PTCL Ar 2018 PDF

PTCL
PAKISTAN
ANNUAL REPORT
Pakistan Telecommunication Company Limited

ANNUAL REPORT 2018
Contents
01 Corporate Vision, Mission & Core Values 04
03 Auditors’ Report to the Members 129-135
COMPANY REVIEW
FINANCIAL STATEMENTS
CONSOLIDATED
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
2018‫ ہ ے‬ 46-47
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
02 Auditors’ Report to the Members 61-67

04
STATEMENTS
FINANCIAL
Statement of Financial Position 68-69

Statement of Profit or Loss 70 Pattern of Shareholding 217-222
ANNEXES
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
Telenor Microfinance Bank Limited
Moqeem Ul Haque The Bank of Khyber
Chief Commercial Officer / Chief Strategy Officer
United Bank Limited
U Microfinance Bank Limited
Adil Rashid
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
E-mail: company.secretary@ptcl.net.pk
Saima Akbar Khattak
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: info.shares@famco.com.pk
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
19.84 2.50
20
2.00 2.00
2.00
15 13.27 12.87 1.72
10.20 10.76 1.64
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
25 23.03
14
12.85
17.18 16.39
20 16.91 16.69 12
19.78 10.11 9.82
18.07 10 9.50
15 16.49 16.28
8.80
8 7.89 8.08
9.96
13.05 6.35
10 6 8.11
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 68.18
70 69.63 72.59
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
181.91 179.57 180.38 182.64 187.35

200 196.04
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. While
the voice segment was affected by OTT applications and menace of grey traffic,
there was attrition in fixed-line data subscribers, mainly due to shift towards
mobile data. The DSL segment, however, grew by 2% to 1.6 million by end of
2018 whereas there was healthy growth of 42% in FTTH users, although the
number of users was limited to 60K only.
These trends indicate the shift in telecom users’ preferences from voice to
data and their appetite for high-speed, larger volume broadband products.
Under the guidance of the Board, PTCL indeed has taken the steps in the
right direction to capitalise on these opportunities, a prime example thereof
is the Network Transformation Project (NTP). Not only the revenue increase
in the transformed exchanges is higher than the average, but the fault
occurrence in there has reduced also.
Accordingly, 2018 was a fruitful year for PTCL Group with 8% increase in
revenue - made possible by positive contribution from all the operational
companies, and significant increase in the Group’s profitability. With
Earning per Share of Rs. 1.46, the PTCL’s Board declared interim cash
dividend of 10% for the year 2018.
Further, performance of the Board and its sub-committees during 2018

was satisfactory. The Board and its committees remained vigilant to the
performance of PTCL as well as of the risks and challenges faced by it
and, by way of constant analysis of Company’s performance in meetings
of the Board and sub-committees, guided the management with concrete
measures to further improve PTCL’s performance in line with related legal,
regulatory and corporate governance frameworks. The Board and its
committees received agenda and supporting written material including
follow-up material in sufficient time prior to the Board and its committees’
meetings. Meetings of the Board and its committees were held at enough
frequent intervals to discharge their responsibilities effectively.
On behalf of the Board, I assure all the stakeholders that in line with the
emergence of the business opportunities in the telecom sector of Pakistan, we, in
our capacity as Board members, shall continue to guide PTCL Group’s
management to make best possible use of such opportunities as per the regulatory
frameworks, towards the value maximization for the shareholders.
Maroof Afzal 2019 04

Chairman PTCL Board
Islamabad: March 04, 2019
18 19
ANNUAL REPORT 2018
Group CEO’s Message

To ensure that needs of all broadband subscribers – fixed as well cellular – using high-speed internet are optimally
catered to, PTCL also expanded its country-wide fiber footprint and increased the back-haul capacity of its
transmission and core networks.
The enterprise segment of PTCL business was equally taken care of. PTCL Smart Cloud is Pakistan’s first SDN
(Software Defined Network) enabled cloud infrastructure with robust security features, duly certified by ISO. Besides
the Smart Cloud, the Corporate customers also benefit from modern-day services like Cyber Security, Data Centre
Hosting, IT System Integration Projects and Managed Services – offered in collaboration with renowned global IT
companies thus ensuring that our valuable customers are beneficiary of the latest technologies.
Besides PTCL, the operational subsidiaries viz. Ufone and Ubank also expanded their businesses in accordance with
their respective market dynamics.
These expansions, upgradations and modernisation of networks, as well as timely and effective commercial and
customer care measures, duly proved fruitful in terms of growth in revenue and profitability of PTCL Group. The Group
revenue of Rs. 126.2 billion in 2018 grew by 8% due to revenue increase in all the contributory units – revenue increase
in PTCL, Ufone and Ubank being about 1%, 13% and 64% respectively –, Group’s operating profits at Rs. 8.9 billion
almost tripled over last year and the profitability after tax increased by 32%, despite the adverse impact of devaluation
and higher prices and inflation. PTCL also declared an interim cash dividend of 10% (Re. 1.0 per share) in 2018.
Financial strength of PTCL was acknowledged in 2018 through an independent rating exercise by JCR-VIS, assigning
long-term rating of AAA – a testimony of stakeholders’ confidence in long-term sustainability of PTCL.
The above-noted successes would not have been possible without the concerted efforts of our employees in the right
direction. To ensure that our work force is suitably equipped technically as well as in soft skills, to effectively meet the
challenges of today’s competitive business environment, managements of the Group companies continuously
arranged to impart the needed training to our staff, after thorough analysis of the training needs of each group of
employees. At the same time, welfare, safety and entertainment aspects were given equal importance to keep the
I feel privileged and honoured to be assigned with the revered responsibility to lead PTCL Group at this important employees engaged and motivated and, accordingly, suitable interventions were implemented throughout the year. To
juncture in time when the contemporary technical advancements such as 5G mobile, artificial intelligence and big data ensure our employees display standardised professional behaviors in the best interest of all the stakeholders, PTCL
analytics are set to impact the telecom industry world over, and Pakistan will not be an exception. PTCL, being the launched its new set of values during the year after careful deliberations.
leading and the only fully integrated telecom operator of the country along with its subsidiaries is cognizant of these
challenges. I also acknowledge the invaluable services of my predecessor, Dr. Daniel Ritz whose leadership in the CSR (Corporate Social Responsibility) is always a point of focus for the PTCL Group. Keeping with the practices in
preceding three years helped PTCL Group to grow. previous years, CSR activities were undertaken throughout the year, across the country. Notable mentions in this
respect are the free medical services in various regions and support to WWF in plantation of mangrove seeds in
2018, I believe, would be remembered in Pakistan as the year of change. With the new government setting-in after the Balochistan.
general elections in middle of 2018, second half of the year witnessed major adjustments on the economic front. The
currency devaluation of about 30%, rise in utility prices and almost doubling of the primary interest rate during the year, In line with the public expectations and regulatory requirements, all related information was continuously shared
increased cost of doing business considerably, beyond estimations. PTCL Group suffered a loss of ruppees one billion through regulatory submissions, media briefings, investors conference and presence of PTCL on all the media
in 2018 on account of currency devaluation alone. channels – print, electronic and social. We were also sponsors in various sporting events of national importance.
Consequently, with the enhancement of public trust, PTCL was declared the ‘Fastest Growing Brand in Pakistan’ by
Nonetheless, the telecom industry in Pakistan grew during the year. With overall tele-density of 75% at the end of the Brand Finance - the leading independent brand valuation and strategy consultancy.
year, the cellular tele-density was 74% with about 154 million mobile subscribers. Of these, the subscribers availing
data services of 3G/4G were about 62 million i.e. 40%. Compared to 7% annual growth in overall mobile industry, the Going forward, data would remain the driving force of the telecom industry in the near future. If harnessed effectively
mobile data subscribers increased by 28%, of which the increase in 4G data subscribers was phenomenally high i.e. by the operators in Pakistan and the latest technologies are made available timely in coordination of all stakeholders,
155%. On the contrary, the voice segment remained dampened, principally because of subscribers’ shift to OTT and this opportunity can help Pakistan to change radically for the betterment in the realms of economic growth and
grey trafficking. advancement in social sectors like education, health and gainful employment – the catalyst for the change would be
the abundant youth population.
The growth and proliferation of data services in the country is, in fact, a good sign for PTCL Group. With penetration of
fixed-line broadband to only 5% of the households, the growth potential in the segment is abundant, for the ultimate Concluding, on behalf of PTCL Group management, I acknowledge with gratitude the contributions of all the
benefit of PTCL. Similarly, the data subscribers of Ufone grew by 46% in 2018 compared to the industry’s average of stakeholders – our valuable customers, diligent employees, business partners and always supportive shareholders. I
28%. am confident that with this continuing support, PTCL Group would maintain its leading role in the telecom industry of
Pakistan by serving its diversified customers base – retail, enterprise and carriers, with products and services based
To reap the benefits of the market potential in fixed-line broadband market, in 2018 PTCL continued with its ambitious upon latest technologies in cost-effective manner.
Network Transformation Project which is implemented in phases, with significant investments involved. Accordingly,
out of 100 exchanges planned for the transformation, 51 are completed to-date with positive results in the form of
higher than average revenue growth of 12% and 36% reduction of the network faults in these transformed exchanges.
Similarly, for the wireless broadband segment of PTCL, focus remained on providing the subscribers with high-end Rashid Naseer Khan
CharJi/LTE services across the country. Not only the spectrum capacity was doubled in major cities besides launching President & Chief Executive Officer
CharJi/LTE in Peshawar, the network was shifted from 3G EVO to CharJi/LTE in most other cities and towns. AJK
remained of special attention in this regard, wherein the number of sites were expanded and new sectors added to Islamabad: March 04, 2019
increase the capacity.
20 21
ANNUAL REPORT 2018
2019 04
22 23
ANNUAL REPORT 2018
VALUES WE LIVE BY
WE TREAT
EVERYONE
WITH RESPECT,
DIGNITY AND
RESPONSIBILITY.
WE ARE PASSIONATE
ABOUT SERVING
OUR CUSTOMERS.
THEIR SATISFACTION
IS A KEY MEASURE
OF OUR SUCCESS.
WE SEEK & VALUE

EVERYONE’S
CONTRIBUTION.
TOGETHER WE
ARE STRONG.
WE SHAPE OUR
OWN DESTINY BY
BEING PROACTIVE &
OPEN TO
NEW IDEAS.
24
ANNUAL REPORT 2018
Directors' Report
to modernising its existing copper access network and reducing the copper loop lengths under the Network
Transformation Project.
In recent years, Pakistan has seen a rapid digitalisation of major industries resulting in transformed business
On behalf of the Board of Directors of Pakistan Telecommunication Company Limited (PTCL), we are pleased and operating models. Almost all the commercial banks have launched their online banking services and
to present the annual report and the audited financial statements for the year-ended December 31, 2018 exponential growth is witnessed in ecommerce industry. These digitalisation trends are opening new
together with the auditors’ report thereon. opportunities in ICT (Information and Communication Technologies) sector that are positively contributing to
corporate and VAS (Value Added Services) revenue growth.
Cognizant of the contemporary challenges in Pakistan’s telecom industry whereby cellular operators are
attaining growth in data services, PTCL Group is fully prepared to meet these challenges with timely actions Corporate and enterprise segment witnessed increase in its customers’ requirements for managed services,
on all operational and business fronts. cloud infrastructure and security solutions, which are helping in development of new revenue streams.
PTCL is constantly enhancing the access network capabilities of wireline broadband services under the
Network Transformation Project (NTP) committing significant investments, with the objective to provide the Financial Performance
customers with unparalleled speeds and volumes. Similarly, capabilities of wireless broadband networks are
also enriched to enable higher-end data Charji LTE services. Your Company’s fiber foot print is further During the year, the PTCL Group performed well. Not only the revenues of all the Group companies grew, but
extended not only for PTCL’s own use but is also encompassing expansion of other carriers’ networks through the Group’s profitability also increased compared to last year. To maintain its market leadership through
provision of fiber-based back-haul services. Innovative and cost-effective commercial products and services provision of quality services to its esteemed customer base using latest technologies, PTCL Group made
based-upon latest technologies commensurate with customers’ needs are introduced and effective, significant investments for expansion and upgradation of the networks.
technology-based initiatives to improve subscribers’ experience are being constantly undertaken.
Revenues
An overview of the Company’s performance during the year is summarized in the succeeding paragraphs.
During 2018, PTCL revenue was Rs. 70.1 billion with about 1% growth over last year. Revenue from Broadband
Industry Outlook & IPTV, Corporate and Carrier & Wholesale increased by 6%, 13% and 14% respectively. However, based
upon declining voice traffic volumes due to subscribers’ conversion to OTT (Over the Top) and cellular
services as well as increase in illegal/grey traffic termination, Voice revenue, both local and international,
During the year under review, Pakistan’s economic environment remained challenging mainly on account of
decreased. Further, although the overall Wireless data revenue declined, the revenue from Charji/LTE services
economic stabilisation measures adopted by the new government which assumed power after the general
included in there increased significantly. As a result of transformation of a considerable number of
elections held in 2018. These measures, inter-alia, consisted of about 30% devaluation of Pak Rupee since
exchanges under the NTP, the pace of overall revenue increase accelerated towards end of year as the last
December 2017, gradual increase in interest rate by State Bank of Pakistan from 5.75% to 10% and upward
quarter of 2018 witnessed 3% revenue growth over same period last year.
adjustment of utility prices. Resultantly, GDP growth is anticipated to decelerate to around 3.5% in FY 2019, as
manufacturing and agriculture sectors are likely to post performance below par amid significant monetary and
PTCL Group’s revenue for the year grew by 8% from last year to Rs. 126.2 billion as a result of positive
fiscal tightening and rising cost of doing business. However, the new government’s eagerness to control the
contribution by all Group companies. Besides the increase in PTCL’s revenue as aforesaid, Ufone revenue
economic situation and recent collaboration/alliances with other governments is expected to restore investors’
increased by 13% whereas growth in Ubank revenue was significantly higher i.e. 64% over the last year.
confidence and interest.
For the telecom operators, the devaluation of Pak Rupee has increased the cost of doing business as Profitability
significant portion of their capital expenditure and operating cost is foreign-currency dependent. Reducing
margins, therefore, may become a catalyst for the operators to explore in-market synergies and PTCL’s profitability for the year remained under stress. The operating profit of Rs. 6.5 billion was 9% lower than
consolidations. the last year, primarily due to increase in operating cost on account of currency devaluation and higher
subscriber acquisition cost. Further, the reduction in profit after tax was 11%, mainly caused by declining
During 2018 the telecom market witnessed steady growth and remained highly competitive. Data remained non-operating income due to lesser availability of funds for investment as well as reduced operating profit as
the major growth lever while the voice revenue continued to decline. With 7% yearly increase in number of aforesaid. PTCL’s earnings per share (EPS) for the year was Rs. 1.46.
mobile subscribers, the growth in 3G/4G mobile subscribers was 28%, inclusive of customers’ migration from
other wireless broadband services such as WiMax and EvDO as well. Accordingly, to meet the ever-growing PTCL Group’s operating profit at Rs. 8.9 billion almost tripled over last year whereas the profit after tax
data demand, the telecom operators continued to make capital investment in infrastructure upgradation with increased by 32%. Main reason of the increased profitability was revenue growth of the Group, as already
the aim to offer higher data speeds to increasing number of subscribers. described. PTCL’s Group earnings per share (EPS) for the year was Rs. 1.12.
Pakistan’s fixed line penetration of PSTN and broadband, however, remained less than 8% and 5% of total Cash Flows
households respectively. Such under-penetration, is an opportunity for fixed line operators to deploy quality
network in order to fulfill the demand for highspeed data products. Amongst the prevalent fixed line broadband PTCL’s cash flows, generated through operations during the year, were primarily used towards network
technologies of DSL, FTTH (Fiber to the Home) and HFC (Hybrid Fiber Coaxial), FTTH remained the transformation and upgradation and long term loans to its subsidiaries, UBank and Ufone.
technology of choice, subscribers of which increased by 42% during the year. In line with the market trend and
to provide the customers with higher-speed data services, PTCL also enhanced its FTTH footprint in addition At the Group level, besides the above-stated PTCL’s network transformation, the cash flows were also used
26 27
ANNUAL REPORT 2018
for Ufone’s network upgradation. Further, free unlimited on-net calls (PTCL Landline to PTCL Landline and PTCL Landline to V-Fone) were also
bundled with various packages, notably of 3Mbps and 5Mbps.
Dividends and Appropriations
During the year, various special GPON (Gigabit Passive Optical Network) promos were also launched in
For the year under review, the Directors declared an interim cash dividend of 10% (Re. 1.0 per share). Further, different regions whereby the customers were offered packages of 10Mbps and above coupled with
the income of Rs. 179 million earned on the insurance reserve funds was transferred from unappropriated specialised pricing. As a result, the customer base availing FTTH (Fiber to the Home) broadband services
profits to the insurance reserve. expanded.
Other Matters Pricing of various wire-line packages were also rationalised during in the year with the aim to sustain the
customer and revenue base.
Your attention is drawn to note 12.7 of PTCL’s financial statements as well as note 18.7 of the consolidated
financial statements for the year, which explains that the matter relating to certain employees’ rights under the Wireless
PTCL pension scheme is pending with various courts, as highlighted by external auditors in their audit reports.
With the objective to offer higher-speed packages to our wireless broadband customer base, CharJi/LTE
services were launched in various cities through transformation of related spectrum and network elements.
Product & Services - Consumers Further, existing 3G EVO customers in various regions were offered attractive complimentary upgradation to
CharJi/LTE by exchanging their existing device with CharJi Cloud at reduced pricing. Upon successful
migration of customers to CharJi/LTE packages, the related wireless network was made exclusively
Cognizant of the ever-increasing demand of data services and diversified needs of our esteemed customers’
LTE-enabled thus significantly enhancing the network capabilities which in turn provided the customers with
base, PTCL continued to offer newer packages with larger data volumes and higher speeds as well as
superior quality of service.
strengthening the existing products, all at affordable prices, and in line with the on-going transformation and
upgradation of the network. A brief of such product offerings is provided in ensuing paragraphs.
Wireline
In line with the region-specific factors of customers’ needs and affordability, new packages of 3Mbps, 5Mbps
and 6Mbps, all at attractive pricing and coupled with large data volumes, were introduced during the year in
various regions.
Further, in order to attract new customer base, discounted installation pricing for limited periods were offered
in various zones and regions at various times of the year. In similar fashion, different loyalty promos were also
made applicable to existing customer base whereby our loyal customers were upgraded from 1Mbps to 2
Mbps and 2 Mbps to 4Mbps data packages without any change in the pricing. The 8Mbps package was also
offered at the price of 6Mbps package for a limited time period. For NTR-I region, a specific customer win-back
campaign with discounted billing also proved successful.
Further, various attractive double volume campaigns were launched during the year whereby the subscribers
purchasing/recharging/upgrading their EVO or CharJi devices during the promotion month were entitled to
additional volume as per their allotted package at the same monthly line rents for a limited number of months.
To bring the inactive customers back on the network, various re-connect promos were launched with
discounted pricing and higher volumes for limited time period. Similarly, in the under-utilised 3G EVO areas,
mostly comprising of tier-2 cities, specific location-based packages with attractive offerings were launched
which proved successful in increasing the customer base.
28 29
ANNUAL REPORT 2018
Content & Multimedia

