Ratio Analysis for PTCL

Pakistan Telecommunication Company Limited (“PTCL”)

Financial Management

Submitted To:

Mr. Sanaullah Ansari

Submitted BY:

Syeda Zainab Rizvi (Reg# 081158)

Shumaila Khan (Reg# 081152)

TABLE OF CONTENTS

Financial Analysis of PTCL as at June 30, 2010

Section Description Page

1 EXECUTIVE SUMMARY of PTCL 2

2 Ratio Analysis 3

3 Balance Sheet 4

4 Income Statement 6

5 Cash Flow Statements 7

6 Fund Flow Statement 8

7 Combined Balance Sheet and Income Statement for Working 9

1. EXECUTIVE SUMMARY

1


Pakistan Telecommunication Company Limited (“the Company”) was incorporated in Pakistan on December 31, 1995 and commenced business on January 01, 1996. The Company is listed on Karachi, Lahore and Islamabad stock exchanges. The Company was established to undertake the telecommunication business formerly carried on by Pakistan Telecommunication Corporation (PTC). The business was transferred to the Company 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 to National Telecommunication Corporation (NTC), Frequency Allocation Board (FAB), Pakistan Telecommunication Authority (PTA) and Pakistan Telecommunication Employees Trust (PTET). The registered office of the Company is situated at PTCL Headquarters, G–8/4, and Islamabad.

The Company provides telecommunication services in Pakistan. It owns and operates telecommunication facilities and provides domestic and international telephone services and other communication facilities throughout Pakistan. The Company has also been licensed to provide such services to territories of Azad Jammu and Kashmir and Gilgit Baltistan.

2. Ratio Analysis

2.1 OBJECTIVE

In an effort to evaluate the Financial Position and the Financial Structure of PTCL, a

ratio analysis has been taken out to evaluate the Performance of PTCL in

Monetary terms and able to analyze the current position and future concerns.

Ratio Analysis

2


Financial AnalysisPTCL Annual Ratio Report

Year ended June 30 Current Year Prior YearJune 30, 2010 Change % Change June 30, 2009 Definition

Liquidity Ratios

Current Ratio Times 1.505 0.003 0.002 1.503 See comment

Quick Ratio Times 0.997 -0.214 -0.177 1.211 See comment

Cash Ratio Times 0.213 -0.117 -0.355 0.330 See comment

Working Capital Ratio Times 0.101 -0.017 -0.140 0.118 See comment

Operating Ratios

Times 0.409 -0.003 -0.008 0.412 See comment



Working Capital Turnover Times 0.824 0.120 0.171 0.703 See comment

Profitability Ratios

% 0.386 -0.020 -0.049 0.406 See comment

% 0.236 0.001 0.002 0.235 See comment

% 0.143 0.002 0.017 0.141 See comment

% 0.023 -0.062 -0.733 0.085 See comment

% 0.150 -0.020 -0.120 0.171 See comment

Leverage Ratios

% 0.179 0.016 0.099 0.163 See comment

% 0.511 -0.039 -0.070 0.550 See comment

Asset Turnover Days in Inventory Days in Receivables

Gross Margin EBIT Margin Return on Equity Return on Assets Operating Expense/Sales

Long-Term Debt/Equity Total Debt/Equity

3


3. Balance Sheet

4


5


4. Income Statement

6


5. Cash Flow Statement

7


6. Fund Flow Statements

PTCLFund Flow Statement

As at June 30, 2010Current Year Prior Year

BALANCE SHEET 6/30/2010 6/30/2009 Ins/Dec Sources Uses

Cash 6,422,144,000 11,906,448,000 Decrease 5,484,304,000 Marketable Securities 13,493,865,000 21,017,790,000 Decrease 7,523,925,000 Accounts Receivable (net) 10,171,530,000 10,760,974,000 Decrease 589,444,000

QUICK ASSETS 30,087,539,000 43,685,212,000

Inventory 4,075,863,000 5,201,991,000 Decrease 1,126,128,000 Prepaid Assets 0 0 -Other Current Assets 11,286,834,000 5,333,038,000 Increase 5,953,796,000

TOTAL CURRENT ASSETS 15,362,697,000 54,220,241,000

Property, Plant & Equipment (net) 88,219,285,000 87,567,351,000 Increase 651,934,000 Intangible Assets 3,079,031,000 3,320,670,000 Decrease 241,639,000 Investment in Shares 6,681,965,000 5,607,439,000 Increase 1,074,526,000 Other Long-Term Assets 7,337,210,000 3,332,378,000 Increase 4,004,832,000

