PTCL 3rd Quarter Final Report

8/9/2019 PTCL 3rd Quarter Final Report

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March 31, 2010

Report for the Quarter

&Nine Months Ended


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CONTENTS

Board of Directors 3

4

5-6

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13-16

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Naguibullah MalikChairman PTCL Board

Secretary (IT & Telecom Division)

Ministry of Information Technology

Government of Pakistan

Islamabad.

Abdulrahim A. Al NooryaniChairman & Chief Executive Officer

Etisalat International Pakistan L.L.C

Executive Vice President (Contracts & Administration)

Etisalat, UAE.

Mushtaq Ahmad BhattiMember (Telecom)

Ministry of Information Technology


Islamabad.

Khurshed Ahmed JunejoAmbassador

Embassy of Pakistan

Abu Dhabi, UAE.

Salman SiddiqueSecretary (Finance)

Ministry of Finance


Islamabad.

Abdulaziz A. Al Sawaleh

Chief Human Resources OfficerEtisalat, UAE.

Fadhil Al AnsariExecutive Vice President (Engineering)

Etisalat, UAE.

Abdulaziz H. TaryamGeneral Manager (Northern Emirates)Etisalat, UAE.

Dr. Ahmed Al JarwanGeneral Manager/eRE

Etisalat, UAE.

Farah QamarCompany Secretary

Board of Directors

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PAKISTAN TELECOMMUNICATION COMPANY LTD.

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Walid IrshaidPresident & Chief Executive Officer

Muhammad Nehmatullah ToorS.E.V.P (Finance) / CFO

Syed Mazhar HussainS.E.V.P (Admin & Procurement / HR)

Sikandar NaqiS.E.V.P (Corporate Development)

Naveed SaeedS.E.V.P (Commercial)

Tariq SalmanS.E.V.P (Business Zone North)

Abdullah YousefS.E.V.P (Business Zone South)

Muhammad NasrullahChief Technical Officer (CTO)

Javed MushtaqChief Information Officer (CIO)

Farah QamarCompany Secretary

Management

Dr. Syed Mohammad Anwer

E.V.P (Legal)

Bankers

Askari Bank Limited

Citibank N.A.

Faysal Bank Limited

Habib Bank Limited

MCB Bank LimitedNational Bank of Pakistan

Royal Bank of Scotland

Standard Chartered Bank Limited

United Bank Limited

AuditorsA.F. Ferguson & Co.

Chartered Accountants

Ernst & Young Ford Rhodes Sidat Hyder

Chartered Accountants

Registered OfficePTCL Headquarters,

Block-E, Sector G-8/4,

Islamabad-44000, Pakistan.

Tel: +92-51-2263732 & 34

Fax: +92-51-2263733

E-mail:[email protected]

Web: www.ptcl.com.pk

Share Registrar

M/s FAMCO Associates (Pvt.) Limited

Ground Floor, State Life Building No. 1-A,

I.I. Chundrigar Road, Karachi - 74000

Tel: +92-21-32422344, 32467406

Fax: +92-21-32428310

Corporate Information


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Directors' ReportThe Directors of Pakistan Telecommunication Company Limited (PTCL) arepleased to present to the shareholders unaudited financial statements of theCompany for the nine months ended March 31, 2010.

The PTCL Group Revenue of Rs. 73.6 billion for the period under review was 7%higher compared to the corresponding period last year. The revenue earned byPTML (Ufone), the wholly-owned subsidiary of PTCL, was higher by 22%, whilePTCL's revenue decreased by 4%. PTCL's domestic revenue declined by 7% whereas International revenue registered an increase of 23%.

The Group net profit of Rs. 9.2 billion showed a 12% growth compared to sameperiod last year. PTCL's Profit after Tax at Rs. 7.9 billion was 9% higher than thesame period last year. The growth in profitability was made possible because ofbetter cost controls resulting in 17% decrease in Administrative and GeneralExpenses, 32% increase in Other Operating Income due to improved realization ofreceivables as well as prudent utilization of available funds and 62% savings inFinance Cost because of relative stabilization of Pakistan Rupee during the period.

Cognizant of the ever evolving telecom needs of the consumers in various strata of

the society, your Company is developing products and solutions based on the latestavailable technologies so as to meet the expectation of transforming itself into anintegrated service provider. During the period under review, PTCL continued itsstrategy of enhancing Broadband penetration for DSL which now covers more than500 cities in the country and is expected to reach 1,000 cities by the end of thecurrent year thus enjoying the status of being the market leader with 80% marketshare. At the same time 'EVO', the wireless broadband service, based on 3G withroaming facility, expanded to all major cities across the country.

To fulfill diversified needs of the landline customer base PTCL introduced a number

of packages for its PSTN users, foremost being a simplified tariff. Value-added-services include three-party-conference-call and voice-mail-service. Productsincluding free on-net minutes for new connections, Double-up-unlimited and variousrural and urban packages have proved to be a success. Sustained campaigns inelectronic and print media have ensured a significant improvement in brand imageof PTCL.

