Pakistan Telecommunication Company Limited CONTENTS Board of Directors 01 Corporate Information 02 Directors’ Report 03-04 Condensed Interim Financial Information Condensed Interim Statement of Financial Position 06-07 Condensed Interim Statement of Comprehensive Income 08 Condensed Interim Statement of Cash Flows 09 Condensed Interim Statement of Changes in Equity 10 Notes to and Forming Part of the Condensed Interim Financial Information 11-14 Condensed Consolidated Interim Financial Information Condensed Consolidated Interim Statement of Financial Position 16-17 Condensed Consolidated Interim Statement of Comprehensive Income 18 Condensed Consolidated Interim Statement of Cash Flows 19 Condensed Consolidated Interim Statement of Changes in Equity 20 Notes to and Forming Part of the Condensed Consolidated Interim Financial Information 21-24
Transcript
Pakistan Telecommunication Company Limited
CONTENTS
Board of Directors 01
Corporate Information 02
Directors’ Report 03-04
Condensed Interim Financial Information
Condensed Interim Statement of Financial Position 06-07
Condensed Interim Statement of Comprehensive Income 08
Condensed Interim Statement of Cash Flows 09
Condensed Interim Statement of Changes in Equity 10
Notes to and Forming Part of the Condensed Interim Financial Information 11-14
Condensed Consolidated Interim Financial Information
Condensed Consolidated Interim Statement of Financial Position 16-17
Condensed Consolidated Interim Statement of Comprehensive Income 18
Condensed Consolidated Interim Statement of Cash Flows 19
Condensed Consolidated Interim Statement of Changes in Equity 20
Notes to and Forming Part of the Condensed Consolidated Interim Financial Information 21-24
BankersAllied Bank LimitedAskari Bank LimitedBank Alfalah LimitedBank Al Habib LimitedCitibank, N.A.Dubai Islamic BankFaysal Bank LimitedHabib Metropolitan Bank LimitedMCB Bank LimitedMeezan Bank LimitedNational Bank of PakistanNIB Bank LimitedSilkbank LimitedSME Bank LimitedStandard Chartered Bank (Pakistan) LimitedThe Bank of PunjabUnited Bank Limited
AuditorsA.F. Ferguson & Co.Chartered Accountants
Ernst & Young Ford Rhodes Sidat HyderChartered Accountants
The Directors of Pakistan Telecommunication Company Limited (PTCL) are pleased to present to the shareholders the un-audited financial information of the Company for the three months period ended September 30, 2011.
During the period under review, your Company continued with the momentum to maximize the revenues and adding value to shareholders’ investment by augmenting the products’ portfolio, revamping of network and enhanced customer care.
Financial Performance
The PTCL Group revenue at Rs. 27.2 billion during the period under review increased by 7% compared to same period last year. Of these, the revenues earned by PTCL registered an increase of 5% whereas revenues of PTML (Ufone), the wholly owned subsidiary of PTCL, rose by 7%.
The Group’s net profit after tax at Rs. 2.2 billion was 8% lower as compared to corresponding period last year. PTCL’s net profit after tax at Rs. 1.4 billion was 32% lower mainly because of decreased level of Other Operating Income.
Commercial Performance
During the first quarter of 2011-12, your Company maintained the growth trajectory in Broadband services – both in DSL (wireline) and EVO (wireless).
The DSL customer base increased by 9% upholding PTCL’s dominant position of 95% market share. Rationalization of a variety of DSL packages, offering services from 256 Kbps to 50 Mbps commensurate with requirements of a wide array of customer base in urban and rural localities, contributed in achieving the above-stated growth. Smart TV has also been made more attractive by offering popular channels as well as expanding the Video on Demand Content.
PTCL’s efforts in DSL business expansion were instrumental in making Pakistan one of the fastest growing countries in the world in terms of broadband growth. The success and growth of multi-media and broadband services contributed to sustain the voice business as well thus helping to retain the land line subscribers with additional data revenues.
The customer base of ‘EVO’ – the wireless broadband based on 3G technology, grew by 19% during the period under review. On the Independence Day of 14th August 2011, your Company launched country’s first 3G enabled EVDO tablet at attractive bundled pricing. PTCL also launched a mid-tier unlimited package on 256 Kbps on its flagship ‘EVO’ service. An attractive and affordable package was also offered on the EVO Cloud – the product enabling simultaneous 3G wireless broadband connectivity through Wi-Fi on multiple devices.
