Beruflich Dokumente
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ANNUAL
REPORT 2013
Annual Report
2013
Contents
02/
03/
05/
This is
Grameenphone
Vision, Mission & Values
History &
Milestones
06/
07/
Accolades in 2013
09/
Performance
at a Glance - 2013
10/
Corporate Information
11/
13/
15/
17/
45/
Organisational Structure
Directors
Profile
22/
26/
29/
47/
48/
49/
50/
Directors Report
67/
68/
The
Shareholders
Corporate Governance
in Grameenphone
39/
40/
Corporate Responsibility
at Grameenphone
42/
113/
117/
119/
Annual Report
2013
This Is Grameenphone
NOVEMBER 11
1996
MARCH 26
This is Grameenphone
NOVEMBER 11
2009
1997
02
Awarded 2G License by
Bangladesh Telecommunication
Regulatory Commission
SEPTEMBER 12
2013
AUGUST 07
2012
Annual Report
2013
&
Values
Vision
Mission
Vision
Empower societies
We provide the power of digital communication,
enabling everyone to improve their lives, build
societies and secure a better future for all.
Mission
Values
MAKE IT EASY
Everything we produce should be easy to understand and use.
We should always remember that we try to make customers
lives easier.
KEEP PROMISES
Everything we do should work perfectly. If it doesnt, were there
to put things right. Were about delivery, not over-promising.
Were about actions, not words.
BE INSPIRING
Were creative. We bring energy and imagination to our work.
Everything we produce should look fresh and modern.
BE RESPECTFUL
We acknowledge and respect local cultures. We want to be a
part of local communities wherever we operate. We want to
help customers with their specific needs in a way that suits way
of their life best.
03
Annual Report
2013
2012
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
1999
1998
1997
1996
2011
05
Annual Report
2013
Bondhu
Business Solutions
Postpaid
Xplore
Internet
3G Smart Packs
Prepaid
Enterprise
Solution
Value Added
Services (VAS)
Nishchinto
Adjusted djuice
Ekota
Business Solutions
Smile
GP Public Phone
Ekota
M- Reporting
Tracking
Vehicle Tracking
Messaging
Web SMS
Office
Connectivity
GP Connect
mCentrex
Religious Services
Career Service
Call Block
Instant Messaging
Pay For Me
Online Games
Roaming
Outbound Roaming
Inbound Roaming
Device
Adjacent
Businesses
Wholesale Business*
SMS Chat
Quick Search
Spondon
Emergency Balance
Internet SIM
2G Smart Packs
2G Minipack (9 MB)
2G Minipack (2 MB)
2G Pay As You Go
News Services
Matrimony Service
GP World
Mobile Applications
Mobile Reporting
Music Radio
Corporate Services
Voice Chat
Directory Services
Welcome Tune
Internet SIM
Aapon
Team Tracker
Music News
BlackBerry
Business SMS
Shohoj
Village Phone
GP Public Phone
06
Amontron
Mobile
Office
Stock Update
GP App
Media Services
Partner Services
Jokes Services
Downloadable Contents
Healthline
Studyline
Entertainment Box
Buddy Tracker
International SMS
Sports Services
Education Service
Mobile Backup
Infotainment
Messaging
Enablers
Video Doctor
E-care
International MMS
Modem
Financial Services**
* In compliance with BTRC guidelines, GP is sharing its passive infrastructure with other operators under Wholesale Business.
** Introduced different Financial Services as electronic ticketing, bill collection, electronic lottery and remittance disbursement
under the brand MobiCash.
Annual Report
2013
Accolades In 2013
In 2013, Grameenphone won a number of awards. With integrity and hard work, we continue our journey with
recognition and goodwill. We get better every year and our awards inspire us to GO Beyond.
Best Presented
Annual Report
2012
Won the award from the
Institute of Chartered
Accountants of Bangladesh
(ICAB) in recognition of
transparency,
accountability and
compliance with local and
international standards.
07
mBillionth
Award
Grameenphones SMS based
solution for maintenance of
tubewells to ensure safe
drinking water in partnership
with HYSAWA received
mBillionth award by Digital
Empowerment Foundation.
Accolades In 2013
Brand Award
Received a total of 5 awards;
Three Grand Prix (highest
recognition), One Gold and
One Silver at the 3rd edition
of the Commward organized
by Brand Forum.
Annual Report
2013
Performance
at a Glance 2013
Figures in BDT
REVENUE
+5.1%
NOCF
PER SHARE
+23.5%
2013
2012
2013
2012
96.6
91.9
27.46
22.23
BILLION
BILLION
OPERATING
PROFIT
-1.4%
NAV
PER SHARE
-12.2%
2013
2012
2013
2012
33.2
33.7
23.06
26.26
+8.8%
EARNINGS
PER SHARE
-16.0%
2012
2013
2012
BILLION
BILLION
PROFIT
BEFORE TAX
2013
32.9
30.2
BILLION
BILLION
NET PROFIT
AFTER TAX
-16.0%
2013
2012
14.7
BILLION
17.5
BILLION
10.89
12.96
Annual Report
2013
Corporate Information
Company Name
Grameenphone Ltd.
Company Registration No.
C-31531 (652)/96
Board of Directors
Chairman
Sigve Brekke
Corporate Information
Directors
10
M Shahjahan
Md. Ashraful Hassan
Tore Johnsen
Parveen Mahmud
Pal Wien Espen
Hakon Bruaset Kjol
Hans Martin Hoegh Henrichsen
Independent Directors
Dr. Jamaluddin Ahmed FCA
Rokia Afzal Rahman
Company Secretary
Hossain Sadat
Audit Committee
Dr. Jamaluddin Ahmed FCA (Chairman)
M Shahjahan
Tore Johnsen
Hossain Sadat (Secretary)
Treasury Committee
M Shahjahan (Chairman)
Pal Stette
Md. Mainur Rahman Bhuiyan
Imdadul Haque (Secretary)
Legal Form
A public listed company with limited liability. Incorporated as
private limited company on October 10, 1996 and subsequently
converted to a public limited company on June 25, 2007. Listed on
the Dhaka and Chittagong Stock Exchanges on November 11,
2009.
Management Team
Vivek Sood, Chief Executive Officer
Md. Mainur Rahman Bhuiyan, Acting Chief Financial Officer
Tanveer Mohammad, Chief Technology Officer
Quazi Mohammad Shahed, Chief Human Resources Officer
Allan Bonke, Chief Marketing Officer
Mahmud Hossain, Chief Corporate Affairs Officer
Erlend Prestgard, Head of Strategy and Project Office
Statutory Auditors
ACNABIN
Chartered Accountants
Registered Office
GPHouse
Bashundhara, Baridhara
Dhaka-1229, Bangladesh
Annual Report
2013
many others.
we introduced 3G packages in
process.
respective customers.
Bangladesh.
2013 AT A GLANCE
11
Annual Report
2013
promoters of our services and
international markets.
sports.
12
Bangladesh.
inclusion in Bangladesh by
the community.
Excellence in Creative
Annual Report
2013
The Shareholders
The shareholding structure comprises of mainly two sponsor Shareholders namely Telenor Mobile Communications AS
(55.80%) and Grameen Telecom (34.20%). The rest 10.00% shareholding includes General Public & other Institutions.
Grameen
Telecom
Telenor Mobile
Communications AS
(34.20%)
(55.80%)
(10.00%)
TMC, a company established under the laws of the Kingdom of Norway, seeks to develop and invest in
telecommunication solutions through direct and indirect ownership of companies and to enter into national and
international alliances relating to telecommunications. It is a subsidiary of Telenor Mobile Holdings AS and an affiliate of
Telenor. Telenor ASA is the leading Telecommunications Company of Norway listed on the Oslo Stock Exchange. TMC
owns 55.80% shares of Grameenphone Ltd.
Telenor's strong international expansion in recent years has been based on leading-edge expertise, acquired in the
Norwegian and Nordic markets, which are among the most highly developed technology markets in the world. It has
substantial International operations in mobile telephony, satellite operations and pay Television services. In addition to
Norway and Bangladesh, Telenor owns mobile telephony companies in Sweden, Denmark, Hungary, Serbia, Montenegro,
Bulgaria, Thailand, Malaysia, Pakistan, India and Myanmar. Telenor has 166 million consolidated mobile subscriptions
worldwide as of December 31, 2013.
Telenor uses the expertise it has gained at its home and international markets for the development of emerging markets
like Bangladesh.
As part of the conversion of Grameenphone from a private limited to a public limited company, Telenor Mobile
Communications AS transferred ten (10) shares each on May 31, 2007 to its three (3) affiliate organizations namely Nye
Telenor Mobile Communications II AS, Norway; Telenor Asia Pte. Ltd., Singapore; and Nye Telenor Mobile
Communications III AS, Norway.
The Shareholders
13
Annual Report
2013
GTCs mandate is to provide easy access to GSM cellular services in rural Bangladesh and create new opportunities for
income generation through self-employment by providing villagers, mostly the poor rural women, with access to modern
information and communication-based technologies.
Grameen Telecom, with its field network, administers the Village Phone Program, through which Grameenphone
provides its services to the fast growing rural customers. Grameen Telecom trains the operators and handles all
service-related issues.
GTC has been acclaimed for the innovative Village Phone Program. GTC & its Chairman Nobel Peace prize laureate
Professor Muhammad Yunus have received several awards which include; First ITU World information Society Award in
2005; Petersburg Prize for Use of the IT to improve Poor Peoples Lives in 2004; GSM Association Award for GSM in
Community Service in 2000.
As part of the conversion of Grameenphone from a private limited to a public limited company, Grameen Telecom
transferred one (1) share each on May 31, 2007 to Grameen Kalyan and Grameen Shakti.
The Shareholders
Sl No.
14
Name of Shareholders
Number of Ordinary
Shares Held
Percentage
753,407,724
55.80%
Grameen Telecom
461,766,409
34.20%
11,817,000
0.88%
11,037,221
0.82%
4,626,000
0.34%
4,452,746
0.33%
3,550,000
0.26%
2,361,528
0.17%
2,164,800
0.16%
10
2,114,800
0.16%
11
2,096,700
0.16%
12
1,802,000
0.13%
13
1,636,800
0.12%
14
SSBT A/C Morgan Stanley Institutional Fund, Inc.Frontier Emerging Markets Portfolio
1,537,272
0.11%
15
1,283,800
0.10%
16
1,196,600
0.09%
17
Sonali Bank
1,151,400
0.09%
18
1,130,400
0.08%
19
1,104,305
0.08%
20
Bangladesh Fund
1,070,000
0.08%
Total
(as per CDBL records)
1,271,307,505
94.15%
Annual Report
2013
Organisational Structure
Board
of
Directors
Organisational Structure
Vivek Sood
Chief Executive
Officer
Hossain Sadat
Company Secretary
15
Md. Mainur
Rahman Bhuiyan
Tanveer
Mohammad
Acting Chief
Financial Officer
Chief Technology
Officer
Allan Bonke
Chief Marketing
Officer
Mahmud
Hossain
Chief Corporate
Affairs Officer
Quazi Mohammad
Shahed
Chief Human
Resources Officer
Erlend
Prestgard
Head of Strategy
and Project Office
Annual Report
2013
Directors Profile
Mr. Sigve Brekke was appointed to the Board on September 1, 2008 and is also the Chairman of
Grameenphone Board. Mr. Brekke has held a number of positions in the Telenor Group. He joined
Telenor Asia Pte. Ltd. in 1999 as Manager of Business Development and later became the
Managing Director. He served as the Co-Chief Executive Officer (Co-CEO) of Total Access
Communication PLC (dtac) from 2002 to 2005, was the sole CEO and Director from 2006 to
2008 and was elected as the Vice Chairman of dtac Board in 2008. He also served as Director
and CEO of United Communication Industry PLC from 2005 to 2008. In July 2008, he was
appointed as Director and Executive Vice President of Telenor Group, Head of Asia Region,
Telenor. In 2009, Mr. Brekke was elected as Director of Unitech Wireless Ltd. (Uninor) and
the Chairman of DiGi.Com Berhad Board. He was appointed Managing Director of Uninor
in July 2010. Prior to joining Telenor, Mr. Brekke served as the Deputy Minister
(State Secretary) of Defence in Norway in 1993 and was also an associate research
fellow at the John F. Kennedy School of Government, Harvard University. Mr. Brekke
obtained Masters degree in Public Administration from John F. Kennedy School of
Government, Harvard University.
Sigve Brekke
Mr. Tore Johnsen was appointed to the Board on December 10, 2013. Mr. Tore Johnsen has
a long career in Telenor since 1974. He is now Senior Vice President at Telenor Group,
Asia Region responsible for Performance Management of the Asian companies where
Telenor is a shareholder. He has been CEO of 4 Asian companies. Grameenphone Ltd.
from 2011 to 2013, Total Access Communication PLC (dtac), Thailand from 2008 to
2011, Telenor Pakistan from 2004 to 2008 and DiGi.Com Berhad, Malaysia from 2001
to 2004. Since joining Telenor Group in 1974, he has held a number of managerial
positions and international assignments. He holds a Master of Science in addition to
studies in International Business Management.
Tore Johnsen
Directors Profile
M Shahjahan
Mr. M Shahjahan was appointed to the Board on June 26, 2006 and is also Chairman of the
Companys Treasury Committee. He was appointed as Deputy Managing Director of
Grameen Bank on July 26, 2011. In addition, he has been made responsible to act as
Managing Director of the same organization since August 14, 2011. Earlier, he served as the
General Manager and Head of the Accounts, Finance, Planning, Monitoring and Evaluation
Division of Grameen Bank. Prior to joining the Company, he served in several executive
management positions in Grameen Bank, including Chief of the Audit Department and
Zonal Manager. Mr. Shahjahan is a member of the Board of Directors of several
companies that work in the fields of health, education, agriculture, welfare, renewable
energy and telecommunications. He obtained a Bachelor of Commerce (Honours)
degree in Accounting from the University of Dhaka in 1976, as well as a Masters
degree in Accounting in 1977 and a Masters degree in Finance in 1981. He was
awarded ICAB Medal (Silver) for passing the C.A. Intermediate examination at
the earliest eligible chance in 1981.
17
Annual Report
2013
Mr. Md. Ashraful Hassan was appointed to the Board on January 20, 2010. He currently serves as
Managing Director of Grameen Telecom, and is engaged in promoting and providing easy
access to GSM cellular services in rural Bangladesh. He also serves as Managing Director of
Grameen Knitwear Ltd., Grameen Distribution Ltd., and Grameen Fabrics & Fashions Ltd.
He gained extensive and diversified knowledge in various industrial sectors especially in the
field of textile focusing on resource efficient production and energy saving products having
wide exposures in the industrial management, export market, labour management and so on.
Mr. Hassan also acquired wide range of experience for different kinds of project
development and industrial setup. He started his career in Grameen Bank, the Nobel
Peace Prize winning organization, in 1984. During his 16 years of tenure with the
Bank, he held various key positions including the Chief of Engineering section. He has
gained extensive knowledge in the field of construction engineering and extended
notable contribution to the infrastructural development of Grameen Bank. He serves
as a member of the Board of Directors of several enterprises that play commendable
role in the fields of renewable energy, health care, food & nutrition, information and
communication technology and so forth. He holds Bachelor of Science in Civil
Engineering from Khulna University of Engineering and Technology, Bangladesh.
Directors Profile
Mr. Hans Martin Hoegh Henrichsen was appointed to the Board on January 22, 2014 and is
member of the Companys Human Resources Committee and Health, Safety, Security &
Environment Committee. He is Senior Vice President in Telenor Asia and serves as Chief
Representative Officer for Bangladesh. Mr. Henrichsen has professional experiences
in the financing and telecommunications industries. He joined Telenor in 2000 and
has since then held several senior positions in the Company. During the past 13 years,
Mr. Henrichsen has worked with project financing and mobile acquisition projects in
markets new to Telenor, most recently with Telenors expansion into Myanmar. He is
a Master of Science (MSc) in Economics and Business Administration from the
Norwegian School of Economics.
18
Mr. Hakon Bruaset Kjol was appointed to the Board on September 14, 2011. He is the
Senior Vice President and Head of Corporate Affairs of Asia Region, Telenor Group. Mr. Kjol joined
the Telenor Group in 1995, beginning his career in the domestic mobile operations in Norway.
Since then, he contributed to the Groups growing international presence through his strategic
involvement in Telenors international mobile activities where he played significant roles in
operational development and merger and acquisition activities both in Europe and Asia.
For the last 13 years, Mr. Kjol has been based in Asia where he continues to assume a key
role in the development of the Group strategy for Asia and managing the Asia business
environment to include the areas of public affairs,regulatory management, government
relations, strategic communications and corporate responsibility. He has been a key
member of several management committees and currently the Director of Total Access
Communication PLC (dtac), Thailand; Telenor Asia Pte Ltd., Singapore; Digi.Com
Berhad, Malaysia and Telenor India Pvt. Ltd., India. Mr. Kjol is a former student of the
Norwegian School of Management majoring in Marketing and Communications.
Annual Report
2013
Ms. Parveen Mahmud FCA was appointed to the Board on October 17, 2012. She is the
Managing Director of Grameen Telecom Trust, and a fellow member of the Institute of
Chartered Accountants of Bangladesh (ICAB). In her diversified professional career,
Ms. Mahmud worked for a substantial amount of time with national and international
development agencies and was a practicing chartered accountant. Ms. Mahmud started
her career with BRAC, and was the Deputy Managing Director of Palli Karma-Sahayak
Foundation (PKSF). She was partner ACNABIN, Chartered Accountants. She was the first
female President of the ICAB for the year 2011 and also the first female Board member in
the South Asian Federation of Accountants (SAFA), the apex accounting professional
body of the SAARC. She was the member of National Advisory Panel for SME
Development of Bangladesh and founding Board member of SME Foundation and
Convenor, SME Womens Forum. Ms. Mahmud serves in various Boards, and was the
Chairperson of Acid Survivors Foundation. She was awarded Begum Rokeya Shining
Personality Award 2006 for womens empowerment by the Narikantha Foundation,
Bangladesh.
Parveen Mahmud
Mr. Pal Wien Espen was appointed to the Board on April 24, 2013. He joined Telenor Legal
Department in 1995 and in 1998, he became Deputy Group General Counsel, and in
2000 he was appointed Group General Counsel. After obtaining his law degree, he joined
focusing on M&A and financing. After that he served as a judge at Nedre Ringerike
Court,Norway during 1994-95 before joining Telenor. Mr. Espen obtained his Law
degree from University of Oslo, Norway and Social Science degree from
Pal Wien Espen
Directors Profile
Bugge, Arentz-Hansen & Rasmussen, one of the major law firms in Norway in 1992,
19
Dr. Jamaluddin Ahmed FCA was appointed to the Board on March 19, 2010 as an Independent Director and is also
Chairman of the Board Audit Committee (since 2012). He is the Chairman of Emerging Credit Rating Company
Limited which is affiliated with the Malaysian Rating Corporation (MRC). Dr. Jamal was the President (2010) of
the Institute of Chartered Accountants of Bangladesh (ICAB). He is the elected Vice President of the
countrys independent think tank-Bangladesh Economic Association. He is engaged in
assignments in Financial, Banking and Energy Sector industries. He worked as country specialist
in Migrant Remittance Management. He was involved in DFID funded Cheque Automation,
Automated Clearing System, mobile banking and in the development of National Payment
System in Bangladesh. He was involved with Bangladesh Energy Regulatory Commission
for introducing Uniform Energy Accounting in Bangladesh. Over his professional career,
Dr. Jamal has written copious publications and conducted numerous research papers
on various aspects. Recently, he completed his paper Demutualization of Stock
Exchanges-Rationale, Comparative Practice and a Roadmap for Bangladesh;
Transparency in Financial Reporting of Central Banks-A Comparison of Practices;
Changing Role of Central Banks - A Comparison of Practices; and Political
Economy of Central Bank Independence. He holds Masters degree in Accounting
from the University of Dhaka, PhD from the Cardiff Business School, under the
University of Wales, United Kingdom, and is also a fellow of ICAB.
