Beruflich Dokumente
Kultur Dokumente
(ii) (iii)
(c)
in our opinion and to the best of our information and according to the explanations given to us, the balance sheet, profit and loss account, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and give the information required by the Companies Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the companys affairs as at June 30, 2009 and of the profit, its cash flows and changes in equity for the year then ended; and in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the company and deposited in the Central Zakat Fund established under Section 7 of that Ordinance.
(d)
A. F. Ferguson & Co. Chartered Accountants Lahore. Name of engagement partner: Muhammad Masood Dated September 29, 2009
Ford Rhodes Sidat Hyder & Co. Chartered Accountants Islamabad. Name of engagement partner: Sajjad Hussain Gill
35
Balance Sheet
as at June 30, 2009
Note 2009 2008
(Rupees in thousand)
Equity and liabilities Share capital and reserves Authorized capital 11,100,000,000 A class ordinary shares of Rs 10 each 3,900,000,000 B class ordinary shares of Rs 10 each 111,000,000 39,000,000 150,000,000 Issued, subscribed and paid up capital Revenue reserves Insurance reserve General reserve Unappropriated profit 6 1,683,074 30,500,000 16,206,485 99,389,559 Non current liabilities Payable to PTA against WLL license fee Long term security deposits from customers non interest bearing Deferred taxation Employees retirement benefits Deferred government grants 7 8 9 10 11 990,055 2,379,000 14,142,099 1,061,044 18,572,198 Current liabilities Trade and other payables Current portion of payable to PTA against WLL license fee Taxation Dividend payable 12 7 26,114,171 1,953,971 368,180 7,650,000 36,086,322 Contingencies and commitments 13 154,048,079 The annexed notes from 1 to 47 form an integral part of these financial statements. 137,447,852 21,731,667 182,292 21,913,959 1,768,839 951,618 590,000 14,240,062 95,000 17,645,519 1,683,074 30,500,000 14,705,300 97,888,374 5 51,000,000 111,000,000 39,000,000 150,000,000 51,000,000
Chairman
36
Note
2009
2008
(Rupees in thousand)
Assets Non current assets Property, plant and equipment Capital workinprogress Intangible assets Long term investments Long term loans 14 15 16 17 18 77,730,763 9,836,588 3,320,670 5,607,439 3,332,378 99,827,838 Current assets Stores and spares Trade debts Loans and advances Accrued interest Recoverable from tax authorities Other receivables Receivable from Government of Pakistan Short term investments Cash and bank balances 19 20 21 22 23 24 25 26 27 5,201,991 10,760,974 590,061 821,027 1,059,608 698,270 2,164,072 21,017,790 11,906,448 54,220,241 4,954,085 13,366,216 888,309 315,817 1,383,766 1,641,617 2,164,072 10,344,379 4,545,145 39,603,406 82,800,178 7,892,823 3,149,063 3,607,439 394,943 97,844,446
154,048,079
137,447,852
37
Revenue Cost of services Gross profit Administrative and general expenses Selling and marketing expenses Operating profit Voluntary separation scheme Other operating income Finance cost Profit / (loss) before tax Taxation Profit / (loss) after tax
28 29
66,336,042 (37,346,869) 28,989,173 (10,823,555) (1,799,946) 16,365,672 (23,937,854) 3,957,539 (847,973) (4,462,616) 1,637,726 (2,824,890)
(Rupees)
30 31
32 33 34
35
(4,869,732) 9,151,185
41
1.79
(0.55)
The annexed notes from 1 to 47 form an integral part of these financial statements.
Chairman
38
Cash flows from operating activities Cash generated from operations Long term security deposits Employees retirement benefits paid Payment of other VSS components Received from Government of Pakistan Finance cost paid Income tax paid Net cash inflow from operating activities Cash flows from investing activities Capital expenditure Intangible assets Proceeds from disposal of property, plant and equipment Short term investments other than cash equivalents Advance to the wholly owned subsidiary against issue of ordinary shares Long term loansnet Loan to the wholly owned subsidiary Return on bank placements / loan to subsidiary Government grants received Dividend income Net cash outflow from investing activities Cash flows from financing activities Repayment of suppliers credit Dividend paid Net cash outflow from financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 39 (2,742) (2,742) 16,812,828 14,889,524 31,702,352 (172,961) (10,195,524) (10,368,485) (16,248,188) 31,137,712 14,889,524 (9,455,527) (397,979) 206,039 (1,221,886) (2,000,000) 62,565 (3,000,000) 2,751,824 966,044 (12,088,920) (11,411,216) (109,270) 19,651 1,214,991 2,860,719 95,000 350,000 (6,980,125) 38 34,337,391 38,437 (1,470,335) (840,927) (265,232) (2,894,844) 28,904,490 28,091,249 (244,166) (17,373,671) (21,444,052) 15,264,928 (360,407) (2,833,459) 1,100,422
26
The annexed notes from 1 to 47 form an integral part of these financial statements.
Chairman
39
(Rupees in thousand)
Balance as at July 01, 2007 Net loss for the year Transfer from insurance reserve Final dividend for the year ended June 30, 2007 Rs. 2 per share Balance as at June 30, 2008 Net profit for the year Interim dividend for the year ended June 30, 2009 Rs. 1.5 per share Balance as at June 30, 2009
The annexed notes from 1 to 47 form an integral part of these financial statements.
Chairman
40
41
IFRS 4 IFRS 8 IFRIC 15 IFRIC 16 IFRIC 17 IAS 23 IAS 27 IAS 32 IFRS 2 IFRS 3 IFRIC 18 IFAS 2 3.
