistan
NIB Bank Limited
Royal Bank of Scotland
Silkbank Limited
SME Bank Limited
Standard Chartered Bank (Pakistan) Limited
United Bank Limited
Share Registrar
M/s FAMCO Associates (Pvt.) Limited
Ground Floor,
State Life Building No. 1-A,
I.I. Chundrigar Road, Karachi - 74000
Pakistan
Tel: +92-21-32422344, 32467406 &
32420755
Fax: +92-21-32428310
Corporate Information
PAKISTAN TELECOMMUNICATION COMPANY LTD.
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Company Secretary
Zahida Awan
Ghulam Mustafa
Legal Affairs
Auditors
A.F. Ferguson & Co.Chartered Accountants
Ernst & Young Ford Rhodes Sidat Hyder
Chartered Accountants
Registered Office
PTCL Headquarters, Sector G-8/4,
Islamabad-44000, Pakistan.
Tel: +92-51-2263732 & 34
Fax: +92-51-2263733
E-mail: [email protected]
Web: www.ptcl.com.pk
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infrastructure capabilities. A new Data Centre has been established inLahore which is similar to the one earlier set up in Karachi. Commensuratewith the launch of Rev-B technology for EVO wireless broadband, wherebythe internet speed has been tripled to 9.3 Mbps, the respective network in allthe major cities was upgraded. Further expansion in existing capacity of DSL Broadband was carried out. Country-wide availability of bandwidth tosupport the segment of Broadband (DSL and EVO) and Corporate Serviceswas enhanced by augmenting the Metro Ethernet Network. Major work onphase II of Optical fibre (OFC) network was completed besides increasingthe OFC resilience in smaller cities. The Access Network in Greenfieldareas was expanded to provide for increased PSTN and Broadband
connectivity. To curb the menace of grey traffic, the project of Revenue Assurance and Fraud Management based on latest available technologicalsolution is underway. Besides, work on various USF projects to providetelecommunication facilities in rural and under developed areas is beingcompleted in line with the contractual obligations.
The management and employees of PTCL are committed to provide qualityservices at competitive prices through optimal use of resources forachieving enhanced revenue and improved shareholders' value.
On behalf of the Board,
Naguibullah Malik Walid Irshaid
Chairman PTCL Board President & CEO PTCL
Islamabad: October 27, 2010
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Condensed
Interim Financial
Statements
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CONDENSED INTERIM STATEMENT OF FINANCIAL POSITIONAS AT SEPTEMBER 30, 2010 (UN-AUDITED)
The annexed notes from 1 to 13 form an integral part of these condensed interim financial statements.
8
September 30,
2010
Rs ‘000
(Un-audited)
June30,
2010
Rs ‘000
(Audited)Note
5
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June30,
2010
Rs ‘000
(Audited)
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September 30,
2010
Rs ‘000
(Un-audited)
Fixed assets
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September 30,
2010
Rs ‘000
September 30,
2009
Rs ‘000
13
CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
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September 30,
2010
Rs ‘000
September 30,
2009
Rs ‘000
13
Note
10
11
CONDENSED INTERIM STATEMENT OF CASH FLOWS
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C O N D E
N S E D
I N T E R I M S
T A T E M E N T O F C H
A N G E S I N
E Q U I T
Y
F O R T H E Q U A R T E R
E N D
E D
S E P T E M B E R
3 0 , 2 0 1 0 ( U N - A U D I T E D )
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1. The Company and its operations
Pakistan Telecommunication Company Limited ("the Company") wasincorporated in Pakistan on December 31, 1995 and commenced business onJanuary 01, 1996. The Company is listed on Karachi, Lahore and Islamabadstock exchanges. The Company was established to undertake thetelecommunication business formerly carried on by PakistanTelecommunication Corporation (PTC). The business was transferred to theCompany on January 01, 1996 under the Pakistan Telecommunication (Re-organization) Act, 1996 at which date the Company took over all the properties,
rights, assets, obligations and liabilities of PTC except those transferred toNational Telecommunication Corporation (NTC), Frequency Allocation Board(FAB), Pakistan Telecommunication Authority (PTA) and PakistanTelecommunication Employees' Trust (PTET). The registered office of theCompany is situated at PTCL Headquarters, G-8/4, Islamabad.
The Company provides telecommunication services in Pakistan. It owns andoperates telecommunication facilities and provides domestic and internationaltelephone services and other communication facilities throughout Pakistan.The Company has also been licensed to provide such services to territories of
Azad Jammu & Kashmir and Gilgit-Baltistan.