During the year, PTCL partnered with Netflix, the world’s leading streaming content provider, to give customers
access to quality international content, thus further enhancing their viewing experience. Customers having
8Mbps and above unlimited internet packages can enjoy Netflix subscription for six months free of cost.
Your Company also entered into an agreement with E-Vision (Etisalat) through which PTCL Smart TV/OTT
customers were provided with premium movies and content from several Hollywood studios.
Further, during the year PTCL also launched ‘Starz play by Cinepax’- Video-on-Demand (VOD) service for
PTCL Smart TV and Smart TV App customers enabling availability of Hollywood movies, TV shows,
documentaries and kids’ entertainment programs, sourced from some of the prominent studios.
In 2018, PTCL enhanced its alliances/partnerships with the Global IT Companies to strongly position itself as
the leading ICT as well as system integration services provider in Pakistan. PTCL Smart Cloud as Pakistan’s
first SDN (Software Defined Network) enabled cloud infrastructure, made its niche in the market by providing
flexible and innovative solutions, catering to the present-day needs of our enterprise customers across
multiple industry segments viz. education, financial, healthcare and FMCG.
During the year, PTCL had special emphasis on new areas like PTCL Smart Cloud, Cyber security initiatives,
Data Center Hosting, security solutions, IT System Integration Projects and Managed Services. Accordingly,
with successful implementation of projects in these areas, revenue from Corporate segment grew by 13%
annually.
Carrier and Wholesale Services
Your Company being the only fully-integrated telecom operator in Pakistan, possesses vast capacity of
PTCL Smart TV interface was also revamped thus not only enhancing the visual appeal and aesthetics thereof fiber-based back-hauling which is vital for country-wide internet connectivity.
but also making the process of content discovery more user friendly by adopting a modular design based on
tiles, enabling easy navigation. As a result, the customer experience has enhanced. With the growth in 3G/4G customers of cellular operators, the demand for back-hauling is on the rise to ensure
reliable data services to these customers. PTCL duly capitalises on such opportunities by timely entering into
contractual arrangements with other carriers to provide them with the needed connectivity using its vast
Product & Services - Business back-hauling resources. The rationale of availing PTCL’s capacity for these operators is not only to ensure fast
and reliable data services to their mobile customers but also the considerable savings in their CAPEX and
OPEX costs.
In order to meet the specialised telecommunication needs of our valued enterprise and corporate customers
as well as other telecom operators, your Company offers a wide range of products and services ensuring that Accordingly, during the year, the IP bandwidth service business with different carriers was further expanded.
each such offering is agile, customer centric and innovative, to the extent possible. The array of these offerings PTCL in collaboration with Special Communications Organisation (SCO) successfully established strategic
cover the digitalisation, cloud, data center hosting, managed services and connectivity needs for our valued partnership to monetize CPEC cross border connectivity. In addition, PTCL also started new projects to
customers, both within and outside the country. enhance cross border connectivity with neighbouring Afghanistan and Iran.
Digital Services Resultantly, revenue from this segment of PTCL business increased by 14% during the year.
Leading the way for digital transformation in Pakistan, your Company has enhanced its digital services
portfolio from serving connectivity needs to becoming a valued - added partner for our enterprise customers.
Realising the growing market needs for digitalisation, our focus remains on proactive sales strategy and
prudent account management which results in long-term relationship management.
30 31
ANNUAL REPORT 2018
Support Functions To expand the back-haul capability of high-speed service backbone, capacity of the transmission network was
enhanced to 100G DWDM (Dense Wave Division Multiplexing) capable of transmitting traffic up to 8Tbps.
Also, 246, 100/10 Gb/s MPLS-TP (Multi-Protocol Label Switching – Transport Profile) nodes were installed
Network Infrastructure replacing the legacy transport network of SDH (Synchronous Digital Hierarchy) nodes, enabling handling of
larger traffic volumes with ease.
In order to timely realise the opportunities offered by the ever-increasing demand of higher speeds and larger
volumes of data services from all facets of its valued customers comprising of retails, corporate and wholesale Moreover, to conserve the international bandwidth requirements as well as to provide speedier and seamless
segments, your Company is continuously expanding and modernising its network with innovative technologies content delivery to our valued internet customers, CDN/Cache serving capacity was expanded to around
and smart solutions in a synchronised manner. Service delivery platforms and network elements are being 2Tbps, facilitating local availability of pages of Google, Facebook, Akamai, Qwilt, Netflix, CloudFlare and iFlix.
transformed with high throughput devices to enhance customers’ experience.
Your Company is implementing laying of around 1,300 Kms of fiber cable covering 41 Tehsils in KPK and FATA
The foremost current initiative of PTCL in this regard is the Network Transformation Project (NTP) committing under USF-awarded contracts. This is in addition to laying of 688 Kms of fiber to increase Telenor’s back-haul
significant amount of CAPEX to fiberize and renovate the wireline access network connected to the top 100 capacities. New microwave links (>1000 Mbps) were also installed for capacity enhancement in high traffic
exchanges, country-wide, thus enabling higher-end data products up to 100Mbps speed with better quality of areas of Tall to Parachinar giving resilience to spur fiber for quality services.
experience to our valued customers.
With the aim to further improve the communication and collaboration among internal teams spread across the
To-date, under NTP, 51 such exchanges were fully transformed. In this regard, during 2018, additional 1,456 country, 13 new sites for video conferencing system were deployed and integrated with the existing 4 sites.
MSAGs (Multi Services Access Gateway) were added. In these MSAGs, as well as in allied exchanges, 479K Additionally, on-premises WebEx solution was implemented enabling to join the video conferencing from
new VDSL2 ports as well as 57K new GPON lines to provide FTTH service were added. Expansion in IP the workstations.
network at 40 sites was also completed. Through this deployment, not only the network faults were reduced
enhancing quality of service, but the customers were also enabled to opt for higher-end data packages. Further, towards the cost saving measures, solar solution was deployed at 146 sites besides merging a
number of sites with Ufone sites.
To improve diagnostic and remedial-action capabilities of the wireline access network, a Network Analyser
solution was deployed. The solution has not only helped to improve the last mile visibility, but also aids to During the year, PTCL also secured ISO/IEC 27001:2013 and ISO/IEC 27017:2015 certifications relating to
reduce the workload at field level by increasing the First Call Resolution (FCR) at contact centres. For new Information Security Management System, for its cloud services ‘Infrastructure-as-a-Service’ (IaaS) offering.
connections, auto feasibility without physical visit to customer premises has also been made possible thus The said certifications are testimony of the excellent security features of your Company’s Cloud services.
reducing the service provisioning time. Customers can migrate from copper network to fiber (GPON) network
by retaining the same landline number. Also, the commissioning of a new IPTV/OTT headend at Multan has
provided the needed redundancy to the primary site at Islamabad. Capacity of 10 HD (High Definition) Information Technology (IT)
channels was added for IPTV customers as well.
In the wireless access network, for CharJi/LTE sites in major cities, the spectrum capacity was doubled. Your Company continued to provide up-to-date solutions for better customer experience management as well
Similarly, for most of the other cities and towns, the network was shifted from EVO to CharJi/LTE. Also, the as internal operational efficiency improvements through its IT capabilities based upon leading-edge and
CharJi/LTE service was launched in Peshawar city. In AJK region, besides increasing number of the integrated technology. In this regard, various initiatives of IT transformation, facility revamp and synergy with
CharJi/LTE sites, new sectors were added in number of sites thus expanding the capacity to accommodate Ufone were undertaken during the year.
over 17,000 additional subscribers. Further, with the development of Flux validity extension feature in OCS
(Online Charging System) platform for wireless customers, the subscribers have been facilitated in carrying During the year, revamping of PTCL tier-1 sites to enhance operational efficiency thereof in line with to-date
forward the unused data volumes not only from one period to the next but also from 3G service to international standards was undertaken. Revamping of ICT facility at Satellite Town Rawalpindi and creation of
CharJi/LTE service on migration. LTE-TDD - Smart Radio service for corporate clients was extended to PODC (Performance Optimized Data Centre) at PECHS Karachi were completed. The revamping work on ICT
Gwadar city as well. facility at Garden Town Lahore and five other tier-1 sites is under implementation. As a result of this initiative,
utilisation of PTCL’s infrastructure in terms of systems, storage and network resources is optimised
considerably.
A number of initiatives were completed to further add value to the cross functional activities. Capabilities of
PTCL’s own private cloud infrastructure were increased. Several other projects, notably TEMIP, Nokia Network
Analyser, CA ITNOC, Website, Smart Link, PTCL Talent, PCRM, CRM, Share point, E-payment, Siebel and HR
solutions were successfully deployed. Further, the existing Active Directory/Microsoft Exchange infrastructure
was comprehensively upgraded. Additional EMS (Enterprise Mobility Suite) licenses were procured and the
overall PTCL-Wide EMS implementation plan is being rolled out to further improve the compliance, risk
management and security aspects of our systems. Databases were also upgraded to the latest version to
improve reliability, performance and security thereof.
With the objective to achieve higher levels of customers’ satisfaction, ease of operation, and process
32 33
ANNUAL REPORT 2018
perfection, systems and processes of the IP Contact Centre were further enhanced. The launch of ‘one A strong leadership pipeline is crucial in meeting the new challenges created by the changing and competitive
number’, self-service IVR (Interactive Voice Response) change, enhanced one window UI (User Interface) with landscape. During the year, your Company invested in developing leadership capabilities through various
KYC (Know Your Customer) integration, call back request option on sales queue, bulk upload feature in CBR programs such as Future Leaders (FueL) for high potential young employees, Management Development
(Call Based Routing), revamp of employees’ helpline, integration of CBR for flexible announcement, numbers Program (MDP) and Executive MBA from LUMS for the top tier and mid-level managers respectively. Certain
whitelisting, routing billing of service requests via OBD (Out Bound Dialer) and embedded SMS/email option coaching and business simulation programs were also conducted by renowned trainers for the mid-level
inside the finesse one window are few vital mentions. management. Also, PTCL relaunched the online training Harvard ManageMentor® (HMM) and ‘SkillSoft’ for
employees to promote e-earning in convenient and cost effective ways. PTCL also launched an online
Further, successful upgradation of obsolete DR (Disaster Recovery) network fabric over SDN approach tool ‘PTCL Chaperone’ to promote a culture of mentoring and coaching.
selected Cisco ACI (Application Centric Infrastructure) solution is underway. In addition, country-wide
enterprise network remote sites (130 sites) with software defined WAN (SD-WAN) approach were Cognizant of the need to infuse fresh talent, PTCL hired over 100 newly-graduated management trainees as
upgraded. Perimeter security gateway solution for Data Centre traffic deep inspection, auditing, tracking and part of the Summit Program. These management trainees were selected after thorough assessment and went
control was also deployed. Data Centre Core Load Balancer upgradation was completed and, consequently, through a focused orientation training in a residential program.
all major services were duly migrated for better performance and high availability of business applications. In
this regard, deployment of WAF (Web Application Firewall) and migration of all critical PTCL web portals, Furthermore, customised training programs encompassing functional and behavioural skills up-gradation
especially official website, was also implemented for enhanced security levels. were held across the company. ‘Developing Managerial Excellence Training’ program was launched for
Assistant Managers and Managers. Moreover, to equip the front-line staff with new technical skills, ‘GPON
In 2018, PTCL also completed the technical upgrades and consolidation of SAP ERP System (PTCL & Ufone), Installation’ training sessions were held inclusive of extensive hands-on training. To further improve the
Microsoft SharePoint Portal (PTCL & Ubank), payment collection reconciliation system and customers’ customer-centric culture, ‘Culture of Service Excellence’ training was conducted.
interface for online monthly invoices/bills. The ISO 9001:2015 certificate for completion of Project Management
Framework and processes was also received. Besides, the integration of a prominent bank’s payment system For the safety of all employees, initiatives such as Emergency Evacuation and Safety drills and Incident
with PTCL ERP system, automation of General Provident Fund (PTCL & Ufone), automation of processes for Reporting Portal were implemented. Also, a comprehensive HSE (Health, Safety and Environment) Awareness
outsourced staff and law enforcement agencies portal were other notable achievements in your Company’s IT Campaign was launched company-wide along with provisioning of personal protection equipment to the field
domain. employees to ensure their safety.
With the view to keep our staff motivated and fully-engaged, various initiatives were undertaken. Besides the
Human Resources implementation of ‘Engagement Action Planning’ across the organisation, ‘PTCL Champions Program’
rewarding the exceptional performers amongst front-line employees all year long as well as the ‘HR Raabta
Program’ involving visit of senior HR managers at exchanges/smart shops to understand field staff concerns,
With its vision to become the leading ICT provider in and for Pakistan, your Company launched its new set of proved fruitful.
values after detailed deliberations. The values are the guiding principles for PTCL employees’ behaviours in
business dealings. Company-wide sessions led by the top management as well as specially trained personnel Further, for the employees welfare, various initiatives were carried out viz. retreats, book club, movie nights for
were conducted to explain the rationale of these values and the ways for employees to practice these in their employees and their family members, Iftaar parties, Chand Raat and Eid celebrations, poetry night - ‘Bahaar
daily routine work. The values were also reinforced through communication campaign on digital platforms e Sukhan’ etc. Your Company also sponsored forty employees to perform Hajj. Moreover, company-wide
across the organisation. ‘Sports Gala’ was organized comprising of sporting events of cricket, badminton, table tennis, long tennis and
a tug of war. The event helped to uplift spirits and improved team building and collaboration amongst
employees.
Customer Care
During the year, PTCL implemented various initiatives to further enhance overall customer experience. Latest
technology, improved processes and people development were the major steps undertaken in this direction.
The front-end customer support staff was enabled to update new order feasibility using Google Maps
technology thus increasing customer satisfaction level by optimising provisioning process. Through
implementation of Network Analyser solution, First Call Resolution of customer complaints relating to network
elements has improved considerably. Similarly, our staff proactively interacted with related customers in the
areas where Network Transformation Project was undertaken so as to redress any possible issues. Through a
dedicated SMS code (9017) with various extensions, communication with customers relating to billings,
payments, order execution etc. has been further expanded. Also, retention of the customers desiring to cancel
PTCL services was improved through dedicated retention agents who proactively made efforts to resolve the
underlying issues by effectively communicating with such customers.
34 35
ANNUAL REPORT 2018
PTCL was the first telecom operator in Pakistan to launch a partnership with Netflix, a leading Subscription
A major rehabilitation of customer touch points viz. the One Stop Shops (OSS), Customer Service Centres
(CSC) and Sales Points was undertaken in 2018. The rehabilitation encompasses provision of new IT
equipment, queueing system, surveillance cameras, civil works and whitewash, furniture, fixture and internal &
external branding. 59 OSS, 106 CSC and 56 sales points across the country are included in the ambit of the
project. While the major work on the rehabilitation was completed during the year, the remaining work is
expected to be completed in early part of next year. Video-on-Demand (SVOD) service to provide high quality and unlimited access to premium Netflix content,
both local and international, to PTCL’s subscribers. A 360° campaign was run, consisting of TV advertisements
In order to ensure that our esteemed customer base is served with the best possible service levels, continuous and digital promotion for the said availability of Netflix. Besides, a famous feature film ‘7 DIN MOHABBAT IN’
training and education of the staff dealing with customers is essential. Accordingly, during the year, entire was sponsored by PTCL which gave phenomenal mileage to the brand.
Contact Centre staff was trained on using new technology, digital mediums and latest tools. Similarly, the
front-end shop staff was imparted with training on use of related softwares after a careful training-need Your Company also launched a special Independence Day Campaign, ‘Hum Hain PTCL, Hum Hain Pakistan’,
analysis of each employee. Also, through the master trainers developed for the purpose, the back-office nationwide. The focus of the campaign was to enhance PTCL’s public image by highlighting the fact that PTCL
employees were duly trained in using various customer-related systems like CRM, billing etc. with the aim to is the national incumbent telecom operator. The campaign was well received by the intended audience and
provide the customers timely and effective service to resolve the issues to their satisfaction. was duly appreciated in the media.
Moreover, your Company continued to facilitate the customers with ‘self-care’ using PTCL Touch App and A comprehensive countrywide marketing campaign on NTP (Network Transformation Project) was launched,
website. This was further augmented with live support on all social media channels which was well received by whereby on-ground marketing activations were executed at the upgraded exchanges in various cities across
the customers as is evident from the increased number of subscribers interacting with PTCL using these Pakistan. The objective of this campaign was to create awareness in areas where PTCL exchanges have been
channels. upgraded in 2018. The campaign included float activations, outdoor media, live radio and TV interviews along
with social media awareness and focusing on the target market through geo-fencing on digital mediums. In
furtherance of the objective of the NTP advertisement, the public relation campaign consisted of a bloggers
Marketing and Communication meetup, exclusive blogs and articles, strategic placement of press releases in regional and national print
media, radio and TV interviews and news coverage in respective cities.
During the year, PTCL’s brand value was further enhanced through various advertisement and public relation
campaigns in print, electronic and social media. Due to these initiatives, your Company was declared the
‘Fastest Growing Brand in Pakistan’ by Brand Finance - the world’s leading independent brand valuation
and strategy consultancy.
One of the major brand initiatives for the year was PTCL’s partnership with Islamabad United (ISLU) team for
the 3rd edition of Pakistan Super League (PSL). A comprehensive marketing campaign included TV
advertisements, outdoor branding, live updates and promotion on digital platforms including media briefing
and visit of ISLU team with the PSL winning trophy to PTCL headquarters. Moreover, your Company also
sponsored the Hockey Cup 2018 as well as the national cricket team in T20 cricket series i.e. Pakistan vs.
New Zealand, West Indies and Scotland tours.
PTCL launched numerous campaigns including ‘8 Mbps speed for the price of 6 Mbps’, ‘CharJi - Double the
Speed! Double the Volume!’ along with CharJi/LTE reconnect offer, to cater to the needs of high-speed
internet users. These campaigns were well received by customers across Pakistan.
36 37
ANNUAL REPORT 2018
Further, through corporate communications on events like quarterly media briefings to announce financial
results, partnership deals with Netflix and other corporate collaborators, launch of National Incubation Centre
in Peshawar, International Women’s Day, Breast Cancer Awareness session, CSR activities under Razakar
and collaboration with WWF-Pakistan, PTCL’s brand was consistently kept visible during 2018.
Regulatory Affairs
In order to ensure seamless migration of wireless broadband services and related device swapping in
selected regions and cities from EVDO to Charji/LTE to provide higher speed data services to our valued
customers, your Company successfully managed the technical requirement of additional spectrum on an
ad-hoc basis in collaboration with the PTA (Pakistan Telecommunication Authority) and the FAB (Frequency
Allocation Board).
In coordination with PTA, a new telecom-industry wide agreement was signed for deployment of a
comprehensive Web Monitoring System to enable complete coverage of traffic monitoring to restrict grey
traffic and also to facilitate web monitoring/blocking in compliance of PTA’s directives.
Your Company also signed two new Universal Service Fund projects for optical fiber deployment in un-served PTCL’s medical service teams conducted 495 health awareness sessions and set up 289 mobile medical units
areas of Khyber Pakhtunkhwa and FATA. PTCL received a subsidy of Rs. 300 million in this regard. that benefitted 35K people from underserved communities, across the country.
During the year, various issues relating to ‘Right of Way’ were duly negotiated with different public sector Towards the environment protection, your Company took part in the ‘Rung Do’ program of WWF Pakistan by
organisations including National Highway Authority (NHA) and private housing authorities paving the way for supporting plantation of 200K mangrove seeds in Lasbela district of Balochistan thus helping to protect
timely completion of the network expansion projects. inhabitants of Miani Hor island from potential threat of flooding in the foreseeable future. PTCL also contributed
towards disaster response by donating 140 pints of blood for the victims of multiple bomb blasts in
PTCL also provided the required assistance and arrangements to the Election Commission of Pakistan in Balochistan.
relation to the general elections held in 2018.
For the gender inclusion, multiple initiatives were implemented under the ambit of a virtual club viz. ‘The Pink
Club’. The club arranged power yoga sessions and a Masterclass on Self-Defence techniques for its female
Corporate Social Responsibility (CSR) employees. PTCL also carried out nation-wide sessions on breast cancer.
During the year, various CSR initiatives were undertaken by your Company. In furtherance of the causes of The PTCL Razakaar force continued to undertake quarterly initiatives running parallel at multiple PTCL offices
education and youth development in the country, PTCL, in collaboration with partners, arranged interventions nationwide. A total of 16K beneficiaries were reached out through four initiatives viz. Movie Mania, Ramzan
such as Spellathon, sponsorships and mentorships. Mehman, Green Exchange and Christmas with PTCL.
During 2018, your Company incurred expenses of Rs. 12.9 million on various CSR activities with benefit thereof
extended to about 53K persons from diversified community groups.
Subsidiaries
Pak Telecom Mobile Limited - Ufone
In 2018, Ufone’s financial performance enhanced. Revenue for the year increased by 13% compared to last
year; operating results turned into profit versus the operating loss of previous year and the loss after tax was
reduced considerably, despite absorbing the impact of devaluation of Pakistan Rupee. The main driver for the
improved financial performance was more-than-average increase in the subscribers’ base. Compared to
cellular industry’s average increase in total and 3G/4G data subscribers by 7% and 28% respectively in 2018,
the corresponding increase in Ufone’s subscribers was 14% and 46%, although Ufone is the only mobile
operator in Pakistan with 3G license only. Suspension of taxes by The Supreme Court of Pakistan in June 2018
38 39
ANNUAL REPORT 2018
also had a positive impact on the industry revenue, including that of Ufone. under the Ramzan campaign of ‘Bano Achai ki Misaal’. Ufone also partnered with The Citizens Foundation on
its flagship ‘Rahbar’ project in which 15 employees of Ufone, for six weekends, trained children on subjects
With the increase in Ufone’s retail footprint, supported by sales channel efficiency initiatives, the U900 rollout like character building and leadership in the cities of Islamabad and Lahore.
for providing improved quality 3G experience and introducing a new Post-pay universe, the infrastructure of
the products was further improved during the year with the main focus on filling the gaps in the product Further, in recognition of the standardised and efficient working on technical front, the respective ISO9001
portfolio. standard was upgraded from 2008 version to 2015 and IT functionality was also duly included in the scope of
ISO9001:2015 certification.
U Microfinance Bank Limited - Ubank
Ubank is a wholly owned subsidiary of PTCL. During the year, the bank’s operations were further expanded.
Ubank has a network of 141 touch points, across 100 cities and rural areas in Pakistan, offering a wide range
of microfinance loans, deposit products and branchless banking solutions. Ubank offers branchless banking
services under the banner of ‘U Paisa’ in collaboration with Ufone. The service is offered at nearly 45,000 agent
locations across the country.
Currently, Ubank serves more than 850K customers, where 22% of the served customers are women. The
number of Ubank’s employees also grew by 50% during the year, where 9% of the total work force comprises
of women.
Super Card remained an accomplished product in Pakistan’s telecom market. It continued the message of
convenience and transparency into Ufone’s communication with its customers. To cater to the higher data
needs of the customers, Weekly Internet Plus was added in the Super family. Data Portfolio and Super Family
was added with bundles tailor-made to customised needs in the market. Accordingly, the yearly growth in use
of the Super Family products was 17%.
In 2018, many new features were added to further improve experience of the customers using Ufone’s digital
platform of ‘My Ufone’ on Android and iOS Apps as well as Web Portal and Self Service Booths (VTMs). The
main added features included Number booking, bill payment and Ublock services beside many others. These
digital platforms are instrumental in expanding the digital horizon of Ufone products across Pakistan.
Ufone fully recognises the importance of provisioning of Next Generation Mobile Services (NGMS), especially
in the less developed areas of Pakistan and further expanding the network coverage by tapping available
avenues for investment and strategic partnerships with other network operators. In this context, Ufone is During the year, Ubank’s performance enhanced significantly. The deposit portfolio at the end of 2018 grew
complying with its NGMS rollout obligations while aggressively working for the expeditious rollout through by 71% while the increase in loan portfolio was 61%. Revenues and profitability also grew considerably.
Infrastructure Sharing (passive and active), National Roaming and other opportunities arising from initiates of
the Universal Service Fund Company. In view of the national agenda of National Financial Inclusion Strategy 2020, Ubank stands at the forefront of
fighting poverty through economic enablement of underserved Pakistanis by contributing to bring the
Accordingly, during the year, Ufone won a Universal Service Fund (USF) pilot project in Balochistan Province, unbanked population into the formal banking net as access to microfinance services contributes significantly
under the Next-Generation Broadband for Sustainable Development (NG-BSD) Program for National towards building a more inclusive society. The said expansion of the formal banking net also helps to
Highways & Motorways, after a competitive open tendering process. The subsidy amount for the project is document the informal economy which in turn can be of assistance in increasing the national resources.
Rs. 759 million. The pilot project will also be a test case for National Roaming Activation in Pakistan as Ufone
will mandatorily be required to open up the USF-National Highways Network for roaming by interested USF
DVCOM Data (Private) Limited – DVCOM Data
contributors in the country. The project is an addition to Ufone’s track record of significant contributions
towards extension of mobile network services to far-flung and rural areas of the country.
DVCOM Data, a 100% owned subsidiary of PTCL, possesses 5 MHz spectrum in 1900 MHz band. To realise
synergies within the PTCL Group, the said spectrum is used through commercial arrangement with PTCL to
To replicate the true spirit of care and generosity in Ramzan, Ufone continued the promotion of different
supplement the wireless broadband services of PTCL.
humanitarian initiatives during the year. The work of two exceptional Pakistani individuals were duly highlighted
40 41
ANNUAL REPORT 2018
Smart Sky Private Limited – Smart Sky • There are no significant doubts about the Company’s ability to continue as a going concern.
Smart Sky, a 100% owned subsidiary of PTCL, was incorporated with the objective to provide Direct-to-Home • The Audit Committee has recommended the appointment of KPMG Taseer Hadi & Co., Chartered
(DTH) television services throughout Pakistan under license from the Pakistan Electronic Media Regulatory Accountants, as auditors of the Company for the financial year ending December 31, 2019 and the
Authority (PEMRA). Auction for the DTH license was held in November 2016, in which Smart Sky also Board has endorsed the same.
participated. The Honourable Lahore High Court through an order, however, declared the auction null and
void advising PEMRA to restart the whole process. PEMRA has filed an appeal before the Honourable • Information regarding outstanding taxes and levies, as required by Listing Regulations, is disclosed in
Supreme Court of Pakistan against the said order. Accordingly, Smart Sky has not started its commercial the notes to the financial statements.
operations.
• Detail of aggregate amount of remuneration of Directors including perquisites and benefits etc. has
been disclosed in Note 37 to the financial statements.
Corporate Governance
• Statement of Value of Investments in respect of employees’ retirement plans has been disclosed in Note
8.1 to the financial statements.
The Company has complied with all the material requirements of the Listed Companies (Code of Corporate
Governance) Regulations, 2017 as well as of Pakistan Stock Exchange (PSX) Regulations. The Directors
confirm the following in compliance of the referred Regulations:
Compliance – Board Performance
• A formal and effective mechanism is put in place for an annual evaluation of the Board’s own
Compliance - General
performance and of its committees.
• The vision and mission statement, corporate values and overall corporate strategy for the Company is
• The Chairman of the Board at the beginning of the term of each Director issued letter to such Director
prepared, adopted and reviewed as and when deemed appropriate by the Board. The last “vision and
setting out his role, obligations, powers and responsibilities, remuneration and entitlement in
mission” statement approved by the Board (as part of the HR presentation) was at the 160th Board
accordance with the Companies Act, 2017 and Company’s Articles of Association and policies.
meeting held on February 22, 2012.
• The Board of Directors has approved the Directors’ Remuneration Policy, which is in line with the best
• A formal code of conduct is in place and put on the Company’s website.
corporate and governance practices.
• Adequate systems and controls, including whistle-blowing policy, are in place for identification and
• Training program for new Directors appointed during the year was arranged in February 2019.
redressal of grievances arising from unethical practices.
• The Board of Directors for the purposes of clause 5.6.1 (a) and 5.6.1 (d) of the PSX Regulations has set
• The system of internal control is sound in design and has been effectively implemented and monitored.
the threshold of Company’s employees considered as ‘Executive’.
• Decisions on all material transactions and or significant matters are taken by the Board of Directors and
the management as per the delegation of powers approved by the Board. Composition of Board
• A complete record of particulars of significant policies along with the dates on which they were The Board of Directors (the “Board”) comprises of nine Members. Pursuant to the provisions of the
approved or amended has been maintained. Shareholders Agreement effected per provisions of the Privatization Commission Ordinance, 2000, between
Government of Pakistan (GOP) and the Strategic Investor viz. Etisalat, as well as under the Articles of
• There has been no material departure from the best practices of corporate governance, as detailed in Association of the Company, the GOP nominates four (04) Members on the Board of the Company while
the Regulations. Etisalat International Pakistan (“EIP”) nominates five (05) Members. The Board of Directors has not yet elected
any independent or female directors because the Company is in discussions with the Securities and Exchange
Compliance – Financial Statement & Auditors Commission of Pakistan (”SECP”) regarding an exemption for these requirements.
Accordingly, the present Board consists of 9 directors:

• The financial statements prepared by the management of the Company present fairly its state of affairs,
the results of its operations, its cash flows and its changes in equity.
Independent directors Nil
• Proper books of accounts of the Company have been maintained. Non-executive directors 9
Executive directors Nil
• Appropriate accounting policies have been consistently applied in the preparation of financial Total number of directors 9
information and accounting estimates are based on reasonable and prudent judgment.
• International Financial Reporting Standards, as applicable in Pakistan, have been followed in the
preparation of financial information and in case of any departure therefrom, the same has been
adequately disclosed.
42 43
ANNUAL REPORT 2018
Further, during the year, following persons were members of the Board: The new market entrants are offering lower price per Mbps to gain market share. The operators, therefore, are
striving to upgrade the subscriber base to higher speeds without corresponding increase in the price i.e. ARPU
• Mr. Shahid Mahmood • Mr. Rizwan Bashir Khan - average revenue per user, per month, resulting in erosion of price per Mbps in the market. At the same time,
• Mr. Irfan Ali • Mr. Maroof Afzal to provide higher speeds and larger volumes of fixed line data services to meet growing data appetite of
• Mr. Arif Ahmed Khan • Mr. Rizwan Malik consumers as well as keeping in sight the low penetration of wireline broadband, the operators would need to
• Mr. Mudassar Hussain • Mr. Abdulrahim A Al Nooryani invest considerably to expand and upgrade the networks with latest technologies, thus requiring large capital
• Mr. Hatem Dowidar • Mr. Serkan Okandan expenditure with longer payback periods. Realising these market dynamics, your Company is continuously
• Mr. Hesham Al Qassim • Mr. Khalifa Al Shamsi taking the needed measures, foremost of which is the on-going implementation of Network Transformation
Project. Also, PTCL is offering attractive bundling offers to its subscribers to sustain PSTN business while
The Directors, CEO and executives do not hold any interest in the shares of the Company other than that growing its broadband subscriber base.
disclosed in the pattern of shareholding.
Overall voice traffic is expected to decrease continuously due to rapid adoption of OTT (Over the Top)
The ‘Closed Period’, prior to the announcement of interim/final results was determined, and business applications, specifically in international incoming and outgoing traffic, which is resulting in revenue decline of
decisions, which may materially affect the market price of Company’s securities, were determined and LDI (Long Distance International) operations. On positive side, OTT applications are creating significantly high
intimated to Directors, employees and the stock exchange. Material/price sensitive information was IP bandwidth requirements in market and PTCL, being the largest submarine and long-haul optical fiber
disseminated to all market participants through the stock exchange. operator in the country, is poised to monetise its fiber footprint.
Compliance statement with the Listed Companies (Code of Corporate Governance) Regulations, 2017 and Rise in digital trends indicates that, in near future, data will be the driving force for the growth of entire telecom
Auditors Review thereon by statutory auditors are part of this report. Chairman’s Review, Notice of Annual industry. Rapid digitalisation of major industries is resulting in complete transformation of business and
General Meeting, historical business indicators, composition of Audit Committee, Human Resource & operating models, which is set to open major revenue growth opportunities in enterprise, ICT and VAS
Remuneration (HR&R) Committee, Investment & Finance Committee, number of Board Meetings and segments. PTCL is all set to transform its existing network to enhance its throughput and user’s experience.
attendance of Directors and Shareholding Pattern are also part of this report. Digitalisation is a key growth pillar in your Company’s agenda for coming years to optimise the operational
practices with modern technological solutions.
Risk Management
The Board, through Audit Committee, regulates the Enterprise Risk Management (ERM) of PTCL. For this
Acknowledgements
purpose, the ERM policy and framework is in place and through an ERM Committee, formed by the Board
under CFO’s leadership and consisting of cross-functional representation, your Company’s risk profile is The Board of Directors of the Company would like to thank all our customers, suppliers, contractors, service
constantly monitored through identification of enterprise-level inherent risks, their possible impact on PTCL’s providers, stakeholders and shareholders for their continued support.
business and mitigation measures, existing as well as needed, to effectively safeguard Company’s assets,
businesses, people and reputation. We would also like to appreciate the hard work, diligence and dedicated efforts of our employees across the
country which enabled the Company to successfully face the challenges of a highly competitive operating
As such, following are the key identified risks with the potential to adversely impact Company’s ability to environment. We would also like to extend our special thanks to the Government of Pakistan and the Etisalat
achieve its strategic targets: Group for their continued support and encouragement in striving to achieve the objective of enhancing
shareholders’ value.
• Tax recoverable and related outstanding cases
• Liability on account of Funded Pension Retirement Scheme On behalf of the Board of Directors
• Occupational health and safety hazards
• Service continuity
• Negative foreign exchange fluctuations
• Cyber security
In coordination with internal and external stakeholders, PTCL continuously evaluates the possible impact of
these risks and accordingly takes all needed measures to mitigate/reduce the evaluated impact to acceptable
levels.
Challenges and Way Forward Rashid Naseer Khan Maroof Afzal

President & Chief Executive Officer Chairman PTCL Board
PTCL continues to maintain its market dominance in the fixed line segment despite growing competition from Islamabad: March 04, 2019
several small-scale operators rolling out FTTH network in high value pockets.
44 45
ANNUAL REPORT 2018
2018‫ ہ ے‬
2019 04
46 47
ANNUAL REPORT 2018
AUDIT COMMITTEE HUMAN RESOURCE & INVESTMENT & FINANCE PTCL BOARD
REMUNERATION COMMITTEE COMMITTEE
COMPOSITION COMPOSITION COMPOSITION COMPOSITION

Mr. Serkan Okandan Chairman Mr. Abdulrahim A. Al Nooryani Chairman Mr. Hatem Dowidar Chairman Total 06 Board Meetings were held during the Financial Year ended
December 31, 2018.
Mr. Abdulrahim A. Al Nooryani Member Mr. Serkan Okandan Member Mr. Serkan Okandan Member
Mr. Rizwan Malik Member Mr. Rizwan Malik Member Mr. Arif Ahmed Khan Member Sr. Name of Director Portfolio Attendance
Mr. Mudassar Hussain Member Mr. Mudassar Hussain Member Mr. Mudassar Hussain Member
Mr. Aamir Ashraf Khawaja Chairman 3
Mr. Mohamed Dukandar Member Mr. Khalifa Al Shamsi Member Mr. Khalifa Al Shamsi Member 1
Mr. Maroof Afzal 2
2 Mr. Abdulrahim A. Al Nooryani Member 6
3 Mr. Arif Ahmed Khan Member 6
4 Mr. Hatem Dowidar Member 6
Mr. Irfan Ali Member 3
5
ATTENDANCE ATTENDANCE ATTENDANCE Mr. Rizwan Malik Member 2
6 Mr. Serkan Okandan Member 6
Total 06 meetings of the Audit Committee were held during the Total 04 Meetings of the HR & R Committee were held Total 06 Meetings of the Investment and Finance Committee
during the Financial Year ended December 31, 2018. were held during the Financial Year ended December 31, 2018. 7 Mr. Mudassar Hussain Member 6
Financial Year ended December 31, 2018.
8 Mr. Khalifa Al Shamsi Member 5
Sr. Name of Director-Member Attendance Sr. Name of Director-Member Attendance Sr. Name of Director-Member Attendance 9 Mr. Hesham Abdulla Al Qassim Member 6
1 Mr. Serkan Okandan 6 1 Mr. Abdulrahim A. Al Nooryani 4 1 Mr. Hatem Dowidar 6
2 Mr. Abdulrahim A. Al Nooryani 6 2 Mr. Serkan Okandan 4 2 Mr. Serkan Okandan 6
Mr. Irfan 2 Mr. Irfan Ali 2 Mr. Irfan Ali 1
3 3
3 Mr. Aamir Ashraf Khawaja 2 Mr. Rizwan Malik 2 Mr. Arif Ahmed Khan 5
Mr. Rizwan Malik 2 4 Mr. Mudassar Hussain 4 4 Mr. Mudassar Hussain 6
4 Mr. Mudassar Hussain 6 5 Mr. Khalifa Al Shamsi 4 5 Mr. Khalifa Al Shamsi 6
FUNCTIONS FUNCTIONS FUNCTIONS

Recommends to the Board in approving company’s financial Reviews and recommends development and maintenance of Reviews and recommends the Company’s annual budgets and
statements and appointment of External Auditors. Reviews the long-term HR policies, effective employee development business plans, Company’s treasury policies and framework
scope of internal control, monitors statutory and corporate programs, appropriate compensation and benefit plans and including investment/divestment strategy, financial risk
governance compliances, determines the appropriate good governance model in line with statutory requirements and management strategy and rules, execution of mergers and
measures to safeguard Company’s assets, reviews enterprise best practices of good corporate governance. It ensures that the acquisition strategy, procurement policy and procedures,
risk management processes and exposures and recommends governance and HR policies and procedures are aligned with the investment projects encompassing expansions and new
appropriate policies to the Board. Reviews and recommends strategic vision and core objectives of the Company. It also technologies based on evaluation measurement indicators and
significant policies and Company’s delegation of fiduciary provides leadership and guidance for the organisational Company’s capital structure strategy including external funding
powers, oversees tax and fiscal exposures, discusses major transformation required to achieve Company’s corporate requirements. It also evaluates Company’s dividend policies
internal audit findings with external auditors and establish objectives. having regard to regulatory provisions and Company’s funding
procedures for and reviews whistle blowing material cases. and working capital requirements.
• Composition of Board Committees is as of February 12, 2019