Insurance Contracts Operating Segments Accounting for Agreements for the Construction of Real Estate Hedge of Net Investment in a Foreign Operation Distribution of Noncash Assets to Owners Borrowing Costs (Revised) Consolidated and Separate Financial Statements Financial Instruments: Presentation Amendments regarding puttable Financial Instruments Share Based Payments Amendments Regarding Vesting Conditions and Cancellation Business Combinations (Revised) Transfer of Assets of Customers IJARAH
Basis of measurement These financial statements have been prepared under the historical cost convention, except for revaluation of certain financial instruments at fair value and recognition of certain employee retirement benefits and license fee payable at present value. The Companys significant accounting policies are stated in note 4. Not all of these significant policies require the management to make difficult, subjective or complex judgments or estimates. The following is intended to provide an understanding of the policies the management considers critical because of their complexity, judgment of estimation involved in their application and their impact on these financial statements. Estimates and judgments are continually evaluated and are based on historical experience, including expectations of future events that are believed to be reasonable under the circumstances. These judgments involve assumptions or estimates in respect of future events and the actual results may differ from these estimates. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are as follows:
a)
Employees retirement benefits The Company uses the valuation performed by an independent actuary as a present value of its retirement benefits obligations. The valuation is based on assumptions as mentioned in note 4.4.
b)
Provision for taxation The Company takes into account the current income tax law and the decisions taken by appellate authorities. Instances where the Companys view differs from the view taken by the Income Tax department at the assessment stage and where the Company considers that its view on items of material nature is in accordance with law, the amounts are shown as contingent liabilities.
c)
Useful life and residual values of property, plant and equipment The Company reviews the useful lives of property, plant and equipment on regular basis. Any change in estimates in future years might affect the carrying amounts of the respective items of property, plant and equipment with the corresponding effect on the depreciation charge and impairment.
42
43
The expected rate of return is based on complex mathematical model which takes into account the maturity of high yielding DSCs and other investments present at the beginning of the financial year. It considers the expected returns on the re investments of maturity proceedings in similar instruments up to the life of related obligations. The expected rate of return also considers the changes of plan assets during the year on account of contributions and benefit payments. The model results in expected rate of return of 13% (2008: 10%). The rounded expected rate of return used for the Fund Assets is 13% during 200809 (200708: 10%) (b) Medical benefits The Company provides post retirement medical benefits to pensionable employees and their families. Under the unfunded scheme all such employees, their spouses, children up to the age of 21 and parents residing with and dependent on the employee are entitled to the benefit. Unmarried daughters are not subject to 21 years age limit. The pensioner and the family are entitled to the facility up to the life of the pensioner and spouse. There are no annual limits to the cost of drugs, hospital in patient treatment and consultation fees. Provisions are made annually to cover the obligations under the scheme on the basis of actuarial valuation and are charged to profit. The most recent valuation was carried out as at June 30, 2009 using the Projected unit credit method. The amount recognized in the balance sheet represents the present value of the defined benefit obligations as adjusted for unrecognized actuarial gains and losses and unrecognized past service cost. Cumulative net unrecognized actuarial gains and losses at the end of the previous year which exceed 10% of the present value of the Companys obligations are amortized over a period of fourteen years. The principal assumptions used in the valuation as at June 30, 2009 were as follows: Discount rate Expected rate of increase in medical costs Expected mortality rate 12% (2008: 12%) 11% (2008: 11%) EFU 61 66 Mortality Table adjusted for Companys experience
(c)
Accumulating compensated absences The Company provides a facility to its employees for accumulating their annual earned leave. Under the unfunded scheme, regular employees are entitled to four days of earned leave per month. Unutilized leave can be accumulated without limit and can be used at any time subject to the Companys approval up to 120 days in a year without medical certificate, 180 days with medical certificate and 365 days during the entire service of the employee. Up to 180 days of accumulated leave can be encashed on retirement provided the employee has a minimum leave balance of 365 days. Leaves are encashed at emoluments applicable for monthly pension.
44
(d)
Provident fund The Company operates approved funded provident fund covering permanent employees. For the purposes of the scheme a separate trust titled as PTCL Employees GPF Trust has been established. Monthly contributions are deducted from the salaries of employees and are to be paid to the Trust by the Company. Interest is paid at the rate announced by the Federal Government. Such rate for the year was 15% (2008: 12.5%) per annum. The Company contributes to the fund the differential, if any, of the interest charge for the year and the income earned on the investments made by the Trust. The contributions deducted from the employees during the year and interest payable by the Company for the year, if any, appear as other liabilities.
