46520701 WorldCall Telecom Limited

8/3/2019 46520701 WorldCall Telecom Limited

1/33

1

(WTL)WorldCall Telecom Limited (WTL), an Oman TelecommunicationsCompany (Omantel), is the most reliable and unique telecom and multimedia service provider in Pakistan. WorldCall Telecom Limited became an associate company ofOmantel after acquisition of major share holding by Omantel in 2008. Today, Wor

ldCall Telecom has become synonymous with innovation, dedication, and reliability in Pakistan. WorldCall is a telecommunication operator in Pakistan which provides services such as Cable TV, Broadband Internet, 3G EVDO Internet, pay-phone services, dial-up Internet cards and wireless telephone. It was established in 1996 by First Capital Securities Corporation Worldcall Telecom Limited provides various telecommunication and multimedia services in Pakistan. It provides wireless local loop, and long distance and international services; and operates and maintains public payphones network. The company also involves in re-broadcasting international/national

satellite/terrestrial wireless and cable television, and radio signals, as wellas interactive communication. In addition, it offers Internet over cable, digita

l television, and cable television services, as well as video on demand. Worldcall Telecom also establishes, maintains, and operates the licensed telephony services. The company was founded in 1996 and is headquartered in Lahore, Pakistan.As of April 18, 2008, Worldcall Telecom Limited operates as a subsidiary of OmanTelecommunications Company


2/33

2Vision To become the number one national alternative telecoms provider and a leading multi-services operator with regional and international footprint. We at Worldcall are committed to achieving dynamic growth and service excellence by being at the cutting edge of technological innovation. We strive to consistently meet and surpass customers', employees' and stake-holders' expectations by offeringstate-ofthe-art telecom solutions with national & international footprints. We

feel pride in making efforts to position Worldcall and Pakistan in the forefrontof international arena. Mission Statement In the telecom market of Pakistan, Worldcall to have an overwhelming impact on the basis of following benchmarks: - Create new standards of product offering in basic and value added telephony by being more cost effective, easily accessible and dependable. Thus ensuring real value for money to all segments of market. - Be a leader within indigenous operators in terms of market share, gross revenues and ARPU within five years and maintain the same positioning thereafter. - Achieve utmost customer satisfaction by setting up high standards of technical quality and service delivery. - Ensuring the most profitable and sustainable patterns of ROI (Return on Investment) for the stake-holders.


3/33

3History In 1996, First Capital Securities Corporation began to incubate a payphone operation called Worldcall Payphones Limited. At that time, notable development was being done to improve the payphone infrastructure in the country. The first payphone was installed in June 1996. Now, Worldcall has over 70,000 payphonesall over the country and the company has become one of the largest fixed line payphone operator and the pioneers of Supervised Payphones business model in Pakist

an. WorldCall launched its business in June 1996 with payphone operations. Amidfundamental shifts in technology and industry, innovation and dedication led usto growth in diversified businesses with a range of services designed to serve the needs of the local market. From Cable Broadband to Wireless Broadband, from Cable TV to Video on Demand, from LDI services and fiber optic network to wireless local loop telephony, WTL has crossed a number of milestones. WTL offers an array of services under three major service categories i.e. Data, Entertainment and Voice. Products & Services WorldCall Telecom Limited being pioneers in a number of telecommunication solutions in Pakistan persists to raise the bar. As we strive to provide state of the art technology in order to bring Pakistan at par with the most advanced countries in the world, we remain focused on consistency tosatisfy our customers.


4/33

4Innovation and excellence leads our way to provide our customers with next generation communication environment. - Data - Voice - Entertainment - LDI Data - WorldCall Wireless Broadband With a Plug & Play small USB device, WorldCall Wireless Broadband opens up a new world of hassle-free wireless internet connectivity with amazing speeds and unlimited downloads. You can take the internet with you and surf the internet in your car, at the office or in a park. - WorldCall Cable

Broadband With a simple click, WorldCall Cable Broadband makes internet surfingfaster and a lot more pleasing ensuring transfer of heavy data, sending/receiving large emails, music downloads and uninterrupted viewing of online videos. Voice - WorldCall Wireless Phone WorldCall Wireless Phone offers hassle-free wireless communication. Operating in more than 50 cities of Pakistan, using CDMA 1x technology we provide reliable voice services along with express and economical data access. Offered both in home-use and payphone models, we provide ease of communication with economical packages.