For the PTCL V-fone customers, new package with flexible tariff and attractive mobile calling rate was introduced in the first quarter of current financial year. Further, airtime incentives were offered to encourage customers in purchasing V-fixed wireless phones.
Your Company continued to expand services to the Corporate customers during the period under review. The Data Centre infrastructure was leased for data hosting to some of the large public and private enterprises of repute. PTCL also made contractual arrangements to provide managed servers and their hosting in our Data Centers to numerous provincial education governing bodies.
Technical Performance
During the period under review, PTCL further expanded the Broadband DSL by adding over 200K lines thus bringing the total installed capacity to 1.2 million lines. Your Company now provides DSL coverage in all the major cities and towns of the country including lesser developed and remote areas under the Universal Services Fund projects.
To augment broadband services in line with customer preferences, PTCL also introduced cutting-edge technologies like MSAG (Multi Service Access Gateways) and Ultra Broadband VDSL-2 service. VDSL-2 Bonding Technology enables delivery up to 50 Mbps bandwidth on existing copper pair and has, therefore, facilitated offering of broadband packages from 256 Kbps to 50 Mbps thereby widening the choice for broadband customers.
DIRECTORS’ REPORT
4First Quarter Report 2011
‘EVO’ - the wireless broadband, is now being provided through 1,150 sites all over the country with speed ranging from 3.1 Mbps to 9.3 Mbps making PTCL the first operator in the world to offer such technology on commercial basis.
In order to extend the reach of broadband services to remote and far-flung sites of Corporate customers, 134 DVB-S2 based VSATs were installed during the period under review. Also, over 1,500 dedicated circuits were added in the network to further facilitate the Enterprise segment.
With the objective to facilitate growing data traffic, necessary enhancement in the infrastructure was carried out by adding 290 Km optical fiber on the parallel backbone with the total length thereof at 1,990 Km now. Further, another 120 Km optical fiber cable (OFC) was laid in Baluchistan thus making available a total of 2,100 Km OFC providing connectivity to remote towns and tehsils in the province. The conventional microwave back haul links are also being transformed to IP technology to improve the transmission capability.
As part of Network Transformation, 100K TDM (Time Division Multiplexing) lines have been replaced with Class-5 NGN (Next Generation Switching Network) using MSAGs, while replacement of another 1.2 million lines is in progress. Metro network in major places is being upgraded with Carrier Ethernet technology adding new IP based high capacity metro nodes in broadband core infrastructure. PTCL has also undertaken a pilot project to transform its network at selected places by deploying 15K GPON (Gigabit Passive Optic Network) based lines utilizing optical fiber technology in the access network up to subscriber premises. At the same time, service quality was enhanced by improving the existing Access network through rehabilitation of related network elements. The Access network was also extended to green field areas to provide for expanded PSTN and Broadband connectivity.
Customer Care
During the period under review, your Company continued to further improve various processes with the objective to enhance customer satisfaction levels. The Web-Services portal was reinforced enabling customers not only to get all information about PTCL’s services but also to subscribe for them at their convenience.
Your Company has also installed Public Cash Payment Machines (PCPM) at prominent public places facilitating bill payment by customers. The ambience and working of OSS (One Stop Shops) throughout the country is being further improved and professional training of customer handling is being imparted to OSS staff.
Besides, data relating to customers’ experience is being captured and analyzed regularly by conducting surveys. Based on this data, continual improvement of processes and services is being driven allowing PTCL to closely align with the customers’ expectations.
Corporate Social Responsibility
Similar to the catastrophic floods of last year, Pakistan faced the calamity of floods in current year too. In line with the help extended by PTCL Group in the previous year, a donation of Rs. 50 million was made by PTCL Group in Prime Minister Flood Relief Fund. For this purpose, the cheques were presented to the President of Pakistan by CEOs of PTCL and Ufone.
The management and employees of PTCL remain committed to provide quality services at competitive prices through optimal use of resource for achieving enhanced revenue and improved shareholders’ value.