2. Basis of preparation
These condensed interim financial statements are unaudited and are beingsubmitted to the members in accordance with the requirements of Section 245of the Companies Ordinance, 1984 and International Accounting Standard(IAS) 34 'Interim Financial Reporting'. These condensed interim financialstatements do not include all the information and disclosures required in the
annual financial statements and should be read in conjunction with the annualaudited financial statements of the Company for the year ended June 30, 2010.
3. Significant accounting policies
The accounting policies adopted in the preparation of these condensed interimfinancial statements are the same as those applied in the preparation of annualaudited financial statements of the Company for the year ended June 30, 2010.
4. Accounting judgement and estimates
The preparation of financial statements in conformity with approved accountingstandards requires the use of certain critical accounting estimates. It alsorequires management to exercise its judgment in the process of applying theCompany's accounting policies. Estimates and judgements are continuallyevaluated and are based on historic experience including expectation of futureevents that are believed to be reasonable under the prevailing circumstances.
Estimates and judgements made by the management in preparation of thesecondensed interim financial statements are the same as those used in the
preparation of annual audited financial statements of the Company for the yearended June 30, 2010.
5. Contingencies and commitments
5.1 Contingencies
There has been no material change in contingencies since the last annualaudited financial statements of the Company.
5.2 Commitments
Commitments in respect of contracts for capital expenditure amount to Rs.15,280,902 thousand (June 30, 2010: Rs. 14,127,643 thousand).
NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL STATEMENTSFOR THE QUARTER ENDED SEPTEMBER 30, 2010 (UN-AUDITED)
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June 30,
2010
Rs ‘000
(Audited)
September 30,
2010
Rs ‘000
(Un-audited)
PAKISTAN TELECOMMUNICATION COMPANY LTD.
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8. Long term loans
This includes unsecured loans of Rs. 11,000,000 thousand (June 30, 2010:Rs. 7,000,000 thousand) to Pak Telecom Mobile Limited, a wholly ownedsubsidiary of the Company, under subordinated debt agreements. Theseloans are recoverable in eight equal quarterly instalments commencing after agrace period of 3 to 4 years by 2015 and carry mark-up at the rate of threemonths KIBOR plus 82 to 180 basis points.
Property, plant and equipment6.
Operating assets7.
Transactions with related parties9.
September 30,
2010
Rs ‘000
(Un-audited)
September 30,
2009
Rs ‘000
(Un-audited)
September 30,
2010
Rs ‘000
(Un-audited)
June 30,
2010
Rs ‘000
(Audited)
7
7.1
9.1
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12. Date of authorisation for issue of financial statements
These condensed interim financial statements were authorised for issue onOctober 27, 2010 by the Board of Directors of the Company.
13. General
Figures presented in these condensed interim financial statements have beenrounded off to the nearest thousand rupees.
Effect on cash flows due to working capital changes:
Cash generated from operations10.
Cash and cash equivalents11.
September 30,
2010
Rs ‘000
(Un-audited)
September 30,
2009
Rs ‘000
(Un-audited)
9.1 This represents PTCL's share of fee payable to Emirates TelecommunicationCorporation (Etisalat) under an agreement for technical services effectiveOctober 01, 2006 at the rate of 3.5% of PTCL group's consolidated annual
revenue.
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T h e m o s t r o b u s t & c a p a b l e n e t w o r k
B i g g e s t N e t w o r k
– 1 0 0 0 c i t i e s
M o s t f l e x i b l e b a n d w i d t h p a c k a g e s
E c o n o m i c a l s t u d e n t p a c k a g e s f o r o n l i n e e d u c a t i o n
T h e l a r g e s t s a t i s
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Q u a d p l a y p a c k a g e s o f f e r i n g I P T V , B r o a d b a n d , P S T N
& o n l i n e s e c u r i t y s u r v e i l l a n c e
O n l i n e “ B U Z Z ” g a m i n g a n d i n f o t a i n m e n t p o r t a l
“ E a s y L e a r n i n g ” - e d u c a t i o n p o r t a l w i t h i n t e r n a t i o n a l l y r e c o g n i z e d d i p l o m a
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Financial Statements Consolidated Interim
Condensed
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PAKISTAN TELECOMMUNICATION GROUP
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CONDENSED CONSOLIDATED INTERIM
AS AT SEPTEMBER 30, 2010 (UN-AUDITED)
STATEMENT OF FINANCIAL POSITION
September 30,
2010
Rs ‘000
(Un-audited)
June 30,
2010
Rs ‘000
(Audited)
5
The annexed notes from 1 to 10 form an integral part of these condensed consolidated interim financial statements.