(e)
Gratuity The Company operates an unfunded gratuity scheme for its NTC / contractual employees. Provisions are made annually to cover the obligation under the scheme on the basis of actuarial valuations and are charged to profit. The most recent valuation was carried out as at June 30, 2009 using the Projected unit credit method. The amount recognized in balance sheet represents the present value of the defined benefit obligation as on June 30, 2009 as adjusted for unrecognized actuarial gains and losses. Cumulative net unrecognized actuarial gains and losses at the end of the previous year which exceed 10% of the present value of the Companys obligations are amortized over the expected average working lives of the participating employees. The principal assumptions used in the valuation as at June 30, 2009 were as follows: Discount rate Expected increase in salaries Average expected remaining working lifetime of NTC / contractual employees 12% (2008: 12%) 9% for first five years and then 11% (2008: 11%) 6 years (2008: 5 years)
Retirement benefits are payable to staff on completion of prescribed qualifying period of service under these schemes. 4.5 Trade and other payables Liabilities for creditors and other amounts payable are carried at cost which is the fair value of the consideration to be paid in the future for the goods and / or services received, whether or not billed to the Company. Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
45
46
47
48
note 5.1
1,326,000
1,326,000
13,260,000
13,260,000
5,100,000
5,100,000
51,000,000
51,000,000
5.1
These shares were initially issued to the Government of Pakistan in consideration for the assets and liabilities transferred from Pakistan Telecommunication Corporation (PTC) to Pakistan Telecommunication Company Limited (PTCL) under the Pakistan Telecommunication (Reorganization) Act, 1996 as referred to in note 1.1. Except for voting rights the A and B class ordinary shares rank pari passu in all respects. A class ordinary shares carry one vote and B class ordinary shares carry four votes save for the purposes of election of directors. A class ordinary shares can not be converted into B class ordinary shares. However, B class ordinary shares may be converted into A class ordinary shares at the option exercisable in writing submitted to the Company by the holders of three fourths of the B class ordinary shares. In the event of termination of the license issued to the Company under the provisions of Pakistan Telecommunication (Reorganization) Act, 1996 or at any time within three years from April 12, 2006, if there is any change of control of any member holding B class ordinary shares without the prior written approval of Government of Pakistan, the B class ordinary shares shall be automatically converted into A class ordinary shares. The Government of Pakistan through an Offer for Sale document, dated July 30, 1994 issued to domestic investors a first tranche of vouchers exchangeable for A class ordinary shares of the Company and through an Information Memorandum dated September 16, 1994 issued a second tranche of vouchers to the international investors also exchangeable, at the option of voucher holder for A class ordinary shares or Global Depository Receipts ( GDRs ) representing A class ordinary shares of the Company. Out of 3,774,000 thousand A class ordinary shares, vouchers against 601,084 thousand A class ordinary shares were issued to general public. Till June 30, 2009, 599,500 thousand (2008: 599,476 thousand) A class ordinary shares had been exchanged for vouchers. In pursuance of the privatization of the Company, a bid was held by the Government of Pakistan on June 8, 2005 for sale of B class ordinary shares of Rs 10 each along with management control. Emirates Telecommunication Corporation(Etisalat) was the successful bidder. The shares along with management control were transferred with effect from April 12, 2006 to Etisalat International Pakistan (EIP), UAE which is a subsidiary of Etisalat. 2009
(Number of shares)
5.2
5.3
5.4
2008
5.5
Ordinary shares of the Company held by the related parties as at year end are as follows: Etisalat International Pakistan (LLC) SE Etisalat International Pakistan (LLC) (B class ordinary shares) (B class ordinary shares) 407,809,524 918,190,476 1,326,000,000 407,809,524 918,190,476 1,326,000,000
49
In previous years the Company had paid to PTA Rs 4,278,639 thousand in respect of license to provide Wireless Local Loop (WLL) services. Previously PTA allowed the Company to adjust Rs 2,105,500 thousand out of Rs. 4,278,639 thousand already paid against the amount payable to Universal Service Fund (USF). The balance amount of Rs 2,105,500 thousand in respect of license fee is payable to PTA in March 2010 and carries no interest. The license fee payable has been discounted to present value of future cash flows using effective interest rate of 10% per annum and the corresponding adjustment was made to the cost of license included in intangible assets. Difference between the amount payable and the present value of cash equivalents being recognized as imputed interest over the remaining credit period. 2009 2008
(Rupees in thousand)
8.
note 8.1
990,055
951,618
8.1
During the current year, the Company adjusted security deposits amounting to Rs Nil (2008: Rs 40,711 thousand) against defaulter receivable balances. 2009 2008
(Rupees in thousand)
9.
Deferred taxation The liability for deferred taxation comprises of timing differences relating to: Accelerated tax depreciation / amortization Provision for doubtful trade debts Provision for doubtful advances and receivables Available tax losses Others
The gross movement in deferred tax liability during the year is as follows: Balance as at July 01 Charge / (reversal) during the year Balance as at June 30
note 35
50
2008
(Rupees in thousand)
Present value of defined benefit obligations Fair value of assets Unrecognized actuarial gains / (losses) Liability as at June 30 Liability as at July 01 Charge for the year
note 10.2 53,610,885 note 10.5 (50,096,598) 3,514,287 1,035,921 4,550,208 5,389,026 445,896 6,012,673 (6,297,387) 161,182 (1,000,000) 4,550,208 (669,566)
932,231 932,231 (90,359) 841,872 630,417 131,893 85,125 472 217,490 (6,035) 841,872 232,604
314,871 314,871 76,738 391,609 267,106 108,135 30,147 138,282 (13,779) 391,609 99,286
1,025,164 1,025,164 1,025,164 833,006 33,234 117,419 (27,825) 145,482 268,310 (76,152) 1,025,164 186,473
6,448,686 6,448,686 884,560 7,333,246 7,120,507 64,052 623,452 (100,395) 587,109 (374,370) 7,333,246 282,072
62,331,837 (50,096,598) 12,235,239 1,906,860 14,142,099 14,240,062 783,210 6,868,816 (6,297,387) (127,748) 145,482 1,372,373 (1,000,000) (470,336) 14,142,099 130,869
Current service cost Interest cost Expected return on plan assets Actuarial losses / (gains) recognized during the year Liability for NCPG / contractual employees Contributions Benefits paid during the year Liability as at June 30 10.1.1 Charge for the year 2008 was as follows
51
(Pension Unfunded) 2009 Balance as at July 01 Current service cost Interest cost Benefits paid Actuarial losses Curtailment / settlement (gains) Balance as at June 30 709,378 131,893 85,125 (6,035) 11,870 932,231 (Gratuity) 2009 Balance as at July 01 Current service cost Interest cost Benefits paid Actuarial (gains) / losses Balance as at June 30 251,226 108,135 30,147 (13,779) (60,858) 314,871 2008 111,444 97,290 11,164 (9,798) 41,126 251,226
(Rupees in thousand)
(Rupees in thousand)
(Accumulating Compensated Absences) 2009 Balance as at July 01 Current service cost Interest cost Benefits paid Actuarial (gains) / losses Curtailment / settlement losses Recognition of NCPG / contractual liabilities Balance as at June 30 833,006 33,234 117,419 (76,152) (27,825) 145,482 1,025,164 2008 1,871,553 13,125 160,358 (1,382,160) 12,990 157,140 833,006
(Rupees in thousand)
52
(Rupees in thousand)
2006
2005
39,239
12,990
21,748
(235,937)
(91,581)
53
Defence saving certificates Term finance and other certificates Pakistan investment bonds Fixed & other assets
43 47 6 4 100 2009
(Rupees in thousand)
10.5
Changes in the fair value of plan assets Balance as at July 01 Expected return on plan assets Contributions made by the Company during the year Contributions made by the employees deputationists Benefits paid Actuarial (losses) on plan assets Balance as at June 30 Actual return on plan assets 48,441,436 6,297,387 1,000,000 (3,906,371) (1,735,854) 50,096,598 4,561,533 45,158,318 4,515,832 1,569,879 6,487 (2,286,416) (522,664) 48,441,436 3,993,168
10.6
Effect of increase / decrease in medical cost trend rate Effect of 1 % increase in medical cost trend rate in current service cost and interest cost is Rs 18,181 thousand (2008: Rs 44,426 thousand) and effect of 1% decrease is Rs 15,063 thousand (2008: Rs 36,810 thousand). Effect of 1 % increase in medical cost trend rate in present value of defined benefit obligations for medical cost is Rs 1,892,189 thousand (2008: Rs 1,792,423 thousand) and effect of 1% decrease is Rs 1,563,113 thousand (2008: Rs 1,480,697 thousand).