On behalf of the Board,
Saeed Ahmad Khan Walid IrshaidChairman President & CEO PTCL
Islamabad: October 18, 2011
5Pakistan Telecommunication Company Limited
CONDENSED INTERIMFINANCIAL INFORMATION
6First Quarter Report 2011
CONDENSED INTERIMSTATEMENT OF FINANCIAL POSITIONAS AT SEPTEMBER 30, 2011 (UN-AUDITED)
September 30, June 30, Note 2011 2011 Rs ‘000 Rs ‘000 (Un-Audited) (Audited)
Equity and liabilities
Equity
Share capital and reserves
Share capital 51,000,000 51,000,000Revenue reserves Insurance reserve 2,385,532 2,385,532 General reserve 30,500,000 30,500,000 Unappropriated profit 15,778,822 14,376,349
48,664,354 47,261,881Unrealized gain on available-for-sale investments 39,217 30,590
Taxation Current (576,402) (1,243,544) Deferred (176,123) 126,739
(752,525) (1,116,805)
Profit for the period 1,402,473 2,081,376
Other comprehensive income for the period
Unrealized gain on available-for-sale investments -net of tax 8,627 –
Total comprehensive income for the period 1,411,100 2,081,376
Earnings per share - basic and diluted (Rupees) 0.28 0.41
The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.
Chairman President & CEO
9Pakistan Telecommunication Company Limited
CONDENSED INTERIMSTATEMENT OF CASH FLOWSFOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)
Note September 30, September 30, 2011 2010 Rs ‘000 Rs ‘000
Cash flows from operating activities
Cash generated from operations 5,804,810 2,607,308Long term security deposits (10,859) 817Employees’ retirement benefits paid (75,618) (116,226)Payment of other VSS components (1,091) (1,646)Finance costs paid (42,859) (49,688)Income tax paid (1,190,419) (470,757)
Net cash inflows from operating activities 4,483,964 1,969,808
Cash flows from investing activities
Capital expenditure (2,432,220) (2,510,083)Proceeds from disposal of property, plant and equipment – 7,613Long-term loans - net 26,817 20,815PTA WLL license fee – (1,894,950)Loan to the wholly owned subsidiary - PTML – (4,000,000)Return on long-term loans and short-term investments 610,995 753,621
Net cash inflows from investing activities (1,794,408) (7,622,984)
Cash flows from financing activities
Dividend paid (3,351,120) (3,356,350)
Net cash outflows from financing activities (3,351,120) (3,356,350)
Net decrease in cash and cash equivalents (661,564) (9,009,526)Cash and cash equivalents at beginning of the period 10,271,285 19,916,009
Cash and cash equivalents at end of the period 10 9,609,721 10,906,483
The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.
Chairman President & CEO
CONDENSED INTERIMSTATEMENT OF CASH FLOWSFOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)
10First Quarter Report 2011
CONDENSED INTERIMSTATEMENT OF CHANGES IN EQUITYFOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)
Issued, subscribed and paid-up capital Revenue reserves Unrealized gain on Insurance General Unappropriated available-for- sale Class “A” Class “B” reserve reserve profit investments Total
Balance as at July 01, 2010 37,740,000 13,260,000 2,113,704 30,500,000 16,145,007 – 99,758,711
Total comprehensive incomefor the period
Profit for the period – – – – 2,081,376 – 2,081,376 Other comprehensive income – – – – – – –
– – – – 2,081,376 – 2,081,376
Balance as at September 30, 2010 37,740,000 13,260,000 2,113,704 30,500,000 18,226,383 – 101,840,087
Balance as at July 01, 2011 37,740,000 13,260,000 2,385,532 30,500,000 14,376,349 30,590 98,292,471
Total comprehensive incomefor the period
Profit for the period – – – – 1,402,473 – 1,402,473 Other comprehensive income – – – – – 8,627 8,627
– – – – 1,402,473 8,627 1,411,100
Balance as at September 30, 2011 37,740,000 13,260,000 2,385,532 30,500,000 15,778,822 39,217 99,703,571
The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.
Chairman President & CEO
11Pakistan Telecommunication Company Limited
NOTES TO AND FORMING PART OF THECONDENSED INTERIM FINANCIAL INFORMATIONFOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)
1. The Company and its operations
Pakistan Telecommunication Company Limited (“the Company”) was incorporated in Pakistan on December 31, 1995 and commenced business on January 1, 1996. The Company, which is listed on the Karachi, Lahore and Islamabad stock exchanges, was established to undertake the telecommunication business formerly carried on by the Pakistan Telecommunication Corporation (PTC). PTC’s business was transferred to the Company on January 1, 1996 under the Pakistan Telecommunication (Reorganization) Act, 1996, on which date, the Company took over all the properties, rights, assets, obligations and liabilities of PTC, except those transferred to the National Telecommunication Corporation (NTC), the Frequency Allocation Board (FAB), the Pakistan Telecommunication Authority (PTA) and the Pakistan Telecommunication Employees Trust (PTET). The registered office of the Company is situated at PTCL Headquarters, G-8/4, 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 in territories of Azad Jammu and Kashmir and Gilgit-Baltistan.