5/33


6/33

6Directors Review about the WTL The Directors of Worldcall Telecom Limited (WTL or the Company) are pleased to present the financial information for the third quarterand nine months ended 30 September 2010. - Financial Overview The business activity generally remained slow during the past quarter. Heavy floods effected vastarea and normal business activity in many important cities came to halt due toheavy rains. Compared with the same period last year, the Company was able to ma

intain the revenue levels and close the period by posting revenue of Rs 5,976 million. Direct cost of Rs. 5,126 million witnessed an increase of 2% over the comparative period mainly on account of depreciation and network maintenance charges. This however affected the gross profit margin which stands at 14% as against17% of the same period last year. High finance cost of Rs. 559 million on TFCs and other borrowings continued to be the major impediment to better financial performance. After accounting for tax, impairment and other expenses the period wasclosed with a net loss of Rs 744 million. - Future Outlook Activities on different USF projects are in progress. The commercial launch of MTR got delayed due to floods in the region however work has now been resumed expeditiously. Competition and escalating cost of doing business are making it hard to translate the growth in revenues and subscribers into bottom line profits. The Company is assess

ing different synergy initiatives with Omantel which are aimed at entering new revenue streams so as to create value for the shareholders. Subsequent to the period end the Company successfully paid off a hefty redemption of TFCs of Rs 817 million entirely through its current resources. This not only indicates the potential but also offers reflection of the fact that the


7/33

7Company

s financial position is expected to improve remarkably once its high cost debt burden is alleviated. - Company

s staff and customers We would like to thank all our customers and subscribers for their encouragement and for the trustthey placed in us. We also put on record here our appreciation and gratitude forall our staff members and valuable employees. Their efforts and loyalty to theorganization is highly commendable. The Balance Sheet (2006 2009)

2006 Non - Current Assets Tangible Fixed Assets Property Plans Equity Capital Work-in-Progress 5,973,792 886,893 6,860,685 Intangible Assets Investment DepositsLong-Term Investment (at cost) Long-Term Deposits Deferred Costs 4,826,751 56,634 1,000,072 199,704 10,063 12,053,909 Current Assets Store & Spares Stock in Trade Trade Debts Loans & Advances (considered good) Short-Term Deposits & Pre-Payments Other Receivables Short-Term Investment Income Tax Recovered (net) Cash &Bank Balances 34,637 21,931 701,434 134,095 191,024 549,548 784,542 0 1,452,7893,870,000 67,451 35,187 899,052 115,195 178,320 410,245 570,941 58,229 560,575 2,895,195 57,340 90,868 900,712 216,089 234,004 233,821 574,785 102,469 849,040 3,259,128 317,614 182,105 2,116,744 589,790 181,918 15,890 378,439 143,111 336,480 4,262,091 7,643,496 1,780,544 9,424,040 4,704,499 72,150 58,758 223,383 4,72714,487,557 8,903,741 1,976,225 10,879,966 5,008,323 76,162 51,461 109,908 0 16,1

25,820 4,767,265 76,162 0 68,801 0 18,553,786 12,110,704 1,530,854 2007 2008 2009


8/33

8Current Liabilities Current Liabilities Running Finance under Markup Offering Trade & Other Payables Interest & Markup Accrued Provision for Tax Net Current Assets Maturities of Non-Current 793,762 273,207 845,569 34,131 101,202 1,822,129 751,320 525,459 1,039,068 31,981 0 547,367 323,429 66,894 1,020,125 74,841 0 1,773,839 1,858,591 1,045,660 2,239,121 166,605 0 5,309,977

Non-Current Liabilities Term Finance Certificates (secured) Long Term Finance Deferred Taxation Retirement Benefits Liabilities against Assets subject to 49,9091,085,017 477,545 69,823 175,624 6,261 76,260 705,667 0 11,229,932 Shared Capital & Reserves Authorized Capital {775,000,000 7,750,000 9,000,000 9,000,000 9,000,000 342,855 677,464 666,625 98,856 194,026 134,127 59,774 806,791 2,980,518 12,054,518 3,237,470 258,787 710,589 133,200 110,916 119,876 53,060 913,452 5,537,452 12,362,207 3,364,861 398,122 0 175,942 18,542 2,125,220 44,160 0 6,126,847 11,379,053

Financial Lease Long Term Payable Long Term Deposits License Fee Payable Contingencies & Commitments

(2005:350,000,000) ordinary share price Rs. 10 each Issued Subscribes & Paid-upCapital Share Premium Convertible Loan Reserve Accumulated P & Loss