Annual Report
2013
Ms. Rokia Afzal Rahman was appointed to the Board on December 6, 2012 as an Independent
Director. A leading woman entrepreneur and a former Adviser to the Caretaker Government
of Bangladesh, Ms. Rahman started her agro-based company in 1980 and further diversified her
business into insurance, media, financial institution and real estate. She is currently the President
of Metropolitan Chamber of Commerce and IndustriesMCCI, Dhaka; Vice President of
International Chamber of Commerce-ICC Bangladesh; Trustee Board Member of
Transparency International BangladeshTIB. Ms. Rahman is founder President of
Bangladesh Federation of Women EntrepreneursBFWE. Her commitment to development
brought her to the Boards of a number of development organizations. She is also Chair
and Managing Director of R. R. Group of Companies; Chair and Managing Director of
Arlinks Group of Companies. Ms Rahman did her Post Graduate Diploma
in Banking from Pakistan.
Companies (other than Grameenphone Ltd.) in which GP Directors hold directorship and committee memberships:
Sl No.
1
Name of Director
Mr. Sigve Brekke
Mr. M Shahjahan
Directors Profile
20
Directorship
dtac, Thailand
Remuneration Committee
None
Remuneration Committee
Nomination Committee
Governance Committee
DiGi Telecommunications
Sdn. Bhd., Malaysia
Audit Committee
None
Annual Report
2013
Sl No.
Name of Director
Directorship
None
None
None
Directors Profile
Audit Committee
10
None
21
Annual Report
Annual Report
2013
Management Team
2013
Management Team
22
23
05
02
06
01
01
03
Tanveer Mohammad
Chief Technology Officer
02
03
Vivek Sood
Chief Executive Officer
04
04
Erlend Prestgard
Head of Strategy and Project Office
05
Mahmud Hossain
Chief Corporate Affairs Officer
06
07
Allan Bonke
Chief Marketing Officer
07
Annual Report
2013
24
Mr. Md. Mainur Rahman Bhuiyan was appointed as Acting CFO, effective from July 18, 2013.
Mr. Mainur has been working with Grameenphone since November 15, 1999. Over his long career
with the Company, he spent a considerable time in Finance and led Business Controlling,
Financial Planning, Reporting and Treasury functions including large overseas syndicated
Financing. Before joining GP, he worked for US Oil companies and KPMG Bangladesh.
Mr. Mainur is a Chartered Accountant and holds a Masters degree in Accounting.
He also obtained a Diploma in Management from National University of Singapore (NUS).
Md. Mainur Rahman Bhuiyan | Acting CFO
Mr. Tanveer Mohammad was appointed as Chief Technology Officer (CTO), effective from
July 01, 2010. Mr. Tanveer has been working with Grameenphone since 1997. In this long journey
with Grameenphone, he has worked with Roll out, Operation and overall network responsibilities.
He has played pivotal roles in developing local entrepreneurs in civil works, tower fabrication,
installation and commissioning and capacity expansion of the network. He has also contributed
towards creating the efficiency focus in the operational activities through aggressive service
level agreements and high customer focus. He has led the network modernization bringing
in huge efficiency in energy consumption and overall opex efficiency. He has also
successfully led Grameenphone to be the first operator to introduce 3G in Bangladesh.
He is taking active part in CTO/CMO board in Telenor. Before joining Grameenphone,
Mr. Tanveer worked with Hyundai Engineering and Construction. He holds a graduation in
Engineering from the Bangladesh University of Engineering and Technology (BUET).
Mr. Allan Bonke was appointed as Chief Marketing Officer (CMO), effective from
August 05, 2012. Before joining Grameenphone, he was Executive Vice President in Uninor, India.
While with Uninor, he was responsible for Uttar Pradesh west (UP) circle operation. He joined
Telenor in 2006 and worked as Director, Business Sales in Telenor Denmark before
joining Uninor. Before joining Telenor, he held senior positions in different Danish
ICT companies. He has a financial background from the Danish banking sector.
He holds a diploma education in business economics from Copenhagen Business
School-CBSI with strategy as line of specialization.
Annual Report
2013
Mr. Quazi Mohammad Shahed was appointed as Chief Human Resources Officer (CHRO), effective
from November 01, 2012. Before joining Grameenphone, he was employed by British American
Tobacco (BAT) as Human Resources Lead, Global SAP, Template & Pilot Project in United
Kingdom. After obtaining his Bachelors Degree in Mechanical Engineering from Bangladesh
University of Engineering and Technology (BUET), he started his career in BAT Bangladesh.
During the early part of his career, he worked in different roles within Operations and
subsequently moved to HR as the Head of HR of BAT Bangladesh in December 2001.
He later worked in Iran, Pakistan, Malaysia and UK in different HR leadership and global
project roles. He has an MBA from North South University, Bangladesh. After Joining
Grameenphone, he undertook many initiatives in the people front that resulted in the
highest employee engagement index growth within the Telenor group in 2013.
Quazi Mohammad Shahed | CHRO
Mr. Erlend Prestgard was appointed as Head of Strategy and Project Office, effective from
September 01, 2013. Before joining Grameenphone, he was Director in the strategy team of
the Telenor ASA. Prior to Telenor and Grameenphone, he worked as Chief Commercial
Officer and Chief Financial Officer with over-the-top service companies delivering music
and TV streaming services. He also has background from McKinsey & Company and UBS
Investment Bank. He holds a Master of Science degree in Economics and Business
Administration from the Norwegian School of Economics and Business Administration.
Erlend Prestgard | Head of Strategy and Project Office
Mr. Mahmud Hossain was appointed as Chief Corporate Affairs Officer (CCAO), effective from
March 08, 2010. He started his career in 1990 when he joined the technical team of the erstwhile
Hutchison BD Telecom Ltd. He worked for Grameenphone, at his first spell with the Company,
as Additional General Manager at Technology Operations during 2000-2001. In his credibly
long career, he also worked for few other telecom operators before rejoining Grameenphone
in August 2009. He obtained his B.Sc. in Electrical & Electronic Engineering from Bangladesh
University of Engineering and Technology (BUET). He obtained his MBA from the Institute
of Business Administration (IBA), Bangladesh. He also holds a Masters (Telecom)
Degree from Concordia University, Canada.
25
Annual Report
2013
Vivek Sood
Message from the Chairman & CEO
26
Sigve Brekke
Chairman
Annual Report
2013
Dear Shareholders,
2013 marked a new beginning for Grameenphone (GP) as
we entered into 3G era. We are now geared up for the
journey towards data centric communication. This will
take us towards fulfilling the strategy of Internet for All.
We started the year with renewed emphasis on customer
engagement while motivating the employees to excel in
the market. That has helped us to pass this challenging
year on an optimistic note.
The most momentous event of the year was getting the
license and spectrums to offer 3G services. On this
occasion, we would like to thank the Ministry of Posts,
Telecommunications and Information Technology,
Bangladesh Telecommunication Regulatory Commission
(BTRC) and the Government of Bangladesh for providing
us the 3G license through a competitive bidding process,
which we believe was another step towards digitalization
of the country.
27
Annual Report
2013
Corporate Governance in GP
Grameenphone (GP) throughout its entire business operation puts persistent
ne
rn
an
ce
ho
am
Gr
le
op
Pe
Go
ve
stakeholders' value are interconnected. With this end in view, GP has been
np
ee
gy
te
ra
t
S
l
oa
Pr
oc
es
s
y
og
ol
n
ch
Te
Commitment
Community
Transparency
Economy
Accountability
Authority
Industry
Compliance
Culture
As a public listed company, GPs Board of Directors plays a crucial role in upholding the interests of all its stakeholders.
The Board of Directors and the Management Team are also dedicated to maintaining a well-established culture of
accountability, transparency, easy-to-understand policies and procedures to ensure effective Corporate Governance at
all the laws of the country and all the internal regulations, policies and procedures to make GP a thoroughly transparent
company. Moreover, recognizing the fact that compliance has been the corner stone of good governance, the Company
meticulously undergoes through the process of statutory audit and compliance certification as required by laws of the
land. As a result, GP has been able to maintain the highest level of integrity and accountability of global standards over
the years.
b)
Board Composition
The Board in GP is comprised of ten (10) Directors, including the Chairman who is elected from amongst the
members. In compliance with the Corporate Governance Guidelines issued by the Bangladesh Securities and
Exchange Commission (BSEC), the Board of Directors has appointed two (2) Independent Directors. We believe
that our Board has the optimum level of knowledge, composure and technical understanding about the
Companys business which, combined with its diversity of culture and background, stands as the perfect platform
to perform and deliver.
Corporate Governance in GP
every level of its operations. The Board of Directors and the Management Team also put their best efforts to comply with
29
Annual Report
2013
c)
Board Meetings
The AoA of the Company requires the Board to meet at least four times a year or more when duly called for in
writing by a Board member. Dates for Board Meetings in a year are decided in advance and notice of each Board
Meeting is served in writing well in advance. Such notice contains detailed statement of business to be transacted
at each meeting. The Board meets for both scheduled meetings and on other occasions to deal with urgent and
important matters that require attention.
d)
Division of work for the Board and Chief Executive Officer (CEO)
The roles of the Board and Chief Executive Officer are separate and delineation of responsibilities is clearly
established, set out in writing and agreed by the Board to ensure transparency and better corporate governance.
To that end, GP has also adopted Rules of Procedure for Chief Executive Officer. The CEO is the authoritative head
for day-to-day management in GP. He acts to reasonably ensure that GP operates business as per the Articles of
Association, decisions made by the Board and Shareholders, as well as according to GP Policies and Procedures
and applicable regulatory legislations.
e)
Access to Information
The Board recognizes that the decision-making process is highly dependent on the quality of information
furnished. In furtherance to this, every Director has access to all information within the Company. Throughout their
Corporate Governance in GP
tenure in office, the Directors are continually updated on the Companys business and the regulatory and industry
30
specific environments in which it operates. These updates are given by way of written briefings and meetings with
senior executives and, where appropriate, external sources.
Board Committees
For better, quicker and furnished flow of information and thereby exercising effective governance, the Board has also
constituted a number of Committees and has delegated certain responsibilities to the Board Committees to assist in the
discharge of its responsibilities. The role of Board Committees is to advise and make recommendations to the Board.
Each Committee operates in accordance with the Terms of Reference (TOR) approved by the Board. The Board reviews
the TOR of the committees from time to time. The Board appoints the members and the Chairman of each committee. A
brief description of each Committee is presented below:
Board
of
Directors
Audit
Committee
a)
Treasury
Committee
Human
Resources
Committee
Health, Safety,
Security &
Environment
Committee
Audit Committee
The GP Audit Committee was established in late 2008 as a sub-committee of the Board and has jurisdiction all
over GP and its subsidiaries. The Audit Committee is comprised of three (3) members of the Board. The Chairman
of the committee is an Independent Director. The Chief Executive Officer, the Chief Financial Officer, the Company
Secretary and the Head of Internal Audit are permanent invitees to the Audit Committee meetings.
Annual Report
2013
The Audit Committee assists the Board in discharging its supervisory responsibilities with respect to internal
control, financial reporting, risk management, auditing matters and GPs processes of monitoring compliance with
applicable legal & regulatory requirements and the Codes of Conduct. The Audit Committee Charter, as approved
by the Board, defines the purpose, authority, composition, meetings, duties and responsibilities of the Audit
Committee.
The Audit Committee met five (5) times during the year 2013 and attendance of the Committee members in the
meetings was as follows:
Name
Dr. Jamaluddin Ahmed FCA
Per Erik Hylland
M Shahjahan
b)
Attendance
5/5
5/5
4/5
Treasury Committee
This committee consists of three (3) members who are appointed by the GP Board. All significant financial matters
which concern the Board are discussed in this committee meeting in detail. Upon endorsement of the Treasury
Committee, such issues are forwarded to the Board for their final review and approval.
The Treasury Committee met three (3) times during the year 2013 and attendance of the Committee members in
Name
M Shahjahan
Pal Stette
Fridtjof Rusten
c)
Attendance
3/3
3/3
3/3
d)
Attendance
2/2
2/2
2/2
Corporate Governance in GP
31
Annual Report
2013
The HSSE Committee met one (1) time during the year 2013 and attendance of the Committee members in the
meeting was as follows:
Name
Attendance
1/1
1/1
1/1
Company Secretary
To ensure effective assimilation and timely flow of information required by the Board and to maintain necessary
liaison with internal organs as well as external agencies, the Board has appointed a Company Secretary. The
Corporate Governance Guidelines issued by the Bangladesh Securities and Exchange Commission (BSEC) also
require a listed company to appoint Company Secretary. In pursuance of the same, the Board of Directors has
appointed Company Secretary and defined his roles & responsibilities. In GP, among other functions, the Company
Secretary:
performs as the bridge between the Board, Management and Shareholders on strategic and statutory
decisions and directions.
Corporate Governance in GP
acts as a quality assurance agent in all information streams towards the Shareholders/Board.
is responsible for ensuring that appropriate Board procedures are followed and advises the Board on
Corporate Governance matters.
acts as the Disclosure Officer of the Company and monitors the compliance of the Acts, rules, regulations,
notifications, guidelines, orders/directives, etc. issued by BSEC or Stock Exchange(s) applicable to the
conduct of the business activities of the Company so as to protect the interests of the investors and other
stakeholders.
32
Company. The Management Team consists of the CEO and other key Managers across the Company. The CEO is the
leader of the team. The Management Team endeavors to achieve the strategic goals & mission of the Company set
by the Board of Directors. The Management Team meets on a weekly basis to monitor the business performance of
the Company.
Annual Report
2013
action-oriented approach towards managing the business. The resource allocations are dynamic and are based
on the intended actions linked with the target and strategy. It aims to build a culture of freedom through
responsibility and thereby leading to increased responsiveness to surrounding changes.
b)
Financial Reporting
GP has strong financial reporting procedures. Financial statements are prepared in accordance with
International/Bangladesh Financial Reporting Standards (IFRS/BFRS), the Companies Act 1994, the Securities
and Exchange Rules 1987 and other applicable financial legislations. The financial data are captured from the
financial reports generated from Oracle ERP (Enterprise Resource Planning) system. These financial statements,
once prepared, are reviewed by CFO and CEO on a regular basis. Upon submission to Group in the form of
Management Accounts, these financial statements are reviewed by Group Accounting and Group Finance. At every
quarter, external auditors review the quarterly financial statements prepared in accordance with local financial
reporting policies and Company procedures. The annual audit is conducted by the external auditors, who are
appointed by the Board of Directors followed by the Shareholders approval in the Annual General Meeting. Apart
from the statutory reporting of financial statements, Grameenphone also maintains regular reporting to its group
company Telenor, which consolidates all its subsidiaries financial information in its consolidated financial
statements.
c)
Operational Excellence
Cost Efficiency, Service Quality Enhancement and faster Time to market. Through structured approach if an
organization can address these three factors, it will definitely capture the opportunities, beat the odds &
competition and many more.
Three years back, GP established a structured process to dig deeply into the functional areas and rip out the
hidden opportunity honoring proper prioritization. Phase wise plans have been chalked out till 2016, accordingly
being implemented in line with economic factors, organizational mission and other practicalities. The Company is
having a group driven program in every year which is to set a global benchmark of its operational cost through
world recognized consultant. Based on the consultants report a well defined cost mapping has been conducted
and followed accordingly.
Achieving the desire to decrease structural cost, GP is methodically addressing both high and low hanging
opportunities. Other than the mentioned big steps, there have been lots of medium and small initiatives that are
in progress to address proper developments. These initiatives have been divided into three belts of activities,
Commercial, Technology and rest. Ranging from head office to regional offices, the horizon has been built based
on nature of efficiency initiatives. Vendor management along with proper evaluation of need has become one of
the beneficial approaches so far. Challenging to the needs traditional assumptions and respective returns to the
investments is a certain part of GPs day to day operations now. Screening business process scientifically is the
crucial option to overcome relevant barriers in this regard, which the Company is doing for last two years and will
be doing in future.
d)
Corporate Governance in GP
Operational Excellence mostly perceived as economic gain rather than as a sustainable business performance in
present and also for future. Thus Operational Excellence (OE) in GP comes with three fold ambitions, Competitive
33
Annual Report
2013
provide an analysis of the economic and financial situations, which will then form the basis for external reporting
and presentations, and to provide quality assurance for the financial reporting. In addition to quarterly business
and financial review with Group, the CEO and CFO review financial results on a monthly basis and set action points
to achieve the Companys business goals. In 2013, GP has started the process of quarterly regional business
reviews whereby the business performance of the nine regions are presented to GP Management and way forward
plans are devised.
e)
Management of Assets
GP, in its pursuit of best quality network for its subscribers, has been investing in cutting edge telecom technology
since its inception. Transparency and accountability are ensured at all stages from acquisition to disposal to
protect the interest of Shareholders. Internationally accepted safety measures have been implemented and
periodic physical verification is undertaken on a test basis to safeguard the assets and to ensure representational
faithfulness of reported numbers. All the assets are adequately insured against industrial risks with local and
international insurance companies.
f)
Corporate Governance in GP
governance best practices to ensure independence of statutory auditors. Statutory auditors are rotated every
three years in compliance with the order of Bangladesh Securities and Exchange Commission (BSEC). Audit
Committee meets with the statutory auditors to ensure that auditors are acting independently and reviews the
financial statements before submission to the Board for approval. Non-audit services that may create threat to
independence are not procured from statutory auditors unless otherwise required by regulators. In addition to the
audit of annual financial statements, the auditors also carry out audit of half-yearly financial statements of the
Company.
Further, to ensure adequate regulatory discharge, a Compliance Certificate is obtained from licensed practicing
professionals who certify that the Company has duly complied with all the regulatory requirements as stipulated
34
Internal Audit
Internal Audit supports the Company in achieving its objectives by bringing a systematic and disciplined approach
to evaluate and improve the effectiveness of its risk management, control and governance processes. In order to
ensure organizational independence of Internal Audit, the Head of Internal Audit reports functionally to the Audit
Committee and administratively to the Chief Executive Officer.
GP Internal Audit is empowered to carry out its activities in GP and its subsidiaries. Internal Audit activity is
governed by the Internal Audit Charter, which is approved by the Board. GP Internal Audit department discharges
its assurance and consulting activities through management of three distinct audit streams: Finance, Technology
and General Business processes. Additionally, a separate team is responsible for quality assurance of internal
audit activity. A risk-based annual audit plan is in place, which takes into consideration the strategic imperatives
and major risks surrounding GP, while considering pervasive audit needs. GP Internal Audit also works closely with
Telenor Group Internal Audit in sharing knowledge and resources to ensure achievement of internal audit
deliverables.