2. Statement of Compliance
This condensed interim financial information of the Company for the three months period ended September 30, 2011 has been prepared in accordance with the requirements of International Accounting Standard (IAS) 34 - Interim Financial Reporting and provisions of and directives issued under the Companies Ordinance, 1984. In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed.
3. Significant accounting policies
The accounting policies and the methods of computations adopted in the preparation of this condensed interim financial information are the same as those applied in the preparation of annual audited financial statements of the Company for the year ended June 30, 2011.
4. Significant accounting judgements and estimates
The preparation of this condensed interim financial information in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. Estimates and judgements are continually evaluated and are based on historic experience including expectation of future events that are believed to be reasonable under the circumstances.
Estimates and judgements made by the management in preparation of this condensed interim financial information are the same as those used in the preparation of annual audited financial statements of the Company for the year ended June 30, 2011.
5. Contingencies and commitments
5.1 Contingencies There has been no material change in contingencies as disclosed in the last
annual audited financial statements of the Company.
5.2 Commitments Commitments, in respect of contracts for capital expenditure, amount to Rs
NOTES TO AND FORMING PART OF THECONDENSED INTERIM FINANCIAL STATEMENTSFOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)
12First Quarter Report 2011
September 30, June 30, 2011 2011 Note (Un-Audited) (Audited) Rs ‘000 Rs ‘000
6. Property, plant and equipment
Operating assets 6.1 75,054,505 73,788,459 Capital work-in-progress 14,408,392 18,588,817
89,462,897 92,377,276
6.1 Operating assets
Opening book value 73,788,459 73,960,689 Additions during the period / year - at cost 6.2 4,155,291 11,459,584
77,943,750 85,420,273
Disposals during the period / year - at book value – (977) Depreciation for the period / year (2,889,245) (11,630,837)
(2,889,245) (11,631,814)
Closing book value 75,054,505 73,788,459
6.2 Details of additions during the period / year:
Land - freehold – 233 Buildings on freehold land 203,479 339,793 Lines and wires 648,200 1,878,997 Apparatus, plant and equipment 3,287,656 4,937,900 Office equipment 8,015 14,451 Computer equipment 1,846 45,959 Furniture and fittings 6,095 6,478 Vehicles – 148,035 Submarine cables – 4,087,738
4,155,291 11,459,584
7. Long term loans
These include unsecured loans of Rs 11,000,000 thousand (June 30, 2011: Rs 11,000,000 thousand) to Pak Telecom Mobile Limited, a wholly owned subsidiary of the Company, under subordinated debt agreements. These loans are recoverable in eight equal quarterly installments commencing after a grace period of 3 to 4 years by 2015, carrying mark-up at the rate of three months KIBOR plus 82 to 180 basis points.
13Pakistan Telecommunication Company Limited
Three months period ended September 30, September 30, 2011 2010 (Un-Audited) (Un-Audited) Rs ‘000 Rs ‘000
8. Transactions with related parties Relationship with the Company Nature of transaction
i. Subsidiaries Purchase of goods and services 359,188 392,718 Sale of goods and services 1,162,733 1,299,530 Mark-up on long term loans 408,818 361,559 Disbursement of loans – 4,000,000
ii. Associated undertakings Technical services fee - note 8.1 466,090 437,386 Purchase of goods and services 248,910 347,128 Sale of goods and services 408,305 1,400,787
iii. Employees’ benefit plans Contribution to Pakistan Telecommunication Employees’ Trust (PTET) 643 992 PTCL employees’ GPF Trust 2,611 4,136
iv. Directors, Chief Executive Fees, remuneration including and Executives benefits and perquisites 256,401 239,674
September 30, June 30, 2011 2011 (Un-Audited) (Audited) Rs ‘000 Rs ‘000
Period-end balances
Receivables from related parties
Long term loans to subsidiary 11,000,000 11,000,000
8.1 This represents PTCL’s share of fee payable to Emirates Telecommunication Corporation (Etisalat) under an agreement for technical services, effective October 01, 2006, at the rate of 3.5% of PTCL group’s consolidated annual revenue.