6,539,658 1,391,836 1,400,430 1,898,008 11,229,932

7,520,607 410,887 1,403,575 2,521,544 11,856,613 197,793

8,605,716 837,335 0 2,597,762 12,040,813 321,394

8,605,716 837,335 (230,713) 2,172,537 11,384,875 324,759

Surplus on Revaluation

0


9/33

9The Income Statements (2006 2009)2006 Revenue (net) Direct Cost Gross Profit Operating Cost Operating P or Loss Finance Cost 4,355,859 (2,673,303) 1,682,556 (1,090,851) 591,705 (179,092) 412,613 Impairment Loss Gain on Re-Measurement of Assets at Fair Value Gain on Re-Measurement of Investment at Fair Value Gain on Re-Measurement of Property at Fair Value Other Operating Income Other Expenses Profit or Loss before Taxation Taxati

on Profit or Loss after Taxation 0 138,363 2007 4,312,513 (2,628,806) 1,683,707(1,057,853) 625,854 (312,939) 312,915 0 279,183 2008 4,508,111 (2,854,820) 1,653,291 (1,210,139) 443,152 (460,569) (17,417) 0 0 2009 8,408,275 (7,036,603) 1,371,672 (1,356,317) 15,355 (523,025) (507,670) (167,865) 0

21,000

15,516

3,844

0

0 157,137 0 1,182,220 (234,610) 947,610

15,516 138,086 (39,259) 706,441 (82,905) 623,536

4,012 93,355 (29,941) 53,853 22,365 76,218

0 133,473 (81,461) (623,523) 132,704 (490,819)

Profitability Analysis The company

s revenue of Rs. 4.422 billion for the periodunder review was 11% higher compared to the corresponding period last year. Major reasons attributed to this increase were robust growth in data segment and commencement of EVDO operations in major cities. Direct costs increased by 9.7% fr

om Rs. 3.34 billion to 3.67 billion in 1HFY10. The increase in direct cost was mainly due to higher depreciation charges, network maintenance and excessive fuelconsumption resulting from power outages across the country.


10/33

10Liquidity Analysis Finance cost more than doubled from Rs. 169.022 million to Rs. 377.353 million. Due to the high direct cost and high finance, cost, there wasa loss after taxation of Rs. 407.151 million for the period under review. Thistranslated into a Loss per Share of Rs 0 47 as compared to LPS of Rs. 0.26 in 1HFY09. Winding up of the subsidiary "Worldcall Telecommunications Lanka (Pvt.) Limited" is in process. The subsidiary has been accounted for as discontinued oper

ations. Loss for 1 discontinued operation was Rs. 5.869 million. There was an increase in current assets from Rs. 4.1 FY09 to Rs. 4.847 billion in 1HFY10 mainlydue to the] trade debts. Current maturities of non-current liabilities by 21% while trade and other payables increased by 81%; increasing the current liabilities by 46% from Rs. 5.309 bill Rs. 7.731 billion in 1HFY10. Asset Management Analysis The company recorded a 62% increase in its revenue from Rs. 5196 million toRs. 8408 million in FY-09. This increase was mainly contributed by the LDI LongDistance and International segment where the company was successfully able to strengthen its operations and attract healthy volumes of traffic. Direct Costs increased from Rs. 3807 million to 7037 million due to the higher ATC rates that prevailed during the year as compared to the previous year as well as higher depreciation charges of Rs. 1110 million which increased due to significant enhancem

ent in infrastructure and equipment. Even though the company managed to make anoperating profit of Rs. 15.36 million as compared to an operating loss of Rs. 302.55 million, the profit was eroded by the high depreciation costs and high finance costs leading to a net loss of Rs. 490.82 million for FY09. The gross margindecreased from 19.23% to 16.31% while net profit margin improved from -


11/33


12/33

12Debt Management Analysis The decline in profitability of the company in FY09 took its toll on Earnings per Share, resulting in a 63% drop in EPS, bringing it down to Rs. -0.51 for the year. The company

s stock performance has not been veryimpressive for the year, as depicted in the graph. The stock remained below theKSE 100 Index for the larger part of the year. Future Outlook Analysis Telecom has become a highly competitive sector and the strategy of the company plays a ve

ry important role in the success of that company. WTL is focusing on increasingthe share of data services in its product portfolio. With the growing popularityof cable and advertisement business segment; it also has plans to add nearly 30% new house passes to its network in the coming year. Furthermore, the intense competition in the voice market along with profits attrition due to price wars has negatively affected the sets segment. Mobile substitution factor has put downward pressures on revenues and margins. Steps need to be taken to win customers justly loyalty and ensure steady streams of revenue from existing customers. Implementation of various USF projects will also be r the accomplished by the year-end.