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September 30,
2010
Rs ‘000
(Un-audited)
June 30,
2010
Rs ‘000
(Audited)
Fixed assets
Note
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CONDENSED CONSOLIDATED INTERIM
FOR THE QUARTER ENDED SEPTEMBER 30, 2010 (UN-AUDITED)
STATEMENT OF COMPREHENSIVE INCOME
September 30,
2010
Rs ‘000
September 30,
2009
Rs ‘000
The annexed notes from 1 to 10 form an integral part of these condensed consolidated interim financial statements.
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PAKISTAN TELECOMMUNICATION GROUP
September 30,
2010
Rs ‘000
September 30,
2009
Rs ‘000Note
6
7
The annexed notes from 1 to 10 form an integral part of these condensed consolidated interim financial statements.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
FOR THE QUARTER ENDED SEPTEMBER 30, 2010 (UN-AUDITED)
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C O N D E N S E D
C O N S O L I D
A T E D
I N T E R I M S T
A T E M E N T O F C H A N G E S I N
E Q U I T Y
T h e a n n e x
e d n o t e s f r o m 1
t o 1 0 f o r m a
n i n t e g r a l p a r t o f t h e s e c o n d e
n s e d c o n s o l i d a t e d i n t e r i m f i n
a n c i a l s t a t e m e n t s .
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1. Constitution and ownership
The consolidated financial statements of the Pakistan TelecommunicationGroup ("the Group") comprise of the financial statements of:
Pakistan Telecommunication Company Limited (PTCL)
PTCL owns and operates telecommunication facilities and provides domesticand international telephone services and other communication facilities
throughout Pakistan. PTCL has also been licensed to provide such services toterritories of Azad Jammu & Kashmir and Gilgit-Baltistan.
Pak Telecom Mobile Limited (PTML)
PTML provides cellular mobile telephony services throughout Pakistan underthe brand name of Ufone.
Maskatiya Communications (Private) Limited (MAXCOM)
MAXCOM provides broadband services in the cities of Karachi & Hyderabad.
2. Basis of preparation
These condensed interim financial statements are unaudited and are beingsubmitted to the members in accordance with the requirements of Section 245of the Companies Ordinance, 1984 and International Accounting Standard(IAS) 34 'Interim Financial Reporting'. These condensed interim financialstatements do not include all the information and disclosures required in the
annual financial statements and should be read in conjunction with the annualaudited financial statements of the Group for the year ended June 30, 2010.
3. Significant accounting policies
The accounting policies adopted in the preparation of these condensed interimfinancial statements are the same as those applied in the preparation of annualaudited financial statements of the Group for the year ended June 30, 2010.
4. Accounting judgement and estimates
The preparation of financial statements in conformity with approved accountingstandards requires the use of certain critical accounting estimates. It alsorequires management to exercise its judgment in the process of applying theGroup's accounting policies. Estimates and judgements are continuallyevaluated and are based on historic experience including expectation of futureevents that are believed to be reasonable under the circumstances.
Estimates and judgements made by the management in preparation of thesecondensed interim financial statements are the same as those used in the
preparation of annual audited financial statements of the Group for the yearended June 30, 2010.
5. Contingencies and commitments
5.1 Contingencies
There has been no material change in contingencies since last audited financialstatements of the Group.
5.2 Commitments
Commitments in respect of contracts for capital expenditure amount toRs.26,584,279 thousand (June 2010: Rs. 18,967,439 thousand).
NOTES TO AND FORMING PART OF THE CONDENSED CONSOLIDATEDINTERIM FINANCIAL STATEMENTSFOR THE QUARTER ENDED SEPTEMBER 30, 2010 (UN-AUDITED)
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Effect on cash flows due to working capital changes:
8. Segment Information
For Management purposes, the group is organized into business units basedon their services and has two reportable operating segments. Transfer prices
between operating segments are on an arm's length basis in a manner similar totransactions with third parties.
8.1 Revenue information regarding the Group's operating segments for the quarterended September 30, 2010 and 2009 is tabulated below:
8.1.1 Inter segment revenues are eliminated on consolidation.
Rs ‘000 Rs ‘000 Rs ‘000
non-cash charges & other items:
September 30,
2010
Rs ‘000
September 30,
2009
Rs ‘000
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PAKISTAN TELECOMMUNICATION GROUP
9. Date of authorisation for issue of financial statements
These condensed interim financial statements were authorised for issue onOctober 27, 2010 by the Board of Directors of the Group.
10. General
Figures presented in these condensed interim financial statements have beenrounded off to the nearest thousand rupees.
Rs ‘000 Rs ‘000 Rs ‘000
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8.2 Assets & liabilities of the Group's operating segments as at September 30,2010 and June 30, 2010 are tabulated below.
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Notes