14First Quarter Report 2011
Three months period ended September 30, September 30, 2011 2010 (Un-Audited) (Un-Audited) Rs ‘000 Rs ‘000
9. Cash generated from operations
Profit before tax 2,154,998 3,198,181
Adjustments for non-cash charges and other items:
Depreciation and amortization 2,954,665 2,879,345 Provision for doubtful trade debts 405,744 435,931 Employees’ retirement benefits 981,738 810,996 Imputed interest on consideration payable on MAXCOM 1,101 2,166 Interest on long-term loans (408,818) (335,413) Gain on disposal of property, plant and equipment – (7,344) Unrealized gain on available-for-sale investments 8,627 (6,994) Dividend income – (644,000) Return on bank placements (218,243) (355,259) Provision for obsolete stores, spares and loose tools – 49,062 Amortization of USF grants (23,742) – Finance costs 42,859 67,621
5,898,929 6,094,292
Effect on cash flows due to working capital changes: (Increase) / decrease in current assets:
Stores, spares and loose tools (277,030) 107,908 Trade debts (1,564,007) (3,351,475) Loans and advances (270,784) (263,175) Recoverable from tax authorities (197,721) 165,872 Other receivables (198,396) (99,614)
(2,507,938) (3,440,484)
Increase / (decrease) in current liabilities: Trade and other payables 2,413,819 (46,500)
5,804,810 2,607,308
10. Cash and cash equivalents
Short term investments 6,222,788 7,038,553 Cash and bank balances 3,386,933 3,867,930
This condensed interim financial information for the three months period ended September 30, 2011 was authorised for issue on October 18, 2011 by the Board of Directors of the Company.
Chairman President & CEO
15Pakistan Telecommunication Company Limited
CONDENSED INTERIMCONSOLIDATED FINANCIAL INFORMATION
16First Quarter Report 2011
CONDENSED CONSOLIDATED INTERIMSTATEMENT OF FINANCIAL POSITIONAS AT SEPTEMBER 30, 2011 (UN-AUDITED)
September 30, June 30, Note 2011 2011 Rs ‘000 Rs ‘000 (Un-Audited) (Audited)
Equity and liabilities
Equity
Share capital and reserves
Share capital 51,000,000 51,000,000Revenue reserves Insurance reserve 2,385,532 2,385,532 General reserve 30,500,000 30,500,000 Unappropriated profit 25,895,112 23,669,848
58,780,644 56,555,380 Unrealized gain on available-for-sale investments 39,217 30,590
109,819,861 107,585,970
Liabilities
Non-current liabilities
Long-term loans from banks 13,000,000 11,000,000 Liability against assets subject to finance lease 81,584 83,439 Payable to PTA against license fee 145,111 138,246 Long-term security deposits 1,681,485 1,646,400 Deferred taxation 16,229,983 15,498,413 Employees’ retirement benefits 17,867,841 17,018,391 Deferred government grants 3,607,843 3,631,585 Long-term vendor liability 1,346,066 3,188,375
53,959,913 52,204,849
Current liabilities
Trade and other payables 34,542,481 34,306,442 Interest accrued 99,795 387,114 Short-term running finance – 234,676
Current portions of: Long-term loans from banks – 9,000,000 Liability against assets subject to finance lease 32,075 32,075 Payable to PTA against license fee 41,870 42,984 Long-term vendor liability 3,016,502 3,232,951 Unearned income 1,703,409 1,592,680 Dividend payable 97,188 3,375,631
39,533,320 52,204,553
Total equity and liabilities 203,313,094 211,995,372
Contingencies and commitments 5
The annexed notes from 1 to 10 form an integral part of this condensed consolidated interim financial information.