• Attendance of Committees is of Directors-Members only
48 49
ANNUAL REPORT 2018
Statement of Compliance with Listed Companies 9. The Board has arranged Directors’ Training program for the following:
(Code of Corporate Governance) Regulations, Names of Directors who have certified the Directors’ Training Program:
1. Arif Ahmed Khan
2017 (the ‘Regulations’) 2. Mudassar Hussain
3. Abdulrahim A. Al Nooryani
Pakistan Telecommunication Company Limited 4.
5.
Serkan Okandan
Hesham Al Qassim
(the ‘Company’) Year ended December 31, 2018 Names of Executives who have certified the Directors’ Training Program:
S.No. Participants Name PTCL Management
The Company has complied with the requirements of the Regulations in the following manner:
1 Dr. Daniel Ritz President & CEO
1. The total number of Directors is nine as per the following:
2 Nadeem Khan Chief Financial Officer
a. Male: Nine 3 Syed Mazhar Hussain Chief Human Resource Officer
b. Female: None1
4 Muhammad Shehzad Yousuf Chief Internal Auditor
2. The composition of Board is as follows: 5 Sikandar Naqi Chief Business Development Officer
6 Jahanzeb Taj Chief Business Operations Officer
a) Independent Directors None2
7 Amir Siddiqui Executive Vice President (FP & T)
b) Non-executive Directors 1. Maroof Afzal, Chairman 8 Jamal Akhtar Advisor (Finance)
2. Arif Ahmed Khan 9 Zahida Awan Executive Vice President (Legal)
3. Rizwan Malik 10 Essa Al Taheri Executive Vice President (Group Fin. Policies & Sys.)
4. Mudassar Hussain 11 Syed Mohammad Irfan Executive Vice President (Group Taxation)
5. Abdulrahim A Al Nooryani
6. Hatem Dowidar
10. The Board has approved appointment of Chief Financial Officer (‘CFO’), Company Secretary and Head
of Internal Audit, including their remuneration and terms and conditions of employment and complied
7. Serkan Okandan
with relevant requirements of the Regulations.
8. Khalifa Al Shamsi
9. Hesham Al Qassim 11. The CFO and Chief Executive Officer duly endorsed the financial statements before approval of the
Board.
c) Executive Directors None
12. The Board has formed committees comprising members given below:
3. The Directors have confirmed that none of them is serving as a director on more than five listed a) Audit Committee3 b) Human Resource and Remuneration Committee4
companies, including this Company.
1. Serkan Okandan, Chairman 1. Abdulrahim A. Al Nooryani, Chairman
4. The Company has prepared a Code of Conduct and has ensured that appropriate steps have been 2. Rizwan Malik 2. Rizwan Malik
taken to disseminate it throughout the Company along with its supporting policies and procedures. 3. Mudassar Hussain 3. Mudassar Hussain
5. The Board has developed a vision/mission statement, overall corporate strategy and significant policies 4. Abdulrahim A. Al Nooryani 4. Serkan Okandan
of the Company. A complete record of particulars of significant policies along with the dates on which 5. Mohamed Dukandar 5. Khalifa Al Shamsi
they were approved or amended has been maintained.
c) Investment and Finance Committee
6. All the powers of the Board have been duly exercised and decisions on relevant matters have been taken 1. Hatem Dowidar, Chairman
by Board/shareholders as empowered by the relevant provisions of the Companies Act, 2017 (the ‘Act’)
2. Arif Ahmed Khan
and the Regulations.
3. Serkan Okandan
7. The meetings of the Board were presided over by the Chairman and, in his absence, by a Director 4. Mudassar Hussain
elected by the Board for this purpose. The Board has complied with the requirements of the Act and the 5. Khalifa Al Shamsi
Regulations with respect to frequency, recording and circulating minutes of meeting of Board.
8. The Board of Directors has a formal policy and transparent procedures for remuneration of Directors in 13. The terms of reference of the aforesaid committees have been formed, documented and advised to the
accordance with the Act and the Regulations. committee for compliance.
1
The Board of Directors has not yet elected a female director because the Company has applied for exemption from the 3
The Board of Directors has not yet elected an independent director because the Company’s legal councels have advised
requirement and is also in discussions with the Securities and Exchange Commission of Pakistan (‘SECP’) for the purpose. that it is not requried to comply with this requirement. Furthermore, the Company has applied for exemption from the
requirement and is also in discussions with the SECP for the purpose.
2
The Board of Directors has not yet elected an independent director because the Company’s legal councels have advised 4
The Board of Directors has not yet elected an independent director because the Company’s legal councels have advised
that it is not requried to comply with this requirement. Furthermore, the Company has applied for exemption from the that it is not requried to comply with this requirement. Furthermore, the Company has applied for exemption from the
requirement and is also in discussions with the SECP for the purpose. requirement and is also in discussions with the SECP for the purpose.
50 51
ANNUAL REPORT 2018
14. The frequency of meetings (quarterly/half yearly/yearly) of the committees were as per following:
a) Audit Committee
Review Report on the statement of
The frequency of meetings is on quarterly basis and as per the requirement of the Company. Total six
meetings were held during year 2018.
Compliance contained in Listed Companies
b) Human Resource and Remuneration Committee (Code of Corporate Governance)
The frequency of meetings is on quarterly basis and as per the requirement of the Company. Total four
meetings were held during year 2018. Regulations, 2017
c) Investment and Finance Committee
The frequency of meetings is on quarterly basis and as per the requirement of the Company. Total six
meetings were held during year 2018.
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate
15. The Board has set up an effective internal audit function. Governance) Regulations, 2017 (the Regulations) prepared by the Board of Directors of Pakistan
16. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating Telecommunication Company Limited for the year ended December 31, 2018 in accordance with the
under the quality control review program of the The Institute of Chartered Accountants of Pakistan requirements of regulation 40 of the Regulations.
(‘ICAP’), and registered with Audit Oversight Board of Pakistan; that they or any of the partners of the
firm, their spouses and minor children do not hold shares of the Company and that the firm and all its The responsibility for the compliance with the Regulations is that of the Board of Directors of the Company. Our
partners are in compliance with International Federation of Accountants (‘IFAC’) guidelines on code of
responsibility is to review whether the Statement of Compliance reflects the status of the Company’s
ethics as adopted by the ICAP.
compliance with the provisions of the Regulations and report if it does not and to highlight any non-compliance
17. The statutory auditors or the persons associated with them have not been appointed to provide other with the requirements of regulations. A review is limited primarily to inquiries of the Company’s personnel and
services except in accordance with the Act, the Regulations or any other regulatory requirement and the
review of various documents prepared by the Company to comply with the Regulations.
auditors have confirmed that they have observed IFAC guidelines in this regard.
18. We confirm that all other requirements of the Regulations have been complied with. As a part of our audit of the financial statements, we are required to obtain an understanding of the accounting
and internal control systems sufficient to plan the audit and develop an effective audit approach. We are not
required to consider whether the Board of Directors’ statement on internal control covers all risks and controls
or to form an opinion on the effectiveness of such internal controls, the Company’s corporate governance
procedures and risks.
The Regulations require the Company to place before the Audit Committee, and upon recommendation of the
Audit Committee, place before the Board of Directors for their review and approval, its related party
transactions and also ensure compliance with the requirements of section 208 of the Companies Act 2017. We
Dr. Daniel Ritz Maroof Afzal are only required and have ensured compliance of this requirement to the extent of the approval of the related
President & Chief Executive Officer Chairman PTCL Board party transactions by the Board of the Directors upon recommendation of the Audit Committee. We have not
carried out procedures to assess and determine the Company’s process for identification of related parties
Islamabad: February 12, 2019
and that whether the related party transactions were undertaken at arm’s length price or not.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of
Compliance does not appropriately reflect the Company’s compliance, in all material respects, with the
requirements contained in the Regulations as applicable to the Company for the year ended December 31,
2018.
KPMG Taseer Hadi & Co.
Further, we highlight below the status of compliance with the requirements of the Regulations as reflected in
the paragraph where these are stated in the Statement of Compliance:
52 53
ANNUAL REPORT 2018
Reference Description
ii. 2,12(a) and 12(b) As stated in para 2, 12(a) and 12(b), the Board of Directors has not yet
elected an independent director because the Company’s legal counsels
have advised that it is not required to comply with this requirement.
Furthermore, the Company has applied for an express exemption from this
requirement and is also in discussions with the SECP for the purpose.
KPMG Taseer Hadi & CO.
Chartered Accountants
Islamabad
March 04, 2019
54
ANNUAL REPORT 2018
PTCL & LMKT Ignite the Entrepreneurial Spark PTCL Mentor Review Session at NIC Peshawar
in Khyber Pakhtunkhwa
PTCL participated as a panelist to judge the Mentor Idea Review session, where innovative Startups and
Founders from KPK presented their business ideas. The session included Murtaza Zaidi, Director, NIC
Peshawar, Atif Rais Khan, Founder and CEO, LMKT, Jahanzeb Khan, CEO, LMKR Pakistan, Ayub Zakori, MD,
Zakori Group, Moqeem ul Haque, Chief Commercial Officer, PTCL, Syed Shahzad Shah, Executive Vice
President, Marketing & Communication, PTCL and Fariha Tahir Shah, GM Corporate Communication, PTCL.
The panel discussion explored the potential business ideas and how they can strengthen the entrepreneurial
ecosystem of the country. The goal was to review the ideas and analyse the business models of all Founders
and Startups. The judges panel, paired with other mentors, listened to a series of Founders’ pitches. The
interactive session covered presentations on idea viability to market sustainability, real customer problems to
their solutions, success or failure of the business, business revenue models, business name impact &
memorability and leadership qualities.
Brainstorming Session with NIC Startup at PTCL HQ

In 2018, LMKT and Pakistan Telecommunication Company Limited (PTCL), announced the formal
inauguration of National Incubation Centre (NIC), Peshawar, funded by the Ministry of IT&T and Ignite Fund. Sana and Huzaifa, co-founders of Butnut were invited by PTCL to offer them guidance and support on brand
The launch ceremony was attended by the Prime Minister of Pakistan as Chief Guest, along with Governor of positioning, product placement, pricing and marketing strategies. Being part of NIC Peshawar’s 2nd cohort,
Khyber Pakhtunkhwa, Minister of IT&T, and other renowned dignitaries from the public and private sectors. Butnut is a homemade organic peanut butter startup.
Equipped with the latest ICT infrastructure offering high-speed connectivity, the 12,000 sq. ft. facility, in the At the PTCL HQ, the founders had a brainstorming session with Fariha Tahir Shah, General Manager, Corporate
heart of Peshawar at PTCL Training Centre, was repurposed to incubate more than 25 handpicked startups Communication, PTCL, Hamza Bin Tahir, Manager, Corporate Communication, PTCL, Raja Usman Sarwar,
each year. The incubatees have access to comprehensive mentoring services allowing them to seek guidance Manager Brands, PTCL and Farah Mahmood, Assistant Manager, Corporate Communication, PTCL.
and support on design thinking, business planning, marketing, communication, financial and operational
PTCL team guided the founders to focus on market research and how to position organic peanut butter in the
aspects related to their startups.
local market, turn it into a viable business and take it forward with a strong marketing, branding and
Industry-renowned start-up incubation curriculum developed by Founder’s Institute was implemented for communication strategy. Product tasting was also done during the session with PTCL employees, followed by
incubatees. Furthermore, specialised workshops designed in collaboration with Microsoft, IBM and other valuable feedback.
global technology leaders are conducted throughout each session.
NIC Peshawar has been received very positively by academia, public and private sectors with significant Startups incubated at NIC Peshawar
partnerships and MoUs lined up with leading organisations and universities. Some of these collaborations
include design thinking workshops by IBM, FinTech lab & Google Business Groups.
APRUS Technologies
Muhammad Mohsin Rafiq and Nauman Rafiq, co-founders at APRUS Technologies, developed an
electrosurgical generator, which is both energy and cost-efficient. Their prototype is much safer than its
counterparts available in the market, as it results in less blood loss and more precision, with a digitized screen
for easy monitoring by surgeons.
Eleven.pk
Sajid and Naveed Shah, started Eleven.pk as an online retail startup, after initially buying a starting inventory of
$75 and selling it online in less than 24 hours. They were successful in generating PKR 9M revenue by
December, 2018.
E-Guard
Faizan Azam and Usman Abbasi, the founders of E-Guard are working on creating a robust monitoring system
for electric generators, such as power generators and oil tanks. It not only decreases fuel wastage by keeping
a reliable fuel inventory, but also has predictive features that send a signal when maintenance is required.
Bera
Bera is Khyber Pakhtunkhwa's first startup to be valued at 1 Million USD. Dubbed the ‘Louis Vuitton’ of
Peshawari ‘chappal’ by co-founders, Muhammad Rashid and Muhammad Jehangir, Bera is a rising brand that
is working to elevate the stature and design of Peshawari chappal, introducing it into the mainstream fashion.
56 57
ANNUAL REPORT 2018
Franchise PK
Zahid Iqbal and Shakeel Iqbal, the co-founders of Franchise PK, have made a one-stop solution for setting up
a franchise in Khyber Pakhtunkhwa and eventually all of Pakistan, in every sector. The startup has already
brought more than 150 franchises on-board their online platform, six of which are international brands from the
United Kingdom and United Arab Emirates.
Darewro
The founder of Darewro, Ubaidullah, has made the startup a household name in Peshawar. The startup is easily
recognised as the pioneer of door-to-door service provider in the region with the most number of riders. They
are currently working closely with LMKT on developing their technology roadmap.
Azadi E-Bike
Keeping in mind the environmental challenges and rising fuel prices, Sheharyar Khan, the founder of ‘Azadi
E-Bike’, is working on an electric bike that operates on a battery. Not only is it affordable, but it also helps
minimize noise and environmental pollution. A single one-hour charge can last up to a 100kms and reach to a
speed of 80kmph.
Nano IT Solutions
Muhammad Imran, founder of Nano IT Solutions, has developed a VR-driven motion platform for the
entertainment industry to engage customers. It is an immersive experience through physical movement created
in response to the action of players. The tech can be used in gaming zones and by the tourism industry by
enabling people to virtually experience tourist spots.
Smart Tube well

Abdul Haseeb and Muhammad Jawad, co-founders of Smart Tube well, developed an innovative device that is
installed inside a clean water pump to monitor the flow, level and pressure of water, along with electricity
consumption remotely through any mobile device. This device will help to identify water wastage and water theft
and highlight the problem of water levels dropping throughout the country. The device has been piloted in 3
different water stations of Mardan with efficient results.
Tutors Gateway
Uruba Ali and Moiz, co-founders of Tutors Gateway, are trying to provide students with easy access to quality
tutors by building a home tuition service platform. The startup will also help create jobs on a daily, hourly and
monthly basis.
58
INDEPENDENT AUDITORS’ REPORT
To the members of Pakistan Telecommunication Company Limited
Report on the audit of the financial statements
Opinion
We have audited the annexed financial statements of Pakistan Telecommunication Company Limited (the Company), which
comprise the statement of financial position as at 31 December 2018, and the statement of profit or loss, the statement of
comprehensive income, the statement of changes in equity, the statement of cash flows for the year then ended, and notes
to the financial statements, including a summary of significant accounting policies and other explanatory information, and
we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were
necessary for the purposes of the audit.
In our opinion and to the best of our information and according to the explanations given to us, the statement of financial
position, statement of profit or loss, statement of comprehensive income, the statement of changes in equity and the
statement of cash flows together with the notes forming part thereof conform with the accounting and reporting standards as
applicable in Pakistan and give the information required by the Companies Act, 2017 (XIX of 2017), in the manner so required
and respectively give a true and fair view of the state of the Company’s affairs as at 31 December 2018 and of the profit, the
comprehensive income, the changes in equity and its cash flows for the year then ended.
Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards
Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of
Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to Note 12.7 to the financial statements, which describes that the matters relating to certain employees’
rights under the PTCL pension scheme are pending with various courts. No provision for any effects on the Company that may
result has been made in the financial statements. Our opinion is not modified in respect of this matter.
60 61
INDEPENDENT AUDITORS’ REPORT INDEPENDENT AUDITORS’ REPORT
To the members of Pakistan Telecommunication Company Limited To the members of Pakistan Telecommunication Company Limited
Key Audit Matters S.

Key audit matters How the matter was addressed in our audit
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial No.
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a 2 Income tax recoverable
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Refer notes 5.21 and 21 to the
Following are the Key audit matters: financial statements. Our audit procedures in relation to the matter included:
S. As at 31 December 2018, income tax • Consulting our tax specialist to assess the
No. recoverable is stated at Rs 16,478,323 reasonableness of the Company’s conclusions on
1 Revenue recognition thousand. recoverability of income tax refundable;
Refer notes 5.20 and 26 to the financial Our audit procedures to assess the recognition of revenue, The Company has a significant amount of • Reviewing the status of significant pending tax
statements. amongst others, included the following: income tax refundable arising mainly from matters, including the Company’s assessment of
payments of income tax in excess of income the potential liabilities;
The Company has reported revenue amounting • Obtaining an understanding of the process relating
tax liabilities and a number of tax assessments
to Rs 70,099,626 thousand for the year ended to recognition of revenue and testing the design, • Comparing refund applications filed for refund of
are pending at different appellate forums.
31 December 2018. implementation and operating effectiveness of tax relating to preceding years with the amounts
key internal controls over recording of revenue Because of the likelihood and potential recorded in the financial statements;
The Company provides telecommunication including involving our internal specialists to test magnitude of misstatements to the
services in which there is an inherent risk key automated application and general information completeness and accuracy of the tax expense • Inspecting correspondence with tax authorities to
around the accuracy of revenue recorded by technology controls; identify any pending taxation matters relating to the
and the current tax liability, this requires
the IT billing systems given the complexity of years to which the refund relates;
special audit consideration.
the systems and the significance of volumes • Comparing a sample of transactions comprising of
of data processed by the systems. various revenue streams recorded during the year • Testing computation of current income tax provisions;
with relevant underlying supporting documents and and
We identified recognition of revenue as a key cash receipts;
audit matter because (i) revenue is one of the • Testing, on a sample basis, whether advance tax paid
key performance indicator of the Company • Comparing the amount of revenue recognized with is in accordance with the Income Tax Ordinance, 2001
and gives rise to an inherent risk that revenue relevant system generated reports and corresponding and amounts recorded in the books of account are
could be subject to misstatement to meet validation by the Company’s revenue assurance supported by underlying documentations.
expectations or targets and (ii) recognition and function;
measurement of revenue and contract related 3 Cost capitalisation for
assets may involve significant judgement • Assessing the appropriateness of accounting policies property, plant and equipment Our audit procedures in relation to the matter, amongst
due to adoption of IFRS 15 ‘Revenue from for revenue recognition and relevant contract assets
Contracts with Customers’ by the Company and liabilities for compliance with applicable Refer notes 5.11 (a) and 13 to the financial others, included the following:
during the year. financial reporting framework including their correct statements. • Assessing the design, implementation and
application during the year; operating effectiveness of key internal controls
The Company has recorded additions to
property, plant and equipment amounting to over capitalisation of property, plant and equipment
• Inspecting manual journal entries relating to revenue
Rs 15,016,722 thousand during the current including transfers from capital work in progress to
recognized during the year and the corresponding
year. operating fixed assets;
underlying documentation for those journal entries
which were considered to be material or met certain
specified risk-based criteria; and The Company continues to incur capital • Comparing, on sample basis, costs capitalised during
expenditure in connection with the expansion the year with underlying supporting documentation;
• Considering the appropriateness of disclosures in of its network coverage and improvements to • Assessing the nature of cost incurred meet the criteria
the financial statements. network quality. for capitalisation under accounting framework;
The initial recognition and classification of • Comparing, on sample basis, the cost of completed
property, plant and equipment and certain projects from capital work in progress to operating
elements of expenditure as either assets or fixed assets with supporting documentation including
expenses involves subjective judgments or completion certificates, where relevant, and
uncertainties. comparing the date of capitalisation with supporting
documentation; and
• Assessing whether the depreciation has been

correctly computed from the date of capitalisation.
62 63
S. Information Other than the Financial Statements and Auditors’ Report Thereon
No. Management is responsible for the other information. Other information comprises the information included in the annual
4 Recoverability of trade debts report for the year ended 31 December 2018, but does not include the financial statements and our auditors’ report thereon.
Refer notes 5.17.4 and 19 to the financial Our audit procedures to assess the valuation of trade Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
statements. debts included the following: conclusion thereon.
As at 31 December 2018, the Company’s gross • Obtaining an understanding of and testing the design In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
trade debtors were Rs 23,453,816 thousand and implementation of management’s key internal consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
against which allowances for doubtful debts controls relating to credit control, debt collection the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is
of Rs 7,275,293 thousand were recorded. and making allowances for doubtful debts; a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
We identified the recoverability of trade • Agreeing, on a sample basis, the balances used in
debtors as a key audit matter because it management’s estimate of expected credit loss with
involves significant management judgment the books of account of the Company; Responsibilities of Management and Board of Directors for the Financial Statements
and estimates in determining the allowance Management is responsible for the preparation and fair presentation of the financial statements in accordance with the
of expected credit loss. • Testing the assumptions and estimates made by
management for the allowances for doubtful debts; accounting and reporting standards as applicable in Pakistan and the requirements of Companies Act, 2017 (XIX of 2017) and
and for such internal control as management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
• Evaluating that the allowance for doubtful debt is
in accordance with the requirements of applicable In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going
financial reporting framework. concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
5 Cash and bank balances Our procedures in relation to cash and bank, amongst
Board of directors are responsible for overseeing the Company’s financial reporting process.
Refer note 25 to the financial statements. other, included the following:
As at 31 December 2018, the Company has • Obtaining bank reconciliation statements of the cash
cash and bank balances of Rs 5,375,026 collection bank accounts for the year-end balances
thousand. and, on a sample basis, testing the accuracy of
reconciliation statements and reconciling items;
Cash and bank balances was considered a
key audit matter since the collections against • Reviewing transactions in the bank statements
the Company’s revenue represent voluminous of collection account and testing a sample of
transactions. Although, bank reconciliation transactions as to whether they represents cash
statements as at 31 December 2018 have been receipts;
prepared, historic reconciliations of collection • For a sample of banks, tracing the transfer of funds
bank accounts are in progress. to the main collection accounts maintained by the
Company;
• Obtaining the bank confirmations directly from the

banks and comparing the balance confirmed by the
bank with the balance of statement of respective
bank account at the reporting date; and
• The reconciling balance as at the year-end was

deemed not material.
64 65
Auditors’ Responsibilities for the Audit of the Financial Statements Report on Other Legal and Regulatory Requirements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material Based on our audit, we further report that in our opinion:
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs as applicable in Pakistan a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
b) the statement of financial position, the statement of profit or loss, the statement of comprehensive income, the
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
statement of changes in equity and the statement of cash flows together with the notes thereon have been drawn up
taken on the basis of these financial statements.
in conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account and returns;
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgement and maintain
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of the
professional skepticism throughout the audit. We also:
Company’s business; and
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
deposited in the Central Zakat Fund established under section 7 of that Ordinance.
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Other Matter
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal Prior Year Financial Statements Audited by Predecessor Auditor
control. The financial statements of the Company for the year ended 31 December 2017, were audited by another auditor who
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related expressed an unmodified opinion on those financial statements on 14 February 2018.
disclosures made by management.
The engagement partner on the audit resulting in this independent auditors’ report is Atif Zamurrad Malik.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a
going concern. KPMG Taseer Hadi & Co.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation. Islamabad
04 March 2019
We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters
in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
66 67
STATEMENT OF
FINANCIAL POSITION
AS AT DECEMBER 31, 2018
2018 2017 2018 2017