Annual Report
2013
h)
GP is committed to high standards of internal control as this process has proven to provide significant benefits in
relation to the quality of GPs financial statements. The work to operate and document good Internal Control over
Financial Reporting is continued in the years and the objective today is still to ensure that ICFR related activities
are integrated into GPs business operations.
A standard accountability structure is implemented with defined roles and responsibilities within ICFR in-scope
areas to create the basic building blocks to ensure effective ICFR ownership. The overall responsibility for ensuring
ICFR, including monitoring and performance of internal controls and maintaining documentation lies with the
CEO/CFO, and the process level responsibility lies with the process owners and control owners.
The scope of ICFR includes Company Level Control (CLCPolicies & Manuals) along with General Computer Control
(GCC) and Transactional Controls to ascertain operational efficacy, consistent and dependable financial reporting,
a listed company in the countrys Stock Exchanges.
i)
j)
Dividend Policy
The Board of Directors has established a dividend policy which forms the basis for the proposals on dividend
payments that it makes to the Shareholders taking into consideration the business performance of the Company
and its strategic initiatives. The Board believes that it is in the best interest of GP to draw up a long-term and
predictable dividend policy. The objective of the policy is to allow the Shareholders to make informed investment
decisions.
k)
Risk Owner
Risk
Identification
Response
Preparation
Risk
Coordinator
Risk
Assessment
Response
Finaliztion
Logical Risk
Manager
Vetting on
Risks
Finalize Top
Risk Register
Report to
GP BoD
GP BoD
Corporate Governance in GP
information security and legal compliance. This reasonable assurance has become even more crucial after being
35
Annual Report
2013
l)
m)
Corporate Governance in GP
applicable laws of the country as well as with the directives/guidelines/regulations of various Government
Authorities. GP also takes various initiatives to conduct awareness sessions on existing and proposed laws and
regulations of the country to ensure compliance throughout the Company. Overall, GP has always strived to remain
a fully compliant Company accommodating every possible ways and strategies to ensure the same.
n)
36
network outage during cases like cyclone Mahasen, localized long-hour power outage etc.
Business Continuity Management is a holistic process of identifying potential threats and preparing with
consequent proactive measures for creating organizational resilience. Crisis management process requires being
ready with Business Continuity Plan (BCP) and Crisis Management Plan (CMP). BCCM approach encompasses all
enterprise-wise critical business processes.
GP is striving in establishing excellence in Business Continuity and Crisis Management. We follow standards set by
Business Continuity Institute (BCI), UK. strategy & programs at GP is also guided by Telenor Group strategy, policy
& manuals. GP also got its resources trained from BCI, UK for managing BCCM program. Governing documents
including Crisis Management Plan (CMP), local business continuity manuals, crisis management manuals are
updated and several divisional crisis simulation exercise & workshop carried out in past year as part of BCCM
program.
o)
Codes of Conduct
GP has adopted a Code of Conduct (Code) approved by the Board of Directors, which reflects GPs core
values, integrity, respect, trust and openness. It provides clear direction on conducting business, interacting
with the community, government, business partners and general workplace behavior. It also includes guidance
Annual Report
2013
on disclosure of conflict of interest situations, maintaining confidentiality and disclosure of information, good
international practices and internal control and the duty to report where there is a breach against the Code.
The Code is properly communicated to all the employees including its Board members and others acting on
behalf, who are strictly required to abide by it. All of them have certified in writing that they have read and
understood the Code.
ii) Restrictions on dealings in GP Shares by Insiders
The Company has established a detailed policy relating to trading of GP shares by Directors, Employees and
other Insiders. The securities laws also impose restrictions on similar transactions. All the Insiders are
prohibited from trading in the GP shares, while in possession of unpublished price sensitive information in
relation to the Company during prescribed restricted trading period. Directors and Employees are also required
to notify their intention to trade in the GP shares prior to initiating the same.
iii) Supplier Conduct Principles
The Supplier Conduct Principles (SCP) outline the standards for ethical and business conduct expected from
suppliers and contractors in their relationship with the Company. The SCP are binding on the Companys
suppliers through the confirmation and signing of the Agreement on Responsible Business Conduct to ensure
high standards of business ethics amongst all suppliers of the Company.
p)
q)
Shareholders
i)
Continuous disclosure which is its core disclosure and primary method of informing the market and
Periodic disclosure in the form of quarterly and yearly reporting of financial results and other issues;
Shareholders;
and
Corporate Governance in GP
As the largest public listed corporate house in Bangladesh, GP has always placed high importance to the investor
37
Annual Report
2013
Event based disclosure as and when required, of administrative and corporate developments, usually
in the form of stock exchanges & press releases.
All information provided to BSEC and stock exchanges are immediately made available to Shareholders and
the market on the Companys Investor Relations section of the website: www.grameenphone.com
iii) General Meeting
The General Meeting is the supreme governing body in GP. The Company recognizes the rights of Shareholders
and the Shareholders interests are primarily ensured through GPs Annual General Meeting (AGM). The
Company requires its Board and auditors to attend each AGM so as to be available to answer Shareholders
queries on the result of the Company.
iv) Website
All financial results and key performance indicators as well as other relevant financial and non-financial data
are posted on the Investor Relations section of the Companys website: www.grameenphone.com
v) Shareholders Queries
Whilst the Company aims to provide sufficient information to Shareholders and Investors about the Company
and its activities, it also recognizes that Shareholders may have specific queries relating to their shareholding.
Corporate Governance in GP
To ensure that Shareholders can obtain all relevant information to assist them in exercising their rights as
38
Annual Report
2013
Internal
Control
Risk
assessment
Control
activities
Information &
communication
Monitoring
The entire financial reporting environment is subdivided into 12 individual processes. Risks are identified and assessed
for each individual process. Risks are assessed on a three-point ordinal scale (High, Medium, Low) and controls are
primarily targeted towards mitigating the high risks elements.
Operating effectiveness of the control
machanism is
39
Identify
& manage
changes
Scoping
Risk assessment
Risk coverage
YE assesment- filing
Adjust fin.
reporting
risk
ICFR Management
Delivarables
controls accordingly.
Control
enviornment
Control
remediation
Implement
or adjust
controls
Grameenphone.
Fig: ICFR Cycle in GP
Annual Report
2013
Corporate Responsibility at
Grameenphone
Grameenphone (GP) as a good corporate citizen has continued its sustainable Corporate Responsibility (CR) initiatives
throughout the year in 2013 with an aim to empower society and bring about positive changes in the lives of the general
people in Bangladesh. Apart from the regular projects, GP has also extended its hands to the victims of disasters and also
to educational institution for developing their ICT capacity. The following are some of the projects currently running
40
Teledermatology
Online School
Annual Report
2013
Rehabilitation Program
Collapse Victims
for
Savar
Building
Bangladesh,
an
organization
booths remained open for 7 days and more than 900 people availed the service provided.
41
Annual Report
2013
ion
at
pt
a
Ad
(
SR
CO
2
Re
du
cti
on
Internal
Corporate
Climate
Initiatives
Goals
Employee
Awareness
42
Green Business
External
with DC ventilation fans have helped reduce GPs carbon intensity. Through
[From Business As
Usual]
l
Green Company
Measures
Management
controls
l
l
l
Ad
vo
ca
c
Annual Report
2013
carbon solution GP has decided to convert all generator-only sites, existing and upcoming, to solar-DG hybrids.
From 2013 onwards, GP will have Zero generator-only sites. In 2013, GP has converted all the 120 generator run
sites to solar hybrids and also rolled out 112 new solar hybrid sites. Today, GP has a total of 496 solar hybrid
sites in its network. As a result there will be 2.04 million liters of yearly fuel savings, which is over 5,400 Tons
CO2 reductions per year.
Green Company
Largest cabinet recycling project
After 2011 network modernization, GP had over 15 thousand cabinets, 13,977 BTS cabinets and 1,404 core
cabinets, returned to warehouse, more than 2000 tons of e-waste! As these are all frequency related
circuit boards, were recycled to recover the constituent iron, aluminum, stainless steel, copper, and plastic for
reuse. The circuit boards had been drilled and exported to partner facility to extract valuable metals. Around
98.40% of this e-waste has been successfully recovered for reuse. The recycling work performed in Bangladesh
and abroad was done in accordance to ISO 14000, OSHAS 18000, and R2 standards.
Rainwater harvesting in GPHouse
GPHouse accommodates 2500 inhabitants on a daily basis to run its daily operations. Average daily water
consumption at GPHouse is 250,000 Liters. To meet the requirements, we are mostly dependant on ground
water, extracted through deep tube well. However, as a part of the continuous improvement, a rain water
harvesting system has been implemented at GPHouse recently. The current rainwater harvesting system at
GPHouse is a pilot project to capture the rain water which falls into our court yard and water body. The water
collected in the catchment area, is transferred to storage tank and then used for the toilet flushing purpose.
Approximately 93,000 toilet flashes annually can be done by using the collected rainwater. However, it also
has a separate flow path fitted with sand filter to transfer the rain water to a raw water tank, where it can be
treated further by sand filter, chemical dosing and carbon filter and be used as potable water.
Green Services
Paper savings through ebill
As an environment conscious organization, GP introduced electronic bill service in 2009. Starting with only
4,000 subscribers, it has gained popularity over the years. Recently, the total eBill subscriber base reached the
100 thousand milestone. The eBill service provides various advantages. It is the fastest and most secure way for
subscribers to receive monthly mobile bills and also enhances efficient operation in bill distribution by
Grameenphone. Due to less papper use, approximately 250 trees have been saved per year since this service
was initiated.
equipment, GP had to take permission from BTRC to dispose these off. After permission, all of those, except the
43
Annual Report
2013
2012*
Individual
Operational Results
2011
2010
2009
Individual
Consolidated
in million BDT
Revenue
96,624
74,733
Operating Profit
91,920
33,675
89,060
33,199
32,572
20,207
20,518
32,852
30,193
33,006
20,913
18,596
14,702
17,505
18,891
10,705
14,968
Paid-up Capital
Shareholders' equity
13,503
13,503
13,503
13,503
13,503
31,141
35,458
38,883
50,374
50,154
Total assets
135,221
117,665
108,905
109,502
109,162
Total liabilities
104,080
82,207
70,022
59,129
59,008
Current assests
16,993
14,005
32,421
30,802
22,182
Current liabilities
78,580
63,060
51,469
42,300
38,952
118,227
103,660
76,484
78,700
86,981
25,500
19,148
18,552
16,828
20,056
0.22
0.22
0.63
0.73
0.57
Debt to Equity
0.55
0.16
0.13
0.10
0.14
34%
37%
37%
27%
31%
Financial Position
65,300
in million BDT
15%
19%
21%
14%
23%
Return on Equity
44%
47%
42%
21%
39%
12%
15%
17%
10%
14%
1,350
1,350
1,350
1,350
1,350
10
10
10
10
10
140%
140%
205%
120%
60%
Dividend payout 1
NAV per Share
129%
108%
147%
151%
54%
23.06
26.26
28.80
37.31
37.14
27.46
22.23
30.09
23.16
24.77
10.89
12.96
13.99
7.93
12.08
*Gain/loss on disposal of property, plant and equipment has been included in operating profit.
1
Financial Ratios
45
Annual Report
2013
Revenue (Million BDT)
89,060
65,300
2009
91,920
74,733
2010
+5.1%
2011
2012
32,572
96,624
2013
33,675
-1.4%
20,518
20,207
2009
2010
18,891
33,199
2011
2012
42,508
2013
2009
50,154
109,162
109,502
-16%
2010
2011
2012
50,374
+14.9%
38,883
108,905
35,458
- 29.6%
10,369
2009
31,141
- 12.2%
12,963
8,456
2010
2011
2012
2013
2009
2013
135,221
117,665
29,925
14,702
10,705
17,505
14,968
23.16
27.46
22.23
2010
2011
2012
2013
2009
NAV/Share (BDT)
37.14
2010
2011
13.99
12.08
+23.5%
26.26
2013
EPS (BDT)
37.31
28.80
2012
23.06
12.96
10.89
7.93
-16.0%
-12.2%
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
46
ROA %
17.3%
13.8%
Subscriber ('000)
ROE %
15.5%
42.3%
38.5%
47.1%
36,493
-6.1%
11.7%
9.8%
2010
2011
2012
2013
2009
Market Share %
44%
44%
43%
41%
2010
250
2011
2012
2013
2009
+0.5%
214
2010
2011
2012
2013
AMPU** (Minutes)
306
231
+17.7%
29,970
ARPU* (BDT)
41%
40,021
23,259
21.3%
-24.5%
2009
47,110
44.2%
191
279
258
176
236
249
+5.4%
-7.8%
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
Annual Report
2013
7.1
40.0
2012
47.1
2013
4,704
91,920
2012
96,624
2013
Operating Expenditure
Total operating expenditure in 2013 increased by 9% (BDT 518 crores) from 2012.
The increase was mainly in material and traffic cost, operation & maintenance cost and market spending.
The increase in opex was partly offset by lower subsidy due to SIM tax reduction from 16th May 2013.
To compensate for the growth in business opex, GP continued with operational efficiency in 2013 which
resulted in savings of BDT 240 crores during the year.
5,180
58,245
2012
63,425
2013
In 2013, GP had to recognize BDT 399 crores as one-off tax adjustment for the period of 2012 due to
increased corporate tax rate from 35% to 40%.
Due to the above reason, despite BDT 266 crores higher profit before tax, net profit after tax for 2013
decreased by 16% (BDT 280 crores) compared to 2012.
2,803
17,505
12.96
14,702
EPS
2012
10.89
2013
Total Assets
Total asset base increased in 2013 compared to 2012, was mainly due to capitalization of 3G License and
spectrum and increased prepaid expenses.
Cash balance increased due to increased bank borrowings and efficient working capital management.
Capital expenditure during 2013 was 1,268 crores (excluding investment recognized for 3G license
acquisition), spent for enhancement of network capacity and quality.
17,555
117,665
2012
135,221
2013
Total Liabilities
Total liabilities increased during the year was mainly from drawdown of long term loan from IFC and
increase in trade payables.
Increased current tax payable as a result of change in corporate tax rate from 35% to 40% .
82,207
21,873
2012
104,080
2013
Total Equity
Total equity decreased during the year 2013 was due to payment of final dividend for the year 2012 and
interim dividend for the year 2013.
This was partly offset by BDT 1,470 crores net profits generated from operations during the year.
35,458
2012
4,317
31,141
2013
Revenue
47
Annual Report
2013
2013
Revenue
96,624,227
91,920,446
454,505
1,055,210
740,591
-
2012
14,511,990
13,799,076
112,645,932
106,460,113
29,829,156
24,599,324
82,816,776
100%
81,860,789
100%
7,062,188
8.5%
6,858,404
8.4%
42,786,892
51.7%
38,347,305
46.8%
Distributions
Employees
Government
Providers of finance:
48
Financial institutions
2,927,092
3.5%
3,973,411
4.9%
Shareholders*
14,701,574
17.8%
17,504,770
67,477,746
81.5%
66,683,890
21.4%
81.5%
15,339,030
18.5%
15,176,899
18.5%
15,339,030
18.5%
15,176,899
18.5%
82,816,776
100%
81,860,789
100%
* Distribution for 2013 was BDT 18,904,200,308 (including the proposed dividend) out of which BDT 14,701,574,489 was from
the wealth created during the current year. The rest of the distribution was from wealth accumulated in earlier years.
Annual Report
2013
69,076
59,289
62,667
With the payment of taxes and the investment in the network, Grameenphone is making a significant contribution to the
49
36,017
31,718
28,704
24,405
15,397
10,405
Withholding Taxes
1,646 2,792
4,366
6,774
10
344
165
365
629
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
11
18
22
28
36
82
143
256
445
748
1,130
1,185
1,398
2,575
7,107
5,998
5,933
2,590
3,330
13,500
13,207
17,522
2013
BTRC
10
34
32
75
213
575
712
650
1,168
1,239
2,523
4,766
6,204
3,836
4,308
5,138
6,659
7,461
NBR
298
115
268
388
1,035
1,999
3,572
5,350
8,721
12,126
18,509
21,739
20,140
29,134
33,545
36,803
38,159
10
344
165
365
629
1,646
2,792
4,366
6,774
10,405
15,397
24,405
31,718
28,704
36,017
59,289
62,667
69,076
In BDT crore
Annual Report
2013
Directors Report
FOR THE YEAR ENDED DECEMBER 31, 2013
Dear Shareholders,
On behalf of the Board of Directors and Management, I welcome you all to the 17th Annual General Meeting (AGM) of
Grameenphone Ltd. (GP). We have the pleasure to place herewith the Directors' Report and the Auditors' Report together
with the Audited Financial Statements of the Company for the year ended December 31, 2013 for your valued
consideration, approval and adoption.
Solid Business Performance in a Competitive Landscape
Grameenphone (GP) has delivered a strong performance in 2013. It has taken significant steps towards unfolding new
chapter in history with the launching of 3G and setting a platform for achieving strategy of Internet for All. Performance
was achieved against a backdrop of intense competition, sluggish economic activity and persisting political unrest. We
are proud of our ability to create a winning spirit in 2013.
We would like to thank the Bangladesh Telecommunication Regulatory Commission (BTRC) and the Ministry of Posts,
Telecommunications and Information Technology for finally agreeing to rules and guidelines that allowed operators to
participate in the 3G auction. Embarking on 3G, GP has definitely opened up a new horizon for Bangladesh. Since
receiving the license in September 2013, an intense roll out process was undertaken resulting in one of the fast roll out
Directors Report
of the 3G service-commissioning more than 1000 base stations in less than three months.
50
During the year, GP has managed to be in a forward leaning position revitalized market machineries and secured a fair
share of growth from the market. The growth is attributed to increase in traffic, data volume, device sales and adjacent
business.
As a result, GP has added 7.1 million customers, taking the year-end customer base to 47.1 million while maintaining
market share. GP has been successful in acquiring new customers, capitalizing on point of sale expansion, improving
market visibility and driving positive price perception. Our customer centric attitude and value driven initiatives have also
helped us to be competitive and enthusiastic throughout the year.
GP believes in building strategic partnership, where necessary, with global names to enhance its strategic position and
competitiveness. With that in mind, GP, on 01 September 2013, had partnered with Accenture, a globally renowned
company in ICT and Business Process Outsourcing (BPO), by selling 51% stake in Grameenphone IT Ltd. (GPIT). This
strategic partnership will help GPIT to increase its footprint in IT business domestically as well as internationally and build
its capability to provide BPO services on a global scale. This will also help GP in getting access to latest technology.
Socio-economic Landscape 2013
In 2013, Bangladesh economy has shown positivity and an upward trend with consistent GDP growth and buoyant
performance in agriculture, RMG and foreign remittance. At the same time, the country also experienced severe
economic hardship due to the prevailing energy and infrastructure deficiencies, global economic slowdown, sluggish
business activities and political uncertainty. According to the provisional estimates from Bangladesh Bureau of Statistics
(BBS), GDP growth for the current fiscal year is expected to be 6.0%. As reported by BBS, the inflation rate in Bangladesh
was recorded at 7.35% in December of 2013. Foreign exchange reserve reached to a record high as it crossed USD 18
billion mark for the first time in history. However, investment both local and foreign, posted a sharp decline due to
political uncertainties and a lack of business confidence.