10.7
In the next financial year expected contribution to be paid to the funded pension plan by the Company is Rs 463,242 thousand (2008: Rs 740,975 thousand). 2009 2008
(Rupees in thousand)
11.
Deferred government grants Balance as at July 01 Received during the year Balance as at June 30 note 11.1 95,000 966,044 1,061,044 95,000 95,000
11.1
These represent grants received from Universal Service Fund ( a government formed agency ) mainly relating to property, plant and equipment received as assistance towards development of the telecommunication infrastructure in rural areas and include telecom infrastructure project for (i) basic telecom access in Pishin, Mansehra, Dadu and Larkana; (ii) Optical fibre extension Baluchistan Package 2; (iii) Broadband projects in Faisalabad, Sargodha Civil Division, Multan, Bahawalpur, Dera Ghazi Khan Civil Division and Hyderabad Civil Division.
54
note 30.2
12.3
55
13.3
13.6
56
13.8
(Rupees in thousand)
57
(Rupees in thousand) Land Freehold Leasehold Buildings on Freehold land Leasehold land Lines and wires Apparatus, plant and equipment Office equipment Furniture and fittings Vehicles Submarine cables Total 1,643,226 74,151 9,838,254 1,009,184 102,895,985 118,024,486 1,008,318 444,310 1,566,821 5,715,407 242,220,142 555 1,643,781 3,267 77,418 210,065 10,048,319 1,009,184 1,677,423 104,573,408 5,240,150 123,264,636 183,575 1,189,925 (1,968) 15,801 455,345 (4,766) 180,926 1,359,277 (388,470) 5,715,407 21,821 2,701,091 351,389 71,323,741 80,785,132 518,677 296,127 1,335,671 2,086,315 1,178 22,999 247,328 2,948,419 25,230 376,619 4,630,990 75,954,731 6,995,979 87,781,111 103,480 620,971 (1,186) 24,642 316,003 (4,766) 114,854 1,076,706 (373,819) 422,063 2,508,378 12,565,744 171,605,937 (379,771) 1,643,781 54,419 7,099,900 632,565 28,618,677 35,483,525 568,954 139,342 282,571 3,207,029 77,730,763 1 3.3 2.5 2.5 7 10 10 10 20 6.67 8.33
Additions/ (deletions)
Accumulated Depreciation depreciation for the year/ as at July 1, (on disposals) 2008
(Rupees in thousand) Land Freehold Leasehold Buildings on Freehold land Leasehold land Lines and wires Apparatus, plant and equipment Office equipment Furniture and fittings Vehicles Submarine cables Total 1,641,805 74,114 9,568,729 1,009,184 98,704,981 108,244,220 883,871 394,832 1,590,906 5,464,910 227,577,552 1,421 1,643,226 37 74,151 286,079 9,838,254 (16,554) 1,009,184 4,191,004 102,895,985 10,188,181 118,024,486 (407,915) 130,410 1,008,318 (5,963) 52,965 444,310 (3,487) 21,270 1,566,821 (45,355) 250,497 5,715,407 20,868 2,463,469 326,159 66,291,133 74,849,887 430,402 273,243 1,265,600 1,664,252 953 21,821 242,575 2,701,091 (4,953) 25,230 351,389 5,032,608 71,323,741 6,294,774 80,785,132 (359,529) 91,553 518,677 (3,278) 26,009 296,127 (3,125) 108,241 1,335,671 (38,170) 422,063 2,086,315 12,244,006 159,419,964 (409,055) 1,643,226 52,330 7,137,163 657,795 31,572,244 37,239,354 489,641 148,183 231,150 3,629,092 82,800,178 1 3.3 2.5 2.5 7 10 10 10 20 6.67 8.33
58
As explained in note 1.1 the property and rights in the above assets at January 1, 1996 were transferred to the Company from Pakistan Telecommunication Corporation under the Pakistan Telecommunication (Reorganization) Act, 1996. However, the title to such freehold land was not formally transferred in the name of the Company in the land revenue records. The Company initiated the process of transfer of title of land in its name in previous year which is still ongoing and shall be completed in due course of time.