Note Rs ‘000 Rs ‘000 Note Rs ‘000 Rs ‘000
Restated Restated
Equity and liabilities Assets

Equity Non-current assets
Share capital and reserves

Share capital 6 51,000,000 51,000,000 Property, plant and equipment 13 106,151,422 100,537,119
Intangible assets 14 1,690,725 1,882,868
Revenue reserves
Insurance reserve 2,985,696 2,806,993 107,842,147 102,419,987
General reserve 27,497,072 27,497,072
Unappropriated profit 2,088,583 3,797,720 Long term investments 15 8,968,757 7,977,300
Long term loans and advances 16 10,690,139 5,401,152
32,571,351 34,101,785 Contract cost 17 364,502 300,046
83,571,351 85,101,785 127,865,545 116,098,485
Liabilities
Current assets
Non-current liabilities Stores and spares 18 6,067,575 3,633,569
Deferred income tax 7 6,991,303 7,145,461 Contract cost 17 1,093,505 900,139
Employees retirement benefits 8 28,487,425 23,503,831 Trade debts and contract assets 19 16,178,523 16,040,224
Deferred government grants 9 7,841,637 8,059,878 Loans and advances 20 1,762,470 1,546,806
Advances from customers 1,112,453 1,223,912 Income tax recoverable 21 16,478,323 15,253,394
Receivable from GoP 22 2,164,072 2,164,072
44,432,818 39,933,082 Prepayments and other receivables 23 14,128,424 11,860,653
Short term investments 24 4,930,370 5,607,778
Current liabilities Cash and bank balances 25 5,375,026 14,243,299
Trade and other payables 10 67,195,789 61,549,919 68,178,288 71,249,934
Security deposits 11 579,039 553,446
Unpaid / unclaimed dividend 264,836 210,187
68,039,664 62,313,552
Total equity and liabilities 196,043,833 187,348,419 Total assets 196,043,833 187,348,419
Contingencies and commitments 12
The annexed notes 1 to 46 are an integral part of these financial statements.
Chief Financial Officer President & CEO Chairman Chief Financial Officer President & CEO Chairman
68 69
STATEMENT OF STATEMENT OF
PROFIT OR LOSS COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2018 FOR THE YEAR ENDED DECEMBER 31, 2018
2018 2017 2018 2017

Restated Restated
Revenue 26 70,099,626 69,619,602 Profit for the year 7,422,447 8,368,017

Cost of services 27 (52,257,894) (51,018,513)
Gross profit 17,841,732 18,601,089 Other comprehensive income for the year
Items that will not be reclassified to profit or loss:
Administrative and general expenses 28 (8,456,188) (8,617,478) Remeasurement loss on employees retirement benefits (5,426,593) (1,872,484)
Selling and marketing expenses 29 (2,871,420) (2,806,321) Tax effect 1,573,712 561,745
(11,327,608) (11,423,799)
Other comprehensive income for the year - net of tax (3,852,881) (1,310,739)
Operating profit 6,514,124 7,177,290
Other income 30 4,796,873 6,001,194

Finance costs 31 (553,828) (304,611) Total comprehensive income for the year 3,569,566 7,057,278
Profit before tax 10,757,169 12,873,873
Taxation 32 (3,334,722) (4,505,856)
Profit after tax 7,422,447 8,368,017
Earnings per share - basic and diluted (Rupees) 33 1.46 1.64
70 71
STATEMENT OF STATEMENT OF
CASH FLOWS CHANGES IN EQUITY
2018 2017 Issued, subscribed and

paid-up capital Revenue reserves
Note Rs ‘000 Rs ‘000 Insurance General Unappropriated Total
Restated Class ‘A’ Class ‘B’ reserve reserve profit
(Rupees in ‘000)
Cash flows from operating activities
Balance as at December 31, 2016 37,740,000 13,260,000 2,621,288 27,497,072 1,894,739 83,013,099
Cash generated from operations 35 27,449,431 32,636,470
Payment to Pakistan Telecommunication Employees Trust (PTET) (2,779,570) (5,253,506)
Impact of change in accounting policy - Note 44 - - - - 131,408 131,408
Employees retirement benefits paid (1,063,334) (872,100) Balance as at January 01, 2017 - Restated 37,740,000 13,260,000 2,621,288 27,497,072 2,026,147 83,144,507
Advances from customers (111,459) -
Payment of voluntary separation scheme - (4,711,600) Total comprehensive income for the year 2017
Consideration paid against purchase of PTML losses - (2,244,885) Profit for the year - - - - 8,368,017 8,368,017
Income tax paid (3,140,097) (2,869,695) Other comprehensive income - net of tax - - - - (1,310,739) (1,310,739)
Net cash inflows from operating activities 20,354,971 16,684,684 - - - - 7,057,278 7,057,278
Distribution to owners of the Company

Cash flows from investing activities Interim dividend for the year ended
December 31, 2017 - Re. 1.00 per share - - - - (5,100,000) (5,100,000)
Capital expenditure (19,884,397) (18,520,231)
- - - - (5,100,000) (5,100,000)
Acquisition of intangible assets (222,694) (87,881)
Proceeds from disposal of property, plant and equipment 82,657 167,856 Transfer to insurance reserve - - 185,705 - (185,705) -
Short term investments 3,080,778 20,919,222 Balance as at December 31, 2017 - Restated 37,740,000 13,260,000 2,806,993 27,497,072 3,797,720 85,101,785
Long term loans and advances (387,358) (92,572)
Return on long term loans and short term investments 1,142,205 1,630,431 Total comprehensive income for the year 2018
Government grants received 300,000 263,626 Profit for the year - - - - 7,422,447 7,422,447
Long term investment in U Microfinance Bank Limited (Ubank) (1,000,000) - Other comprehensive income - net of tax - - - - (3,852,881) (3,852,881)
Subordinated long term loan to PTML (1,000,000) (5,000,000) - - - - 3,569,566 3,569,566
Subordinated long term loan to Ubank (4,000,000) -
Dividend income - Ubank 114,286 - Distribution to owners of the Company
Net cash outflows from investing activities (21,774,523) (719,549) Interim dividend for the year ended
December 31, 2018 - Re. 1.00 per share - - - - (5,100,000) (5,100,000)
- - - - (5,100,000) (5,100,000)
Cash flows from financing activities Transfer to insurance reserve - - 178,703 - (178,703) -
Balance as at December 31, 2018 37,740,000 13,260,000 2,985,696 27,497,072 2,088,583 83,571,351
Dividend paid 36 (5,045,351) (5,096,980)

Net cash outflows from financing activities (5,045,351) (5,096,980) The annexed notes 1 to 46 are an integral part of these financial statements.
Net (decrease) / increase in cash and cash equivalents (6,464,903) 10,868,155
Cash and cash equivalents at the beginning of the year 16,770,299 5,902,144
Cash and cash equivalents at the end of the year 36.1 10,305,396 16,770,299
72 73
NOTES TO AND FORMING PART OF THE NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS FINANCIAL STATEMENTS
1. The Company and its operations 2.1 Standards, interpretations and amendments adopted during the year
Pakistan Telecommunication Company Limited (“PTCL”, “the Company”) was incorporated in Pakistan on The following amendments to existing standards have been published that are applicable to the Company’s
December 31, 1995 and commenced business on January 01, 1996. The Company, which is listed on the financial statements covering year beginning on or after the following dates:
Pakistan Stock Exchange Limited (PSX), was established to undertake the telecommunication business
formerly carried on by the Pakistan Telecommunication Corporation (PTC). PTC’s business was transferred a) New accounting standards / amendments and IFRS interpretations that are effective for the year ended
to the Company on January 01, 1996 under the Pakistan Telecommunication (Re-organization) Act, 1996, December 31, 2018.
on which date, the Company took over all the properties, rights, assets, obligations and liabilities of PTC,
except those transferred to the National Telecommunication Corporation (NTC), the Frequency Allocation
Board (FAB), the Pakistan Telecommunication Authority (PTA) and the Pakistan Telecommunication IFRS 15 ‘Revenue from Contracts with Customers’ Effective from accounting period beginning
Employees Trust (PTET). The registered office of the Company is situated at PTCL Headquarters, G-8/4, This standard establishes a single comprehensive model on or after January 01, 2018. Securities and
Islamabad. for entities to use in accounting for revenue arising from Exchange Commission of Pakistan (SECP)
contracts with customers. It will supersede the following has adopted for local application from
The Company provides telecommunication services in Pakistan. It owns and operates telecommunication revenue standards and interpretation upon its effective accounting period beginning on or after July
facilities and provides domestic and international telephone services and other communication facilities date: IAS 18 Revenue, IAS 11 Construction Contracts, IFRIC 01, 2018.
throughout Pakistan. The Company has also been licensed to provide such services in territories of Azad 13 Customer Loyalty Programs, IFRIC 15 Agreements
Jammu and Kashmir and Gilgit-Baltistan. for the Construction of Real Estate, IFRIC 18 Transfers
1.1 The business units of the Company include the following: of Assets from Customers and SIC 31 Revenue-Barter
Transaction Involving Advertising Services.
Business Unit Geographical Location
Detailed disclosure of the effects of IFRS 15 is given in
1 Headquarters G-8/4, Islamabad note 44.
2 PTCL Business Zone- North Telecom House F-5/1, Islamabad
3 PTCL Business Zone- Central 131, Tufail Road, Lahore The following standards, amendments and interpretations thereto as notified under the Companies Act,
4 PTCL Business Zone- South Hatim Alvi Road Clifton, Karachi 2017 are either not relevant to the Company’s operations or are not expected to have significant impact on
the Company’s financial statements.
1.2 Summary of significant transactions and events:
During 2018, PTCL continues its comprehensive network transformation project with several additional Amendments to IFRS 2 ‘Share-based Payment’ - Effective from accounting period beginning
exchanges fully transformed in different parts of Pakistan to provide reliable high internet speed Clarification on the classification and measurement of on or after January 01, 2018
and improve customer experience. This has contributed 6% growth in the broadband & IPTV revenue. With share-based payment transactions
the acquisition of new customers under Managed Services, Cloud Infrastructure, IT and Security Solutions,
Corporate business continues to perform strongly and has shown significant growth of 13% over same Amendments to IFRS 4 ‘Insurance Contracts’ - Applying Effective from accounting period beginning
period last year. In order to arrest decline in EVO revenue, a drive to convert EVO customers to Charji/ IFRS 9 Financial Instruments with IFRS 4 Insurance on or after January 01, 2018.
LTE was carried out which has resulted in higher subscriber acquisition cost and cost of devices sold, as Contracts.
compared to last year.
IFRS 9 ‘Financial Instruments’- This standard contains the Effective from accounting period beginning
During the year, there was a significant devaluation of Pak Rupee against US Dollar which has resulted
requirements for on or after January 01, 2018. SECP has
in increase in cable and satellite and network maintenance charges under cost of services and exchange
a) the classification and measurement of financial assets adopted for local application from accounting
loss of Rs 323,020 thousand. Re-measurement loss amounting to Rs 5,426,593 thousand on employees
and liabilities, period beginning on or after July 01, 2018.
retirement benefits has been recognized during the year due to lower than expected returns on plan assets.
b) impairment methodology, and
The financial strength of PTCL has been acknowledged through an independent rating exercise as a result c) general hedge accounting. This standard will
of which JCR-VIS has assigned PTCL a long-term credit rating of AAA which will enhance stakeholders’ supersede IAS 39 ‘Financial Instruments: Recognition and
confidence. Measurement’.
Interim cash dividend of 10% (Re. 1.00 per share) was declared and paid during the year.
Amendments to IAS 40 ‘Investment Property’- Effective from accounting period beginning
Clarification on transfers of property to or from investment on or after January 01, 2018. Earlier
2. Statement of compliance
property. application is permitted.
These financial statements have been prepared in accordance with the accounting and reporting standards
as applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of: IFRIC 22 ‘Foreign Currency Transactions and Advance Effective from accounting period beginning
– International Financial Reporting Standards (IFRS Standards) issued by the International Accounting Consideration’- Provides guidance on transactions where on or after January 01, 2018. Earlier
Standards Board (IASB) as notified under the Companies Act, 2017. consideration against non-monetary prepaid asset / application is permitted.
deferred income is denominated in foreign currency.
– Provisions of and directives issued under the Companies Act, 2017.
Where the provisions of and directives issued under the Companies Act, 2017 differ from the IFRS Standards,
the provisions of and directives issued under the Companies Act, 2017 have been followed.
These financial statements are the separate financial statements of the Holding Company (PTCL). In addition
to these separate financial statements, the Company also prepares consolidated financial statements.
74 75
b) New accounting standards / amendments and IFRS interpretations that are not yet effective Other than the aforesaid standards, interpretations and amendments, IASB has also issued the following
IFRS 16 ‘Leases’ standards which have not been adopted locally by the Securities and Exchange Commission of Pakistan:
This standard replaces existing leasing guidance, including IAS 17 ‘Leases’, IFRIC 4 ‘Determining whether - IFRS 1 First-time Adoption of International Financial Reporting Standards
an Arrangement contains a Lease’, SIC-15 ‘Operating Leases - Incentives’ and SIC-27 ‘Evaluating the - IFRS 14 Regulatory Deferral Accounts
Substance of Transactions Involving the Legal Form of a Lease’. - IFRS 17 Insurance Contracts
IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognizes a
right-of-use asset representing its right to use the underlying asset and a lease liability representing its The Companies Act, 2017 specified certain disclosures to be included in the financial statements. The
obligation to make lease payments. There are recognition exemptions for short-term leases and leases of Company has presented the required disclosures in these financial statements and re-presented and
low-value items. Lessor accounting remains similar to the current standard i.e. lessors continue to classify reclassified certain comparatives. However, there was no change in the reported amounts of profit and
leases as finance or operating leases. other comprehensive income and the amounts presented in the statement of financial position due to these
re-presentations / reclassifications. Additional disclosures include but are not limited to, management
Assuming the Company’s lease commitments remain at this level, the effect of discounting these assessment of sufficiency of tax provision in the financial statements (note 32.2), change in threshold for
commitments is anticipated to result in right-of-use assets and lease liabilities of approximately Rs identification of executives (note 37), additional disclosure requirements for related parties (note 41) etc.
1,556,000 thousand to be recognized on January 01, 2019. However, further work still needs to be carried
out to determine whether and when extension and termination options are likely to be exercised, which 3. Basis of measurement
will result in the actual liability recognized being slightly higher or lower than this. Instead of recognizing
These financial statements have been prepared under the historical cost convention, except for the
an operating expense for its operating lease payments, the Company will instead recognize interest on its
revaluation of certain financial instruments at fair value and the recognition of certain employees retirement
lease liabilities and amortization on its right-of-use assets.
benefits on the basis of actuarial assumptions.
Amendments to the following International Financial Reporting Standards (IFRS Standards) as notified
under the Companies Act, 2017 and interpretations thereto are not yet effective and are not likely to have 4. Critical accounting estimates and judgments
an impact on the Company’s financial statements:
The preparation of financial statements in conformity with approved accounting and reporting standards
requires the use of certain critical accounting estimates. It also requires management to exercise its
Amendment to IFRS 3 ‘Business Combinations’ Effective from accounting period beginning on or
judgment in the process of applying the Company’s accounting policies. Estimates and judgments are
after January 01, 2020.
continually evaluated and are based on historic experience, including expectations of future events that
Amendments to IFRS 10 ‘Consolidated Financial Effective from accounting period beginning on or are believed to be reasonable under the circumstances. The areas involving a higher degree of judgment
Statements’ after January 01, 2019. or complexity, or areas where assumptions and estimates are significant to the financial statements, are
as follows:
IFRS 17, ‘Insurance Contracts’ Effective from accounting period beginning on or
after January 01, 2021. (a) Provision for employees retirement benefits
The actuarial valuation of pension, gratuity, medical, accumulating compensated absences plans and
Amendments to IAS 1 ‘Presentation of Financial Effective from accounting period beginning on or benevolent grants requires the use of certain assumptions related to future periods, including increase in
Statements’ after January 01, 2020. future salary / pension / medical costs, rate of increase in benevolent grant, expected long-term returns
on plan assets and the discount rate used to discount future cash flows to present values.
IAS 8: ‘Accounting Policies, Changes in Accounting Effective from accounting period beginning on or
Estimates and Errors’ after January 01, 2020. (b) Provision for income tax
Amendments to IAS 19 ‘Employee Benefits’ Effective from accounting period beginning on or The Company recognizes income tax provision using estimates based upon expert opinions of its tax and
- Plan amendments, curtailments or Settlements. after January 01, 2019. legal advisors. Differences, if any, between the recorded income tax provision and the Company’s tax
liability, are recorded on the final determination of such liability. Deferred income tax is calculated at the
Amendments to IAS 28 ‘Investments in Associates Effective from accounting period beginning on or rates that are expected to apply to the periods when the temporary differences reverse, based on tax rates
and Joint Ventures’ after January 01, 2019. that have been enacted or substantively enacted, by the date of the statement of financial position.
IFRIC 23 ‘Uncertainty over Income Tax Treatments’ Effective from accounting period beginning on or (c) Recognition of government grants
after January 01, 2019. The Company recognizes government grants when there is reasonable assurance that grants will be
received and the Company will be able to comply with conditions associated with grants.
(c ) Annual Improvements to IFRS Standards 2015 - 2017 Cycle
(d) Useful life and residual value of fixed assets
The improvements address amendments to following approved accounting standards but are not likely
to have an impact on Company’s financial statements. The amendments are effective from annual period The Company reviews the useful lives and residual values of fixed assets on a regular basis. Any change in
beginning on or after January 01, 2019. estimates may affect the carrying amounts of the respective items of property, plant and equipment with
a corresponding effect on the related depreciation charge.
- IFRS 3 Business Combinations
- IFRS 11 Joint Arrangements
- IAS 12 Income Taxes
- IAS 23 Borrowing Costs
76 77
(e) Provision for stores and spares Contract assets