TOTAL ASSETS 150,767,727,000 154,048,079,000

Trade Payables 24,922,197,000 26,114,171,000 Decrease 1,191,974,000 Other Current Liabilities 5,270,581,000 9,972,151,000 Decrease 4,701,570,000 Long-Term Debt (excl. Dfd. Taxes) 17,866,468,000 16,193,198,000 Increase 1,673,270,000 Defferd tax 2,949,770,000 2,379,000,000 Increase 570,770,000

TOTAL LIABILITIES 51,009,016,000 54,658,520,000

Preferred Stock 0 0 -Common Equity or Paid in Capital 83,613,704,000 83,183,074,000 Increase 430,630,000 Retained Earnings 16,145,007,000 16,206,485,000 Decrease 61,478,000

TOTAL EQUITY 99,758,711,000 99,389,559,000

TOTAL LIABILITIES & EQUITY 150,767,727,000 154,048,079,000 17,640,110,000 17,640,110,000

8


7. Combined Balance Sheet and Income Statement for Working

PTCL

Statement of Financial Position

As at June 30, 2010

Current Year Prior Year

BALANCE SHEET 6/30/2010 6/30/2009

Cash 6,422,144,000 11,906,448,000 46.1% (5,484,304,000)

Marketable Securities 13,493,865,000 21,017,790,000 35.8% (7,523,925,000)

Accounts Receivable (net) 10,171,530,000 10,760,974,000 5.5% (589,444,000)

QUICK ASSETS 30,087,539,000 43,685,212,000 31.1% (13,597,673,000)

Inventory 4,075,863,000 5,201,991,000 21.6% (1,126,128,000)

Prepaid Assets 0 0 - -

Other Current Assets 9,124,926,072 5,333,038,000 71.1% 3,791,888,072

TOTAL CURRENT ASSETS 43,288,328,072 54,220,241,000 20.2% (10,931,912,928)

Property, Plant & Equipment (net) 88,219,285,000 87,567,351,000 0.7% 651,934,000

Intangible Assets 3,079,031,000 3,320,670,000 7.3% (241,639,000)

Investment in Shares 6,681,965,000 5,607,439,000 19.2% 1,074,526,000

Other Long-Term Assets 7,337,210,000 3,332,378,000 120.2% 4,004,832,000

TOTAL ASSETS 148,605,819,072 154,048,079,000 3.5% (5,442,259,928)

Trade Payables 24,922,197,000 26,114,171,000 4.6% (1,191,974,000)

Other Current Liabilities 5,270,581,000 9,972,151,000 47.1% (4,701,570,000)

Long-Term Debt (excl. Dfd. Taxes) 17,866,468,000 16,193,198,000 10.3% 1,673,270,000

Defferd tax 2,949,770,000 2,379,000,000 24.0% 570,770,000

TOTAL LIABILITIES 51,009,016,000 54,658,520,000 6.7% (3,649,504,000)

Preferred Stock 0 0 - -

Common Equity or Paid in Capital 83,613,704,000 83,183,074,000 0.5% 430,630,000

Retained Earnings 16,145,007,000 16,206,485,000 0.4% (61,478,000)

TOTAL EQUITY 99,758,711,000 99,389,559,000 0.4% 369,152,000

TOTAL LIABILITIES & EQUITY 150,767,727,000 154,048,079,000 2.1% (3,280,352,000)

Difference %

Difference Amount

9


Current Year % of Net Prior Year % of Net

INCOME STATEMENT 6/30/2010 Sales 6/30/2009 Sales

Net Revenue / Sales 62,309,173,000 100% 63,506,173,000 100% 1.9% (1,197,000,000)

Cost of Sales / Cost of Goods Sold (38,258,711,000) -61% (37,732,282,000) -59% 1.4% (526,429,000)

GROSS PROFIT 24,050,462,000 39% 25,773,891,000 41% 6.7% (1,723,429,000)

Administration (7,223,780,000) -12% (8,935,261,000) -14% 19.2% 1,711,481,000

Selling and Marketing (2,142,324,000) -3% (1,817,071,000) -3% 17.9% (325,253,000)

Other Operating Expenses 0 0% (92,118,000) 0% 100.0% 92,118,000

Depreciation / Amortization 0 0% 0 0% - -

OPERATING INCOME 14,684,358,000 24% 14,929,441,000 24% 1.6% (245,083,000)

Interest Expense (403,240,000) -1% (908,524,000) -1% 55.6% 505,284,000

INCOME BEFORE TAXES 14,281,118,000 23% 14,020,917,000 22% 1.9% 260,201,000

Income Taxes (4,986,966,000) -8% (4,869,732,000) -8% 2.4% (117,234,000)

NET INCOME 9,294,152,000 15% 9,151,185,000 14% 1.6% 142,967,000

Difference %

Difference Amount

10

Ratio Analysis for PTCL

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