13/33

13Tabular Analysis 2006 2007 Liquidity Current Ratio 1.94 1.23 2.15 0.80 2008 2009

Asset Management Inventory Turnover Days Sales 3 4 11 8

Outstanding Total Turnover Sales / Equity Asset

59

68

79

67

0.28 0.39

0.25 0.36

0.21 0.37

0.37 0.74

Profitability Gross Margin Net Margin Return Asset Return Equity on on Profit Profit 0.37 0.39 0.19 0.16

0.22

0.14

(0.07)

(0.06)

0.06

0.04

(0.02)

(0.02)

0.08

0.05

(0.03)

(0.04)


14/33

14Debt Management Debt / Asset Debt / Equity Long Term Debt / Equity Times Interest Earned 0.14 0.20 0.11 0.14 0.20 0.09 0.24 0.43 0.35 0.28 0.55 0.30

3.32

2.00

(1.85)

(0.03)

Market Value Earnings Share per 1.28 0.83 (0.35) (0.57)

Analysis of Financial Statements by Ratio Technique Ratios Analysis The ratios analysis is one of the most powerful tools of financial management. Though ratiosare simple to calculate and easy to understand, they suffer from serious limitations. 1) Limitations of financial statements: Ratios are based only on the information which has been recorded in the financial statements. Financial statement

s themselves are subject to several limitations. Thus ratios derived, there from, are also subject to those limitations. For example, non-financial changes though important for the business are not relevant by the financial statements. Financial statements are affected to a very great extent by accounting conventions and concepts. Personal judgment plays a great part in determining the figures forfinancial statements. Comparative study


15/33

15required: Ratios are useful in judging the efficiency of the business only whenthey are compared with past results of the business. However, such a comparisononly provide glimpse of the past performance and forecasts for future may not prove correct since several other factors like market conditions, management policies, etc. may affect the future operations. 2) Ratios alone are not adequate: Ratios are only indicators; they cannot be taken as final regarding good or bad fi

nancial position of the business. Other things have also to be seen. 3) Problemsof price level changes: A change in price level can affect the validity of ratios calculated for different time periods. In such a case the ratio analysis maynot clearly indicate the trend in solvency and profitability of the company. Thefinancial statements, therefore, be adjusted keeping in view the price level changes if a meaningful comparison is to be made through accounting ratios. 4) Lack of adequate standard: No fixed standard can be laid down for ideal ratios. There are no well accepted standards or rule of thumb for all ratios which can be accepted as norm. It renders interpretation of the ratios difficult. 5) Limited use of single ratios: A single ratio, usually, does not convey much of a sense. To make a better interpretation, a number of ratios have to be calculated which is likely to confuse the analyst than help him in making any good decision. 6) Pe

rsonal bias: Ratios are only means of financial analysis and not an end in itself. Ratios have to interpret and different people may interpret the same ratio indifferent way.


16/33

167) Incomparable: Not only industries differ in their nature, but also the firmsof the similar business widely differ in their size and accounting procedures etc. It makes comparison of ratios difficult and misleading. CURRENT RATIO: Current ratio may be defined as the relationship between current assets and current liabilities. This ratio is also known as "working capital ratio". It is a measureof general liquidity and is most widely used to make the analysis for short term

financial position or liquidity of a firm. It is calculated by dividing the total of the current assets by total of the current liabilities. [Current Ratio = Current Assets / Current Liabilities] Limitations of Current Ratio This ratio ismeasure of liquidity and should be used very carefully because it suffers from many limitations. It is, therefore, suggested that it should not be used as the sole index of short term solvency. 1) It is crude ratio because it measures onlythe quantity and not the quality of the current assets. 2) Even if the ratio isfavorable, the firm may be in financial trouble, because of more stock and workin process which is not easily convertible into cash, and, therefore firm may have less cash to pay off current liabilities. 3) Valuation of current assets andwindow dressing is another problem. This ratio can be very easily manipulated byovervaluing the current assets. An equal increase in both current assets and cu

rrent liabilities would decrease the ratio and similarly equal decrease in current assets and current liabilities would increase current ratio.


