Annual Report 2018
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Pakistan Telecommunication Company Limited Company Telecommunication Pakistan PTCL PAKISTAN ANNUAL REPORT 2018 REPORT ANNUAL /ptcl.official /ptclofficial ANNUAL REPORT Pakistan Telecommunication /theptclcompany Company Limited www.ptcl.com.pk PTCL Headquarters, G-8/4, Islamabad, Pakistan Pakistan Telecommunication Company Limited ANNUAL REPORT 2018 Contents 01COMPANY REVIEW 03FINANCIAL STATEMENTS CONSOLIDATED Corporate Vision, Mission & Core Values 04 Auditors’ Report to the Members 129-135 Board of Directors 06-07 Consolidated Statement of Financial Position 136-137 Corporate Information 08 Consolidated Statement of Profit or Loss 138 The Management 10-11 Consolidated Statement of Comprehensive Income 139 Operating & Financial Highlights 12-16 Consolidated Statement of Cash Flows 140 Chairman’s Review 18-19 Consolidated Statement of Changes in Equity 141 Group CEO’s Message 20-23 Notes to and Forming Part of the Consolidated Financial Statements 142-213 Directors’ Report 26-45 47-46 ہ 2018 Composition of Board’s Sub-Committees 48 Attendance of PTCL Board Members 49 Statement of Compliance with CCG 50-52 Auditors’ Review Report to the Members 53-54 NIC Peshawar 55-58 02STATEMENTS FINANCIAL Auditors’ Report to the Members 61-67 Statement of Financial Position 68-69 04ANNEXES Statement of Profit or Loss 70 Pattern of Shareholding 217-222 Statement of Comprehensive Income 71 Notice of 24th Annual General Meeting 223-226 Statement of Cash Flows 72 Form of Proxy 227 Statement of Changes in Equity 73 229 Notes to and Forming Part of the Financial Statements 74-125 ANNUAL REPORT 2018 Vision Mission To be the leading and most To be the partner of choice for our admired Telecom and ICT provider customers, to develop our people in and for Pakistan. and to deliver value to our shareholders. Values We Care We Put Customer First We Work As One Team We Embrace Change 04 ANNUAL REPORT 2018 Board of Directors ANNUAL REPORT 2018 Corporate Information Management Bankers Rashid Naseer Khan Conventional President & Chief Executive Officer Citibank N.A - Pakistan Faysal Bank Limited Mohammad Nadeem Khan Habib Metropolitan Bank Limited Chief Financial Officer Habib Bank Limited JS Bank Limited Syed Mazhar Hussain Khushhali Bank Limited Chief Human Resource Officer MCB Bank Limited Mobilink Microfinance Bank Limited Saad Muzaffar Waraich National Bank of Pakistan Chief Technology and Information Officer NRSP Microfinance Bank Limited Soneri Bank Limited Sikandar Naqi Standard Chartered Bank (Pakistan) Limited Chief Business Development Officer The Bank of Punjab Moqeem Ul Haque Telenor Microfinance Bank Limited The Bank of Khyber Chief Commercial Officer / Chief Strategy Officer United Bank Limited Adil Rashid U Microfinance Bank Limited Chief Business Services Officer Islamic Jahanzeb Taj Meezan Bank Chief Business Operations Officer Registered Office Muhammad Shehzad Yousuf Chief Internal Auditor PTCL Headquarters Block-E, Sector G-8/4, Islamabad-44000, Pakistan. Company Secretary Fax: +92-51-2263733 Saima Akbar Khattak E-mail: [email protected] Web: www.ptcl.com.pk Legal Advisor Share Registrar Zahida Awan Executive Vice President (Legal Affairs) FAMCO Associates (Pvt.) Limited 8-F, Next to Hotel Faran, Nursery, Block-6, P.E.C.H.S., Shahra-e-Faisal, Karachi. Auditors Tel # 021- 34380101-2 KPMG Taseer Hadi & Co., Fax # 021-34380106 Chartered Accountants E-mail: [email protected] 08 ANNUAL REPORT 2018 The Management Team ANNUAL REPORT 2018 Operating & Financial Highlights Year ended Dec 31 2018 2017 2016 2015 2014 2013 Key Indicators Operating Operating profit margin % 9.29 10.31 12.83 11.45 15.56 19.70 Net profit margin % 10.59 12.02 9.57 11.56 6.39 15.66 Performance Fixed assets turnover Times 0.77 0.79 0.82 0.87 0.99 1.06 Debtors' turnover Times 4.35 4.60 5.01 5.04 4.75 4.77 Return on equity % 8.80 9.96 8.08 9.82 5.40 12.85 Return on capital employed % 5.45 6.13 7.51 6.66 9.32 11.69 Retention % 31.29 39.05 25.38 (16.44) (144.84) 19.66 Leverage Debt:Equity Ratio 31:69 28:72 28:72 