Annual Report
2013
The most important of which is for us right now is to create business-friendly regulatory environment in the country and
political stability. The economic activities will go on in full swing; this is what we really hope for now.
Telecommunication Industry Scenario
2013 was an eventful year for the Telecom industry. Many of the critical issues including the 3G auction have made news
headlines on a regular basis. The mobile industry has finally committed to the 3G auction after rounds of negotiations
with the Government stakeholders that saw somewhat positive outcome on the most pressing issues.
GP has launched 3G services in Dhaka city and subsequently all divisional cities by December 2013. We see significant
uptake in the number of users, and a clear demand for increased data usage in Bangladesh.
Total mobile subscribers of the country grew to 114 million from 97 million of 2012 registering a year-on-year growth of
more than 17.1%. GP still holds the majority market share in terms of both connections and revenue. The market has been
vibrant as the competition intensified among the mobile operators to increase market share and retain their respective
customer base.
Mobile industry came up with creative offers and services for data including handset bundles in the data products. GP for
the first time has introduced its mini pack sachet offer for internet, which has become popular among the customers.
VoIP was a much talked about issue throughout the year. GP remained vigilant and kept on fighting over the VoIP issues
through regular monitoring and by following instructions from BTRC.
Regulatory Environment
Throughout the process of securing 3G license, GP had been pursuing for improved regulatory regime by removing some
conditions. GP at the same time has brought some of the key concerning areas like Rules formulation under Telecom Act,
Consultation Process, Spectrum roadmap etc. to improve the certainty and predictability of the Telecom regulatory
environment.
Reduction of SIM replacement tax by 50%, 5% VAT instead of 7.5% on the 3G license fees, removal of VAT on revenue
sharing, and stable scope of services of the 3G license were some of the positive outcomes for the industry. However, the
main deterrent had turned out to be the dispute of around BDT 3,000 crore (GP's exposure is BDT 1,580 crore) with NBR
regarding the SIM replacement Tax claim, as NBR was quite rigid to materialize this unsubstantiated demand. This issue
is still being discussed with NBR and the industry is hopeful to arrive at an amicable solution.
For the listed mobile operators, Governments decision to increase the corporate tax rate from 35% to 40% in last year
was not welcoming for the sector. GP, being the only listed mobile operator, was affected due to this sudden and abrupt
change. One of the big incentives to get listed in the stock exchange is now withdrawn and this will impact the growth of
telecom sector which is already burdened with heavy taxation. This change in fiscal policy is an example of unpredictable
regulatory environment and would not only discourage other mobile operators to get listed, but also would send a
negative signal to the potential foreign investors.
National Telecom Policy remained somewhat unattended by the Ministry throughout the year, even though there was a
lot of urgency from the industry to revise this old policy, which was formulated in 1998. BTRC issued Mobile Number
Portability directive in the 2nd quarter of 2013 with implementation timeline of seven months. GP together with the
industry opposed the implementation timeline, terming it too ambitious, and sought for an opportunity for consultation.
During the year, the Government granted four 4G licenses (two amendments and two new) at prices much below the
price at which mobile network operators had bought 3G license. Mobile network operators including GP were not allowed
to participate in these licenses. This has created anomaly and deprived Mobile operators to enter into new technology
and environment of level playing. This is another example of inconsistencies in regulation.
Directors Report
of the key uncertainties mainly VAT rebate on 2G license, NBR's claim of SIM replacement Tax and 3G license terms &
51
Annual Report
2013
To the dismay of the mobile operators, after repeated requests the Government did not finalize the SOF rules. GP is
seriously concerned that in absence of a proper scope and rules, there is a chance of the funds being misused and
remaining unutilized.
Predictability and certainty of the regulatory regime has been sought by the industry time and again to create an
investment friendly climate. We have observed comparatively better openness and inclination for discussion with the
industry, but a long-term regulatory roadmap, adhoc decisions and absence of formal consultation process have still
been the deterrent.
Industry Outlook and Possible Future Developments in the Industry
The launch of 3G by the major mobile operators has created customers' expectation for high speed data services. In the
coming years, the industry has to deliver on the promises and spread the services to the mass population at affordable
price. Broadband and data services are definitely going to be the next big wave in Bangladesh. Value added services
especially mobile based health, education and commercial services will flourish in alignment with Government's vision of
a Digital Bangladesh. Even so, basic communication services such as voice and SMS will remain significant driver of
growth also in the coming years.
Capital Market Regained Vibrancy with Modest Confidence Level
During the year 2013, the prolonged bear run from 2011 and 2012 took a break and the market revitalized with a positive
return. However, market activity was sluggish mainly due to turbulence in the political environment. Consequently,
adoption of risk averse investment mandate dominated the broader investor sentiment. In Dhaka Stock Exchange (DSE),
Directors Report
the broad market based index DSEX, launched on 27 January 2013, gained 5.2% (210.64 points) against a drop of 19.7%
52
Annual Report
2013
Customers as our priority
Being loved by customers is at the core of our philosophy and business strategy. We exist to help our customers to get
the full benefit of being connected. Our success is measured by how passionately they promote us. As our business
grows, we will continue to strengthen our efforts to delight our customers in every interaction by providing them with
their desired services. In this endeavor, the year 2013 was one step ahead. In our effort to bring comfort to our customers
lives, a 2000-member Customer Service team ran 24/7, 365 days a year! A total of 85 million customers received
services throughout 2013 from Customer Service (over phone) touch points.
Our Adjacent Businesses
i)
Financial Services
GP contributed for financial inclusion in Bangladesh by developing its own vision and business model for
enabling banks and service providers who wanted to deliver their Mobile Financial Services (MFS) over the nations
leading mobile network. The cornerstone of GPs strategy was to launch its own nationwide network of 20,000
MFS agent outlets under the MobiCash brand to provide partner banks with a completely managed solution for
delivering services such as cash-in, cash-out, payment of utility bills, disbursements of salaries, and other
transactional services. This has allowed GP to grow its existing partnerships with market leading service providers
and banks, while actively pursuing new partnerships and mutual business opportunities in mobile financial
services.
ii)
Wholesale Business
GP has continued its contribution towards the development of a more cost optimized telecom operation and has
made optimum use of national resources, by sharing infrastructure, transmission capacity and OPEX with the other
By the end of 2013, Wholesale Business has shared more than 2,700 sites with various telecom operators and a
total of 24 agreements were signed with new customers. Better and stronger stakeholder relationship
management with regulatory bodies was one of the key focus areas in 2013. Also, various initiatives were taken to
increase customer satisfaction.
Directors Report
telecom operators as well as other businesses, such as WIMAX operators, ISPs, etc.
53
Annual Report
2013
Moving Ahead with Performance and Value Driven People
GP has a strong team of more than 3,200 permanent employees. We believe that passionate, skilled and engaged
employees are the key to success. GP has continued to invest in its people through employee engagement, talent
development, regional focus, continuous communication, and people processes. Employee engagement index
increased by 10 percentage points in 2013, which is the highest increase within Telenor group in 2013. GP was also ranked
as the number 1 Employer of choice within Bangladeshs Telecom Industry in various independent surveys. With a view
to become a world-class organization, we have continued to invest in building the right culture around our values,
performance and engagement.
GP offered voluntary retirement scheme to its employees for the first time which was very well received and 187
employees opted for it. People rationalization in a very systematic way has been focus for GP and will remain so in future.
GP will look at capabilities in certain specific areas required as we move from communication to digital era.
Corporate Responsibility
At GP, we acknowledge the complementary relationship and interdependency between responsibility and commercial
interest. Our strategic ambitions and the countrys development issues are mutually inclusive, and hence, they cannot be
put into separate boxes and treated in isolation. We believe good business is good development and vice versa. Thus, our
relationship with Bangladesh is built on a partnership which strives to achieve common economic and social goals.
Throughout 2013, we have taken small but bold steps to bring quality education and health services to the
underprivileged community. Detailed information on the initiatives of the Company towards CR activities is provided in
Directors Report
54
the financial statements, prepared by the Management of the Company, present fairly its state of affairs, the result
of its operations, cash flows and changes in equity;
Annual Report
2013
(b)
(c)
appropriate accounting policies have been consistently applied in preparation of the financial statements and
that the accounting estimates are based on reasonable and prudent judgments;
(d)
the International Accounting Standards, as applicable in Bangladesh, have been followed in preparation of the
financial statements and any departure therefrom has been adequately disclosed;
(e)
the system of internal control is sound in design and has been effectively implemented and monitored;
(f)
there is no doubt, whatsoever, upon the Companys ability to continue as a going concern.
Corporate Governance
In the fast-paced world of telecommunications, vibrant and dynamic Corporate Governance practices are an essential
ingredient to success. As a Public Listed Company, the Board of Directors of GP has played a pivotal role in meeting all
stakeholders interests. The Board of Directors and the Management Team are committed to maintaining effective
Corporate Governance through a culture of accountability, transparency, well-understood policies and procedures.
The Company has complied with the conditions as stipulated in the Corporate Governance Guidelines issued on 7 August,
2012 by the Bangladesh Securities and Exchange Commission (BSEC). In this connection, status of compliance has been
annexed to this report as Annexure-I. A certificate from M/s Al-Muqtadir Associates, Chartered Secretaries confirming
compliance of conditions of Corporate Governance Guidelines as stipulated under condition 7(i) is also annexed to this
report as Annexure-IV.
Other Disclosures/Statements Pursuant to the Provisions of the BSECs Corporate Governance Guidelines 2012
GP, however, reviews revenue performance of different services, which have been disclosed under note 24 of the financial
statements.
Total Revenue
Total revenue for 2013 was BDT 96.6 billion (BDT 9,662 crore) having a
solid growth of 5.1% compared to the previous year. The growth in revenue
was contributed by voice, data, device sales and adjacent business i.e.
91,920
7,250
9,173
2.3% increase in voice traffic revenues for the year 2013 from last year,
mainly driven by the subscription growth. However, revenue growth for GP
as well as the mobile industry was partly offset by the directives from the
regulators regarding implementation of 10-second pulse in voice tariff and
elimination of call setup charges from September 2012.
Directors Report
Business activities of GP are not organized on the basis of differences in related products and services or variations in
geographical areas of operations. GP essentially provides similar products and services to customers across the country.
73,296
+5.1 %
96,624
+10.2 %
+8.9 %
+2.3 %
74,962
2012
Voice tariff
7,990
9,991
2013
Interconnection
Customer Equipment
Other Mobile
55
Annual Report
2013
Review on Cost of Goods Sold, Gross Profit Margin and Net Profit Margin
Performance measures like cost of goods sold and gross profit margin (which are the outcome of expenses being
classified on the basis of function) are not suitable for a company like GP as it provides telecommunication services to its
subscribers. Fixed operating costs reflect a significant portion of the cost structure of GP and hence GP, in 2013, changed
the way it classifies its expenses in the financial statements on the basis of their nature instead of their function.
Operating expenses consist of material cost, personnel expense, network operation and maintenance, selling &
distribution cost, dealers commission & marketing expense, revenue sharing & frequency charges to regulator and
depreciation & amortization. Increase in operating expense is mainly driven by higher mobile device sales, higher
subscriber acquisition cost, provisions for bad debts against IGW operators, restructure cost for organizational efficiency
and higher network operation & maintenance cost particularly in IT area as a result of GPIT deconsolidation.
As a combined effect of the revenue growth and higher operating expenses, operating profit for the year 2013 decreased
by 1.4% from 2012.
However, profit before tax has increased by 8.8% from 2012 with the positive impact from foreign exchange gain and gain
on sale of GPIT.
Net profit margin for the year 2013 was 15.2% compared to 19.0% of 2012. Despite steady operating profit margin, net
profit after tax decreased by 16.0% due to the one-off tax adjustment for increased corporate tax rate from 35% to 40%,
effective from 2012. As a result, Earnings Per Share (EPS) for the year 2013 stood at BDT 10.89 compared to BDT 12.96 of
2012.
Directors Report
33,675
36.6%
33,199
34.4%
2012
56
2013
Operating Profit Margin
17,505
19.0%
2012
NPAT (Mn BDT)
14,702
15.2%
2013
NPAT Margin
All transactions with related parties have been made on a commercial basis. Details of related party and related
party transactions have been disclosed under note 40 of the financial statements as per IFRS.
The GP IPO was made in 2009 and the fund raised thereby has already been utilized by 30 June, 2010 as reported
to the regulators. No further issue of any instrument was made during the year.
The financial results of the Company have continued to grow since the floatation of GP IPO in 2009 as reflected in
the yearly financial statements.
As per IAS 1 Presentation of Financial Statements, no items of income and expense are to be presented as
extraordinary gain or loss in the financial statements. Accordingly, no gain or loss has been presented as
extraordinary gain or loss in the financial statements.
No significant variations have occurred between quarterly and final financial results of the Company during 2013.
No remuneration was paid to the Directors apart from their Board meeting attendance fees. During the year, the
Company has paid a total amount of BDT 265,472 as Board meeting attendance fees. However, payments to
Foreign Directors, not remitted as yet, have been provided for in the accounts of the relevant year.
Annual Report
2013
There are no significant deviations in operating results (profit before tax) from last years operating results (profit
before tax).
The key operating and financial data for the last five years has been disclosed in the Annual Report at Page 45.
GP has declared interim dividend and recommended final dividend for the year 2013.
During 2013, a total of 12 (twelve) Board meetings were held, which met the regulatory requirements in this
respect. The attendance records of the Directors are shown in Annexure-II to this report.
Shareholding patterns of the Company as on December 31, 2013 are shown in Annexure-III to this report.
2013
2012
14,701,574,489
13,983,642,577
17,354,535,376
17,558,757,542
28,685,217,066
34,913,292,918
(6,751,500,110)
(8,77,950,143)
(12,152,700,198)
(12,152,700,198)
9,781,016,758
13,983,642,577
(6,751,500,110)
(6,751,500,100)
3,029,516,648
7,232,142,467
Directors Report
57
Annual Report
2013
paid already, this would make a cumulative total dividend @ 140% of the paid-up capital amounting to BDT 14 which was
BDT 18,904,200,308 per share for the year 2013.
The above recommendation of dividend is as per the Board approved dividend policy, which is Minimum 50% of the Net
Profit After Tax to be allocated for dividend payment depending on the financial health and capital requirement of the
Company with an aim to have a relatively steady growth in per share dividend.
Board of Directors
The composition of the Board of Directors who held office during the year was as below:
1.
Mr. Sigve Brekke, Telenor Mobile Communications AS, Director & Chairman
contributions.
58
Annual Report
2013
In GP, we have a well-defined governing document on risk management and a periodic monitoring system to address the
strategic and enterprise-level risks that may affect our business, operations, liquidity, financial position or future
performances. Our comprehensive risk management system is devised to enable the Company to recognize, assess and
set action plans on the risks on a real-time basis and in accordance with the risk management framework.
Looking Forward
Continued product innovations shall remain the key to driving sales growth in the competitive environment in the years
ahead. We want to offer the best experience to our customers through the introduction of latest technologies and
innovative Value Added Services. We will continue our drive for customer satisfaction and, at the same time, we want to
be the partner of progress in this country through our contributions to the economy, society, and environment.
We will continue to play a key role in improving the quality of life by providing access to key services such as healthcare,
education, and agriculture. We will further explore the Data, content, and VAS market by offering 3G service. GP is the first
mobile operator in Bangladesh to take mobile internet around the country and now using 3G to further fulfill its
ambitions of providing Internet for All.
Appreciation
The Board of Directors firmly believes that GP has the necessary strengths, resources and commitments to further propel
the Company to newer heights. The performance in 2013 is indeed a tribute to the pledge, promise, energy and hard work
of our Directors, Management and employees together. And keeping that in mind, the Members of the Board would like
to place on record their appreciation to the valued Shareholders and Stakeholders of the Company for their persistent
support and guidance. But the Company never strides alone, and accordingly, the Board profoundly acknowledges the
Telecommunications and Information Technology, Bangladesh Telecommunication Regulatory Commission (BTRC),
Bangladesh Railway (BR), Bangladesh Bank (BB), Board of Investment (BOI), Registrar of Joint Stock Companies & Firms
(RJSC), Chief Controller of Export & Import, Bangladesh Securities and Exchange Commission (BSEC), Dhaka Stock
Exchange Ltd. (DSE), Chittagong Stock Exchange Ltd. (CSE), Central Depository Bangladesh Limited (CDBL), GPs
Bankers and financial institutions, vendors and other business partners during the year 2013.
The success story of GP would not have been the same without the continued loyal support of our valued customers.
Accordingly, the Board admires all the GP customers for making GP Brand as their preferred choice. We would also
recognize that our employees are our pride and backbone, who help us stand tall and deliver our products and services
with excellence. Therefore, we would also thank all our employees for their innovation, dedication and commitment to
serving our customers.
For and on behalf of the Board of Directors of Grameenphone Ltd.
Sigve Brekke
Chairman
February 10, 2014
Directors Report
cooperation and assistance that it had received from Government of Bangladesh, the Ministry of Posts,
59
Annual Report
2013
Annexure-I
Status of compliance with the conditions imposed by the Bangladesh Securities and Exchange Commissions Notification
No SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August, 2012 issued under section 2CC of the Securities and
Exchange Ordinance, 1969 is presented below:
(Report under Condition No. 7.00)
Condition
No.
Title
Compliance Status
( has been put in
the appropriate column)
Complied
1.
1.1
1.2 (ii)
Directors Report
60
1.3 (ii)
Boards Size
(number of Board members minimum 5 and Maximum 20)
Independent Directors
At least one fifth (1/5) of the total number of Directors shall be
Independent Directors
Not
Complied
1.2
1.2 (i)
Remarks
(If any)
- do - do - do -
- do -
- do - do -
- do The appointments
are duly approved
None
No vacancy
occurred
Annual Report
2013
Condition
No.
Title
Compliance Status
( has been put in
the appropriate column)
Complied
1.3 (iii)
1.4
The Chairman of the Board and the Chief Executive Officer (CEO) shall
be different individuals. The Chairman shall be elected from among
the directors. The Board of Directors shall clearly define respective
roles and responsibilities of the Chairman and the CEO
1.5
1.5 (ii)
1.5 (iii)
1.5 (iv)
1.5 (v)
1.5 (vi)
1.5 (vii)
1.5 (viii)
1.5 (ix)
1.5 (x)
1.5 (xi)
1.5 (xii)
1.5 (xiii)
1.5 (xiv)
1.5 (xv)
1.5 (xvi)
1.5 (xvii)
1.5 (xviii)
1.5 (xix)
1.5 (xx)
1.5 (xxi)
1.5 (xxi) (a)
1.5 (xxi) (b)
None
Included in the
Directors Report
- do - do - do - do - do - do -
None
- do -
None
- do -
- do -
- do - do - do - do Given on page 45 of
the Annual Report
None
Pattern of shareholding and name wise details (disclosing aggregate number of shares) :
Parent/Subsidiary/Associated Companies and other related parties
Directors, Chief Executive Officer (CEO), Company Secretary (CS),
Chief Financial Officer (CFO), Head of Internal Audit (HIA) and their
spouses and minor children
Executives
Shareholders holding ten percent (10%) or more voting interest in the
company
1.5 (xxii)
1.5 (xxii) (a)
Not
Complied
Given on page 17 of
the Annual Report
- do Given on page 20 of
the Annual Report
Directors Report
1.5 (i)
Remarks
(If any)
61
Annual Report
2013
Condition
No.