17/33

17The WTL current ratio is continuously decreasing from 2006 to 2009 and it is near to become insolvent the favorable current ratio is 2:1. And now in current position company is not able to fulfill its current liabilities. Companys trade debts are also continuously increasing from 2006 to 2009. It means company is investing more on trade debtors and company current liabilities dramatically increasesin 2009 which is also a cause of unfavorable current ratio. STOCK / INVENTORY T

URNOVER RATIO Stock turn over ratio and inventory turn over ratio are the same.This ratio is a relationship between the cost of goods sold during a particularperiod of time and the cost of average inventory during a particular period. Itis expressed in number of times. Stock turn over ratio / Inventory turn over ratio indicates the number of time the stock has been turned over during the periodand evaluates the efficiency with which a firm is able to manage its inventory.This ratio indicates whether investment in stock is within proper limit or not.[Inventory Turnover Ratio = Cost of goods sold / Average inventory at cost] TheWTL inventory turnover ratio continual increases till 2008 and in 2009 is little decreases, its means company is managing its inventory. Its inventory is in abetter way or it is efficiently utilizing its inventory. It also means that company has a better control on their direct cost. DAYS SALE OUT STANDING Formula wi

ll be as: Days Sale Out Standing = Days in a Year / Receivable Turnover


18/33

18Its means the period in which receivables convert into cash and this period is also continuously increasing till 2006 to 2008 and little decreases in 2009. It means the company credit policy is linear and company is more investing into thebounding and company is not efficient converting receivables into cash due to more receivables, the company current ratio is little stable which is not a good sign for the WTL. TOTAL ASSET TURNOVER RATIO The Total Asset Turnover Ratio descr

ibes the efficient use of assets in the specific time period. The formula for this ratio is: Total Asset Turnover = Cost of Goods Sold / Total Assets The WTL total assets turnover is continuously decreasing from 2006 to 2008 and a significant improvement happen in 2009, the improvement in this ratio is happen due to the companys revenues or sales increasing very fastly in 2009 on important factorsin this ratio is also this that company fix assets are also significantly increasing year to year. SALES TO EQUITY RATIO The Sales to Equity-Ratio explains thesales turnover with respect to the Shareholders Equity. Formula will be as: Salesto Equity Turnover = Net Credit Sales / Shareholders Equity The WTL sales to equity ratio have a little fluctuation from 2006 to 2008 but its rapidly increases in 2009. The main factor in this ratio is that the company sales have little fluctuations in 2006 to 2008 but sales in increasing very fastly in 2009. So, this r

atio also improves in 2009.


19/33

19GROSS PROFIT MARGIN Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a percentage. It expresses the relationship between gross profit and sales. Following formula is used to calculate gross profit ratios:[Gross Profit Ratio = (Gross profit / Net sales) 100] The WTL Gross Profit Margin significantly decreases in 2008 & 2009. It main reason is that company directcost increases greatly in 2009. The sales also an increase in 2009but the %age

increases in direct cost was very high then %age increase in sale. So, as a result gross profit margin became unfavorable in 2008 and 2009. NET PROFIT MARGIN Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as percentage. [Net Profit Ratio = (Net profit / Net sales) 100] The WTL net profit margin shows a very bad picture companys net profits decreases in 2006and 2009. It shows also in 2008 & 2009 due to following reasons: 1) Company haveno control on their finance cost 2) Company have no control on their operatingcost 3) Increases in other expenses are also contributing in unfavorable net profit margin


20/33

20RETURN ON ASSETS (ROA) The Return on Assets describes the return that we get onour assets. Formula for this ratio is as: ROA = Total Assets / Shareholders Equity The WTL return on asset ratio is also having a bad picture and which is sharing loss in 2008 and 2009. Its means WTL management is not effective in generatingprofit with available assets. The main reason behind unfavorable return on asset is this that although the company total assets increases year by year but due

to heavy loss in 2008 and 2009. The company this position is unfavorable by nature. RETURN ON EQUITY (ROE) In real sense, ordinary shareholders are the real owners of the company. They assume the highest risk in the company. (Preference share holders have a preference over ordinary shareholders in the payment of dividend as well as capital. Preference share holders get a fixed rate of dividend irrespective of the quantum of profits of the company). The rate of dividends varies with the availability of profits in case of ordinary shares only. Thus ordinary shareholders are more interested in the profitability of a company and the performance of a company should be judged on the basis of return on equity capitalof the company. Return on equity capital which is the relationship between profits of a company and its equity can be calculated as follows: Return on Equity Capital = [(Net profit after tax Preference dividend) / Equity share capital] 100

In ROE (return on equity) ratio company response towards its shareholders wealthis also bad company is unable to give dividend to their shareholders in 2008 &


21/33

212009. And, loss is showing in 2008 & 2009 is also in current position companys shareholders are facing loss on their investment. DEBT TO TOTAL ASSET RATIO This ratio describes the debt burden on the firms assets. Formula will be as: Debt to Total Asset Ratio = Total Debt / Total Assets The WTL debt to total asset ratio indicates that the companys less portion is financed from total debt and it is mostly financed through shareholders equity and this ratio is constant in 2006 and 2