(Rupees in thousand)
Office Equipment TV Computer Accessories Printers, CPUs ACs Photocopiers Miscellaneous items Miscellaneous parties Miscellaneous parties Miscellaneous parties Miscellaneous parties Miscellaneous parties Miscellaneous parties 120 151 847 178 648 24 1,968 Furniture & fittings Motor Vehicles Gul Muhammad M. Iqbal Waseem Syed Abid Hussain Zubair Assadullah Tunio Nafees Ahmed Siddique Bashir Hussain Nawazish Ali Anjum Rizwan Ahamd Bhutto Hussain Ahmad M. Amjad Ali M. Iqbal Siyal Atiq Nawaz Mazhar Amin Ehsan Ul Haq Rao Abdul Raqeeb Khan M. Roshan Awan Sana Ullah Shaikh Dr. Tahir Saeed Zakir Hussain Satti Anwer Jamil Mian Muhammad Bilal Fuad Enver 567 887 1,314 880 849 759 866 323 585 772 568 583 570 563 563 563 563 563 563 834 568 563 453 710 1,226 704 679 455 693 158 468 617 454 466 456 305 225 225 225 225 225 333 454 300 114 177 88 176 170 304 173 165 117 155 114 117 114 258 338 338 338 338 338 500 114 263 283 169 250 167 161 304 173 152 293 154 284 291 285 338 321 338 321 338 338 500 270 338 Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy 4,766 54 63 581 51 428 9 1,186 4,766 66 88 266 127 220 15 782 260 38 275 88 115 97 873 477 Auction Auction Auction Auction Auction Auction Auction
59
2009
Sold to Cost Accumulated depreciation Book value Sale proceeds Mode of disposal
(Rupees in thousand)
Imran Ul Haq Mubashir Naseer Ch. Iftikhar Ahmed Cheema Kanwar Ghulam Mustafa Khan Shakeel Ahmed Aftab Ahmad Chishti Col (Retd) Zamir Hussain Bhatti Zomma Mohiuddin Sajjad Ahmad Shahid Ahmad Gohar Malik S. M. Imran Ali M. Amir Hussain Brig (R) Waqar Ahmed Malik Syed Ali Qadir Jillani Noor Ahmed Noor Javed Iqbal Tariq Qamar Sohail Anwar Zia Ud Din Barki Badar Ul Zaman Behram Shahrokh Aslam Shaukat Ali Muhammad Siddique Afridi Faheem Ul Hassan Abrar Ahmed Fazle Mabood Ghulam Shabbir Mehboob Iqbal Qadir Mudassar Hafeez Dar M. Aamir M. Afzal Kharal Muhammad Umar Wajeeh Anwar Muhammad Saleem Akhtar Mushtaq Ahmed Afridi Sardar Ali S. Mazhar Hussain Syed Shafqat Mehdi Zulfiqar Ali Shah Sher Bahader Khan Saleem Mudassar Hafeez Dar Muhammad Azam Mujeeb Ur Rehman Israr Ahmed Abro Muhammad Anwar Tariq Mehmood M. Hatam Shad Others Total
834 582 582 867 585 866 567 1,141 759 773 563 866 755 773 955 563 757 759 585 367 367 404 759 562 323 775 834 416 568 563 563 563 569 563 746 610 640 886 597 563 367 367 563 759 404 626 568 604 344 342,634 388,470 395,204
333 466 466 693 468 693 453 913 384 618 305 693 604 618 764 225 606 405 469 220 232 222 304 450 173 620 413 242 454 225 305 305 454 305 599 486 512 709 478 225 202 202 390 417 222 502 454 484 201 342,577 373,819 379,771
500 116 116 174 117 173 114 228 375 155 258 173 151 155 191 338 151 354 116 147 135 182 455 112 150 155 420 173 114 338 258 258 115 258 147 124 127 177 119 338 165 165 173 342 182 124 114 120 143 57 14,651 15,433
500 291 291 403 293 411 283 542 455 309 338 433 378 386 454 338 144 432 293 220 220 283 329 281 153 147 317 188 284 321 321 338 270 321 142 305 304 443 298 338 244 209 338 455 283 250 284 229 202 183,330 204,689 206,039
Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Auction Company Policy
Others represent vehicles disposed off during the year having a book value of less than Rs 50,000.
60
2008
Sold to Cost Accumulated depreciation Book value Sale proceeds Mode of disposal
(Rupees in thousand)
Apparatus, plant and equipment Exchanges DRS Links BTS Buildings Civil Work / Electrification Furniture and fittings Office furniture & fixture Office equipment Motor Vehicles Sher Bahadur Khan Javaid Akhtar Gul Ahmed Pervaiz Akhtar Naveed Iqbal S Ubaid Hussain Shah Naeem Ul Haq Pervaz Ahmed Mehtab Rehmat Ullah Nawab Khan Afridi M Hanif Khan Muhammad Iqbal Bangish 3,487 5,963 5,950 866 755 759 866 755 894 753 1,168 1,185 759 787 815 5,714 22,026 23,330 479,274 3,125 3,278 5,663 520 466 293 520 466 551 464 720 711 291 590 611 3,062 14,928 23,241 409,055 362 2,685 287 346 289 466 346 289 343 289 448 474 468 197 204 2,652 7,098 89 70,219 347 290 472 347 289 343 289 448 474 468 197 204 4,168 15,483 19,651 Write Off Write Off Write Off Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Company Policy Theft 16,554 4,953 11,601 Write Off 394,740 8,708 4,466 407,914 354,248 3,562 1,720 359,530 40,492 5,146 2,746 48,384 Write Off Write Off Write Off
Others Total
Others represent property, plant and equipment disposed off during the year having a book value of less than Rs 50,000. The amounts written off during the year represent the book value of assets that were partially or completely destroyed under the country wide riots that took place in December 2007.