32:68 30:70 28:72 Debt ratio % 53.80 50.76 50.57 49.01 47.20 42.49 Liquidity Current Times 1.00 1.14 1.27 1.55 1.57 1.94 Quick Times 0.91 1.09 1.23 1.49 1.51 1.85 Valuation Earnings per share Rs 1.46 1.64 1.34 1.72 1.02 2.49 Breakup value per share Rs 16.39 16.69 16.28 16.91 18.07 19.78 Dividend payout ratio % 68.71 60.95 74.62 116.44 244.84 80.34 Price earnings ratio Times 6.60 7.95 12.82 9.60 22.55 11.42 Market price to breakup value Times 0.59 0.78 1.06 0.98 1.27 1.44 Dividend per share Rs 1.00 1.00 1.00 2.00 2.50 2.00 Dividend yield % 10.41 7.66 5.82 12.13 10.86 7.03 Dividend cover ratio Times 1.46 1.64 1.34 0.86 0.41 1.24 Market value per share (as on Dec 31) Rs 9.61 13.05 17.18 16.49 23.03 28.44 Historical Trends Operating Results Revenue Rs (m) 70,100 69,620 71,420 75,752 81,513 81,061 Profit/(loss) before tax Rs (m) 10,757 12,874 10,201 13,272 8,012 19,838 Profit/(loss) after tax Rs (m) 7,422 8,368 6,835 8,760 5,207 12,696 Dividend Rs (m) 5,100 5,100 5,100 10,200 12,750 10,200 Financial Position Share capital Rs (m) 51,000 51,000 51,000 51,000 51,000 51,000 Reserves Rs (m) 32,571 34,102 32,013 35,218 40,815 49,782 Shareholders' equity Rs (m) 83,571 85,102 83,013 86,218 92,144 100,872 EBITDA Rs (m) 21,193 22,693 23,673 23,234 26,000 28,311 Working capital Rs (m) 139 8,936 16,213 25,778 25,280 36,335 Current assets Rs (m) 68,178 71,250 75,356 72,592 69,625 74,918 Total assets Rs (m) 196,044 187,348 182,637 180,378 179,574 181,908 Non-current liabilities Rs (m) 44,433 39,933 40,481 47,345 43,085 42,453 12 13 ANNUAL REPORT 2018 Operating & Financial Highlights Operating & Financial Highlights Graphical Presentation Graphical Presentation PROFIT BEFORE TAX AND PROFIT AFTER TAX (RUPEES IN BILLION) DIVIDEND PAYOUT PER SHARE (RUPEES) 3.00 25 2.49 2.50 2.50 20 19.84 2.00 2.00 2.00 15 13.27 12.87 1.72 10.76 1.64 10.20 1.46 8.01 1.50 1.34 10 12.70 1.02 1.00 1.00 1.00 8.76 8.37 1.00 5 7.42 5.21 6.83 0.50 0 2013 2014 2015 2016 2017 2018 0.00 Profit before Tax (PBT) Profit after Tax (PAT) 2013 2014 2015 2016 2017 2018 Earnings per Share Dividend per Share BREAKUP VALUE VS MARKET VALUE (RUPEES) RETURN ON OPERATING ASSETS & EQUITY (PERCENTAGE) 28.44 18 30 16.57 16 23.03 25 14 12.85 17.18 16.39 20 16.91 16.69 12 19.78 10.11 9.82 9.50 18.07 16.49 16.28 10 15 8.80 7.89 8.08 8 9.96 13.05 6.35 10 8.11 6 5.40 9.61 5 4 2 0 2013 2014 2015 2016 2017 2018 0 2013 2014 2015 2016 2017 2018 Breakup Value per Share Market Value per Share Return on Operating Assets Return on Equity 14 15 ANNUAL REPORT 2018 Operating & Financial Highlights Graphical Presentation REVENUE AND TRADE DEBTS (RUPEES IN BILLION) 90 80 81.06 81.51 75.75 70.10 70 71.42 60 69.62 50 40 30 20 18.60 15.76 14.30 14.23 16.04 16.18 10 0 2013 2014 2015 2016 2017 2018 Revenue Trade Debts CURRENT ASSETS & CURRENT LIABILITIES (RUPEES IN BILLION) 80 74.92 75.36 71.25 70 69.63 72.59 68.18 62.31 68.04 60 59.14 50 44.35 46.81 40 38.58 30 20 10 0 2013 2014 2015 2016 2017 2018 Current Assets Current Liabilities TOTAL ASSETS VS SHAREHOLDERS' EQUITY (RUPEES IN BILLION) 300 250 181.91 180.38 182.64 187.35 200 179.57 196.04 150 100 100.87 83.57 92.14 86.22 85.10 50 83.01 0 2013 2014 2015 2016 2017 2018 Total Assets Shareholders’ Equity 16 ANNUAL REPORT 2018 Chairman’s Review On behalf of the Board of Directors, I extend felicitation to Mr. Rashid Naseer Khan on assuming the responsibilities as the new Group CEO of PTCL. I also welcome the new Directors on the Board and place on record the Board’s appreciation and thanks for the invaluable contributions of the outgoing Directors as well as of the previous CEO, Dr. Daniel Ritz. During 2018, the telecom industry continued to grow in spite of the economic challenges of substantial devaluation of Pak Rupee, rise in the discount rate by the Central bank from 5.75% to 10% and significant increase in utility prices and resultant inflation. The addition in subscribers came mostly in mobile sector, and in there, the increase in data subscribers was four times the increase of overall mobile users. The tele-density of the fixed line consumers, however, remained static.