007 and then this ratio increases little fastly in 2008 & 2009. DEBT TO EQUITY RATIO This ratio explains the total debt burden on the shareholders equity. Formula will be as: Debt to Equity Ratio = Long Term Debt / Shareholders Equity The WTLdebt to equity ratio remains constant in 2006 and 2007 then its fastly increasesin 2008 and 2009. This happen because company long

term debts decreases in 2009which mean management of WTL handle their long

term finance very well in 2009.This ratio also indicates that the now company is more depending on their shareholders equity rather than long

term debt. TIME INTEREST EARNED RATIO Interest coverage ratio is also known as debt service ratio or debt service coverage ratio.This ratio relates the fixed interest charges to the income earned by the business. It indicates whether the business has earned sufficient profits to pay periodically the interest charges. It is calculated by using the following formula.


22/33

22[Interest Coverage Ratio = Net Profit before Interest and Tax (EBIT) / Fixed Interest Charges] The WTLs time to interest earned ratio decreases in 2007 then itsshows loss in 2008 and its shows very little improvement in 2009 as compare to the 2008 loss. This ratio is overall indicates that company at this time is not in a position to cover its interest expenses. EARNING PER SHARE (EPS) Earnings per share ratio (EPS Ratio) are a small variation of return on equity capital rati

o and are calculated by dividing the net profit after taxes and preference dividend by the total number of equity shares. The formula of earnings per share is:[Earnings per share (EPS) Ratio = (Net profit after tax Preference dividend) / No. of equity shares (common shares)] The WTLs EPS (earning per share) ratio is not favorable. It is showing a loss in 2008 a& 2009 which mean a management of WTLis not utilizing their earning of its shareholders well and in 2008 and 2009 itis unable to give the dividend to their shareholders. INDEX ANALYSIS The Balance Sheet 2006 Non Current Assets Tangible Fixed Assets Property Plans Equity Capital Work

in

Progress 100 100 127.95 200.76 149.04 222.82 202.73 172.6 2007 20082009


23/33

23100 Intangible Assets Investment Deposits Long

Term Investment (at cost) Long

Term Deposits Deferred Costs 100 100 100 100 100 100 Current Assets Store & SparesStock in Trade Trade Debts Loans & Advances (considered good) Short

Term Deposits & Pre

Payments Other Receivables Short

Term Investment Income Tax Recovered (net) Cash & Bank Balances 100 100 100 100 100 100 100 100 100 194.73 160.44 128.117 85.9 93.34 74.65 72.77 38.58 74.81 Current Liabilities Current Maturities of

Non Current Liabilities Running Offering Trade & Other Payables Interest & Markup Accrued Provision for Tax Finance under Markup 100 94.15 40.74 234.14 165.54414.33 128.41 161.14 122.49 42.54 73.26 58.44 84.21 916.97 830.35 301.77 439.8 95.23 2.89 48.23 23.11 110.13 137.36 97.46 127.39 58.71 111.85 46.97 120.18 158.58 103.76 134.48 51.42 55.03 133.78 198.83 98.7675 134.48 34.45 153.92

100 100 100 100

192.32 122.88 93.7

24.48 120.69 219.27

382.73 264.8 486.13


24/33

24Net Current Assets 100 100 Non

Current Liabilities Term Finance Certificates (secured) Long Term Finance Deferred Taxation Retirement Benefits Liabilities 24against Assets subject to Financial Lease Long Term Payable Long Term Deposits License Fee Payable Contingencies & Commitments 100 100 100 100 100 100 100 100 100100 Shared Capital & Reserves Authorized Capital {775,000,000 100 686.96 62.43 139.59 141.58 110.47 6486.74 6741.99 26.33 148.8 190.76 63.15 83.36 251.98 10.55

114.64 30.03 72.52 97.34 259.29 57.5

2142.26 1914.64 33943.8 78.38 114.33 112.63 107.34 5069.59 129.45 209.26 110.0895.41 231.54 101.32

(2005:350,000,000) ordinary share price Rs. 10 each Issued Subscribes & Paid

upCapital Share Premium Convertible Loan Reserve Accumulated P & Loss

100 100 100 100

115 29.52 100.22 132.85

131.59 60.16 136.81

131.59 60.16 88.24


25/33

25Income Statement 2006 Revenue (net) Direct Cost Gross Profit Operating Cost Operating P or Loss Finance Cost 100 100 100 100 100 100 100 Impairment Loss Gain onRe