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15.1
Advances to suppliers include an amount of Rs 1,685,532 thousand (2008: Rs 449,000 thousand) given to Emirates Telecommunication Corporation, a related party, in respect of a project called India Middle East Western Europe (IMEWE). Capital work in progress includes an amount of Rs 443,426 thousand (2008: Rs 704,271 thousand) in respect of overheads relating to the development regions capitalized during the year. 2009 2008
15.2
(Rupees in thousand)
16.
Intangible assets Cost Licenses Softwares note 16.1 Accumulated amortization Licenses Softwares note 16.2 4,015,397 397,979 4,413,376 (1,062,749) (29,957) (1,092,706) 3,320,670 4,015,397 4,015,397 (866,334) (866,334) 3,149,063
16.1
Cost Balance as at July 01 Additions during the year Bill printing software Billing and automation of broadband Enterprise Resource Planning (ERP)SAP system WLL and LDI License Balance as at June 30 4,015,397 8,201 46,065 343,713 397,979 4,413,376 3,906,127 109,270 109,270 4,015,397
16.2
Accumulated amortization Balance as at July 01 Amortization for the year Licenses Softwares note 29 Balance as at June 30 866,334 196,415 29,957 226,372 1,092,706 675,385 190,949 190,949 866,334
16.3
The Pakistan Telecommunication Authority (PTA) has issued a license to the Company to provide telecommunication services in Pakistan for a period of 25 years commencing January 1, 1996 for an agreed license fee of Rs 249,344 thousand. In the year ended June 30, 2005, PTA modified the previously issued license to provide telecommunication services to include spectrum license at an agreed license fee of Rs 4,278,639 thousand. This license allowed the Company to provide the Wireless Local Loop services in Pakistan over a period of 20 years commencing October 2004. The cost of the license is being amortized on straight line basis over the period of the license.
Pakistan Telecommunication Company Limited
62
16.5
16.6
(Rupees in thousand)
note 17.1
23,539 3,523,539
23,539 3,523,539
63
17.3
(Rupees in thousand)
This represents an unsecured loan given during the year to Pak Telecom Mobile Limited, a wholly owned subsidiary of the Company, under a subordinated debt agreement. The loan is recoverable in eight equal quarterly installments commencing after a grace period of four years and carries markup at the rate of three months KIBOR plus 82 basis points. These loans and advances are for house building and purchase of motor cars, motor cycles and cycles. Loans to gazetted employees of the Company carry interest at the rate of 12.5% per annum (2008: 12.5% per annum), whereas, loans to other employees are interest free. The loans are recoverable in monthly installments spread over a period of 5 to 10 years. These loans are secured against future pension payments of employees. This also includes Rs. 35,670 thousand (2008: Nil) receivables from employees against sale of vehicles, recoverable in monthly installments spread over a period of 1 to 2 years. 2009 2008
18.2
(Rupees in thousand)
19.
Stores and spares Stores and spares Provision for obsolescence note 19.2 5,851,582 (649,591) 5,201,991 5,505,540 (551,455) 4,954,085
19.1
Stores and spares include items which may result in property, plant and equipment but are not distinguishable.
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Included in trade debts domestic are amounts due from Pak Telecom Mobile Limited and National Telecommunication Corporation (NTC), related parties of the Company, amounting to Rs 412,309 thousand (2008: Rs 1,442,670 thousand) and Rs 354,744 thousand (2008: Rs 695,070 thousand) respectively. These amounts are interest free and accrued in the normal course of business. 2009 2008
(Rupees in thousand)
20.2
Included in trade debts international are amounts due from the following related parties: Etisalat Afghanistan Etisalat UAE Mobily Saudi Arabia 100,502 657,771 528,119 1,286,392 These amounts are interest free and accrued in the normal course of business. 655,645 655,645
20.3
Provision for doubtful debts Balance as at July 01 Provision for the year Trade debts written off against provision Balance as at June 30 note 30 17,206,069 2,907,395 20,113,464 (1,117,068) 18,996,396 13,652,636 4,993,257 18,645,893 (1,439,824) 17,206,069
21.
Loans and advances Current portion of loans to employees considered good Advances to suppliers and contractors considered good note 18 123,421 466,640 590,061 129,613 758,696 888,309
65
This represents markup on loan to Pakistan Telecom Mobile Limited, the wholly owned subsidiary, as indicated in the note 18.1 2009 2008
(Rupees in thousand)
23.
Recoverable from tax authorities Central excise Sales tax 466,176 593,432 1,059,608 466,176 917,590 1,383,766
24.
Other receivables Due from Pakistan Telecommunication Employees Trust (PTET) related party Due from PTCL employees GPF Trust related party Due from Special Communication Organization (SCO) Other receivables: considered good considered doubtful 69,009 147,767 220,000 261,494 185,239 446,733 Provision for doubtful receivables note 24.1 883,509 (185,239) 698,270 38,978 906,746 221,013 474,880 26,559 501,439 1,668,176 (26,559) 1,641,617
24.1
Provision for doubtful receivables Balance as at July 01 Provision for the year Trade debts written off against provision Balance as at June 30 note 30 26,559 158,680 185,239 185,239 note 25.1 2,164,072 34,310 34,310 (7,751) 26,559 2,164,072
25.
25.1 This represents the amount receivable from Government of Pakistan (GOP) on account of its share in the Voluntary Separation Scheme (VSS) offered to the Companys employees during last year. 2009 26. Short term investments Maturity period upto three months Maturity period three to six months note 26.1 26.1 19,795,904 1,221,886 21,017,790 10,344,379 10,344,379 2008
(Rupees in thousand)
These represent Term Deposit Placements with different banks having maturity periods of three to six months. The effective interest rate ranges between 13% to 17% (2008: 10% to 14.25%) per annum.