Title
Compliance Status
( has been put in
the appropriate column)
Complied
2.1
2.2
3
3 (i)
3 (ii)
3 (iii)
3.1 (i)
3.1 (ii)
Audit Committee
The company shall have an Audit Committee as a sub-committee of
the BoD
The Audit Committee shall assist the BoD in ensuring that the
financial statements reflect true and fair view of the state of affairs of
the company and in ensuring a good monitoring system within the
business
The Audit Committee shall be responsible to the BoD. The duties of
the Audit Committee shall be clearly set forth in writing
The Audit Committee shall be composed of at least 3 (three) members
62
3.2 (i)
The BoD shall select the Chairman of the Audit Committee, who shall
be an Independent Director
3.2 (ii)
3.1 (vi)
3.3
3.3 (i)
3.3 (ii)
3.3 (iii)
3.3 (iv)
3.3 (v)
3.3 (vi)
3.3 (vii)
3.3 (viii)
3.3 (ix)
3.3 (x)
Audit Committee
comprises of
3 (three) members
The BoD shall appoint members of the Audit Committee who shall be
directors of the company and shall include at least 1 (one)
Independent Director
All members of the audit committee should be financially literate
and at least 1 (one) member shall have accounting or related financial
management experience
3.1 (iv)
3.1 (v)
Not
Complied
Directors Report
3.1 (iii)
Remarks
(If any)
One member is
Independent
Director
None
No vacancy
occurred
None
No IPO was
made in the year
2013
Annual Report
2013
Condition
No.
Title
Compliance Status
( has been put in
the appropriate column)
Complied
3.4.1 (i)
Not
Complied
None
None
None
None
3.4.2
Reporting to BSEC (if any material impact on the financial condition &
results of operation, unreasonably ignored by the management)
None
3.5
4.00
Remarks
(If any)
Given on Page 67
of the Annual Report
4.00 (i)
As per Auditors
declaration
4.00 (ii)
- do -
4.00 (iii)
- do -
4.00 (iv)
- do -
4.00 (v)
- do -
4.00 (vi)
- do -
4.00 (vii)
- do -
Directors Report
4.00 (viii)
- do -
63
4.00 (ix)
- do -
Subsidiary Company
5 (i)
5 (ii)
- do -
5 (iii)
- do -
5 (iv)
Not
The minutes of the respective Board meeting of the holding company
shall state that they have reviewed the affairs of the subsidiary applicable
company also
- do -
5 (v)
Not
The Audit Committee of the holding company shall also review the
financial statements, in particular the investments made by the applicable
subsidiary company
- do -
Annual Report
2013
Condition
No.
Compliance Status
( has been put in
the appropriate column)
Title
Complied
6
Remarks
(If any)
Not
Complied
The CEO and CFO shall certify to the Board that they have reviewed financial statements
for the year and that to the best of their knowledge and belief:
6 (i) (a)
6 (i) (b)
these statements together present a true and fair view of the companys affairs and are in compliance with existing accounting standards
and applicable laws
- do -
6 (ii)
- do -
7 (i)
Obtaining certificate from a practicing Professional Accountant/Secretary regarding compliance of conditions of Corporate
Governance Guidelines of the BSEC and include in the Annual
Report
Given on page 66
of the Annual
Report
7 (ii)
Included in the
Directors Report
Directors Report
Annexure-II
64
Board Meeting and attendance during the year ended December 31, 2013
Name of Directors
Number of meetings
held whilst a Board member
Meetings
attended
12
12
12
12
Remarks
12
10
12
Mr. M Shahjahan
12
10
12
12
12
10
12
12
Annual Report
2013
Annexure-III
The Pattern of Shareholding as on December 31, 2013
Name of Shareholders
i)
Status
Shares Held
Percentage
Parent/Subsidiary/Associate Companies
753,407,724
55.80%
215
0.00%
215
0.00%
215
0.00%
Grameen Telecom
461,766,409
34.20%
Grameen Kalyan
22
0.00%
Grameen Shakti
22
0.00%
ii) Directors, Chief Executive Officer, Chief Financial Officer, Company Secretary, Head of Internal
Audit and their spouses and minor children
Chairman
Board Member
Board Member
Board Member
Board Member
Mr. M Shahjahan
Board Member
Board Member
Board Member
Board Member
Board Member
Company Secretary
26,176
0.00%
iii) Executives (as explained in the BSECs Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August, 2012 )
Mr. Allan Bonke
56,400
0.00%
753,407,724
55.80%
Grameen Telecom
461,766,409
34.20%
Directors Report
65
Annual Report
2013
Annexure-IV
Al-Muqtadir Associates
Al-Muqtadir Associates
Company Secretaries & Consultants
Circle Zareen, Block - A, Road -16
House # 413 (5-B), Bashundhara R/A
Dhaka - 1229, Bangladesh
We have examined compliance to the BSEC guidelines on Corporate Governance by Grameenphone Ltd. for the year
ended 31st December 2013. These guidelines relate to the Notification no. SEC/CMRRCD/2006-158/134/Admin/44
dated 7th August 2012 of Bangladesh Securities and Exchange Commission (BSEC) on Corporate Governance.
Such compliance to the codes of Corporate Governance is the responsibility of the Company. Our examination was
limited to the procedures and implementation thereof as adopted by the Management in ensuring compliance to the
Directors Report
conditions of Corporate Governance. This is a scrutiny and verification only and not an expression of opinion or audit on
66
Al-Muqtadir Associates
Dhaka, February 10, 2014
Annual Report
2013
Review the annual, half-yearly and quarterly financial statements and other financial results, and upon its
satisfaction of the review, recommend the same to the Board.
Review the adequacy and effectiveness of financial reporting process, internal control system, risk management,
auditing matters, and the Companys processes for monitoring compliance with laws and regulations and the
Codes of Conduct.
Recommend appointment, termination and determination of audit fees for statutory auditors. Consider the scope
of work, and oversee and evaluate the work performed by statutory auditors. Review permitted non-audit services
performed by statutory auditors.
Exercise its oversight of the work of GP Internal Audit. Review the effectiveness of internal audit function including
performance, structure, adequacy of resources, and compliance with professional standards. Examine audit
findings and material weaknesses and monitor implementation of audit action plans.
Reviewed the quarterly and annual financial statements for the year ended December 31, 2013.
Considered and made recommendation to the Board on the appointment and remuneration of external auditors,
ACNABIN, Chartered Accountants for the year 2014.
Approved the Internal Audit Plan for 2013, monitored progress and effected revisions when necessary.
Discussed Internal Audit reports and findings in detail with auditors and members of Management and monitored
the status of implementation of audit action plans and provided guidance to ensure timely completion of action plans.
Reviewed and received report on the matters as per requirement from the Bangladesh Securities and Exchange
Commission (BSEC).
Any other matter or incident of significance as per Audit Committee Charter.
67
Annual Report
2013
ACNABIN
Chartered Accountants
BDBL Bhaban ( Level 13), 12 Kawran Bazar C/A
Dhaka-1215, Bangladesh
Telephone
Fax
Email
Web
Chartered Accountants
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements prepared in accordance with International Financial Reporting Standards (IFRSs) and
Bangladesh Financial Reporting Standards (BFRSs), give a true and fair view of the state of the companys affairs as at 31
December 2013 and of the results of its operations and cash flows for the year then ended and comply with the Companies Act
1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations.
Emphasis of Matter
Without qualifying our opinion as above, we draw attention to Note#44 to the financial statements, where management
explains the circumstances of claim from Bangladesh Telecommunication Regulatory Commission (BTRC), claim from National
Board of Revenue (NBR) for SIM tax on replacement SIMs and the uncertainties of getting rebate of input VAT paid on 2G licence
renewal fee and managements position on the same.
We also report that:
a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for
the purposes of our audit and made due verification thereof;
b) In our opinion, proper books of account as required by law have been kept by the company so far as it appeared from our
examination of these books;
c) The statement of financial position (balance sheet) and statement of comprehensive income (profit and loss account)
dealt with by the report are in agreement with the books of account and returns; and
d) The expenditure incurred was for the purposes of the companys business.
ACNABIN
Chartered Accountants
Dhaka, February 10, 2014
Auditors Report
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal
control relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
69
Annual Report
2013
Grameenphone Ltd.
Statement of Financial Position
as at
Assets
Non-current assets
Property, plant and equipment, net
Intangible assets, net
Investment in associate
Total non-current assets
Current assets
Inventories
Trade and other receivables
Short-term investment
Cash and cash equivalents
Total current assets
Notes
4
5
6
31 December 2013
31 December 2012
1 January 2012
Taka'000
Taka'000
Taka'000
69,922,682
47,734,203
570,516
69,584,900
34,075,143
-
69,461,932
7,021,941
118,227,401
103,660,043
76,483,873
560,034
11,809,676
78,276
4,545,257
16,993,243
416,896
9,879,471
143,712
3,565,230
14,005,310
354,023
23,830,309
181,857
8,054,597
32,420,787
135,220,644
117,665,353
108,904,660
13,503,000
7,840,226
14,446
1,880
9,781,017
31,140,570
13,503,000
7,840,226
14,446
1,880
2,139,729
11,958,727
35,458,009
13,503,000
7,840,226
14,446
1,880
2,139,729
15,383,608
38,882,890
16
31,140,570
0.382
35,458,009
0.080
38,882,890
Non-current liabilities
Finance lease obligation
Loans and borrowings
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
17
18
19
20
5,310,947
11,665,214
7,820,601
703,316
25,500,078
5,019,806
9,275,457
4,852,304
19,147,567
5,019,806
10,242,988
3,289,684
18,552,478
Current liabilities
Trade and other payables
Loans and borrowings
Current tax payable
Other current liabilities
Total current liabilities
21
18
22
23
40,368,468
7,700,000
23,463,733
7,047,796
78,579,997
35,644,690
8,195,000
17,897,486
1,322,601
63,059,777
32,305,140
17,806,349
1,357,803
51,469,292
135,220,644
117,665,353
108,904,660
7
8
9
10
Total assets
70
Non-controlling interest
Total equity
Director
Director
Company Secretary
As per our report of same date.
Auditor
Annual Report
2013
Grameenphone Ltd.
Statement of Comprehensive Income
For the year ended 31 December 2013
Notes
2013
2012
Taka'000
Taka'000
24
96,624,227
91,920,446
Operating expenses
Cost of material and traffic charges
Salaries and personnel cost
Operation and maintenance
Sales, marketing and commissions
Revenue sharing, spectrum charges and licence fees
Other operating (expenses)/income, net
Depreciation and amortisation
25
26
27
28
29
30
31
(7,755,850)
(7,062,188)
(5,023,411)
(14,446,477)
(8,210,803)
(5,587,529)
(15,339,030)
(6,106,670)
(7,045,460)
(3,549,700)
(13,352,537)
(7,571,550)
(5,442,564)
(15,176,899)
(63,425,287)
33,198,940
(58,245,379)
33,675,066
(30,281)
(1,024,929)
2,594,957
(1,192,879)
3,306,216
175,433
346,867
3,481,649
32,852,073
30,193,417
(18,150,498)
(12,688,647)
14,701,574
17,504,770
14,701,574
17,504,770
14,701,574
14,701,574
17,504,769
0.302
17,504,770
14,701,574
14,701,574
17,504,769
0.302
17,504,770
10.89
12.96
Operating profit
Share of profit of associate
Gain on sale of shares in GPIT
Finance expense/(income), net
Foreign exchange (gain)/loss
32
33
34
35
36
Director
Director
Company Secretary
As per our report of same date.
Auditor
Revenue
71
13,503,000
13,503,000
13,503,000
13,503,000
Share
capital
Taka'000
Share
premium
Taka'000
7,840,226
7,840,226
7,840,226
7,840,226
72
Grameenphone Ltd.
Statement of Changes in Equity
For the year ended 31 December 2013
14,446
14,446
14,446
14,446
Capital
reserve
Taka'000
1,880
(2,139,729)
2,139,729
2,139,729
2,139,729
General
reserve
Taka'000
1,880
1,880
1,880
Deposit from
shareholders
Taka'000
9,781,017
14,701,574
(12,152,700)
(6,751,500)
2,139,729
11,843,913
11,958,727
0.382
0.302
(12,152,700)
17,504,769
0.080
Non-controlling
interest
Taka'000
(8,776,950)
15,383,608
Retained
earnings
Taka'000
31,140,570
14,701,574
(12,152,700)
(6,751,500)
35,343,195
35,458,009
17,504,770
(12,152,700)
(8,776,950)
38,882,890
Total
Taka'000
Annual Report
2013
Annual Report
2013
Grameenphone Ltd.
Statement of Cash Flows
For the year ended 31 December 2013
2013
Taka'000
2012
Taka'000
96,720,248
91,340,092
(5,384,782)
(37,613,269)
336,394
(2,939,431)
(14,038,057)
(59,639,146)
37,081,103
(5,752,106)
(39,327,831)
681,060
(3,353,583)
(13,565,042)
(61,317,502)
30,022,590
730,971
(12,201,560)
50,032
(16,534,433)
(221,089)
65,436
(28,110,643)
(13,859,593)
215,049
(7,755,396)
(448,112)
38,145
(21,809,907)
(495,000)
11,665,214
(18,896,923)
(346)
(7,727,055)
8,195,000
(20,896,517)
(532)
(12,702,049)
1,243,405
(4,489,367)
3,301,852
4,545,257
8,054,597
3,565,230
73
Annual Report
2013
Grameenphone Ltd.
Notes to the Financial Statements
as at and for the year ended 31 December 2013
/01/
Corporate information
Grameenphone Ltd (hereinafter referred to as "GP"/"Grameenphone"/"the company") is a public limited
company incorporated in Bangladesh in 1996 under the Companies Act 1994 and has its registered address at
GPHOUSE, Bashundhara, Baridhara, Dhaka 1229. GP was initially registered as a private limited company and
subsequently converted into a public limited company on 25 June 2007. During November 2009, GP listed its
shares with both Dhaka and Chittagong Stock Exchanges. The immediate parent of GP is Telenor Mobile
Communications AS and the ultimate parent is Telenor ASA; both the companies are incorporated in Norway.
The company is primarily involved in providing mobile telecommunication services (voice, data and other related
services) in Bangladesh. The company also provides international roaming services through international
roaming agreements with various operators of different countries across the world.
Grameenphone disposed of 51% of its stake in its only subsidiary (GPIT) on 1 September 2013. Grameenphone
has lost control, but retains significant influence over GPIT because of this sale transaction. Consolidated
financial statements are not required to be presented as Grameenphone is no longer a parent at the end of this
reporting period.
74
These financial statements are not the separate financial statements of Grameenphone. These financial
statements are unconsolidated financial statements (also known as individual financial statements) of
Grameenphone as at and for the year ended 31 December 2013. These unconsolidated financial statements
present the financial position and performance of Grameenphone and Grameenphone's investment in GPIT
being accounted for under the equity method in accordance with IAS 28 Investment in Associates and Joint
Ventures. These financial statements provide comparative information in respect of the previous period based on
consolidation basis as Grameenphone was a parent at the end of that period. In addition, these financial
statements present an additional statement of financial position as at the beginning of the previous period due
to reclassification of items in the financial statements. The reclassification includes changes in classification of
expenses in the statement of comprehensive income. International Financial Reporting Standards (IFRS) permit
classification of expenses either by nature or by function. In these financial statements, the expenses have been
classified on the basis of their nature. IFRS give emphasis on classification of expenses by nature, because
information on the nature of expenses is useful in predicting future cash flows. Management believes that these
financial statements after reclassification become more informative and better suited to the nature of the
business.
For understanding of Grameenphone's standalone financial performance, a separate statement of
comprehensive income has been appended to these financial statements as supplementary information.
2.1 Statement of compliance
These financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS), Bangladesh Financial Reporting Standards (BFRS), the Companies Act 1994, the Securities and Exchange
Rules 1987 and other applicable laws in Bangladesh.
The Articles of Association of Grameenphone require that the financial statements to be prepared in accordance
with International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS). The
requirements of IFRS and BFRS, to the extent relevant to these financial statements, do not vary from each other.
Authorisation for issue
These financial statements were authorised for issue by the Board of Directors of the company on 10 February
2014.
Annual Report
2013
2.2
Basis of measurement
These financial statements have been prepared on historical cost basis except for the following items in the
statement of financial position:
a)
b)
c)
d)
2.3
Defined post-employment benefit plan is measured on the basis of projected unit credit method.
Finance lease obligation is measured at present value of minimum lease payments.
Asset retirement obligations (ARO) are measured at present value of expected future expenditure.
Investment in associate is measured at fair value.
2.4
In particular, information about significant areas of estimation uncertainty and critical judgments in applying
accounting policies that have the most significant effect on the amount recognised in the financial statements
are described in the following notes:
Note 3.8:
Note 6:
Note 17:
Note 19:
3.1
(a)
Estimates and underlying assumptions are reviewed on an ongoing basis. Revision of accounting estimates is
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period
of revision and future periods if the revision affects both current and future periods.
75
Annual Report
2013
When major parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items (major components) of property, plant and equipment.
(b)
Subsequent costs
The cost of replacing or upgradation of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the item will flow to the
company and its costs can be measured reliably. The carrying amount of the replaced component is
derecognised. The costs of the day to day servicing of property, plant and equipment are recognised in profit or
loss as incurred.
(c)
Depreciation
No depreciation is charged on land and capital work in progress (CWIP) as the land has unlimited useful life and
CWIP has not yet been placed in service.
Depreciation on other items of property, plant and equipment is recognised on a straight-line basis over the
estimated useful lives of each item of property, plant and equipment. Leased assets are depreciated over the
shorter of the lease term and their useful lives unless it is reasonably certain that the company will obtain
ownership by the end of the lease term. For addition to property, plant and equipment, depreciation is charged
from the date of capitalisation up to the month immediately preceding the month of disposal. Depreciation
method, useful lives and residual values are reviewed at each year-end and adjusted if appropriate. The
estimated useful lives of the items of property, plant and equipment for the current and comparative periods are
as follows:
2012
2013
Own assets
Years
Years
10 -50
10 -50
Building
Base station - equipments
3-10
3-10
Base station - tower, fibre optic network and related assets
7- 20
7- 20
Transmission equipment
5-10
5-10
3-5
3-5
22.5
22.5
76
Leased asset
Fibre Optic Network (FON)
(d)
(e)
(f)
Annual Report
2013
attributable to the acquisition, construction or production of a qualifying asset are those borrowing costs that
would have been avoided if the expenditure on the qualifying asset had not been made. All other borrowing
costs are recognised in profit or loss in the period in which they are incurred.
3.2
Intangible assets
(a)
Other development expenditure is recognised in profit or loss as incurred. Development costs previously
recognised as an expense are not recognised as an asset in a subsequent period. Following initial recognition of
the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less
any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when
development is complete and the asset is placed in service. It is amortised over the period of expected future
benefit. During the period of development, the asset is tested for impairment annually.
Internally generated intangible assets, excluding capitalised development costs, are not capitalised and
expenditure is reflected in profit or loss in the year in which the expenditure is incurred.