Measurement of Assets at Fair Value Gain on Re

Measurement of 100 100 2007 99 98.33 100.06 96.97 105.77 174.73 75.83 201.77 2008 103.49 106.78 98.26 110.9374.89 257.16

4.22 2.77 2009 193.03 263.21 81.52 124.33 2.59 292.04 12

Investment at Fair Value Gain on Re Measurement of Property at Fair Value OtherOperating Income Other Expenses Profit or Loss before Taxation Taxation Profit or Loss after Taxation

100

73.88

19.1

100 100 100 100 100 100

87.88

59.4

84.94

65.79 56.56

51.79

59.75 35.33 65.8

4.55 9.53 8.04

In WTLs Index Analysis we see that a tangible fixed asset increases significantly

from base year. This happen due to heavy increases in the value of plant & equipment and capital work in progress shows a little decrease in 2009. WTL non


26/33

26current assets do not show a positive improvement regarding to the base year. Inthis there was no any differed cost in 2008 & 2009, long

term deposits increases in 2008 but then they continuously decreases in 2008 & 2009. WTL long

term investment decreases and then it will be finished in 2009. Intangible assets and investment property also shows a fluctuating position. WTL current assets Index analysis also show many ups & downs regarding to base year company cash and bank b

alance small show a decreasing position regarding to base year. Short term Investment & other receivables well company trade debt also increases continuously regarding to base year which may be due to linent credit policy of WTL. WTL stockin trade and stores spare shows a healthy position regarding the base year. In current liability we are not that a large increase in interest and markup happenthere is no any provision for tax of company regarding to base year. Company trade and other payable also increased in a huge ratio regarding to base year. In WTL non

current liabilities term financed certificates increases dramatically however long term finance reduced and finished in 2009 company liabilities againstassets also decreased which having a look at WTL revenue regarding to base year.We see that company revenue continuously increases till 2009 and company directcost increases in high ratio in 2009 due to which gross profit of 2009 managed

by management of WTL in 2009. WTL operating profit is also continuously decreasing till 2009. Company finance cost is also showing continuously increases. In Index Analysis, we see that company is facing a loss before tax in 2009 and this loss more increases after taxation regarding to base year.


27/33

27COMMON SIZE ANAYLSIS The Balance Sheet 2006 Non

Current Assets Tangible FixedAssets Property Plans Equity Capital Work

in

Progress 37.5 5.5 43.08 IntangibleAssets Investment Deposits Long

Term Investment (at cost) Long

Term Deposits Deferred Costs 30.31 0.35 0.62 0.01 0.06 75.69 Current Assets Store & Spares Stockin Trade Trade Debts 0.21 0.13 4.4

0.38 0.2 5.17 0.66 1.02 2.36 3.28 0.33 9.1224.3 3.22 16.65 0.29 0.46 4.64 1.11 1.2 1.2 2.96 0.52 4.37 16.81 1.39 0.79 9.27

2.58 0.79 0.06 1.65 0.62 1.47 18.68 43.97 10.24 54.21 27.06 0.41 0.33 1.28 0.0288.34 45.93 10.19 56.12 25.83 0.39 0.26 0.56 83.34 53.08 6.7 59.78 20.89 0.33 0.3 81.31 2007 2008 2009

Loans & Advances (considered good) 0.84 Short

Term Deposits & Pre

Payments 1.19Other Receivables Short

Term Investment Income Tax Recovered (net) Cash & Bank Balances 3.4 4.92


28/33

28Current Liabilities Current Maturities of Non

Current Liabilities Running Offering Trade & Other Payables Interest & Markup Accrued Provision for Tax Net Current Assets Finance under Markup 4.98

4.3 1.66 8.14

1.71 5.3 0.21 0.63 12.86 11.44

3 5.97 0.18 13.5 3.14

0.34 5.26 0.38 7.66 9.15

4.58 9.81 0.73 23.27

4.59

Non

Current Liabilities Term Finance Certificates (secured) Long Term Finance Deferred Taxation Retirement Benefits Liabilities against Assets subject to Financial Lease Long Term Payable Long Term Deposits License Fee Payable Contingencies& Commitments 0.3134 6.81 2.99 0.43 1.1 0.03 0.47 4.43 16.61 70.52 Shared Capital & Reserves Authorized Capital {775,000,000

1.97 3.89 3.83 0.56 1.1161 0.77 0.34 4.64 17.14 69.34 16.7 1.33 3.66 0.68 0.57 0.61 0.27 4.71 28.56 63.77 14.74 1