A provision against stores and spares is recognized after considering their physical condition and expected The contract assets primarily relate to the Company’s rights to consideration for postpaid services provided
future usage. It is reviewed by the management on a quarterly basis. to subscribers but not billed at the reporting date. The contract assets are transferred to trade debts when
the rights become unconditional.
(f) Provision for doubtful receivables and contract assets
A provision against overdue receivable balances is recognized after considering the pattern of receipts Contract liability
from, and the future financial outlook of, the concerned receivable party. It is reviewed by the management A contract liability is the obligation of the Company to transfer goods or services to a customer for which
on a regular basis. Contract assets arise when the Company performs its performance obligations by the Company has received consideration or an amount of consideration is due from the customer. If a
transferring goods or services to a customer before the customer pays consideration or before payment is customer pays consideration before the Company transfers goods or services to the customer, a contract
due. liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract
liabilities are recognized as revenue when the Company discharges its obligation under the contract.
(g) Impairment of non - financial assets The Company has not presented a third statement of financial position as at the beginning of the the
Management exercises judgment in measuring the recoverable amount of assets at each reporting date preceding period (i.e. January 01, 2017) as the Company believes that the effect of restatement and
to determine whether there is any indication of impairment loss. If any such indication exists, recoverable reclassifications is not material. Effect of adoption of IFRS 15 has been disclosed in note 44.
amount is estimated to determine the extent of impairment of such assets.
5.1(b) IFRS 9 ‘Financial Instruments’
(h) Revenue from contracts with customers - contract cost The Company has adopted IFRS 9 with a date of initial application of January 01, 2018. It has no significant
Contract cost comprises incremental cost of acquiring the customers and the Company estimates the impact on the Company’s financial statements.
average life of the customer for amortization of capitalized contract cost. IFRS 9 sets out requirements for recognizing and measuring financial assets, financial liabilities and
some contracts to buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments:
(i) Other provisions Recognition and Measurement.
Management exercises judgment in measuring and recognizing provisions and exposures to contingent Classification and measurement of financial assets and financial liabilities
liabilities related to pending litigations or other outstanding claims. Judgment is necessary in assessing
IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost,
the likelihood that a pending claim will succeed, or a liability will arise, and to quantify the possible range
fair value through profit or loss (FVTPL) and fair value through other comprehensive income (FVOCI). The
of the financial settlement. Because of the inherent uncertainty in this evaluation process, actual losses
classification of financial assets under IFRS 9 is generally based on the business model in which a financial
may be different from the originally estimated provision.
asset is managed and its contractual cash flow characteristics. IFRS 9 eliminates the previous IAS 39
categories of held to maturity, loans and receivables and available for sale.
5 Summary of significant accounting policies
The following table and the accompanying notes explain the original measurement categories under IAS
The significant accounting policies adopted in the preparation of these financial statements are set out 39 and new measurement categories under IFRS 9 for each class of the Company’s financial assets and
below. These policies have been consistently applied to all the years for which financial information is financial liabilities as at January 01, 2018.
presented in these financial statements except for the changes as disclosed in para 5.1.
Original classification New classification
5.1 Changes in accounting policies Financial assets Note under IAS 39 under IFRS 9
5.1 (a) IFRS 15 ‘Revenue from Contracts with Customers’ Long term investment 15 Available for sale FVOCI
The Company has adopted IFRS 15 with a date of initial application of January 01, 2018. As a result, the Trade debts 19 Loans and receivables Amortized cost
Company has changed its accounting policy for revenue recognition. The Company has applied IFRS 15 Contract assets 19 Loans and receivables Amortized cost
in accordance with the retrospective transitional approach and accordingly the comparative periods have Long term loans 16 Loans and receivables Amortized cost
been restated. As a result, the Company has changed its accounting policies as detailed below: Deposits 24 Loans and receivables Amortized cost
Other receivables 23 Loans and receivables Amortized cost
Impact of IFRS 15 ‘Revenue from Contracts with Customers’ Interest accrued 23 Loans and receivables Amortized cost
Installation charges Receivable from Govt. of Pakistan 22 Loans and receivables Amortized cost
Short term investment T Bills 24 Loans and receivables Amortized cost
Installation charges for provision of voice, broadband, IPTV and corporate services were previously being
Short term investment Units of Mutual Funds 24 Available for sale FVTPL
recognized as revenue when billed. Under IFRS 15, these charges are required to be deferred and recognized
Cash & Bank balances 25 Loans and receivables Amortized cost
as revenue over the average customer life.
Financial liabilities
Contract cost
Trade and other payables 10 Other financial liabilities Amortized cost
The Company previously recognized cost of acquiring a customer as distribution and selling cost and cost Security deposits 11 Other financial liabilities Amortized cost
of fulfilling a contract as cost of sales when they were incurred. Under IFRS 15, the Company capitalizes the
incremental costs of obtaining and fulfilling a contract, if they are expected to be recovered. The capitalized There is no change in the carrying amounts of financial assets and financial liabilities at the initial
cost is amortized over the average customer life. Applying the practical expedient of IFRS 15, the Company application date of IFRS 9, except for a change in accounting classification as disclosed in the above table.
recognizes the incremental cost of obtaining and fulfilling a contract as expense when incurred if the
amortization period of assets is less than one year.
78 79
Impairment of financial assets 5.9 Contingent liabilities

IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘Expected Credit Loss’ (ECL) model. The A contingent liability is disclosed when the Company has a possible obligation as a result of past events, the
new impairment model applies to financial assets measured at amortized cost, contract assets and existence of which will be confirmed only by the occurrence or non-occurrence, of one or more uncertain
debt investments at FVOCI, but not to investments in equity instruments. Under IFRS 9 credit losses are future events, not wholly within the control of the Company; or when the Company has a present legal or
recognized earlier than under IAS 39, however, it has no significant impact on the Company’s financial constructive obligation, that arises from past events, but it is not probable that an outflow of resources
statements. embodying economic benefits will be required to settle the obligation, or the amount of the obligation
cannot be measured with sufficient reliability.
5.2 Functional and presentation currency
5.10 Dividend distribution
Items included in the financial statements of the Company are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). These financial statements The distribution of the final dividend, to the Company’s shareholders, is recognized as a liability in the
are presented in Pakistani Rupees (Rs), which is the Company’s functional currency. financial statements in the period in which the dividend is approved by the Company’s shareholders; the
distribution of the interim dividend is recognized in the period in which it is declared by the Board of
5.3 Foreign currency transactions and translations Directors.
Foreign currency transactions are translated into the functional currency, using the exchange rates
5.11 Non-current assets
prevailing on the date of the transaction. Monetary assets and liabilities, denominated in foreign currencies,
are translated into the functional currency using the exchange rate prevailing on the date of the statement (a) Property, plant and equipment
of financial position. Foreign exchange gains and losses resulting from the settlement of such transactions, Property, plant and equipment, except freehold land and capital work in progress, is stated at cost less
and from the translation of monetary items at end of the year exchange rates, are charged to income for accumulated depreciation and any identified impairment losses. Freehold land is stated at cost less
the year. identified impairment losses, if any. Cost includes expenditure, related overheads, mark-up and borrowing
costs that are directly attributable to the acquisition of the asset.
5.4 Insurance reserve
Subsequent costs, if reliably measurable, are included in the asset’s carrying amount, or recognized as
The Company has created an insurance reserve for any losses to the Company’s assets resulting from theft, a separate asset as appropriate, only when it is probable that future economic benefits associated with
fire, natural or other disasters. Appropriations out of profits to this reserve, are made at the discretion of the cost will flow to the Company. The carrying amount of any replaced parts as well as other repair and
the Board of Directors. maintenance costs, are charged to profit or loss statement during the period in which they are incurred.
5.5 Government grants Capital work in progress is stated at cost less impairment loss, if any. It consists of expenditure incurred
in respect of tangible fixed assets in the course of their construction and installation.
Government grants are recognized at their fair values, as deferred income, when there is reasonable
assurance that the grants will be received and the Company will be able to comply with the conditions Depreciation on assets is calculated, using the straight line method, to allocate their cost over their
associated with the grants. estimated useful lives.
Grants that compensate the Company for expenses incurred, are recognized on a systematic basis in the Depreciation on additions to property, plant and equipment, is charged from the month in which the
income for the year in which the related expenses are recognized. Grants that compensate for the cost of relevant asset is acquired or capitalized, while no depreciation is charged for the month in which the asset
an asset are recognized in income on a systematic basis over the expected useful life of the related asset. is disposed off. Impairment loss, if any, or its reversal, is also charged to income for the year. Where an
impairment loss is recognized, the depreciation charge is adjusted in future periods to allocate the asset’s
5.6 Borrowings and borrowing costs revised carrying amount, less its residual value, over its remaining useful life.
Borrowings are recognized equivalent to the value of the proceeds received by the Company. Any difference, An item of property and equipment is derecognized upon disposal or when no future economic benefits
between the proceeds (net of transaction costs) and the redemption value, is recognized to income, over are expected from its use or disposal. The gain or loss on disposal of an asset, calculated as the difference
the period of the borrowings, using the effective interest method. between the sale proceeds and the carrying amount of the asset, is recognized in income for the year.
Borrowing costs, which are directly attributable to the acquisition and construction of a qualifying asset, (b) Intangible assets
which are assets that necessarily take a substantial period of time to get ready for their intended use or
sale, are capitalized as part of the cost of that asset. All other borrowing costs are charged to income for (i) Licenses
the year. These are carried at cost less accumulated amortization and any identified impairment losses.
Amortization is calculated using the straight line method, to allocate the cost of the licenses over its
5.7 Trade and other payables estimated useful life, and is charged to income for the year.
Liabilities for creditors and other amounts payable are carried at cost, which is the fair value of the The amortization on licenses acquired during the year, is charged from the month in which a license
consideration to be paid in the future for the goods or services received, whether or not billed to the is acquired / capitalized, while no amortization is charged in the month of expiry / disposal of the
Company. license.
5.8 Provisions (ii) Computer software

Provisions are recognized when the Company has a present legal or constructive obligation as a result of These are carried at cost less accumulated amortization, and any identified impairment losses.
past events; it is probable that an outflow of resources embodying economic benefits will be required to Amortization is calculated, using the straight line method to allocate the cost of software over their
settle the obligation and a reliable estimate of the amount can be made. Provisions are reviewed at each estimated useful lives, and is charged to profit or loss statement for the year. Costs associated with
statement of financial position date and are adjusted to reflect the current best estimate. maintaining computer software, are recognized as an expense as and when incurred.
80 81
The amortization on computer software acquired during the year is charged from the month in which (b) Fair value through other comprehensive income
the software is acquired or capitalized, while no amortization is charged for the month in which the A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated
software is disposed off. as at FVTPL: (i) It is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets; and (ii) Its contractual terms give rise on specified dates to cash
5.12 Investments in subsidiaries and associates flows that are solely payments of principal and interest on the principal amount outstanding.
Investments in subsidiaries and associates, where the Company has control or significant influence, are On initial recognition of an equity investment that is not held for trading, the Company may irrevocably
measured at cost less impairment loss, if any. elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an
investment by investment basis.
5.13 Impairment of non-financial assets
Assets that have indefinite useful lives, for example freehold land, are not subject to depreciation and are (c) Fair value through profit or loss
tested annually for impairment. Assets that are subject to depreciation are reviewed for impairment on the All financial assets not classified as measured at amortized cost or FVOCI as described above are measured
date of the statement of financial position, or whenever events or changes in circumstances indicate that at FVTPL. This includes all derivative financial assets. On initial recognition, the Company irrevocably
the carrying amount may not be recoverable. An impairment loss is recognized, equal to the amount by designates a financial asset that otherwise meets the requirements to be measured at amortized cost or
which the asset’s carrying amount exceeds its recoverable amount. An asset’s recoverable amount is the at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would
higher of its fair value less costs to sell and value in use. For the purposes of assessing impairment, assets otherwise arise.
are grouped at the lowest levels for which there are separately identifiable cash flows. Non-financial assets
that suffered an impairment, are reviewed for possible reversal of the impairment at each statement of 5.17.2 Recognition and measurement
financial position date. Reversals of the impairment loss are restricted to the extent that asset’s carrying Trade and other receivables are initially recognized when they are originated. All other financial assets
amount does not exceed the carrying amount that would have been determined, net of depreciation and financial liabilities are initially recognized when the Company becomes a party to the contractual
or amortization, if no impairment loss has been recognized. An impairment loss, or the reversal of an provisions of the instrument.
impairment loss, are both recognized in the income for the year.
A financial asset (unless it is a trade receivable without a significant financing component) or financial
5.14 Stores and spares liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL),
transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a
These are stated at the lower of cost and net realizable value. Cost is determined using the weighted significant financing component is initially measured at the transaction price.
average method. Items in transit are valued at cost, comprising invoice values and other related charges
incurred up to the date of the statement of financial position. 5.17.3 Subsequent measurement and gains and losses
(i) Financial assets at These assets are subsequently measured at amortized cost using the effective
5.15 Earnings per share (EPS) amortized cost interest method. The amortized cost is reduced by impairment losses. Interest
The Company presents basic earning per share (EPS). Basic EPS is calculated by dividing the profit or loss income, foreign exchange gains and losses and impairment are recognized in
attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
outstanding during the year.
(ii) Financial assets at Debt investments are subsequently measured at fair value. Interest income
5.16 Trade debts / Contract assets FVOCI calculated using effective interest method, foreign exchange gains and losses
and impairment are recognized in profit or loss. Other net gains and losses
Trade debts are carried at their original invoice amounts, less any estimates made for doubtful debts based are recognized in OCI. On derecognition, gains and losses accumulated in OCI
on a review of all outstanding amounts at reporting date. Bad debts are written off as per Company policy. are reclassified to profit or loss.
Effect of adoption of IFRS 15 on opening balances has been disclosed in note 44. Equity investments are subsequently measured at fair value. Interest income
calculated using effective interest method, foreign exchange gains and losses
5.17 Financial instruments and impairment are recognized in profit or loss. Other net gains and losses
5.17.1 Classification are recognized in OCI. On derecognition, gains and losses accumulated in OCI
The Company classifies its financial assets on initial recognition in the following categories: at amortized are reclassified to profit or loss.
cost, at fair value through profit or loss (FVTPL) and at fair value through other comprehensive income (iii) Financial assets at These assets are subsequently measured at fair value. Net gains and losses,
(FVOCI). Financial assets are not reclassified subsequent to their initial recognition unless the Company FVTPL including any interest or dividend income, are recognized in profit or loss.
changes its business model for managing financial asset, in which case all affected financial assets are
reclassified on the first day of the first reporting period following the change in the business model. Financial assets of the Company include trade debts, contract assets, long term loans, deposits, other
receivables and short term investments.
(a) Amortized cost
5.17.4 Impairment of financial assets
A financial asset is measured at amortized cost if it meets both of the following conditions and is not
designated as at FVTPL: (i) It is held within a business model whose objective is to hold assets to collect The Company recognizes loss allowance for Expected Credit Losses (ECLs) on financial assets measured
contractual cash flows; and (ii) Its contractual terms give rise on specified dates to cash flows that are at amortized cost and contract assets. The Company measures loss allowances at an amount equal to
solely payments of principal and interest on the principal amount outstanding. lifetime ECLs. The gross carrying amount of a financial asset is written off when the Company has no
reasonable expectations of recovering a financial asset in its entirety or a portion thereof.
82 83
Lifetime ECLs are those that result from all possible default events over the expected life of a financial Revenue is recognized when the Company satisfies the performance obligations by transferring a promised
instrument. The maximum period considered when estimating ECLs is the maximum contractual period good or service to a customer. Goods or services are transferred when the customer obtains control of the
over which the Company is exposed to credit risk. assets.
At each reporting date, the Company assesses whether the financial assets carried at amortized cost are The Company mainly generates revenue from providing telecommunication services such as data, voice,
credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental IPTV, connectivity services, interconnect, information and communication technology (ICT), digital solutions
impact on the estimated future cash flows of the financial asset have occurred. and equipment sales etc.
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying Services are offered separately and as bundled packages along with other services and/or devices.
amount of the assets. For bundled packages, the Company accounts for individual products and services separately if they are
The gross carrying amount of a financial asset is written off when the Company has no reasonable distinct i.e. if a product or service is separately identifiable from other items in the bundled package and if
expectations of recovering a financial asset in its entirety or a portion thereof. a customer can benefit from it. The consideration is allocated between separate product and services (i.e.
distinct performance obligations, “POs”) in a bundle based on their standalone selling prices.
5.17.5 Financial liabilities The standalone selling prices are determined based on the observable price at which the Company sells
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified the products and services on a standalone basis. For items that are not sold separately, the Company
as FVTPL if it is classified as held-for-trading, it is derivative or it is designated as such on initial estimates standalone selling prices using other methods (i.e. adjusted market assessment approach, cost
recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including plus margin approach or residual approach).
any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured
at amortized cost using the effective interest method. Interest expense and foreign exchange gains and Nature and timing of satisfaction of performance obligations
losses are recognized in statement of profit or loss. Any gain or loss on derecognition is also recognized in
profit or loss. The financial liabilities of the Company include short term security deposits and trade and Products and services Nature and timing of satisfaction of performance obligations
other payables.
Voice, Broadband, IPTV The Company recognizes revenue as and when these services are provided
5.17.6 Derecognition (i.e. actual usage by the customer).
Financial assets Devices The Company recognizes revenue when the control of the device is transferred
The Company derecognizes a financial asset when the contractual rights to the cash flows from the to the customer. This usually occurs at the contract inception when the
financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in customer takes the possession of the device.
which substantially all of the risks and rewards of ownership of the financial asset are transferred or in
Installation charges Installation services provided for service fulfillment are not distinct POs and
which the Company neither transfers nor retains substantially all of the risks and rewards of ownership
the amount charged for installation service is recognized over the average
and it does not retain control of the financial asset.
customer life.
Financial liabilities Corporate Services Revenue is recognized over the period when these services are provided to
The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled the customers. Where hardware (e.g. routers) are provided as part of the
or expire. The Company also derecognizes a financial liability when its terms are modified and the cash contract, the Company recognizes these as distinct POs only if the customer
flows of the modified liability are substantially different, in which case a new financial liability based on the can benefit from them either by selling for more than scrap value or using
modified terms is recognized at fair value. On derecognition of a financial liability, the difference between with services from other service providers.
the carrying amount extinguished and the consideration paid (including any non-cash assets transferred
or liabilities assumed) is recognized in profit or loss. Carrier and Wholesale Revenue from C&WS services is recognized when the services are rendered.
(C&WS)
5.18 Offsetting of financial assets and liabilities
Principal versus agent presentation
Financial assets and liabilities are offset and the net amount is reported in the statement of financial
position, if the Company has a legally enforceable right to set off the recognized amounts, and the Company When the Company sells goods or services as a principal, revenue and related cost is reported on a gross
either intends to settle on a net basis, or realize the asset and settle the liability simultaneously. basis in revenue and operating costs. If the Company sells goods or services as an agent, revenue and
related cost are recorded in revenue on a net basis, representing the margin earned.
5.19 Cash and cash equivalents Whether the Company is considered to be the principal or an agent in the transaction depends on analysis
Cash and cash equivalents are carried at cost. Cash and cash equivalents comprise cash in hand, cash with by management of both the legal form and substance of the arrangement between the Company and its
banks and short term finances under mark up arrangements with banks. Cash equivalents are short term business partners; such judgments impact the amount of reported revenue and operating expenses but do
highly liquid investments, that are readily convertible to known amounts of cash and which are subject to not impact reported assets, liabilities or cash flows.
an insignificant risk of change in value.
5.20.1 Income on bank deposits
5.20 Revenue recognition Return on bank deposits is recognized using the effective interest method.
Revenue is measured at an amount that reflects the consideration to which the Company expects to 5.20.2 Dividend income
be entitled in exchange for transferring promised goods or services to a customer, excluding amounts
collected on behalf of third parties. Dividend income is recognized when the right to receive payment is established.
84 85
5.21 Taxation unmarried daughters who are not subject to the 21 years age limit) and their parents residing with
The tax expense for the year comprises of current and deferred income tax, and is recognized in income for them and any other dependents, are entitled to avail the benefits provided under the scheme. The
the year, except to the extent that it relates to items recognized directly in other comprehensive income, in facility remains valid during the lives of the pensioner and their spouse. Under this facility, there are
which case the related tax is also recognized in other comprehensive income. no annual limits to the cost of drugs, hospitalized treatment and consultation fees.
(a) Current (iv) Accumulated compensated absences
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted The Company provides a facility to its employees for accumulating their annual earned leaves.
at the date of the statement of financial position. Management periodically evaluates positions taken Accumulated leaves can be encashed at the end of the employees service, based on the latest drawn
in tax returns, with respect to situations in which applicable tax regulation is subject to interpretation, gross salary as per Company policy.
and establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax (v) Benevolent grants
authorities.
The Company pays prescribed benevolent grants to eligible employees / retirees and their heirs.
(b) Deferred The liability recognized in the statement of financial position in respect of defined benefit plans, is
Deferred income tax is accounted for using the balance sheet liability method in respect of all temporary the present value of the defined benefit obligations at the date of the statement of financial position
differences arising between the carrying amounts of assets and liabilities in the financial statements and less the fair value of plan assets.
the corresponding tax bases used in the computation of taxable profit. The defined benefit obligations are calculated annually, by an independent actuary using the
Deferred income tax liabilities are recognized for all taxable temporary differences and deferred tax assets projected unit credit method. The most recent valuations were carried out as at December 31, 2018.
are recognized to the extent that it is probable that taxable profits will be available against which the The present value of a defined benefit obligation is determined, by discounting the estimated future
deductible temporary differences, unused tax losses and tax credits can be utilized. cash outflows, using the interest rates of Govt. securities as proxy to high quality corporate bonds
Deferred income tax is calculated at the rates that are expected to apply to the period when the differences as per IAS 19 that are denominated in the currency in which the benefits will be paid, and that
reverse, and the tax rates that have been enacted, or substantively enacted, at the date of the statement of have terms to maturity approximating the terms of the related liability. Remeasurement gains and
financial position. losses arising from experience adjustments and changes in actuarial assumptions are recognized
in other comprehensive income for the year except remeasurement gains and losses arising on
5.22 Employees retirement benefits compensated absences which are recognized in statement of profit or loss.
The Company provides various retirement / post retirement benefit schemes. The plans are generally 5.23 Long term loans
funded through payments determined by periodic actuarial calculations or up to the limits allowed in the
Income Tax Ordinance, 2001. The Company has constituted both defined contribution and defined benefit Long term loans are initially recognized at present value of loan amount disbursed to employees. On initial
plans. recognition, the discount representing difference between loan disbursed and its present value is charged
in the Company statement of profit or loss. Subsequently, the unwinding of discount on present value of
(a) PTCL Employees GPF Trust loans is recognized as income over the loan term using the effective interest method.
The Company operates an approved funded provident plan covering its permanent employees. For the
purposes of this plan, a separate trust, the “PTCL Employees GPF Trust” (the Trust), has been established.
Monthly contributions are deducted from the salaries of employees and are paid to the Trust by the
Company. In line with the Trust’s earnings for a year, the board of trustees approves a profit rate for
payment to the members. The Company contributes to the fund, the differential, if any, of the interest paid/
credited for the year and the income earned on the investments made by the Trust.
(b) Defined benefit plans