Chairman
17Pakistan Telecommunication Company Limited
September 30, June 30, Note 2011 2011 Rs ‘000 Rs ‘000 (Un-Audited) (Audited)
156,663,508 160,741,057 Current assets Stores, spares and loose tools 3,646,518 3,369,488 Stock-in-trade 532,075 577,434 Trade debts 10,681,762 9,434,885 Loans and advances 1,103,367 773,746 Deposits and prepayments 1,578,708 1,295,348 Accrued interest 243,710 377,822 Recoverable from tax authorities 14,154,674 13,317,194 Receivable from Government of Pakistan 2,164,072 2,164,072 Other receivables 565,394 504,042 Short-term investments 6,222,788 2,642,378 Cash and bank balances 5,756,518 16,797,906
46,649,586 51,254,315
Total assets 203,313,094 211,995,372
President & CEO
18First Quarter Report 2011
CONDENSED CONSOLIDATED INTERIMSTATEMENT OF COMPREHENSIVE INCOMEFOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)
September 30, September 30, 2011 2010 Rs ‘000 Rs ‘000
Revenue 27,199,049 25,357,600 Cost of services (17,958,647) (16,573,324)
Gross profit 9,240,402 8,784,276
Administrative and general expenses (3,592,202) (3,208,877)Selling and marketing expenses (1,926,835) (1,779,700)Other operating income 652,299 942,829
Taxation Current (714,073) (1,376,519) Deferred (731,570) (525,641)
(1,445,643) (1,902,160)
Profit for the period 2,225,264 2,422,887
Other comprehensive income for the period
Unrealized gain on available-for-sale investments -net of tax 8,627 –
Total comprehensive income for the period 2,233,891 2,422,887
Earnings per share - basic and diluted (Rupees) 0.44 0.48
The annexed notes from 1 to 10 form an integral part of this condensed consolidated interim financial information.
Chairman President & CEO
19Pakistan Telecommunication Group
CONDENSED CONSOLIDATED INTERIMSTATEMENT OF CASH FLOWSFOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)
Note September 30, September 30, 2011 2010 Rs ‘000 Rs ‘000
Cash flows from operating activities
Cash generated from operations 6 11,151,810 8,025,484 Long term security deposits 35,084 62,013 Employees’ retirement benefits paid (156,763) (189,570)Payment of other VSS components (1,091) (1,646)Finance costs paid (967,120) (313,685)Income tax paid (1,353,832) (566,389)
Net cash inflows from operating activities 8,708,088 7,016,207
Cash flows from investing activities
Capital expenditure (3,989,552) (3,788,222)Proceeds from disposal of property, plant and equipment 25,288 7,631 Long-term loans - net 26,817 20,815PTA license fee – (1,894,950)Return on long-term loans and short-term investments 414,790 549,366
Net cash inflows from investing activities (3,522,657) (5,105,360)
Cash flows from financing activities
Long-term loan received 2,000,000 2,000,000 Long-term vendor liability (2,058,758) (9,072,440)Liabilities against assets subject to finance lease (1,855) – Long-term loan paid (9,000,000) – Dividend paid (3,351,120) (3,356,350)
Net cash outflows from financing activities (12,411,733) (10,428,790)
Net decrease in cash and cash equivalents (7,226,302) (8,517,943)Cash and cash equivalents at beginning of the period 19,205,608 23,566,425
Cash and cash equivalents at end of the period 7 11,979,306 15,048,482
The annexed notes from 1 to 10 form an integral part of this condensed consolidated interim financial information.
Chairman President & CEO
CONDENSED CONSOLIDATED INTERIMSTATEMENT OF CASH FLOWSFOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)
20First Quarter Report 2011
CONDENSED CONSOLIDATED INTERIMSTATEMENT OF CHANGES IN EQUITYFOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)
Issued, subscribed and paid-up capital Revenue reserves Unrealized gain on Insurance General Unappropriated available-for- sale Class “A” Class “B” reserve reserve profit investments Total
Balance as at July 01, 2010 37,740,000 13,260,000 2,113,704 30,500,000 24,461,054 – 108,074,758
Total comprehensive incomefor the period
Profit for the period – – – – 2,422,887 – 2,422,887 Other comprehensive income – – – – – – –
– – – – 2,422,887 – 2,422,887
Balance as at September 30, 2010 37,740,000 13,260,000 2,113,704 30,500,000 26,883,941 – 110,497,645
Balance as at July 01, 2011 37,740,000 13,260,000 2,385,532 30,500,000 23,669,848 30,590 107,585,970
Total comprehensive incomefor the period
Profit for the period – – – – 2,225,264 – 2,225,264 Other comprehensive income – – – – – 8,627 8,627
– – – – 2,225,264 8,627 2,233,891
Balance as at September 30, 2011 37,740,000 13,260,000 2,385,532 30,500,000 25,895,112 39,217 109,819,861
The annexed notes from 1 to 10 form an integral part of this condensed consolidated interim financial information.