.74 0.77 0.08 9.31 0.19 26.85 49.87

(2005:350,000,000) ordinary share price Rs. 10 each


29/33

29Issued Subscribes & Paid

up Capital Share Premium Convertible Loan Reserve Accumulated P & Loss Income Statement 2006 Revenue (net) Direct Cost Gross Profit Operating Cost Operating P or Loss Finance Cost 100 61.37 38.62 25.04 13.58 4.11 9.47 Impairment Loss Gain on Re

Measurement of Assets at Fair Value Gain on Re

Measurement of 3.17 2007 100 60.95 39.04 24.52 14.51 7.25 7.25 6.49 2008 100 63.3236.67 26.84 9.38 10.21 0.38 0.08 2009 100 83.68 16.31 16.31 0.18 6.22 6.03

1.99

Investment at Fair Value Gain on Re

Measurement of Property at Fair Value OtherOperating Income Other Expenses Profit or Loss before Taxation Taxation Profit or Loss after Taxation

0.48

0.35

0.08

10.4 3.6

3.2 0.91

2.07 0.66 1.19 0.49 1.69

1.58

0.96

0.74 1.57

5.83

2.71 5.38

16.38 1.92 14.45


30/33

30In WTL common size analysis we see an overall increases in non

current assets from 2006 to 2009 due to better asset position property, plan & equipment were little few in 2009. An intangible asset shows a significant improvements in 2006 company deferred cost remains low in 2009. Coming towards current assets we see that stock & spare were better in 2009company trade debt level was high in 2007 and 2009, loan and advances also show an increase in 2008 band 2009, short term de

posits and prepayments remain constant in 2007 and 2008. The overall current assets of WTL are high in 2006 are constant in 2007 and 2008 and are little low in2009. The total current liabilities under common size analysis are high in 2009.It non

current liabilities long

term finance was high in 2006 but they were very low in 2009. The overall non

current assets of WTL were high in 2006 and werelow in 2009. Now, if we make a look at income statement under Index Analysis, wesee an increase in direct cost in 2008 and 2009. The operating cost was high in2006 but was controlled by management of WTL in 2009 operating profit was little improves in 2007 under Index Analysis but reached approximately to zero in 2009. The finance cost was high in 2006 but was also controlled in 2009. WTL receive profit before taxation. In 2006, 2007, 2008 & 2009 WTL receive the loss in 2009 but after taxation WTL bears a heavy loss in 2009. Companys Internal Informatio

n Board of Directors

Mr. Aimen bin Ahmed Al Hosni

Mr. Asadullah Khawaja (Nominee of Arif Habib Securities Ltd.)

Mr. Bernhard Heinichen van der Merwe

Mr.Mehdi Mohammed Al Abduwani (Chairman)

Mr. Salmaan Taseer


31/33

31

Mr. Samy Ahmed Abdulqadir Al

Ghassany

Mr. Saud bin Ahmed Al

Nahari

Mr. Talal Said Marhoon Al

Mamari

Mr. Zafar Iqbal

Mr. Babar Ali Syed (Chief Executive Officer)

Mr. Mirghani Hamza Al

Madani (Chief Internal Auditor)

Mr. Saud Al

Mazroui (Company Secretary) Executive Committee

Mehdi Mohammed Al Abduwani (Chairman)

Tala Said Marhoon Al

Mamar (Member)

Asadullah Khawaja (Member)

Babar Ali Syed (Member)

Aimen bin Ahmed Al

Hosni (Member)

Saud Mansoor Al

Mazr

oui (Secretary) Audit Committee Talal Said Marhoon Al Mamari (Chairman) Zafar Iqbal (Member)

Asadullah Khawaja (Member)

Rizwan Abdul Hayi (Secretary) Chief Internal Auditor

Mirghani Hamza Al

Madani Company Secretary

Saud MansoorAl

Mazroui


32/33

32Auditors

KPMG Taseer Hadi & Co.

Chartered Accountants Legal Advisers

M/s Ebrahim Hosain & Associates Advocates Bankers

Allied Bank Limited

Arif HabibBank Limited

Askari Bank Limited

Barclays Bank Plc Pakistan

Deutsche BankAG

Emirates Global Islamic Bank Limited

Faysal Bank Limited

First Dawood Investment Bank Limited

Habib Bank Limited

Habib Metropolitan Bank Limited

HSBC Bank Middle East Limited

IGI Investment Bank Limited

KASB Bank Limited MCB Bank Limited National Bank of Pakistan NIB Bank Limited Oman International Bank S.A.O.G.


33/33

Documents

46520701 WorldCall Telecom Limited