The Company provides the following defined benefits:
(i) Pension plans
The Company accounts for an approved funded pension plan operated through a separate trust, the
“Pakistan Telecommunication Employees Trust” (PTET), for its employees recruited prior to January
01, 1996 when the Company took over the business from PTC. The Company operates an unfunded
pension scheme for employees recruited on a regular basis, on or after January 01, 1996.
(ii) Gratuity plan

The Company operates an approved funded gratuity plan for its New Terms and Conditions (NTC)
employees and contractual employees.
(iii) Medical benefits plan

The Company provides a post retirement medical facility to pensioners and their families. Under
this unfunded plan, all ex-employees, their spouses, their children up to the age of 21 years (except
86 87
6. Share capital 2018 2017

Note Rs ‘000 Rs ‘000
6.1 Authorized share capital Restated
2018 2017 2018 2017
(Number of shares ‘000) Rs ‘000 Rs ‘000 7. Deferred income tax
Deferred tax liability / (asset) relating to:
11,100,000 11,100,000 “A” class ordinary shares of Rs 10 each 111,000,000 111,000,000 Accelerated tax depreciation 9,210,667 9,611,742
3,900,000 3,900,000 “B” class ordinary shares of Rs 10 each 39,000,000 39,000,000 Accelerated tax amortization 313,948 360,133
Provision for obsolete stores (369,758) (379,726)
15,000,000 15,000,000 150,000,000 150,000,000
Provision for receivables (2,163,554) (2,505,726)
Others - 59,038
6.2 Issued, subscribed and paid up capital
6,991,303 7,145,461
2018 2017 2018 2017
(Number of shares ‘000) Rs ‘000 Rs ‘000
7.1 Movement during the year
3,774,000 3,774,000 “A” class ordinary shares of Rs 10 each 37,740,000 37,740,000 Balance at the beginning of the year 7,145,461 7,323,613
issued as fully paid for consideration
other than cash - note 6.3 and note 6.5. Charge / (reversal) for the year in respect of
1,326,000 1,326,000 “B” class ordinary shares of Rs 10 each 13,260,000 13,260,000 Accelerated tax depreciation (401,075) (162,614)
issued as fully paid for consideration Accelerated tax amortization (46,185) (70,443)
other than cash - note 6.3 and note 6.6. Provision for obsolete stores 9,968 23,948
Provision for receivables 342,172 30,957
5,100,000 5,100,000 51,000,000 51,000,000 Others (59,038) -
6.3 These shares were initially issued to the Government of Pakistan, in consideration for the assets and (154,158) (178,152)
liabilities transferred from Pakistan Telecommunication Corporation (PTC) to Pakistan Telecommunication 6,991,303 7,145,461
Company Limited (PTCL), under the Pakistan Telecommunication (Re-organization) Act, 1996, as referred
to in note 1. 8. Employees retirement benefits
6.4 Except for voting rights, the “A” and “B” class ordinary shares rank pari passu in all respects. “A” class Liabilities for pension obligations
ordinary shares carry one vote and “B” class ordinary shares carry four votes, for the purposes of election of Funded 8.1 & 8.2 6,415,222 2,779,570
directors. “A” class ordinary shares cannot be converted into “B” class ordinary shares; however, “B” class Unfunded 8.1 5,510,435 4,611,138
ordinary shares may be converted into “A” class ordinary shares, at the option, exercisable in writing and 11,925,657 7,390,708
submitted to the Company, by the holders of three fourths of the “B” class ordinary shares. In the event of
Gratuity - funded 8.1 230,987 82,513
termination of the license issued to the Company, under the provisions of the Pakistan Telecommunication
Accumulated compensated absences - unfunded 8.1 1,503,324 1,491,597
(Re-organization) Act, 1996, the “B” class ordinary shares shall be automatically converted into “A” class
Post retirement medical facility- unfunded 8.1 11,108,005 10,939,243
ordinary shares.
Benevolent grants - unfunded 8.1 3,719,452 3,599,770
6.5 The Government of Pakistan, through an “Offer for Sale” document, dated July 30, 1994, issued to its 28,487,425 23,503,831
domestic investors, a first tranche of vouchers exchangeable for “A” class ordinary shares of the Company;
subsequently, through an Information Memorandum dated September 16, 1994, a second tranche of
vouchers was issued to international investors, also exchangeable, at the option of the voucher holders,
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 the general public. Till December 31, 2018, 599,547 thousand
(December 31, 2017: 599,545 thousand) “A” class ordinary shares had been exchanged for such vouchers.
6.6 In pursuance of the privatization of the Company, a bid was held by the Government of Pakistan on June
08, 2005 for sale of “B” class ordinary shares of Rs 10 each, conferring management control. Emirates
Telecommunication Corporation (Etisalat), UAE was the successful bidder. The 26% (1,326,000,000 shares)
‘’B’’ class ordinary 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.
88 89
90
8.1 The latest actuarial valuations of the Company’s defined benefit plans, were conducted at December 31, 2018 using the projected unit credit
method. Details of obligations for defined benefit plans are as follows:
Accumulated Post-retirement
Pension Gratuity Compensated absences medical facility Benevolent grants Total
Funded Unfunded Funded Unfunded Unfunded Unfunded
2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
a) The amounts recognized in the

statement of financial position:
Present value of defined
benefit obligations 115,539,324 112,027,257 5,510,435 4,611,138 1,490,918 1,275,611 1,503,324 1,491,597 11,108,005 10,939,243 3,719,452 3,599,770 138,871,458 133,944,616
Fair value of plan assets - note 8.3 (109,124,102) (109,247,687) - - (1,259,931) (1,193,098) - - - - - - (110,384,033) (110,440,785)
Liability at end of the year - note 8.2 6,415,222 2,779,570 5,510,435 4,611,138 230,987 82,513 1,503,324 1,491,597 11,108,005 10,939,243 3,719,452 3,599,770 28,487,425 23,503,831
b) Changes in the present value

of defined benefit obligations:
Balance at beginning of the year 112,027,257 109,098,686 4,611,138 3,242,085 1,275,611 1,015,885 1,491,597 1,430,188 10,939,243 10,757,583 3,599,770 3,491,524 133,944,616 129,035,951
FOR THE YEAR ENDED DECEMBER 31, 2018
Current service cost 790,444 931,116 261,546 260,661 171,399 148,564 80,234 76,353 75,639 75,438 39,150 44,891 1,418,412 1,537,023
Interest expense 10,785,606 11,587,763 459,459 355,054 111,433 94,107 131,467 133,532 1,060,317 1,153,417 347,789 354,960 12,896,071 13,678,833
Actuarial gain on accumulated
compensated absences - - - - - - (138,274) (99,291) - - - - (138,274) (99,291)
11,576,050 12,518,879 721,005 615,715 282,832 242,671 73,427 110,594 1,135,956 1,228,855 386,939 399,851 14,176,209 15,116,565
Remeasurements:
Gain due to change
in financial assumptions - (3,860,439) - (372,815) - - - - - - - - - (4,233,254)
NOTES TO AND FORMING PART OF THE
(Gain) / loss due to experience

adjustments 278,405 1,780,902 211,394 1,154,799 7,400 67,618 - - (295,050) (503,257) (23,497) (69,699) 178,652 2,430,363
Benefits paid (8,342,388) (7,510,771) (33,102) (28,646) (74,925) (50,563) (61,700) (49,185) (672,144) (543,938) (243,760) (221,906) (9,428,019) (8,405,009)
Balance at end of the year 115,539,324 112,027,257 5,510,435 4,611,138 1,490,918 1,275,611 1,503,324 1,491,597 11,108,005 10,939,243 3,719,452 3,599,770 138,871,458 133,944,616
Pension Gratuity compensated absences medical facility Benevolent grants Total
2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
c) Charge for the year:

Profit or Loss:
Net interest expense 138,978 288,943 459,459 355,054 4,054 (12,555) 131,467 133,532 1,060,317 1,153,417 347,789 354,960 2,142,064 2,273,351
Actuarial gain on compensated absences - - - - - - (138,274) (99,291) - - - - (138,274) (99,291)
Contribution from deputationists /
employees (3,341) (2,969) - - - - - - - - (18,955) (19,169) (22,296) (22,138)
926,081 1,217,090 721,005 615,715 175,453 136,009 73,427 110,594 1,135,956 1,228,855 367,984 380,682 3,399,906 3,688,945
Other comprehensive income
Remeasurements:
Loss on remeasurement of assets 5,207,395 3,639,048 - - 40,546 36,327 - - - - - - 5,247,941 3,675,375
Gain due to change in financial
assumptions - (3,860,439) - (372,815) - - - - - - - - - (4,233,254)

adjustments 278,405 1,780,902 211,394 1,154,799 7,400 67,618 - - (295,050) (503,257) (23,497) (69,699) 178,652 2,430,363
5,485,800 1,559,511 211,394 781,984 47,946 103,945 - - (295,050) (503,257) (23,497) (69,699) 5,426,593 1,872,484
6,411,881 2,776,601 932,399 1,397,699 223,399 239,954 73,427 110,594 840,906 725,598 344,487 310,983 8,826,499 5,561,429
d) Significant actuarial assumptions at

the date of the statement of
financial position:
Discount rate 10.00% 10.00% 10.00% 10.00% 9.00% 9.00% 9.00% 9.00% 10.00% 10.00% 10.00% 10.00%
Future salary / medical cost increase 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 9.00% 9.00% 8.00% 8.00%
Future pension increase 6.25% 6.25% 6.25% 6.25% - - - - - - - -
Rate of increase in benevolent grant - - - - - - - - - - 2.00% 2.00%
Average duration of the obligation 21 years 21 years 30 years 30 years 6 years 6 years 6 to 7 years 6 to 7 years 23 years 24 years 17 years 17 years
Expected mortality rate SLIC 2001-2005 SLIC 2001-2005 SLIC 2001-2005 SLIC 2001-2005 SLIC 2001-2005 SLIC 2001-2005
Expected withdrawal rate Based on experience Based on experience Based on experience Based on experience Based on experience Based on experience
8.2 PTCL has accounted for pension increases, as approved by the Board of Trustees in accordance with the law and rules for calculating the pension
liability in the financial statements.
91
Defined benefit pension plan Defined benefit gratuity plan 8.6 The expected contributions in the next financial year to be paid to the funded pension plan and funded
Funded Funded gratuity plan by the Company are Rs 6,415,222 thousand and Rs 230,987 thousand respectively.
2018 2017 2018 2017
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
8.7 Sensitivity analysis
8.3 Changes in the fair value of plan assets The calculations of the defined benefits obligation is sensitive to the significant actuarial assumptions
Balance at beginning of the year 109,247,687 103,845,180 1,193,098 1,122,763 set out in note 8.1 (d). The table below summarizes how the defined benefit obligation at the end of the
Expected return on plan assets 10,646,628 11,298,820 107,379 106,662 reporting period would have increased / (decreased) as a result of change in the respective assumptions.
Total payments made to members on
behalf of fund - - 74,925 50,563 Impact on defined benefit obligation
Loss on remeasurement of assets (5,207,395) (3,639,048) (40,546) (36,327) 1% Increase 1% Decrease
Contributions made by the Company in assumption in assumption
during the year 2,779,570 5,253,506 - -
Rs ‘000 Rs ‘000
Benefits paid (8,342,388) (7,510,771) (74,925) (50,563)
Balance at end of the year 109,124,102 109,247,687 1,259,931 1,193,098 Future salary / medical cost
8.4 Plan assets for funded defined benefit pension plan are comprised as follows: Pension - funded 1,411,462 (1,299,741)
Pension - unfunded 508,907 (456,138)
2018 2017
Gratuity - funded 126,180 (112,553)
Rs ‘000 Percentage Rs ‘000 Percentage Accumulated compensated absences - unfunded 134,497 (120,341)
Debt instruments - unquoted Post-retirement medical facility - unfunded 1,337,877 (1,110,967)
- Special Savings Accounts 71,944,191 65.94 88,656,118 81.16 Discount rate
- Defense Savings Certificates 2,183,794 2.00 1,944,002 1.78 Pension - funded (8,725,020) 10,268,330
- Pakistan Investment Bonds 3,048,762 2.79 3,045,689 2.79
Pension - unfunded (759,539) 944,442
77,176,747 70.73 93,645,809 85.73 Gratuity - funded (110,618) 126,180
Cash and cash equivalents Accumulated compensated absences - unfunded (118,270) 134,497
- Term deposits 13,531,573 12.40 4,829,676 4.42 Post-retirement medical facility - unfunded (1,233,645) 1,509,631
- Equity securities 1,237,541 1.13 - 0.00 Benevolent grants - unfunded (26,193) 28,630
- Sukuks 1,226,970 1.12 - 0.00
- PIBs floating 680,960 0.62 - 0.00 Future pension increase
- Term finance certificates 81,000 0.07 - 0.00 Pension - funded 8,771,950 (7,534,933)
- Cash and bank balances 4,356,373 3.99 429,724 0.39 Pension - unfunded 404,873 (341,801)
21,114,417 19.33 5,259,400 4.81 Benevolent grants
Investment property Benevolent grants - unfunded 30,671 (28,418)
- Telecom tower 7,291,027 6.68 7,291,027 6.67
- Telehouse 1,886,122 1.73 1,881,680 1.72 Expected Mortality Rates
9,177,149 8.41 9,172,707 8.39 Increase by Decrease by
1 year 1 year
Fixed assets 6,346 0.01 6,597 0.01
Other assets 3,022,750 2.77 2,341,537 2.14 Rs ‘000 Rs ‘000
110,497,409 101.25 110,426,050 101.08
Pension - funded (2,652,871) 2,636,892
Liabilities Pension - unfunded (70,997) 69,090
- Staff retirement benefits (53,660) (0.05) (43,606) 0.00 Gratuity - funded (19,211) 18,692
- Amount due to PTCL (2,777) 0.00 (7,712) (0.01)
Accumulated compensated absences - unfunded (19,371) 18,848
- Accrued & other liabilities (130,504) (0.12) (115,506) (0.15)
- Provision for zakat (1,186,366) (1.08) (1,011,539) (0.92) Post-retirement medical facility - unfunded (308,721) 309,901
Benevolent grants - unfunded (100,047) 100,429
(1,373,307) (1.25) (1,178,363) (1.08)
109,124,102 100.00 109,247,687 100.00 The above sensitivity analyses are based on changes in assumptions while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.
8.5 Plan assets for defined gratuity fund are comprised as follows:
When calculating the sensitivity of defined benefit obligation to significant actuarial assumptions the same
2018 2017
method (present value of the defined benefit obligation calculated with the projected unit credit method at
Rs ‘000 Percentage Rs ‘000 Percentage
the end of the reporting period) has been applied when calculating the pension liability recognized within
Units of mutual funds 288,497 22.90 293,237 24.58 the statement of financial position.
Term deposit receipt 967,114 76.76 890,038 74.60
Other assets 1,686 0.13 7,540 0.63 8.8 Through its defined benefit pension plans the Company is exposed to a number of actuarial and investment
Bank balances 2,634 0.21 2,283 0.19 risks, the most significant of which include, interest rate risk, property market risk and longevity risk for
1,259,931 100.00 1,193,098 100.00 pension plan and salary increase risk for all the plans.
92 93
2018 2017 12. Contingencies and commitments