PTCL has introduced a range of products and services based on latest technologiesthat provide the corporate sector value added solutions. Services that are alreadyavailable include Enterprise DSL, I-Sentry (IP video monitoring and surveillance

solution) and Managed services. Several new innovative services launched by theCompany also include Tele-presence (a world-wide video conferencing facility), withfour state-of-the-art Tele-presence centers already commissioned in Karachi,Lahore and Islamabad, while four more centers are being completed. Based onlatest technologies, PTCL Data Center in Karachi is first of its kind in the country. Itprovides data-hosting and disaster-recovery services. Another Data Centre is beingestablished in Lahore. Unified Communication Services introduced by PTCL fulfillthe voice, data and video requirements of the corporate sector from a single platform

A significant achievement for PTCL was the agreement with National Bank of

Pakistan to provide end-to-end enterprise-wide data connectivity solutions for itscountrywide branch network. The Company has entered into an agreement withHigher Education Commission to provide 10 GB IP bandwidth data connectivity tofurther facilitate educational institutions.PTCL has been successful in winning more than 50% of all Universal Service Fund(USF) projects, a scheme of the Government of Pakistan. The Company is in theprocess of implementing these projects that provide voice and data services to theunderserved and far-flung areas of Pakistan. Most significant project is the provisionof broadband in USF areas. Another project being completed under this scheme is

1,250 km long Optical Fiber Cable for Baluchistan.

As an acknowledgement of its technical expertise, PTCL's centralized NetworkOperation Centre (NOC) has been nominated internationally as one of the sixfinalists for the coveted Telecom Management Forum (TMF) Operational


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Excellence Award that is expected to be announced in May 2010. This is in additionto International TeMIP User Group Special Recognition Award 2009.

PTCL has set up international PoPs (Point of Presence) at various international keypoints in anticipation of the foreseeable growth in voice and data traffic and at thesame time ensuring improved services for its ever expanding group of interconnectoperators.

Major expansion in Pakistan Intranet Exchange (PIE) core network is underway tomeet High Internet Speed requirements due to exponential growth in broadbandand data services. Efficiency and reach of the access network is being improvedthrough country-wide cabinet revamping program.

Customer care is at the core of PTCL operations. Multiple channels for customercontact include on-line access, phone contact and walk in service centers to redressany possible complaints and acquaint customers to PTCL's diverse range ofservices and products. Nationwide network of 140 One Stop Shops at strategiclocations in all major cities and four Contact Centers, equipped with modern ITfacilities are a proof of PTCL's commitment to customer care. Arrangements withmajor banks in the country are underway to facilitate bill collection informationthrough electronic means to minimize possible time delays.

Concerted efforts continue to improve productivity of the work force. Regularemployee trainings are imparted to equip them with modern operational techniques.

A well-structured performance management system with periodical reviews hasalso been put in place.

The management and employees of PTCL remain committed to provide qualityservices at competitive prices through optimal use of resources for achievingenhanced revenue and greater levels of customer satisfaction leading to improvedshareholders' value.

On behalf of the Board,

Naguibullah Malik Walid IrshaidChairman PTCL Board President & CEO PTCL


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Condensed

InterimFinancial

Statements


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CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

AS AT MARCH 31, 2010 (UN-AUDITED)

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CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME

FOR THE QUARTER AND NINE MONTHS ENDED MARCH 31, 2010 (UN-AUDITED)

Other operating income

- deferred reversal/(charge)

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CONDENSED INTERIM STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED MARCH 31, 2010 (UN-AUDITED)

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1.The Company and its operations

Pakistan Telecommunication Company Limited ("the Company") was incorporated inPakistan on December 31, 1995 and commenced business on January 1, 1996. TheCompany is listed on Karachi, Lahore and Islamabad stock exchanges. The Companywas established to take over the telecommunication business formerly carried on byPakistan Telecommunication Corporation (PTC). The business was transferred to theCompany on January 1, 1996 under the Pakistan Telecommunication (Reorganization)

Act, 1996 at which date the Company took over all the properties, rights, assets,

obligations and liabilities of PTC except those transferred to National TelecommunicationCorporation (NTC), Frequency Allocation Board (FAB), Pakistan Telecommunication

Authority (PTA) and Pakistan Telecommunication Employees Trust (PTET). Theregistered office of the Company is situated at PTCL Headquarters, G-8/4, Islamabad.

The Company provides telecommunication services in Pakistan. It owns and operatestelecommunication facilities and provides domestic and international telephone servicesand other communication facilities throughout Pakistan. The Company has also beenlicensed to provide such services to territories in Azad Jammu & Kashmir and Gilgit-Baltistan.

2.Basis of preparation

These condensed interim financial statements are unaudited and are being submitted tothe shareholders in accordance with the requirements of Section 245 of the CompaniesOrdinance,1984 and International Accounting Standard (IAS) 34 'Interim FinancialReporting'. These condensed interim financial statements do not include all theinformation and disclosures required in the annual financial statements and should beread in conjunction with the financial statements of the Company for the year ended June30, 2009.