Chairman President & CEO
21Pakistan Telecommunication Group
NOTES TO AND FORMING PART OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATIONFOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)
1. Constitution and ownership
The condensed consolidated interim financial information of the Pakistan Telecommunication Company Limited and its subsidiaries (“the Group”) comprise of the financial information of:
Pakistan Telecommunication Company Limited (PTCL) PTCL provides telecommunication services in Pakistan. PTCL owns and operates
telecommunication facilities and provides domestic and international telephone services and other communication facilities throughout Pakistan. PTCL has also been licensed to provide such services to territories in Azad Jammu & Kashmir and Gilgit-Baltistan.
Pak Telecom Mobile Limited (PTML) PTML provides cellular mobile telephone services throughout Pakistan under the
brand name of Ufone.
2. Basis of preparation
This condensed consolidated interim financial information is un-audited and is being submitted to the members in accordance with the requirements of Section 245 of the Companies Ordinance, 1984 and International Accounting Standard (IAS) 34 ‘Interim Financial Reporting’. This condensed consolidated interim financial information does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the financial statements of the Group for the year ended June 30, 2011.
3. Significant accounting policies
The accounting policies adopted in the preparation of this condensed consolidated interim financial information are the same as those applied in the preparation of annual audited financial statements of the Group for the year ended June 30, 2011.
4. Significant accounting judgements and estimates
The preparation of financial information in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. Estimates and judgements are continually evaluated and are based on historic experience including expectation of future events that are believed to be reasonable under the circumstances.
Estimates and judgements made by the management in preparation of this condensed consolidated interim financial information are the same as those used in the preparation of annual audited financial statements of the Group for the year ended June 30, 2011.
5. Contingencies and commitments
5.1 Contingencies There has been no material change in contingencies since last audited financial
statements of the Group.
5.2 Commitments Commitments in respect of letter of credit for purchase of stock amount to
Rs.162,634 thousand (June 30, 2011: 256,867 thousand) and contracts for capital expenditure amount to Rs.18,225,472 thousand (June 30, 2011: Rs. 17,721,554 thousand).
NOTES TO AND FORMING PART OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTSFOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)
22First Quarter Report 2011
Three months period ended September 30, September 30, 2011 2010 (Un-Audited) (Un-Audited) Rs ‘000 Rs ‘000
6. Cash generated from operations
Profit before tax 3,670,907 4,325,047
Adjustments for non-cash charges and other items:
Depreciation and amortization 5,520,863 5,205,332 Provision for doubtful trade debts 411,814 446,552 Provision for stock-in-trade - 49,062 Employees’ retirement benefits 1,006,213 837,248 Imputed interest 1,101 2,166 Gain on disposal of property, plant and equipment (10,380) (7,362) Unrealised gain on available-for-sale investments 8,627 (6,994) Return on bank placements (290,343) (396,165) Amortization of USF grants (23,742) - Finance costs 679,915 437,460
10,974,975 10,892,346
Effect on cash flows due to working capital changes: ( Increase) / decrease in current assets:
Stores, spares and loose tools (277,030) 107,908 Stock in trade 45,359 (74,900) Trade debts (719,738) (3,497,076) Loans and advances (282,462) (244,748) Deposits and prepayments (117,490) 123,603 Recoverable from tax authorities (197,721) 165,872 Other receivables (198,396) (99,614)
(1,747,478) (3,518,955)
Increase / (decrease) in current liabilities:
Trade and other payables 1,813,582 656,846 Unearned income 110,731 (4,753)
1,924,313 652,093
11,151,810 8,025,484
23Pakistan Telecommunication Group
Three months period ended September 30, September 30, 2011 2010 (Un-Audited) (Un-Audited) Rs ‘000 Rs ‘000
7. Cash and cash equivalents
Short-term investments 6,222,788 7,038,553 Cash and bank balances 5,756,518 8,009,929
11,979,306 15,048,482
8. Segment Information
For Management purposes, the Group is organized into business units based on their services and has two reportable operating segments. Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.
8.1 Revenue information regarding the Group’s operating segments for the quarter ended September 30, 2011 and 2010 is tabulated below:
Wireline Wireless Total Note Rs ‘000 Rs ‘000 Rs ‘000
This condensed consolidated interim financial information was authorised for issue on October 18, 2011 by the Board of Directors of the holding Company.
10. General
Figures presented in this condensed consolidated interim financial information have been rounded off to the nearest thousand rupees.