(b)
Subsequent costs
Subsequent costs are capitalised only when they increase the future economic benefits embodied in the
specific asset to which they relate. All other costs are recognised in profit or loss as incurred.
(c)
Amortisation
Amortisation is recognised in profit or loss on a straight line basis over the estimated useful lives of intangible
assets, from the date that they are available for use. The estimated useful lives are as follows:
Software and others
Pulse Code Modulation (PCM)
Billing software
Other operational software
Network management software
Telecom licence and spectrum
Spectrum-2008
Telecom licence and spectrum -2011
3G licence and spectrum
2013
Years
5
5
3-7
7
2012
Years
5
5
3-7
7
18
15
15
18
15
-
Amortisation methods, useful lives and residual values are reviewed at each year-end and adjusted, if
appropriate.
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
its intention to complete the intangible asset and use or sell it;
its ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits. Among other things, the entity
can demonstrate the existence of a market for the output of the intangible asset or the intangible asset
itself or, if it is to be used internally, the usefulness of the intangible asset;
(e) the availability of adequate technical, financial and other resources to complete the development and to
use or sell the intangible asset;
(f) its ability to measure reliably the expenditure attributable to the intangible asset during its development.
77
Annual Report
2013
(d)
Derecognition
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of intangible assets, measured as the difference between
the net disposal proceeds and the carrying amount of the assets, are recognised in profit or loss.
3.3
Investment in associate
An associate is an entity over which the investor has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee, but is not control or joint control over
those policies. Investment in associate is accounted for using the equity method. Under the equity method, the
investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted to
recognise changes in the investor's share of net assets of the associate since the acquisition date. The
statement of comprehensive income reflects the investor's share of the results of operations of the associate.
Any change in other comprehensive income (OCI) of the investee is presented as part of the investor's OCI. In
addition, when there has been a change recognised directly in the equity of the associate, the investor
recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains
and losses resulting from transactions between the investor and the associate are eliminated to the extent of
the interest in the associate.
The financial statements of associate are prepared for the same reporting period by following the same
accounting policies for like transactions and events as the investor.
3.4
Financial instruments
78
Financial assets and liabilities are offset and the net amount is presented in the statement of financial position
when, and only when, the company has a legal right to offset the amounts and intends either to settle them on
a net basis or to realize the asset and settle the liability simultaneously.
The company classifies non-derivative financial assets into the following categories: financial assets at fair
value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale
financial assets.
i.
ii.
Annual Report
2013
value plus any directly attributable transaction costs. Subsequent to initial recognition, held-to-maturity
financial assets are measured at amortised cost using the effective interest method, less any impairment losses.
Short-term investments are classified as held-to-maturity financial assets. Short term investments comprise
investment in Fixed Deposit Receipts (FDR) with original maturity of more than three months.
iii.
(a)
Trade receivables
Accounts receivable represent the amounts due from subscribers for telecom services, other operators for
interconnection services and infrastructure sharing, customers for FON connectivity. Accounts receivable with
no stated interest rate are measured at the original invoice amount. Accounts receivables are stated net of
allowance for doubtful debts.
(b)
Other receivables
Other receivables comprise other non-mobile receivables and interest receivables. Other receivables are stated
net of provision for doubtful debts, if any.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturity of three months or less from
the date of acquisition that are subject to an insignificant risk of changes in their fair value, and are used by the
company in the management of its short term commitments. Bank overdraft that are repayable on demand and
form an integral part of company's cash management are included as a component of cash and cash
equivalents for the statement of cash flows.
v.
iv.
79
Annual Report
2013
(b)
Impairment
(a)
Financial assets
A financial asset, not classified as fair value through profit or loss, is assessed at each reporting date to
determine whether there is a objective evidence that it is impaired. A financial asset is impaired if there is
objective evidence of impairment as a result of one or more events that occurred after the initial recognition of
the assets, and the loss event(s) had an impact on the estimated future cash flows of that assets that can be
estimated reliably.
i.
The company considers evidence of impairment for financial assets (loans and receivables and
held-to-maturity investment securities) at both a specific asset and collective asset level. All individually
significant receivables and held-to-maturity investment securities are assessed for specific impairment. All
individually significant loans and receivables and held-to-maturity investment securities found not to be
specifically impaired are then collectively assessed for any impairment that has been incurred but not yet
identified. Loans and receivables and held-to-maturity investment securities that are not individually
significant are collectively assessed for impairment by grouping together loans and receivables and
held-to-maturity investment securities with similar risk characteristics.
In assessing collective impairment, the company uses a historical trend of probability of default, timing of
recoveries and amount of loss incurred, adjusted for management's judgement as to whether current economic
and credit conditions are such that the actual losses are likely to be greater or lesser than suggested by
80
historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount and the present value of estimated future cash flows discounted at the asset's
original effective interest rate. Losses are recognised in the profit or loss and reflected in the allowance account
against loans and receivables or held-to-maturity investment securities. Interest on the impaired assets
continues to be recognised. When an event occurring after the impairment was recognised causes the amount
of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
As per the existing credit policy, 100% impairment allowance is recognised on receivables from permanently
disconnected post-paid subscribers. Post-paid subscribers are permanently disconnected if they fail to make
any payment within 90 days of temporary disconnection. Any post-paid receivables remaining uncollected
after one year of allowance creation are written-off. Other accounts receivable are written-off when there is no
reasonable expectation of future recovery.
ii.
Annual Report
2013
component of interest income. If, in a subsequent period, the fair value of an impaired available-for-sale debt
security increases and the increase can be related objectively to an event occurring after the impairment loss
was recognised, then the impairment loss is reversed, with the amount of reversal recognised in profit or loss.
(b)
Non-financial assets
The carrying amounts of the companys non-financial assets, other than inventories and deferred tax assets,
are reviewed at each reporting date to determine whether there is any indication of impairment. If any such
indication exists, then the assets recoverable amount is estimated in order to determine the extent of
impairment loss (if any). Where it is not possible to determine the recoverable amount of an individual asset, the
company estimates the recoverable amount of the cash generating unit (CGU) to which the asset belongs. An
impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable
amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset or CGU. For the purpose of impairment testing, the company considers GP and GPIT as the smallest
identifiable groups of assets (CGU).
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are
allocated to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.
3.6
Inventories
Inventories consisting of scratch cards, SIM cards, mobile handsets, data cards, other devices and IT accessories
are valued at lower of cost and net realisable value. Costs of inventories include expenditure incurred in
acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their
existing location and condition. Cost of inventories is determined by using the weighted average cost formula.
Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying
value of inventories to the lower of cost and net realisable value. Net realisable value is based on estimated
selling price in the ordinary course of business less the estimated costs of completion and the estimated costs
necessary to make the sale.
3.7
Employee benefits
The company maintains both defined contribution plan and defined benefit plan for its eligible permanent
employees. The eligibility is determined according to the terms and conditions set forth in the respective deeds.
Both of the plans are funded and are registered under Income Tax Ordinance 1984.
(a)
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the
loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the
assets carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
81
Annual Report
2013
The company recognises contribution to defined contribution plan as an expense when an employee has
rendered related services in exchange for such contribution. The legal and constructive obligation is limited to
the amount it agrees to contribute to the fund.
(b)
Current service cost, past service cost and gain/loss on settlement and net interest on the net defined benefit
liability (asset) are recognised in profit or loss. Service cost and gain/loss on settlement are classified as
personnel expense and net interest on the net defined benefit liability (asset) is classified as interest expense.
Remeasurements of the net defined liability (asset) are recognised in other comprehensive income, comprising:
i)
ii)
The above changes to accounting policies have been applied for the reporting period beginning on 1 January
2013 and applied retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors. However, Grameenphone had net defined benefit asset as at 31 December 2012 and the
amount of asset was insignificant; hence no adjustment was given in the financial statements.
82
(c)
3.8
Income tax
Income tax expenses comprise current and deferred taxes. Income tax expenses are recognised in profit or loss
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
(a)
Current tax
Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous periods.
The tax rate used for the reporting periods is as follows:
Year
Tax rate
2012
35%
2013
40%
Being a private limited company, applicable tax rate for GPIT is 37.5%. However IT enabled services provided by
GPIT are exempted from income taxes until 30 June 2015 as per Finance Act 2013.
Annual Report
2013
(b)
Deferred tax
Deferred tax is recognised in compliance with IAS/BAS 12 Income Taxes, providing for temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for
taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by the date
of statement of financial position. Deferred tax assets and liabilities are offset if there is a legally enforceable
right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority
on the same taxable entity.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available
against which the deductible temporary difference can be utilised. Deferred tax assets are reviewed at each
year-end and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
3.9
Provisions
A provision is recognised in the statement of financial position when the company has a legal or constructive
obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. Provision is ordinarily
measured at the best estimate of the expenditure required to settle the present obligation at the reporting date.
Where the company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a
separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is
presented in the income statement net of any reimbursement. If the effect of the time value of money is
material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks
specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.
83
Annual Report
2013
3.11
(a)
Services: subscription and traffic fees, connection fees, interconnection fees, roaming charges, fees for
leased lines and leased networks.
Customer equipment is primarily mobile devices/phones and data card.
(b)
Connection fees
Connection fees that are charged and not allocated to the other elements of an arrangement are deferred and
recognised over the periods in which the fees are expected to be earned. The earning period is the expected
period of the customer relationship and is based on past history of churn.
(c)
Customer equipment
Revenues from sales of customer equipment are normally recognised when the equipment, including the
related significant risks and rewards of ownership, is transferred to the buyer and the company retains neither
continuing managerial involvement to the degree usually associated with ownership nor effective control over
the goods sold.
(d)
Discounts
Discounts are often provided in the form of cash discounts or free products and services delivered by the
company or by external parties. Discounts are recognised on a systematic basis over the period the discount is
earned. Cash discounts or free products and services given as part of sales transactions are recognised as a
reduction of revenue. Free products or services provided that are not related to sales transactions are
recognised as expenses.
84
(e)
(f)
Annual Report
2013
customers, after trade discounts, with any related expenses charged as operating costs. Where the company
acts as an agent, the expenses are offset against the revenues and the resulting net revenues represent the
margins or commissions earned for providing services in the capacity of an agent.
Revenues from roaming are recognised gross in line with generally accepted accounting principles within the
telecommunications industry.
Licence fees payable to Bangladesh Telecommunication Regulatory Commission (BTRC) that are calculated on
the basis of revenue share arrangements are not offset against the revenues. Instead, they are recognised as
operating costs because the company is considered to be the primary obligor.
3.12 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the
arrangement at the inception date: whether fulfilment of the arrangement is dependent on the use of a specific
asset or assets and the arrangement conveys a right to use the asset, even if that right is not explicitly specified
in an arrangement. Leases are classified as finance leases whenever the terms of lease transfer substantially all
the risk and rewards of ownership to the lessee. All other leases are classified as operating leases.
(a)
Operating lease payments are recognised as an expense on straight line basis over the lease term, except where
another systemic basis is more representative of the time pattern in which economic benefits from the leased
assets are consumed. Contingent rentals arising under operating leases are recognised as an expense in the
period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as
liability. The aggregate benefit of incentives is recognised as a reduction of rental expenses on a straight line
basis, except where another systematic basis is more representative of the time pattern in which economic
benefits from the leased assets are consumed.
(b)
3.13
Lease payments are apportioned between finance expenses and reduction of lease obligation so as to achieve
a constant rate of interest on the remaining balance of liability. Finance expenses are immediately recognised
in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised.
Contingent rentals are recognised as expenses in the period in which they incur.
85
Annual Report
2013
3.14 Earnings per share
The company presents basic and diluted (when dilution is applicable) earnings per share (EPS) for its ordinary
shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the company
by the weighted average number of ordinary shares outstanding during the period, adjusted for the effect of
change in number of shares for bonus issue, share split and reverse split. Diluted EPS is determined by adjusting
the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares
outstanding, for the effects of all dilutive potential ordinary shares. However, dilution of EPS is not applicable for
these financial statements as there was no dilutive potential ordinary shares during the relevant periods.
3.15 Events after the reporting period
Amounts recognised in the financial statements are adjusted for events after the reporting period that provide
evidence of conditions that existed at the end of the reporting period. No adjustment is given in the financial
statements for events after the reporting period that are indicative of conditions that arose after the reporting
period. Material non-adjusting events are disclosed in the financial statements.
86
24,144,326
3,641,296
Transmission equipment
125,187,686
21,526,661
117,509,365
7,678,322
12,901,542
110,511,074
6,998,290
8,625,119
1,213,580
Vehicles
214,035
2,332,883
72,532
151,474
2,070,556
6,115,972
550
74,313,898
4,058,116
Building
806,976
Taka'000
the year
2013
Taka'000
Addition
during
As at
1 January
Name of assets
Year 2013
Cost
53,282,707
-
26,214,882
3,700,448
2,365,730
1,417,113
117,477,622
11,240,771
128,718,393
7,678,322
136,396,714
(92,322)
(39,685)
(10,502)
(1,658,572)
(8,659,062)
(10,317,633)
(10,317,633)
56,139,534
2,856,828
53,282,707
747,968
1,992,505
3,002,454
10,931,827
36,131,502
78,913,836
(1,516,033)
11,968,744
344,416
11,624,328
11,624,328
126,704
184,006
267,716
2,917,792
7,929,786
198,324
4,058,116
476,451
807,497
(29)
Taka'000
-
Taka'000
during
(1,634,246)
(1,634,246)
(1,634,246)
(5,286)
(39,540)
(91,565)
66,474,032
3,201,243
63,272,789
63,272,789
869,385
2,136,971
3,178,605
13,849,619
69,922,682
4,477,078
65,445,604
11,240,771
54,204,833
547,728
228,759
521,843
12,365,264
36,350,402
3,383,341
674,775
-
42,563,435
807,497
Taka'000
2013
As at
31 December
Carrying amount
Taka'000
2013
As at
31 December
(1,497,854)
Taka'000
Taka'000
the year
Disposal/
Adjustment
Depreciation
Taka'000
2013
2013
Charged
during
the year
As at
1 January
As at
31 December
the year
during
Disposal/
Adjustment
Annual Report
2013
87
88,376
14,526,691
1,267,143
108,990,316
Vehicles
29,468,418
7,678,322
122,943,486
14,941,727
29,468,418
6,274,849
115,265,165
116,269
2,354,865
703,569
3,307,801
24,557,393
Transmission equipment
10,310,383
3,841,952
72,104,134
Base station
293
4,058,116
806,713
Building
the year
2012
Taka'000
during
1 January
Taka'000
Addition
As at
(26,439,143)
(26,439,143)
(14,213,584)
(12,225,560)
(111,984)
(122,538)
(169,520)
(3,720,868)
(8,100,619)
(30)
Taka'000
during
the year
Adjustment
Disposal/
Cost
88
Name of assets
Year 2012
125,972,761
7,678,322
118,294,440
7,002,993
53,481,554
2,522,304
50,959,250
712,507
50,959,250
1,243,535
1,906,034
3,023,155
10,736,314
11,754,870
334,523
11,420,346
11,420,346
120,832
212,180
376,983
2,763,273
7,748,349
198,729
277,722
34,303,518
Taka'000
year
during the
(8,848,563)
(8,848,563)
(8,848,563)
(77,051)
(119,748)
(163,638)
(2,567,761)
(5,920,365)
Taka'000
during
the year
Adjustment
Disposal/
Depreciation
Charged
Taka'000
2012
1 January
As at
111,291,447
2,348,595
4,376,001
24,144,326
74,313,898
4,058,116
806,976
Taka'000
2012
31 December
As at
56,387,861
2,856,828
69,584,900
4,821,494
7,002,993
64,763,407
57,760,414
487,247
350,129
1,139,502
13,212,499
38,182,396
3,581,665
806,976
Taka'000
2012
31 December
As at
Carrying amount
53,531,033
53,531,033
756,288
1,998,466
3,236,499
10,931,827
36,131,502
476,451
Taka'000
2012
31 December
As at
Annual Report
2013
Annual Report
2013
4.1
Land
Land represents freehold land acquired for office premises and base stations.
4.2
Base station
Disposal of Tk. 1,516,033,374 includes accounting adjustment of Tk. 1,045,683,387. This accounting adjustment
is for derecognition of fully depreciated assets no longer in use.
4.3
2012
Taka'000
293
10,081,055
3,263,635
72,532
214,035
8,625,119
116,269
88,376
14,213,584
663,955
Total transfer of CWIP also includes capital inventory write off of Tk. 33,942,099.
4.3.2 Capital work in progress - components
Capital work in progress as at 31 December 2013 includes capital inventory of Tk. 8,566,032,092 (2012: Tk.
3,197,018,118) and work-in-progress of Tk. 2,674,738,469 (2012: Tk. 3,801,272,214).
4.4
Land
Building
Base station
Transmission equipment
Computers and other IT equipment
Furniture and fixtures
Vehicles
2013
Taka'000
550
6,115,972
2,070,556
151,474
89
the year
2012
30,551,077
61,427,686
765,431
12,507,390
11,741,959
29,880,383
30,876,609
5,920,000
996,226
5,821,959
Taka'000
during
1 January
Taka'000
Addition
17,248,875
34,558,128
As at
348,314
42,969,609
17,309,253
42,621,294
60,378
17,248,875
6,820,911
35,800,383
Name of assets
Year 2012
the year
2013
Taka'000
during
1 January
Taka'000
Addition
As at
Cost
(30,952,456)
(30,952,456)
Taka'000
during
the year
Adjustment
Disposal/
Cost
(17,534,404)
(18,645,189)
(1,110,785)
(1,110,785)
Taka'000
42,982,621
364,052
42,618,569
35,800,383
6,818,185
Taka'000
2012
31 December
As at
62,785
58,882,547
58,819,762
53,049,258
5,770,504
Taka'000
2013
during
the year
31 December
As at
Adjustment
Disposal/
90
Name of assets
Year 2013
3,422,029
5,485,449
3,422,029
2,599,252
822,777
Taka'000
the year
during the
Charged
Taka'000
during
the year
Adjustment
Disposal/
8,907,478
8,907,478
3,641,632
5,265,846
Taka'000
2012
34,075,143
364,052
33,711,090
32,158,751
1,552,339
Taka'000
2012
As at
31 December
31 December
Carrying amount
62,785
47,734,203
47,671,418
46,838,339
833,079
Taka'000
2013
31 December
As at
Carrying amount
As at
11,148,344
11,148,344
6,210,919
4,937,425
Taka'000
2013
31 December
As at
(1,110,785)
(1,110,785)
(1,110,785)
Taka'000
the year
during
Adjustment
Disposal/
Amortisation
Amortisation
3,370,286
3,370,286
2,569,287
800,999
Taka'000
the year
during the
Charged
5,485,449
1,042,380
4,443,069
Taka'000
2012
1 January
As at
8,888,843
8,888,843
3,641,632
5,247,211
Taka'000
2013
1 January
As at
Annual Report
2013
Annual Report
2013
5.1
5.2
5.3
CWIP includes cost of software in process of installation/implementation and also software under testing phase
awaiting users' acceptance.