66
The balances in deposit accounts bear mark up which ranges from 5 % to 19.5 % per annum (2008: 1.5 % to 14.25 % per annum). 2009 2008
(Rupees in thousand)
28.
Revenue Domestic International note 28.1 note 28.2 53,039,455 6,199,546 59,239,001 60,704,017 5,632,025 66,336,042
28.1 28.2
Revenue is exclusive of excise duty amounting to Rs 8,611,191 thousand (2008: Rs 7,631,695 thousand). International revenue represents revenue from foreign network operators for calls that originate outside Pakistan and it has been shown net of interconnect cost relating to the other operators and Access Promotion Charges aggregating to Rs. 10,886,794 thousand (2008: Rs 7,758,176 thousand). 2009 2008
(Rupees in thousand)
29.
Cost of services Salaries, allowances and other benefits Call centre charges Interconnect cost Foreign operators cost and satellite charges Fuel and power Communication Stores and spares consumed Rent, rates and taxes Repairs and maintenance Printing and stationery Travelling and conveyance Depreciation of property, plant and equipment Amortization of intangible assets Annual license fee to PTA note 29.1 7,995,033 187,165 4,103,667 6,053,657 3,109,948 7,421 1,160,754 502,709 1,475,724 255,198 16,308 12,314,429 226,372 323,897 37,732,282 9,789,118 109,984 5,250,432 3,541,961 2,474,085 3,303 1,739,081 247,531 1,414,604 190,478 16,574 11,999,126 190,949 379,643 37,346,869
note 29.2
29.1 29.2
This includes Rs 1,097,079 thousand (2008: Rs 104,694 thousand) in respect of employees retirement benefits other than VSS. This includes colocation charges of Rs 78,305 thousand (2008: Rs 86,923 thousand) payable to National Telecommunication Corporation for the current year.
67
This includes Rs 164,562 thousand (2008: Rs 15,705 thousand) in respect of employees retirement benefits other than VSS. This represents amount payable to Emirates Telecommunication Corporation (Etisalat), a related party, under a technical service agreement between the Company and Etisalat for a period of five years commencing October 1, 2006 at the rate of 3.5% of PTCL groups consolidated annual revenue. 2009 2008
(Rupees in thousand)
30. 3 Auditors remuneration The charges for legal and professional services include the following in respect of auditors services for: A F Ferguson & Co. Statutory audit including half yearly review Others Ford Rhodes Sidat Hyder & Co. Statutory audit including half yearly review Others KPMG Taseer Hadi & Co. Statutory audit including half yearly review Others 9,500 4,250 200 8,900 4,500 250 4,500 250 4,250 200
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30.5
30.6
(Rupees in thousand)
note 14.1
This includes Rs 109,708 thousand (2008: Rs 10,469 thousand) in respect of employees retirement benefits other than VSS. Voluntary separation scheme (VSS) Last year the Company offered a uniform nondiscriminatory Voluntary Separation Scheme (the Scheme) to its employees hired on government terms and conditions. The benefits offered over and above the accumulated post retirement benefit obligation as at March 31, 2008 have been treated as VSS cost. Out of 29,954 employees who opted for the scheme, 25,324 belong to funded pension scheme and 4,630 to unfunded pension scheme. 18,167 of these employees have become pensioners last year. The amount of actuarial gain/loss on curtailment / settlement and proportionate share of unrecognized actuarial gains/losses as at March 31, 2008 for employees who have opted for VSS have also been adjusted/charged against the VSS expense. The break up of the VSS expense is as follows:
69
(Rupees in thousand)
Commutation under VSS Pension paid Pension payable long term Accumulating compensated absences Post retirement medical facilities Lump sum medical compensation Cost of VSS retirement benefits Provision for retirement benefits Unrecognized actuarial gains / (losses) recognized on curtailment / settlement VSS expense relating to retirement benefits Other VSS expense VSS consultancy / implementation cost Total VSS cost Contribution from Government of Pakistan Net Cost of VSS
2008
Pension Funded Unfunded Gratuity Accumulating compensated absences Post retirement medical facility Total
(Rupees in thousand)
Commutation under VSS Pension paid Pension payable long term Accumulating compensated absences Post retirement medical facilities Lump sum medical compensation Cost of VSS retirement benefits Provision for retirement benefits Unrecognized actuarial gains / (losses) recognized on curtailment / settlement VSS expense relating to retirement benefits Other VSS expense VSS consultancy/implementation cost Total VSS cost Contribution from Government of Pakistan Net Cost of VSS
11,747,400 490,381 28,956,214 1,317,919 2,482,417 2,580,600 47,574,931 22,995,601 5,386,092 28,381,693 19,193,238 22,040,029 133,587 41,366,854 (17,429,000) 23,937,854
70
Included in markup on loans and advances is an amount of Rs 263,333 thousand (2008: Rs 24,966 thousand) accrued on the loan given to Pak Telecom Mobile Limited, the wholly owned subsidiary, as shown in the note 18.1. This includes dividend from Pak Telecom Mobile Limited, the wholly owned subsidiary, amounting to Rs Nil (2008: Rs 350,000 thousand). 2009 2008
33.2
(Rupees in thousand)
34.
Finance cost Interest and other charges on Suppliers credit Bank and other charges Net exchange loss Imputed interest on payment to PTA against WLL license fee 265,232 458,160 185,132 908,524 1,644 358,764 319,948 167,617 847,973
note 7
35.