3.Significant accounting policies

Except as disclosed below, the accounting policies adopted in the preparation of this

condensed interim financial information are the same as those applied in the preparationof audited annual published financial statements of the Company for the year ended June30, 2009.

IAS 1 (Revised), 'Presentation of financial statements'- effective January 01, 2009. Therevised standard prohibits the presentation of items of income and expenses (that is 'non-owner changes in equity') in the statement of changes in equity, requiring 'non-ownerchanges in equity' to be presented separately from owner changes in equity. All 'non-owner changes in equity' are required to be shown in a performance statement.Companies can choose whether to present one performance statement (the statement ofcomprehensive income) or two statements (profit and loss account and statement of

other comprehensive income). The Company has preferred to present one statement.

4.Use of estimates and judgements

The preparation of these condensed interim financial statements in conformity withapproved accounting standards requires management to make judgements, estimatesand assumptions that affect the application of accounting policies and the reportedamount of assets, liabilities, income and expenses. Actual results may differ from theseestimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions toaccounting estimates are recognised in the period in which the estimates are revised and

in any future periods affected.Estimates and judgements made by the management in preparation of these condensedinterim financial statements are the same as those used in the preparation of thepreceding annual published financial statements of the Company for the year endedJune 30, 2009.

5.Contingencies and commitments

5.1 Contingencies

There has been no material change in contingencies since the last annual auditedfinancial statements.

5.2 Commitments

Commitments in respect of contracts for capital expenditure amounting to Rs.10,635,308thousand (June 30, 2009: Rs. 12,352,378 thousand).

NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL STATEMENTSFOR THE NINE MONTHS ENDED MARCH 31, 2010 (UN-AUDITED)


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7. Long term loans

This includes unsecured loans of Rs. 3,000,000 thousand and Rs. 2,000,000thousand (June 30, 2009: Rs. 3,000,000 thousand) to Pak Telecom Mobile Limited,a wholly owned subsidiary of the Company, under subordinated debt agreements.These loans are recoverable in eight equal quarterly installments commencing aftera grace period of four years in 2013 and 2014 respectively, and carry mark-up at therate of three months KIBOR plus 82 basis points.


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8.1.This represents PTCL's share of fee payable to Emirates TelecommunicationCorporation under an agreement for technical services effective October 1,2006 at the rate of 3.5% of PTCL group's consolidated annual revenue.

11. Interim dividendThe Board of Directors at its meeting on April 29, 2010 has declared 1st interimcash dividend of Rs.1.75 (2009: Rs.1.50) per share for the year ending June 30,2010.


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Financial StatementsConsolidated Interim

Condensed


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CONDENSED CONSOLIDATED INTERIM STATEMENT

OF FINANCIAL POSITION AS AT MARCH 31, 2010 (UN-AUDITED)

PAKISTAN TELECOMMUNICATION GROUP

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(Rupeesin

tho

usand)


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NOTES TO AND FORMING PART OF THE CONDENSED CONSOLIDATEDINTERIM FINANCIAL STATEMENTSFOR THE NINE MONTHS ENDED MARCH 31, 2010 (UN-AUDITED)

1. Basis of preparation

These condensed interim financial statements are unaudited and are being submitted to the

shareholders in accordance with the requirements of Section 245 of the Companies

Ordinance,1984 and International Accounting Standard (IAS) 34 'Interim Financial

Reporting'. These condensed interim financial statements do not include all the information

and disclosures required in the annual financial statements and should be read in conjunction

with the financial statements of the Group for the year ended June 30, 2009.

2. Significant accounting policies

Except as disclosed below, the accounting policies adopted in the preparation of thesecondensed interim financial statements are the same as those applied in the preparation of

audited annual published financial statements of the Group for the year ended June 30, 2009.

IAS 1 (Revised), 'Presentation of financial statements' - effective January 01, 2009. The

revised standard prohibits the presentation of items of income and expenses (that is 'non-

owner changes in equity') in the statement of changes in equity, requiring 'non-owner changes

in equity' to be presented separately from owner changes in equity. All 'non-owner changes in

equity' are required to be shown in a performance statement. Companies can choose whether

to present one performance statement (the statement of comprehensive income) or two

statements (profit and loss account and statement of comprehensive income). The Group

companies have preferred to present one statement.

IFRS 8, 'Operating segments'- effective January 01, 2009. This standard requires disclosureof information about the Group's operating segments and replaces the requirement to

determine primary (business) and secondary (geographical) reporting segments of the

Group. Adoption of this standard did not have any effect on the financial position or

performance of the Group. Additional disclosures about each of these segments are shown in

Note 6.

3. Contingencies and commitments

3.1 Contingencies

There has been no material change in contingencies since last audited financial statements.

3.2 CommitmentsCommitments in respect of contracts for capital expenditure amounting to Rs.20,686,452

thousands (June 2009: Rs. 25,255,605 thousand).


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As at June 30, 2009 (audited)

8.

9.

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PTCL 3rd Quarter Final Report

Documents

Transcript of PTCL 3rd Quarter Final Report