91
Annual Report
2013
/07/ Inventories
2013
Taka'000
171,373
89,897
SIM card
233,910
223,666
Scratch card
154,752
95,967
560,034
7,365
416,896
7.1
2012
Taka'000
Movement of inventories
IT accessories
SIM card
Scratch card
Taka'000
22,643
901,251
(916,529)
7,365
-
Taka'000
50,293
292,000
(239,019)
103,274
(13,377)
Taka'000
247,653
638,174
(661,375)
224,453
(786)
7,365
89,897
223,666
95,967
1,279,668
785,156
522,781
7,365
(7,365)
(1,192,608)
176,957
(5,584)
(772,763)
236,060
(2,150)
(457,737)
161,011
(6,259)
171,373
233,910
154,752
92
Adjustment/write-off
Balance as at 31 December 2013
7.2
Number of inventories
Handset, data card and other device
SIM card
Scratch card
7.3
2013
Units
Taka'000
33,433
286,438
(210,032)
109,839
(13,872)
2012
Units
99,773
53,762
4,390,528
3,961,472
211,459,231
133,927,959
SIM card
As at 31 December 2013, GP had 4,390,528 SIM cards (2012: 3,961,472 SIM cards) out of which 1,674,609 SIM
cards (2012: 671,205 SIM cards) are intended to be issued with new connection to subscribers. Each new
connection currently attracts Tk. 300 as VAT and Supplementary Duty to be paid to Govt. exchequer.
/08/ Trade and other receivables
2013
Taka'000
2012
Taka'000
6,375,489
(689,720)
6,405,870
(190,702)
5,685,770
6,215,168
4,018
23,258
1,569,304
8,277
27,999
1,287,816
1,596,581
1,324,093
9,588
382,103
2,096,886
1,107,018
2,420,852
851,090
4,527,326
2,340,210
11,809,676
9,879,471
Annual Report
2013
8.1
Interconnection receivables
This includes interconnection receivables of Tk. 5,187,389,260 in 2013 and Tk. 5,159,654,077 in 2012.
8.2
8.3
2012
Taka'000
Opening Balance
Provision made during the year
190,702
542,551
268,428
(32,753)
733,253
(43,534)
689,720
235,675
(44,973)
190,702
412,267
5,273,503
689,720
6,375,489
(689,720)
5,685,770
409,868
5,805,300
190,702
6,405,870
(190,702)
6,215,168
/10/
7,389
4,537,868
4,545,257
6,329
3,558,901
3,565,230
10.1
Cash at bank includes bank overdraft of Tk. 2,498,770,857 from Pubali Bank Limited, Tk. 999,903,323 from Jamuna
Bank Limited and Tk. 289,378,535 from Bank Alfalah Limited. Bank overdrafts that form an integral part of company's
cash management are included as a component of cash and cash equivalents as mentioned in note 3.4.1.
10.2
10.3
Non-cash transaction
During the current year, the company entered into the following significant non-cash investing and financing activities
which are not included in the statement of cash flows:
Grameenphone, in 2013, obtained 3G licence and spectrum at BDT 17,248,875,000 for which it paid BDT
10,391,325,000 in 2013. The rest of the amount is shown as liability (Note 21.2).
8.4
2013
Taka'000
93
Annual Report
2013
/11/
Share capital
2013
Taka'000
Authorised:
4,000,000,000 ordinary shares of Tk. 10 each
2012
Taka'000
40,000,000
40,000,000
40,000,000
40,000,000
13,503,000
13,503,000
13,503,000
13,503,000
The company was initially registered with ordinary shares of Tk. 43.00 each. These shares were subsequently converted
into Tk. 10 shares through a 43:1 split at the 16th EGM (held on 15 July 2008) and 1:10 reverse split at the 19th EGM (held
on 2 July 2009).
There has been no change in share capital during the current and comparative period.
11.1
a)
Shareholding position
Percentage of shareholdings
As at
As at
As at
As at
31 December
2013
31 December
2012
31 December
2013
31 December
2012
55.8%
0.0%
0.0%
0.0%
34.2%
55.8%
0.0%
0.0%
0.0%
34.2%
7,534,077,240
2,150
2,150
2,150
4,617,664,090
7,534,077,240
2,150
2,150
2,150
4,617,664,090
0.0%
0.0%
10.0%
100%
0.0%
0.0%
10.0%
100%
220
220
1,351,252,000
13,503,000,220
220
220
1,351,252,000
13,503,000,220
Name of shareholders
b)
% of holding
No. of shareholders
94
As at
As at
As at
As at
31 December
2013
31 December
2012
31 December
2013
31 December
2012
1-500
501-5,000
5,001-10,000
10,001-20,000
20,001-30,000
30,001-40,000
48,108
11,820
803
381
110
49
53,842
12,376
842
381
103
63
10,595,433
17,696,880
5,866,859
5,428,607
2,744,102
1,690,778
11,862,686
17,971,537
6,124,087
5,388,878
2,481,795
2,201,994
40,001-50,000
50,001-100,000
100,001-1,000,000
1,000,001-1,000,000,000
46
90
88
21
61,516
41
78
98
19
67,843
2,161,578
6,389,433
26,418,847
1,271,307,505
1,350,300,022
1,893,983
5,473,513
30,392,153
1,266,509,396
1,350,300,022
Shareholding range
/12/
Share premium
Total amount of Tk. 8,384,003,437 was received as share premium in respect of shares issued to shareholders. Net issue
cost of Tk. 543,777,495 was set off against share premium as per IAS/BAS 32 Financial Instruments: Presentation.
/13/
Capital reserve
In 1999, Grameenphone issued 5,086,779 preference shares of Tk. 45.84 each, which were converted into ordinary
shares of Tk. 43.00 each in 2004. The balance Tk. 2.84 per share was transferred to capital reserve account. The
conversion was in accordance with clauses 41 to 44 of Memorandum and Articles of Association of GP. This amount is
not distributable as dividend as per the Companies Act 1994.
Annual Report
2013
/14/
/15/
General reserve
Grameenphone availed tax holiday benefits from 1 June 2001 to 31 May 2006 as per the provisions of Income Tax
Ordinance 1984. A tax holiday reserve was created during the Tax Holiday period to ensure investment in compliance
with the said Ordinance. The reserve was subsequently transferred to general reserve upon fulfilment of necessary
conditions. This general reserve was distributed as dividend in 2013 after being transferred to retained earnings.
/16/
Non-controlling interest
Non-controlling interest is the equity in GPIT not attributable, directly or indirectly, to GP. This includes the amount of
paid up capital and proportionate share of accumulated profit/loss of GPIT attributable to shareholders of GPIT other
than GP. GP lost control over GPIT in September 2013 after sale of its 51% stake in GPIT. Hence, there is no
non-controlling interest in 2013.
/17/
2013
Taka'000
Finance lease obligation
Less: Current portion (Note 21.1)
5,312,197
5,019,806
1,250
5,310,947
5,019,806
Future minimum
lease payments
Interest
Taka'000
Taka'000
798,566
3,495,610
9,025,303
13,319,479
797,316
3,114,857
4,095,108
8,007,281
Future minimum
lease payments
Interest
Taka'000
Taka'000
768,431
3,375,072
9,944,407
14,087,910
2012
Taka'000
768,431
3,375,072
4,924,601
9,068,104
Present value of
minimum lease
payments
Taka'000
1,250
380,753
4,930,194
5,312,197
Present value of
minimum lease
payments
Taka'000
5,019,806
5,019,806
Obligation under finance lease was initially measured at an amount equal to the present value of minimum lease
95
Annual Report
2013
/18/
/19/
As at 31 December 2013
Property, plant and equipment (excluding land,
CWIP and leased assets) (Note 4)
Property, plant and equipment under finance lease (Note 4)
Difference for vehicle (Note 19.1)
Notes to the Financial Statements
Investment in associate
3G licence and spectrum
Trade receivables (Note 8)
Finance lease obligation including current portion (Note 17)
Other current liabilities (profit sharing plan)
2G licence and spectrum
Net taxable temporary difference
Deferred tax liability @40% tax rate (Note 3.8)
Deferred tax liability @15% tax rate (Note 19.2)
Deferred tax liabilities
As at 31 December 2012
Property, plant and equipment (excluding land,
CWIP and leased assets) (Note 4)
Property, plant and equipment under finance lease (Note 4)
Difference for vehicle (Note 19.1)
96
Carrying
amount
Tax base
Taxable/(deductible)
temporary difference
Taka'000
Taka'000
Taka'000
53,397,336
4,477,078
(108,611)
25,003,336
-
570,516
16,903,734
5,685,770
(5,312,197)
(5,916,638)
25,714,082
36,751
16,098,950
6,209,861
28,177,067
28,394,000
4,477,078
(108,611)
32,762,467
533,765
804,784
(524,092)
(5,312,197)
(5,916,638)
(2,462,984)
19,885,105
7,740,536
80,065
7,820,601
56,421,392
4,821,494
(65,891)
25,009,967
-
31,411,425
4,821,494
(65,891)
36,167,028
5,797,875
(5,019,806)
(265,962)
(51,693)
(4,281,970)
5,844,167
-
(46,292)
(5,019,806)
(265,962)
(51,693)
(4,281,970)
26,501,305
35%
9,275,457
19.2
Annual Report
2013
/20/
2013
Taka'000
Security deposits from subscribers and channel partners
489,662
459,383
116,201
110,951
97,452
4,281,970
20.1
703,316
4,852,304
Opening balance
Provision made during the year
110,951
11,666
122,617
104,716
10,712
115,428
(6,416)
116,201
(4,477)
110,951
20.2
232,615
(21,000)
325,497
67,992
211,615
(211,615)
-
393,489
(393,489)
-
Net defined benefit liability is nil at the end of 2013. There is no change in the discount rate (12.0%) and expected salary
increase rate (10%). Grameenphone engaged a qualified actuary in the measurement of this post-employment benefit
plan (gratuity).
/21/
7,859,317
14,291,590
14,701,418
8,448,323
12,658,111
11,346,761
36,852,325
32,453,195
6,667
486,755
3,509,476
2,676,884
27,856
40,368,468
35,644,690
21.1
Accrued expenses include provision for BTRC revenue share, annual operating licence fee, operation, maintenance,
office running expenses and accrued financial expenses. It also includes current portion of the finance lease obligation
(Tk. 1,250,171).
21.2
This includes liability for telecom licence and spectrum-2011 and 3G licence and spectrum-2013.
Grameenphone recognises asset retirement obligations (ARO) in respect of roof-top base stations and office space for
any constructive and/or legal obligations for dismantling, removal or restoration incurred by the company as a consequence of installing or constructing the sites. ARO is measured at the present value of expected cash out flows required
to settle such obligations. Unwinding of the discount is charged as financial expense in the profit or loss.
97
Annual Report
2013
/22/
2013
Taka'000
2012
Taka'000
17,896,437
19,605,354
37,501,790
17,806,349
13,656,179
31,462,528
(14,038,057)
23,463,733
(13,565,042)
17,897,486
/24/
Revenue
The following is an analysis of revenue for the year:
92,943,359
1,874,894
1,805,974
89,719,548
275,111
1,925,787
96,624,227
91,920,446
24.2
24.3
Other revenues
This mainly includes revenue from telecom facility sharing and commission income.
/25/
98
4,913,064
2,842,785
7,755,850
4,460,819
1,645,851
6,106,670
26.1
Number of employees
Total number of employees having annual salary of BDT 36,000 or above each was 3,204 in 2013 and 3,458
in 2012.
26.2
1,376,584
1,284,795
148,447
166,017
12,726
10,981
1,537,757
1,461,793
Key management personnel includes employees of the rank of Deputy General Manager (DGM), DGM equivalent and
above.
Annual Report
2013
/27/
2012
Taka'000
4,030,944
333,164
659,304
2,853,004
303,521
393,176
5,023,411
3,549,700
Service maintenance fee includes costs related to operation and maintenance of serviceability of mobile
communication network.
/28/
5,023,853
2,200,669
7,221,955
5,969,153
1,804,803
5,578,581
14,446,477
13,352,537
Sales, marketing and representation costs include costs related to trade marketing and subscriber acquisition.
/29/
/30/
30.1
995,058
1,800
1,512,549
2,260
1,298,590
1,945,799
521,333
(94,023)
(27,364)
(984)
8,236
939,082
1,244,191
1,943,042
(58,136)
(73,904)
(3,324)
(50,475)
926,361
5,587,529
5,442,564
30.2
109,927
-
102,903
-
109,927
102,903
Grameenphone shares 5.5% of its revenue as 'revenue sharing' and 1.0% of its revenue as 'contribution to social
obligation fund' with BTRC as per licensing conditions. Licensing conditions also require Grameenphone to pay annual
licence fee and annual spectrum fee and charges.
99
Annual Report
2013
30.3
542,551
(21,218)
521,333
2012
Taka'000
(32,753)
(25,383)
(58,136)
Provision for doubtful debts has been made as per policy of the company mentioned in Note 3.5.
30.4
Others
This includes office supplies, printing and postage, travelling, subscriptions, meeting, insurance, entertainment
expenses etc.
/31/
/32/
100
11,968,744
3,370,286
15,339,030
11,754,870
3,422,029
15,176,899
/33/
/34/
(332,134)
2,098,129
828,962
2,594,957
34.1
This includes mainly interest charged in relation to the periodic unwinding of liability to acquire Telecom
licence and spectrum-2011.
/35/
/36/
(667,195)
1,803,617
2,169,794
3,306,216
(1,214,576)
21,696
(1,192,879)
(44,589)
220,022
175,433
19,605,354
(1,454,856)
18,150,498
13,656,179
(967,531)
12,688,647
Income tax expense includes additional tax impact of Tk 3,230,179,131 for the income year 2012 resulting from change
in tax rate from 35% to 40% by Finance Act 2013.
Annual Report
2013
/37/
37.1
2012
Taka'000
14,701,574,489
1,350,300,022
17,504,769,271
1,350,300,022
10.89
12.96
37.2
/38/
* Credit risk
* Liquidity risk
* Market risk
38.1
Credit risk
Credit risk is the risk of a financial loss to the company if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the company's receivables from subscribers, interconnect
operators, roaming partners and dealers.
The management has overall responsibility for the establishment and oversight of the company's risk management
framework. The company's risk management policies are established to identify and analyse the risks faced by the
company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management
policies, procedures and systems are reviewed regularly to reflect changes in market conditions and the company's
activities. This note presents information about the company's exposure to each of the following risks, the company's
objectives, policies and processes for measuring and managing risk, and the company's management of capital. The
company has exposure to the following risks from its use of financial instruments:
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
In monitoring credit risk, debtors are grouped according to their risk profile, i.e. their legal status, financial condition,
ageing profile etc. Accounts receivable are mainly related to the company's subscribers/customers, interconnect
operators and roaming partners for provision of services, while other receivables represent receivable for accrued
interest and receivables arising from external parties other than for services. The company's exposure to credit risk on
accounts receivables is mainly influenced by the individual payment characteristics of post paid subscribers and
interconnect operators. Interconnection receivables are normally realised within 3 months from when they are invoiced.
The company employs financial clearing house to minimise credit risk involving collection of roaming receivables.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of
financial position.
a)
5,685,770
6,215,168
4,018
23,258
1,569,304
1,596,581
8,277
27,999
1,287,816
1,324,093
78,276
4,537,868
11,898,495
143,712
3,558,901
11,241,874
101
Annual Report
2013
Exposure to credit risk (Contd..)
The maximum exposure to credit risk for accounts receivable as at the statement of financial position date by
geographic regions was:
2013
2012
Taka'000
Taka'000
Domestic
Asia
Europe
Australia
America
Africa
b)
5,339,712
156,488
174,559
7,115
5,175
2,721
5,749,375
223,764
178,021
6,119
54,858
3,031
5,685,770
6,215,168
Ageing of receivables
The ageing of gross interconnection receivables as at the statement of financial position date was:
102
2,130,159
173,546
244,217
280,131
596,029
231,564
1,531,744
821,056
801,991
661,002
304,555
845,966
778,087
946,998
5,187,389
5,159,654
Impairment losses
Impairment losses on the above receivables were recognised as per the company policy mentioned in Note 3.5.
14,701,418
7,700,000
7,047,796
14,291,590
Accrued expenses
Trade payables
7,859,317
11,665,214
5,310,947
Taka'000
Carrying amount
15%
December 2014
January 2014
December 2014
December 2014
December 2014
7,047,796
32,374,133
14,701,418
7,700,000
7,047,796
78,509,502
N/A
10%-11%
N/A
7,700,000
2,981,428
8,146,206
14,291,590
N/A
5,894,488
212,466
391,749
7,859,317
13,589,903
13,319,479
20,465,733
11,719,990
6,145,384
2,451,398
12,661,720
10,556,519
3,636,417
-
9,025,303
7,889,610
2,666,909
Taka'000
1,964,829
2-5 years
Taka'000
1,622,698
228,713
406,817
828,701
1-2 years
Taka'000
Taka'000
Taka'000
Taka'000
As at 31 December 2013
Contractual
cash flows 6 months or less 6-12 months
N/A
June 2027
Maturity date
Nominal Interest
rate
The following are the contractual maturities of financial liabilities of the company:
requirement is determined in advance through cash flow projections and credit lines with banks are negotiated accordingly.
of credit with scheduled commercial banks (Note 42) to ensure payment of obligation in the event that there is insufficient cash to make the required payment. The
expected operational expenses, including financial obligations through preparation of the cash flow forecast. Moreover, the company seeks to maintain short term lines
incurring unacceptable losses or risking damage to the company's reputation. Typically, the company ensures that it has sufficient cash and cash equivalents to meet
equivalents) is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company's approach to managing liquidity (cash and cash
Liquidity risk
38.2
Annual Report
2013
103
11,346,761
8,195,000
1,322,601
8,448,323
12,658,111
Trade payables
Accrued expenses
5,019,806
Taka'000
Carrying amount
December 2013
June 2013
December 2013
December 2013
December 2013
June 2027
Maturity date
N/A
13.5%-14.75%
N/A
N/A
N/A
15%
Nominal Interest
rate
104
56,043,639
1,322,601
8,195,000
11,346,761
8,448,323
12,658,111
14,072,843
Taka'000
Contractual
cash flows
25,746,756
1,322,601
8,195,000
2,301,108
6,336,242
7,215,123
376,682
Taka'000
798,566
16,977,404
798,566
Taka'000
1-2 years
9,045,653
2,112,081
5,442,988
376,682
Taka'000
6-12 months
As at 31 December 2012
6 months or less
2-5 years
4,444,849
4,444,849
Taka'000
8,076,064
8,076,064
Taka'000
Annual Report
2013
Market risk
(14,630,453)
(1,907)
2,805
(1,658,945)
(1,658,945)
(4,009)
(5,146)
(3,239)
1,137
2,805
(22,518)
(22,518)
(22,518)
2,805
JPY
1,137
EUR
GBP
(1,658,945)
NOK
(1,027,601)
(2,002,809)
(1,628,119)
(374,690)
975,208
452,790
64,912
457,507
USD
(3,672,530)
(3,674,269)
(3,674,269)
1,739
1,739
NOK
EURO (EUR)
US Dollar (USD)
131.30
107.98
0.98
0.74
16.60
12.80
128.68
80.30
77.68
107.06
31 December 2012
Taka
Exchange rate as at
31 December 2013
Taka
(12)
12,231
12,231
EUR
JPY
4,718
(37,101) (19,516)
- (49,331) (19,516)
- (49,319) (19,516)
4,718
4,718
GBP
As at 31 December 2012
* Payable to other Telenor entities represents payable for business service costs, consultancy fees etc. which are included mainly in trade and other payables.