35.1
Tax charge reconciliation Numerical reconciliation between the average effective tax rate and the applicable tax rate: Applicable tax rate Chargeable to tax at lower rates / effect of change in prior years tax Tax effect of amounts that are not deductible for tax purposes and others Average effective tax rate charged to profit and loss account
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300 300
325 325 1
Number of persons
The Company also provides free medical and limited residential telephone facility to all its Executives and the Chief Executive. The Chairman is entitled for free transport and limited residential telephone facility whereas the Directors are provided with limited telephone facility. Certain executives are also provided with Company maintained cars. Aggregate amount charged in the financial statements for the year as fee to 9 directors (2008: 9 directors) is Rs 3,736 thousand (2008: Rs 4,684 thousand), for attending Board of Directors and Subcommittee meetings. 37. Rates of exchange Assets in foreign currencies have been translated into Rupees at USD 1.2331 (2008: USD 1.4706) equal to Rs 100. While liabilities in foreign currencies have been translated into Rupees at USD 1.2300 (2008: USD 1.4663) equal to Rs 100.
72
39.
Cash and cash equivalents Short term investments with maturity upto three months Cash and bank balances note 26 note 27 19,795,904 11,906,448 31,702,352 10,344,379 4,545,145 14,889,524
40.
Number of lines
9,240,431
9,225,720
4,796,299
5,315,668
ALI represents switching lines. ALI include 225,195 (2008: 214,784 ) and ALIS include 115,575 (2008: 134,845) Primary Rate Interface (PRI) and Basic Rate Interface (BRI) respectively. ALI and ALIS also include 2,656,000 (2008: 2,599,500) and 1,305,675 (2008 : 1,188,416) WLL connections respectively. The difference between ALI and ALIS is due to pending and potential future demand.
73
If the functional currency, at reporting date, had fluctuated by 5% against the USD, GBP and Euro with all other variables held constant, the impact on profit after taxation for the year would have been Rs 67,750 thousand (2008: Rs 72,980 thousand) respectively lower / higher, mainly as a result of exchange gains / losses on translation of foreign exchange denominated financial instruments. Currency risk sensitivity to foreign exchange movements has been calculated on a symmetric basis.
74
(Rupees in thousand)
(Rupees in thousand)
75
Due to the Companys long standing business relationships with these counterparties and after giving due consideration to their strong financial standing, management does not expect nonperformance by these counter parties on their obligations to the Company. Accordingly, the credit risk is minimal. * Royal Bank of Scotland has been placed on watchlist by the State Bank of Pakistan and the most recent rating was carried out in September 2008. (c) Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company follows an effective cash management and planning policy to ensure availability of funds and to take appropriate measures for new requirements. The following are the contractual maturities of financial liabilities as at June 30, 2009: Carrying amount Less than one year One to five years More than five years
( Rupees in thousand)
Payable to PTA against WLL license fee Long term security deposits from customers Trade and other payables Dividend payable
990,055 990,055
76
( Rupees in thousand)
Payable to PTA against WLL license fee Long term security deposits from customers Trade and other payables
18,573,893 18,573,893
42.2
Fair values of financial assets and liabilities The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values. Fair value is determined on the basis of objective evidence at each reporting date. Available for sale 2009 2008 Loans and receivables 2009 2008
(Rupees in thousand)
42.3
Financial instruments by categories Financial assets as per balance sheet Long term investments Long term loans Trade debts Loans and advances Accrued interest Other receivables Receivable from GoP for VSS Short term investments Cash and bank balances 83,900 83,900 83,900 3,332,378 10,760,974 590,061 821,027 883,509 2,164,072 21,017,790 11,906,448 83,900 51,476,259 394,943 13,366,216 888,309 315,817 1,582,403 2,164,072 10,344,379 4,545,145 33,601,284 83,900 3,332,378 10,760,974 590,061 821,027 883,509 2,164,072 21,017,790 11,906,448 51,560,159 83,900 394,943 13,366,216 888,309 315,817 1,582,403 2,164,072 10,344,379 4,545,145 33,685,184
Financial liabilities as per balance sheet Payable to PTA against WLL license fee Long term security deposits from customers Trade and other payables Dividend payable 1,953,971 990,055 23,758,462 7,650,000 34,352,488 1,768,839 951,618 18,573,893 21,294,350 1,953,971 990,055 23,758,462 7,650,000 34,352,488 1,768,839 951,618 18,573,893 21,294,350
77
78
(Rupees in thousand)
Subsidiary
Purchase of goods and services Sale of goods and services Markup on long term loans Advance against purchase of shares Disbursement of loan
Associates
Purchase of goods and services Sale of goods and services Government grant received Advances against capital expenditure
44.
Proposed dividends The Board of Directors of the Company has proposed a final dividend for the year ended June 30, 2009 of Rs Nil (2008: Nil) at their meeting held on September 29, 2009.
45.
Corresponding figures Corresponding figures have been rearranged and reclassified, wherever necessary, for better presentation and disclosure: Reclassification from component (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) (xv) Revenue Operating cost Operating cost Operating cost Long term investments Loans, advances, deposits, prepayments and other receivables Loans, advances, deposits, prepayments and other receivables Loans, advances, deposits, prepayments and other receivables Loans, advances, deposits, prepayments and other receivables Loans, advances, deposits, prepayments and other receivables Short term borrowings Cash and bank Accrued and other liabilities Accrued and other liabilities Trade creditors Other receivables Cash and bank Short term investments Accrued liabilities Other liabilities Accrued liabilities 1,641,617 2,536,710 10,344,379 1,371,760 401,452 519,851 Recoverable from tax authorities 1,383,766 Accrued interest 315,817 Loans and advances 888,309 Capital workinprogress 351,991 Reclassification to component Cost of services Cost of services Administrative expenses Selling and marketing expenses Property, plant and equipment (Rupees in thousand) 5,250,432 32,096,437 10,823,555 1,799,946 3,629,092
79
46.
Date of authorization for issue These financial statements were authorized for issue on September 29, 2009 by the Board of Directors of the Company.
47.
General Figures have been rounded off to the nearest thousand rupees unless otherwise specified.
Chairman
80