Net exposure
(15,181,275)
(3,065,417)
(450,644)
(11,665,214)
184,325
Cash at bank
550,822
346,058
20,439
USD
Accounts receivable
As at 31 December 2013
The company's exposure to foreign currency risk was as follows (Taka in thousand):
The company is exposed to currency risk on certain revenues and purchases such as roaming revenues and expenses, telecom equipment purchases, network related costs and
interest expense. Majority of the company's foreign currency transactions are denominated in USD and relate to procurement of capital items from abroad. The company also has
exposure in NOK relating to business service costs and consultancy costs. The company maintains USD bank accounts where all receipts from international roaming services are
deposited in and all corresponding payments are made from.
Currency risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks:
currency risk, interest rate risk and other price risk. The objective of market risk management is to manage and control market risk.
a)
38.3
Annual Report
2013
105
Annual Report
2013
Market risk (Contd..)
ii) Foreign exchange rate sensitivity analysis for foreign currency expenditures
A change of 10 basis points in foreign currencies would have increased/ (decreased) equity and profit or loss of
the company by the amounts shown below. This analysis assumes that all other variables, in particular interest
rates remain constant.
2013
Expenditures denominated in USD
Expenditures denominated in NOK
Expenditures denominated in GBP
Expenditures denominated in EURO
Expenditures denominated in JPY
Exchange rate sensitivity
Profit or loss
10 bp increase 10 bp decrease
Taka'000
Taka'000
Equity
10 bp increase
Taka'000
10 bp decrease
Taka'000
(14,630)
(1,659)
3
(4)
(23)
(16,313)
14,630
1,659
(3)
4
23
16,313
(14,630)
(1,659)
3
(4)
(23)
(16,313)
14,630
1,659
(3)
4
23
16,313
(1,028)
(3,673)
5
(37)
(20)
(4,752)
1,028
3,673
(5)
37
20
4,752
(1,028)
(3,673)
5
(37)
(20)
(4,752)
1,028
3,673
(5)
37
20
4,752
2012
106
Carrying amount
As at
As at
31 December 2013
31 December 2012
Taka'000
Taka'000
78,276
143,712
7,700,000
8,195,000
11,665,214
Annual Report
2013
Fair value of financial assets and liabilities of the company together with carrying amount shown in the statement
of financial position are as follows:
As at 31 December 2013
Carrying amount
Fair value
Financial assets
Taka'000
As at 31 December 2012
Carrying amount
Fair value
Taka'000
Taka'000
Taka'000
78,276
78,276
143,712
143,712
11,809,676
11,809,676
9,879,471
9,879,471
5,310,947
11,665,214
40,368,468
7,700,000
7,047,796
5,310,947
11,665,214
N/A*
7,700,000
N/A*
5,019,806
35,644,690
8,195,000
1,322,601
5,019,806
N/A*
8,195,000
N/A*
Financial liabilities
107
2013
2012
15.00%
11.50%-12.50%
6-month-LIBOR + 3.5%
15.00%
12.00%-14.50%
-
* Determination of fair value is not required as per the requirements of IFRS/BFRS 7 Financial Instruments: Disclosure. However, fair value of such instruments is not likely to be significantly different from the carrying amounts
of such instruments.
/39/ Capital management
Companys policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. Capital consists of total equity attributable to the equity
holders of the parent. The Board of Directors monitors the level of capital as well as the level of dividend to the
ordinary shareholders.
In order to maintain or adjust the capital structure, the company may adjust the amount of dividend, return
capital to shareholders, issue new shares or obtain long-term debt.
No changes were made in the objectives, policies or processes for managing capital during the year ended 2013
and 2012.
The company is not subject to any externally imposed capital requirement.
108
40.1
872,765
(1,748)
157,992
468,109
-
Shareholder
Shareholder
Shareholder
Shareholder
Shareholder
Associate
Grameen Telecom
Grameen Kalyan
Grameen Shakti
Grameenphone IT Ltd.
Telenor ASA
Telenor Consult AS
IT support revenue
Dividend payment
Dividend payment
Commission expense
Dividend payment
Dividend payment
Dividend payment
23,495
(1,910)
807
60,779
4,097
-
308,855
27,364
6,207
(9,582)
1,877
7,727
58,693
(6,166)
862,509
400,529
0.341
0.341
198,940
7,157,379
1,265,324
0.308
0.308
220,326
6,464,730
11,677,820
Dividend payment
10,547,708
Shareholder
Dividend payment
2012
Taka'000
Shareholder
2013
Taka'000
Nature of transactions
Nature
Annual Report
2013
Accounts payable
Accounts receivable
Accounts receivable
Accounts payable
Accounts receivable
Accounts payable
Accounts receivable
Accounts payable
Accounts receivable
Receivable for cell Bazaar revenue sharing
Payable for cell Bazaar revenue sharing
Accounts payable
Accounts receivable
Telenor Consult AS
Telenor Pakistan
Telenor Start II AS
(27,159)
-
(227)
1,254
(168,095)
-
2,749
(51,250)
407,248
14,207
(2,284,094)
Accounts payable
Telenor ASA
Accounts receivable
15,062
157,958
Accounts receivable
Accounts payable
3,170
Associate
Grameenphone IT Ltd.
Accounts receivable
Taka'000
2013
(35,484)
Shareholder
Grameen Telecom
Nature of transactions
Accounts payable
Nature
40.2
10,255
(2,577)
(52)
1,406
(15,359)
2,664
(4,779)
949
10,818
(1,042,828)
338,223
28,272
(2,630,030)
(16,859)
11,118
Taka'000
2012
Annual Report
2013
109
Annual Report
2013
/41/
2013
Taka'000
2012
Taka'000
61,802
6,195,633
-
270,876
6,471,203
823,079
843,567
393,996
25,686
462,327
181,960
965,612
816,334
38,274
555,669
236,156
(270,440)
-
(442,125)
(25,505)
The company enjoys composite working capital facilities including both funded and non-funded facilities from 21
banks and 1 non-bank financial institution (2012: 18 banks and 1 non-bank financial institution). The non-funded
facilities include Letters of Credit (LC), Shipping Guarantee, Letters of Guarantee and Foreign Exchange Forward
Contracts. The funded facilities include overdraft facility, short term loan and import loan. The aggregate amount
of arranged composite working capital facilities is Tk. 50,134 million (2012: Tk. 37,657 million) of which
non-funded limit is Tk. 30,348 million (2012: Tk. 23,684 million) and funded limit is Tk. 29,876 million (2012: Tk.
20,993 million).
As per the approval of the Board of Directors of GP, the total amount of short-term funded facilities are limited to
maximum drawing of USD 250 million (2012: USD 250 million) in equivalent BDT.
Security against short term credit facilities
The short-term credit facilities are unsecured and backed by standard charge documents as per terms and
conditions set by respective banks and financial institutions.
110
/43/
Capital commitments
As at the reporting date the company had the following capital commitments:
Purchase orders
7,078,279
4,122,943
/44/ Contingencies
The Company is currently, and may be from time to time, involved in a number of legal proceedings, including
inquiries from, or discussions with, governmental authorities that are incidental to its operations. However, save
as disclosed below, the Company is not currently involved in any legal or arbitration proceedings which may have
a significant effect on the financial position or profitability of the company but for which any provision has not
been recognised in these financial statements.
(a)
BTRC audit
BTRC carried out an audit of the information system of Grameenphone from April 2011 and issued a letter on 3
October 2011 claiming an amount of Tk. 30,341,108,581 on various grounds. Grameenphone during and after the
audit clarified to both BTRC and auditors appointed by BTRC that those observations were framed on wrong basis.
Grameenphone disagrees to the claim made by BTRC and responded to the letter requesting BTRC to review the
notice. GP also took the issue to the court and the High Court passed an order of status quo valid till 21 May 2013.
The High Court on 15 May 2013 extended the status quo till disposal of the rule.
Annual Report
2013
(b)
(c)
/45/
Other disclosures
45.1
Segment information
Business activities of Grameenphone are not organized on the basis of differences in related products and
services or differences in geographical areas of operations. Grameenphone essentially provides similar products
and services to customers across the country. Management, however, reviews revenue performance of different
services as disclosed in these financial statements.
45.2
111
Annual Report
2013
Supplementary information
Separate Statement of Comprehensive Income of Grameenphone for the year ended 31 December 2013
2013
Taka'000
2012
Taka'000
96,624,227
91,488,936
(7,755,850)
(7,062,188)
(5,023,411)
(14,446,477)
(8,210,803)
(5,587,529)
(15,339,030)
(5,699,358)
(6,471,063)
(4,637,393)
(13,309,130)
(7,589,865)
(5,262,365)
(14,993,978)
(63,425,287)
(57,963,152)
33,198,940
33,525,785
(521,445)
2,594,957
3,314,647
(1,192,879)
171,377
880,632
3,486,024
32,318,308
30,039,761
(18,070,433)
(12,685,226)
14,247,875
17,354,535
14,247,875
17,354,535
10.55
12.85
Revenue
Operating expenses
Cost of material and traffic charges
Salaries and personnel cost
Operation and maintenance
Sales, marketing and commissions
Revenue sharing, spectrum charges and licence fees
Other operating (expenses)/income, net
Depreciation and amortisation
Operating profit
112
Annual Report
2013
General
Authorized Capital
BDT 40,000,000,000
BDT 13,503,000,220
Class of Shares
Voting Rights
Number of Shareholders
Percentage
to
500
48,108
10,595,433
0.78%
501
to
5,000
11,820
17,696,880
1.31%
5,001
to
10,000
803
5,866,859
0.43%
10,001
to
20,000
381
5,428,607
0.40%
20,001
to
30,000
110
2,744,102
0.20%
30,001
to
40,000
49
1,690,778
0.13%
40,001
to
50,000
46
2,161,578
0.16%
50,001
to
100,000
90
6,389,433
0.47%
100,001
to
1,000,000
88
26,418,847
1.96%
1,000,000,000
21
1,271,307,505
94.15%
61,516
1,350,300,022
100%
1,000,001 to
Total
113
4. Dividend
For the Year
Dividend Rate
Dividend Per
Share (BDT)
Par Value
Dividend Type
Per Share (BDT)
2013
5.00
10.00
Cash
90 % (Interim Dividend)
9.00
10.00
Cash
50 % (Final Dividend)
5.00
10.00
Cash
90 % (Interim Dividend)
9.00
10.00
Cash
65 % (Final Dividend)
6.50
10.00
Cash
14.00
10.00
Cash
85 % (Final Dividend)
8.50
10.00
Cash
35 % (Interim Dividend)
3.50
10.00
Cash
6.00
10.00
Cash
2012
2011
2010
2009
001
Annual Report
2013
5. GP Share Performance on Stock Exchanges
I.
Monthly Open, High, Low and Close share price and volume of the Companys shares traded on Dhaka Stock
Exchange Ltd. (DSE) during the year 2013:
Month
Open
(BDT)
High
(BDT)
Low
(BDT)
Close
(BDT)
January
174.9
175.0
166.9
168.2
3,784,200
February
168.4
176.1
146.1
147.1
6,736,800
March
144.3
149.8
138.1
146.9
2,479,000
April
146.2
149.8
143.0
143.8
2,705,600
May
144.0
175.5
143.7
173.7
5,448,800
June
174.9
195.2
173.1
178.9
12,525,800
July
182.0
247.2
170.0
184.2
34,210,000
August
180.0
220.0
166.1
213.3
16,486,200
September
217.0
224.6
184.5
189.4
19,280,200
October
184.9
193.9
175.0
192.0
4,421,000
November
190.6
218.0
190.5
203.2
13,651,000
December
200.7
209.7
197.5
200.9
6,503,400
Total Volume
128,232,000
Note:
a. The highest share price of Grameenphone Ltd. on Dhaka Stock Exchange Ltd. (DSE) was BDT 247.2 in July 2013 and the lowest share price was
BDT 138.1 in March 2013.
II. Monthly Open, High, Low and Close share price and volume of the Companys shares traded on Chittagong Stock
Exchange (CSE) during the year 2013:
Month
Open
(BDT)
High
(BDT)
Low
(BDT)
Close
(BDT)
January
174.9
174.9
167.9
168.0
1,048,800
February
168.0
175.0
146.6
146.7
2,387,200
March
146.7
147.2
140.6
145.3
1,060,400
April
145.3
148.2
142.7
142.7
1,378,400
May
142.7
173.6
142.7
172.8
1,024,664
114
Total Volume
June
172.8
192.7
172.8
178.8
1,808,800
July
178.8
239.5
171.0
184.5
5,907,600
August
184.5
215.0
178.4
213.2
2,875,200
September
213.2
220.9
185.1
188.5
3,613,742
October
187.2
191.5
178.6
191.5
824,246
November
191.5
214.4
191.5
202.2
2,250,400
December
202.2
207.6
198.9
203.5
1,073,200
25,252,652
Note:
a. The highest share price of Grameenphone Ltd. on Chittagong Stock Exchange Ltd. (CSE) was BDT 239.5 in July 2013 and the lowest share
price was BDT 140.6 in March 2013.
Annual Report
2013
iiI. Quarterly high low price history of the Companys share for the year 2013
DSE
CSE
2013
Period
2012
2013
2012
High
(BDT)
Low
(BDT)
High
(BDT)
Low
(BDT)
High
(BDT)
Low
(BDT)
High
(BDT)
Low
(BDT)
Quarter 1
176.1
138.1
196.0
144.8
175.0
140.6
192.7
146.9
Quarter 2
195.2
143.0
228.0
183.6
192.7
142.7
222.8
184.9
Quarter 3
247.2
166.1
209.9
104.8
239.5
171.0
209.5
165.7
Quarter 4
218.0
175.0
182.5
158.4
214.4
178.6
177.7
161.1
2012
2013
2012
247.2
228.0
239.5
222.8
138.1
104.8
140.6
146.9
2012
2013
8000
5000
250
4000
200
3000
150
Shares Traded
6000
2000
100
1000
1Q10
2Q10
3Q10
No of
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
14%
130
Rebaased Scale
GP Price
16%
7000
350
300
50
150
12%
110
10%
8%
90
6%
4%
70
2%
50
27-Jan-13
Feb
27-Feb-13
27-Mar-13
Mar
27-Apr-13
Apr
GP Turnover as % of DSE
27-May-13
May
27-Jun-13
Jun
27-Jul-13
Jul
27-Aug-13
Aug
27-Sep-13
Sep
27-O ct-13
Oct
DSEX (Rebased)
27-Nov-13
Nov
27-Dec-13
% of DSE Turnover
2010
400
0%
Dec
DS30 (Rebased)
6.
7.
Associate Company
Name of the Company
Holding
Activity
Grameenphone IT Ltd.
49 %
IT Company
Credit Rating
The Companys credit rating was reaffirmed by Credit Rating Agency of BangladeshLtd.(CRAB) on December 24, 2013.
Long Term
AAA
8.
9.
Short Term
ST-1
Company Website
Anyone can get information regarding Companys activities, products & services or view Annual Report 2013
at www.grameenphone.com
Investor Relations
Institutional investors, security analysts and other members of the professional financial community requiring
additional financial information can visit the Investor Relations section of the Company website:
www.grameenphone.com
10.
Shareholder Services
If you have any queries relating to your shareholding, please contact at 01711555888 or mail to GP Share Office
at shareoffice@grameenphone.com
V.
CSE
115
Glimpse of 16th
Annual General
Meeting
Annual Report
2013
Grameenphone Ltd.
Registered Office: GPHouse, Bashundhara, Baridhara, Dhaka-1229
Share Office: Zahurul Tower, Plot#9, Road#113/A, Gulshan-2, Dhaka-1212
AGENDA
1.
Consideration and adoption of the Directors Report and the Audited Financial Statements of the Company for the year
ended December 31, 2013 together with the Auditors Report thereon.
2. Declaration of Dividend for the year ended December 31, 2013 as recommended by the Board of Directors.
Notice of the 17th Annual General Meeting
3. Election/Re-election of Directors.
118
Sd/Hossain Sadat
Company Secretary
Notes:
Members whose names appeared on the Members/Depository Register as on Record Date i.e. February 20, 2014
are eligible to attend the Annual General Meeting (AGM) and receive dividend.
A Member entitled to attend and vote at the AGM may appoint a Proxy to attend and vote in his/her stead.
The Proxy Form, duly filled and stamped at Tk. 20 must be deposited at the Companys Share Office located at
Zahurul Tower, Plot #9, Road #113/A, Gulshan-2, Dhaka-1212 not later than 72 hours before commencement of the
AGM.
Members/Proxies are requested to record their entry in the AGM well in time on April 09, 2014. The registration
counter will open at 9:00 am on the AGM date.
In case of non-receipt of Annual Report 2013 of the Company sent through courier, Members may collect the same
from the Companys Share Office within April 08, 2014. No additional Annual Report will be distributed at AGM venue.
Annual Report is available in Investor Relations section of the Companys website: www.grameenphone.com
Members are requested to submit to the Companys Share Office on or before April 01, 2014, their written option to
receive dividend. In case of non-submission of such option within the stipulated time, the dividend will be paid off as
deemed appropriate by the Company.
Grameenphone is concerned about the environment and utilizes natural resources in a sustainable way. We request
the members to update their email address and contact number (mobile/fixed phone) with their respective Depository
Participant (DP) for quicker and easier communication. Such cooperation will help conserve paper and minimize the
impact on environment.
Grameenphone Ltd.
Registered Office: GPHouse, Bashundhara, Baridhara, Dhaka-1229
Proxy Form
I/We
of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . being Member of Grameenphone Ltd. do hereby appoint
Mr./Ms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
as my/our PROXY to attend and vote on my/our behalf at the 17 th Annual General Meeting of the Company to be
held on Wednesday, April 09, 2014 at 10:00 am at Bashundhara Convention Center-2, Block-C, Bashundhara R/A,
Baridhara, Dhaka-1229 and at any adjournment thereof.
..............................................................................................
..........................................
..........................................
The Proxy Form, duly filled and stamped, must be deposited at the Companys Share Office located at Zahurul Tower,
Plot#9, Road #113/A. Gulshan-2, Dhaka-1212 not later than 72 hours before commencement of the AGM.
Signature of the Member(s) must be in accordance with the Specimen Signature recorded with the Company.
Signature Verified by
Authorised Signatory of the Company
Grameenphone Ltd.
Registered Office: GPHouse, Bashundhara, Baridhara, Dhaka-1229
Attendance Slip
I/We do hereby record my/our attendance at the 17 th Annual General Meeting of the Company being held on Wednesday,
April 09, 2014 at 10:00 am at Bashundhara Convention Center-2, Block-C, Bashundhara R/A, Baridhara, Dhaka-1229.
Signature Verified by
..........................................
................................................
Note: Please present this Attendance Slip at the registration counter on the AGM date.
Disclaimer
This report contains statements regarding the future in connection with Grameenphones
growth initiatives, profit levels, outlook strategies and objectives. All statements regarding the
future are subject to inherent risks and uncertainties, and many factors may lead to actual
profits and developments deviating substantially from what has been expressed or implied in
such statements.
Grameenphone Ltd.
GPHouse