Rs ‘000 Rs ‘000
Contingencies
9. Deferred government grants Indirect Taxes
Balance at beginning of the year 8,059,878 8,594,920 12.1 Against the decision of Appellate Tribunal Inland Revenue (ATIR) upholding tax authorities’ decision to
Received during the year 300,000 263,626 impose FED amounting to Rs 365,098 thousand on Technical Services Assistance fee assuming that the fee
8,359,878 8,858,546 is against franchise arrangement for the period from July 2008-09 & 2010-11, PTCL has filed reference in
Income recognized during the year (518,241) (798,668) the Honorable Islamabad High Court. Accordingly, the stay order was granted by the Honorable Islamabad
Balance at end of the year 7,841,637 8,059,878 High Court. Similarly, against an order of the Punjab Revenue Authority (PRA) for the services sales tax,
a demand of Rs 461,629 thousand on Technical Services Assistance fee was raised assuming that the fee
This represents grants received from the Universal Service Fund, as assistance towards the development is against franchise arrangement for the period from October 2012 to December 2014. The appeal is sub
of telecommunication infrastructure in rural areas, comprising telecom infrastructure projects for basic judice before the Commissioner Appeals - PRA, and the stay order from the Honorable Lahore High Court
telecom access, transmission and broadband services spread across the country. is also in place against any coercive measures.
2018 2017 12.2 Based on an audit of certain monthly returns of FED, a demand of Rs 1,289,957 thousand was raised on
Note Rs ‘000 Rs ‘000 the premise that the Company did not apportion the input tax between allowable and exempt supplies. The
Restated Company is in appeal before ATIR, which is pending adjudication. Meanwhile, the Honorable Islamabad
High Court has granted a stay order in this regard against any coercive measures.
10. Trade and other payables
12.3 Against the decision of Sindh Revenue Board (SRB) imposing sales tax of Rs 4,417,000 thousand on revenues
Trade creditors 10.1 12,233,377 12,225,727
from international incoming calls from Nov, 2012 to Dec, 2013, the appeal is pending adjudication before
Accrued and other liabilities 26,851,061 25,177,794
the Commissioner Appeals. A stay order has been obtained from Honorable Sindh High Court against any
Technical services assistance fee 28.2 16,763,367 12,347,648
coercive action by SRB.
Advances from customers / contract liability 4,318,188 5,769,687
Retention money / payable to contractors and suppliers 10.1 6,000,635 5,142,146 12.4 Against the decision of the Customs Appellate Tribunal imposing additional custom duties, a reference
Income tax collected from subscribers / deducted at source 658,578 276,370 as well as writ petition against the decision is pending before the Honorable Sindh High Court. Further,
Sales tax payable 345,385 610,547 through the petition filed before the Honorable Sindh High Court, a stay order has been obtained against
Payable to GPF Trust 25,198 - order of the Tribunal. The Honorable Sindh High Court has stayed the recovery of the levies amounting to
67,195,789 61,549,919 Rs 932,942 thousand. Further, the Collector of Customs imposed additional duties and taxes amounting
to Rs 1,622,593 thousand against which the Company has filed an appeal before the Customs Appellate
10.1 Trade and other payables include payables to the following Tribunal.
related parties:
Income Tax
Trade creditors
Pak Telecom Mobile Limited 259,453 77,779 12.5 For the tax years 2007, 2009, 2010 and 2011, taxation officer disallowed certain expenses and tax credits.
U Microfinance Bank Limited 182 2,851 The impugned orders were challenged at the relevant appellate forums which allowed partial relief thereof.
DVCOM Data (Private) Limited 765,000 561,000 After taking into account the orders of CIR (Appeals), ATIR as well as rectification orders tax impact of
Etisalat - UAE 415,428 182,188 the disallowances is Rs 6,988,912 thousand. On the remaining outstanding items of tax years 2007, 2009
Etisalat’s subsidiaries and associates 97,336 65,133 and 2011, appeals are pending adjudication, since year 2011, 2017 and 2014, before ATIR and references
Telecom Foundation 57,649 57,611 of aforementioned four years are pending adjudication, since year 2011, 2012 and 2017, in the Honorable
TF Pipes Limited 4,271 5,558 Islamabad High Court as well.
GoP related entities 1,208,447 1,224,020
12.6 For the tax years 2012 to 2017 taxation officer disallowed certain expenses having tax impact of Rs
Retention money / payable to contractors and suppliers 37,198,443 thousand. Company’s appeals for tax years 2012 and 2015 having tax impact of Rs 13,148,836
TF Pipes Limited 2,751 7,832 thousand are remanded back by ATIR in the year 2018 for afresh assessment. For Tax Year 2013 & 2014
appeal is pending adjudication before ATIR since 2018. For Tax Year 2016 and 2017, the Company has been
These balances relate to the normal course of business of the Company and are interest free.
granted stay orders by the Honorable Islamabad High Court and ATIR respectively since 2018 against any
coercive measures.
11. Security deposits
These security deposits are received from customers for services to be provided and are refundable / Others
adjustable on termination of their relationship with the Company. These are non interest bearing and 12.7 In 2010, Pakistan Telecommunication Employees Trust (PTET) board approved the pension increase which
include security deposits of Rs 3,623 thousand (December 31, 2017: Rs 3,623 thousand) from Pak Telecom was less than the increase notified by the Government of Pakistan (GoP). Thereafter, pensioners filed
Mobile Limited (PTML), a related party. The Company has adjusted / paid a sum of Rs 108 thousand several Writ Petitions. After a series of hearings, on June 12, 2015 the Apex Court decided the case in the
(December 31, 2017: Rs 195 thousand) to its customers during the year against their balances. interest of pensioners. On July 13, 2015, Review Petition was filed in Supreme Court of Pakistan against the
Judgment of June 12, 2015.
94 95
The Honorable Supreme Court of Pakistan (Apex Court) disposed the Review Petitions filed by the Company,
(1,733,802) (260,384,515)
(56,672)
(2,739)
(13,550,839)
(1,046,393)
(2,001,092) (274,927,814)
(2,320,593)
(541)
(13,524,829)
(739,646)
(2,126,355) (286,872,237)
2,203,613 345,431,101
85,046,586
20,749,389
53,933
91,196,004
2,483,453 366,123,818
91,196,004
15,016,722
2,320,052
91,947,710
2,845,931 378,819,947
91,947,710
Rs ‘000
the Pakistan Telecommunication Employees Trust and the Federal Government (collectively, the Review
Total
Petitioners) vide the order dated May 17, 2017. Through the said order, the Apex Court directed the Review
Petitioners to seek remedy under section 12(2) CPC (Civil Procedure Code) which shall be decided by
(10,972)
(2,666)
(275,596)
(45,180)
(1)
(170,442)
469,811
290,812
8,306
-
482,361
482,361
407,658
45,179
-
719,576
719,576
the concerned Court in accordance with the law, and to pursue all grounds of law and fact in other cases
Vehicles
Rs ‘000
20
pending before High Courts. The Review Petitioners have filed the applications under section 12(2) CPC
before respective High Courts. However, PTET has implemented the Apex court decision dated June 12,
2015 to the extent of 343 pensioners who were the petitioners in the main case. Some of the interveners
(474,689)
(22,952)
(497,641)
(22,472)
(520,113)
600,435
125,746
14,481
-
-
-
-
117,275
614,916
117,275
46,156
-
-
-
-
140,959
661,072
140,959
and fittings
Furniture
Rs ‘000
(pensioners) seeking the same relief as allowed vide order dated June 12, 2015 have been directed by the
10
Apex Court to approach the appropriate forum on May 10, 2018. Under the circumstances, management
of the Company, on the basis of legal advice, believes that the Company’s obligations against benefits is
(1,398,443)
(45,691)
(64)
(220,304)
(1,573,120)
(25,793)
(27)
(235,265)
(1,782,619)
1,795,466
397,023
173,067
45,627
-
349,722
1,922,842
349,722
119,271
25,766
-
233,701
2,016,320
233,701
restricted to the extent of pension increases as determined solely by the Board of Trustees of the PTET in
equipment
Computer
33.33
Rs ‘000
accordance with the Pakistan Telecommunication (Re-Organization) Act, 1996 and the Pension Trust Rules
of 2012 and accordingly, no provision has been recognized in the Company’s financial statements.
(890,597)
(158,148)
(1,048,745)
(174,931)
(1,223,676)
1,913,673
1,023,076
323,601
-
-
-
-
1,188,529
2,237,274
1,188,529
323,435
-
-
-
-
1,337,033
2,560,709
1,337,033
equipment
12.8 The Company implemented policy directives of Ministry of Information Technology conveyed by the Pakistan
Rs ‘000
Office
10
Telecommunication Authority regarding termination of all international incoming calls into Pakistan. On
suspension of these directives by the Honorable Lahore High Court, the Honorable Supreme Court of
6.67 to 8.33
Pakistan dismissed the pertinent writ petitions by directing Competition Commission of Pakistan (CCP) to
(7,641,269)
(869,386)
(8,510,655)
(1,107,426)
(9,618,081)
12,174,690
4,533,421
5,492,357
-
-
-
-
9,156,392
17,667,047
9,156,392
452,682
-
-
-
-
8,501,648
18,119,729
8,501,648
Lines and Apparatus, plant Submarine
Rs ‘000
cables
decide the case. The Honorable Sindh High Court suspended the adverse decision of CCP and the case is
pending for adjudication.
and equipment
(545,110) (102,079,869) (140,547,537)
(8,302,546)
(1,046,393)
(570,777) (105,440,717) (149,896,476)
(2,249,620)
(513)
(7,950,599)
(739,646)
(598,000) (108,957,847) (156,337,614)

1,016,560 126,460,968 185,116,477
44,568,940
9,263,917
-
-
-
44,483,918
1,040,519 131,418,876 194,380,394
44,483,918
7,963,381
2,249,107
12.9 A total of 1,677 cases (December 31, 2017: 1,821) against PTCL involving Regulatory, Telecom Operators
43,756,541
1,164,496 136,753,028 200,094,155
43,756,541
10 to 20
Rs ‘000
Employees and Subscribers. Because of number of cases and their uncertain nature, it is not possible to
quantify their financial impact. Management and legal advisors of the Company are of the view that the
outcome of these cases is expected to be favorable and liability, if any, arising on the settlement is not likely
(3,360,848)
(3,517,130)
24,381,099
4,957,908
-
-
-
-
25,978,159
25,978,159
5,334,152
-
-
-
-
27,795,181
27,795,181
Rs ‘000
to be material.
wires
7
No provision on account of above contingencies has been made in these financial statements as the
management and the tax / legal advisors of the Company are of the view, that these matters will eventually
(25,667)
(27,223)
471,450
23,959
-
-
-
-
469,742
469,742
123,977
-
-
-
-
566,496
566,496
Leasehold
Rs ‘000
be settled in favor of the Company.
2.5
land
2018 2017
Buildings on
Rs ‘000 Rs ‘000
(5,040,059)
(314,115)
(5,354,174)
(318,064)
(5,672,238)
12,421,504
7,381,445
209,287
-
-
-
-
7,276,617
12,630,791
7,276,617
246,010
-
-
-
-
7,204,563
12,876,801
7,204,563
Freehold
Rs ‘000
12.10 Bank guarantees and bid bonds issued in favor of:
land
2.5
Universal Service Fund (USF) against government grants 4,530,296 5,076,470
Others 2,649,064 1,769,436
(33,140)
(1,277)
(34,417)
(1,277)
(35,694)
1 to 3.3
90,026
56,886
-
-
-
-
55,609
90,026
55,609
-
-
-
-
54,332
90,026
54,332
Leasehold
Rs ‘000
7,179,360 6,845,906
Land
12.11 Commitments
(9)
(9)
1,637,689
-
1,637,689
-
-
1,637,680
1,637,680
-
1,637,680
-
-
-
-
-
1,637,680
1,637,680
-
1,637,680
- note 13.2
Freehold
Rs ‘000
-
(a) Contracts for capital expenditure 5,727,341 5,682,111
(b) All property rentals are under cancellable operating lease arrangements and are due as follows:
Depreciation charge for the year - note 13.4
Depreciation charge for the year - note 13.4

Accumulated depreciation and impairment

2018 2017
13.1 Operating fixed assets
Rs ‘000 Rs ‘000
Annual rate of depreciation (%)

Impairment charge - note 13.5
Impairment charge - note 13.5

Accumulated depreciation
Accumulated depreciation
Not later than one year 380,810 302,638
As at December 31, 2016

Later than one year and not later than five years 1,581,623 1,188,314
Movement during 2017
Disposals - note 13.3

Later than five years 174,095 613,124
Net book Value
Net book Value
Net book Value
Net book Value
Net book Value

13. Property, plant and equipment
Disposals
Additions
Additions
Cost
Cost
Cost
Cost
Cost
Operating fixed assets 13.1 91,947,710 91,196,004
Capital work in progress 13.6 14,203,712 9,341,115
106,151,422 100,537,119
96 97
13.2 As explained in note 1, the property and rights vesting in the operating assets, as at January 01, 1996, 2018 2017
were transferred to the Company from the Pakistan Telecommunication Corporation under the Pakistan Rs ‘000 Rs ‘000
Telecommunication (Re-organization) Act, 1996; however, the title to and possession and control of certain
freehold land and properties were not formally transferred in the name of the Company in the land revenue 13.7 Movement during the year
records. The Company has initiated the process of transfer of titles to freehold land, in its own name, in Balance at beginning of the year 9,341,115 9,732,897
previous years, which is still ongoing and shall be completed in due course of time. Further, in view of Additions during the year 19,973,960 20,306,856
large number of properties i.e. over three thousand, located across Pakistan, it is impracticable to disclose
the details of properties in the financial statements as required under paragrapghs VI.1(ii) and VI.12 of the Transfers during the year
4th Schedule to the Companies Act, 2017 and the Company is in process of obtaining exemption from the - operating fixed assets (14,888,669) (20,610,757)
Securities and Exchange Commission of Pakistan from these disclosure requirments. - intangible assets (222,694) (87,881)
13.3 Disposals of property, plant and equipment: (15,111,363) (20,698,638)

Balance at end of the year 14,203,712 9,341,115
Accumulated Net book Sale Gain / (loss) Mode of Particulars of
Cost depreciation value proceeds on disposal disposal purchaser This includes Rs 10,858,984 thousand ( December 31, 2017 : Rs 9,060,796 thousand) spent on transformation
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 of network exchanges and Rs 2,098,869 thousand (December 31, 2017: Rs 1,646,663 thousand), in respect
of direct overheads relating to development of assets.
Apparatus, Plant & Equipment 2,249,620 2,249,107 513 38,933 38,420 Auction Various buyers
Computer Equipment 25,793 25,766 27 2,059 2,032 Auction Various buyers Licenses and Computer
Motor Vehicles 45,180 45,179 1 41,665 41,664 Auction Various buyers Note spectrum software Total
2,320,593 2,320,052 541 82,657 82,116 Rs ‘000 Rs ‘000 Rs ‘000
None of the assets disposed off during the year had book value exceeding five hundred thousand rupees. 14. Intangible assets
13.4 The depreciation charge for the year has been allocated as follows:
Cost 4,129,794 1,731,654 5,861,448
2018 2017
Accumulated amortization (2,550,880) (977,779) (3,528,659)
Net book value 1,578,914 753,875 2,332,789
Cost of services 27 13,240,311 13,258,895
Administrative and general expenses 28 213,388 218,958 Movement during 2017
Selling and marketing expenses 29 71,130 72,986 Opening net book value 1,578,914 753,875 2,332,789
13,524,829 13,550,839 Additions 37,000 50,881 87,881
Amortization charge for the year (206,684) (331,118) (537,802)
13.5 The carrying amount of certain items of apparatus, plant and equipment and lines and wires have been
reduced to their recoverable amount through recognition of an impairment loss of Rs 739,646 thousand Net book value 1,409,230 473,638 1,882,868
(December 31, 2017: 1,046,393 thousand). This loss has been included in ‘cost of services’ in the statement
of profit or loss. The impairment charge arose due to obsolescence of WLL assets, servers, and other As at December 31, 2017
assets classified in apparatus, plant and equipment. Cost 4,166,794 1,782,535 5,949,329
2018 2017 Accumulated amortization (2,757,564) (1,308,897) (4,066,461)
Net book value 1,409,230 473,638 1,882,868
13.6 Capital work in progress
Buildings 719,882 693,864
Opening net book value 1,409,230 473,638 1,882,868
Lines and wires 5,338,033 4,009,433
Apparatus, plant and equipment 3,095,018 2,348,524 Additions - 222,694 222,694
Turnkey projects 5,048,425 2,286,440 Amortization charge for the year 27 (206,067) (208,770) (414,837)
Others 2,354 2,854 Net book value 14.1 1,203,163 487,562 1,690,725
13.7 14,203,712 9,341,115
Cost 4,166,794 2,005,229 6,172,023
Accumulated amortization (2,963,631) (1,517,667) (4,481,298)
Net book value 1,203,163 487,562 1,690,725
Annual rate of amortization (%) 4 - 10 6.67 - 20
98 99
2018 2017 2018 2017

14.1 Breakup of net book values as at year end is as follows : 15.1 Investments in subsidiaries and associate - at cost (unquoted)
Licenses and spectrum Wholly owned subsidiaries
Telecom 14.2 19,945 29,919 Pak Telecom Mobile Limited - Islamabad 6,500,000 6,500,000
WLL spectrum 14.2 1,029,212 1,208,210 650,000,000 (December 31, 2017: 650,000,000)
WLL and LDI License 14.3 125,023 138,418 ordinary shares of Rs 10 each
IPTV 14.4 28,983 32,683 Shares held 100% (December 31, 2017: 100%)
1,203,163 1,409,230 U Microfinance Bank Limited - Islamabad 2,283,857 1,283,857
Computer software 487,562 473,638 228,571,429 (December 31, 2017: 128,571,429)
ordinary shares of Rs 10 each
1,690,725 1,882,868
Shares held 100% (December 31, 2017: 100%)
14.2 The Pakistan Telecommunication Authority (PTA) has issued a license to the Company, to provide DVCOM Data (Private) Limited - Karachi 1,000 1,000
telecommunication services in Pakistan, for a period of 25 years, commencing January 01,1996, at an 10,000 (December 31, 2017: 10,000 )
agreed license fee of Rs 249,344 thousand. In June 2005 PTA modified the previously issued license to ordinary shares of Rs 100 each
provide telecommunication services to include a spectrum license at an agreed license fee of Rs 3,646,884 Shares held 100% (December 31, 2017: 100%)
thousand. This license allows the Company to provide Wireless Local Loop (WLL) services in Pakistan, over Smart Sky (Private) Limited - Islamabad 100,000 100,000
a period of 20 years, commencing October 2004. The cost of the license is being amortized on a straight 10,000,000 (December 31, 2017: 10,000,000)
line basis over the period of the license. ordinary shares of Rs 10 each
Shares held 100% (December 31, 2017: 100%)
14.3 PTA has issued a license under section 5 of the Azad Jammu and Kashmir Council Adaptation of Pakistan
Telecommunication (Re-organization) Act, 1996, the Northern Areas Telecommunication (Re-organization) 8,884,857 7,884,857
Act, 2005 and the Northern Areas Telecommunication (Re-organization) (Adaptation and Enforcement) Associate
Order 2006, to the Company to establish, maintain and operate a telecommunication system in Azad TF Pipes Limited - Islamabad
Jammu and Kashmir (AJ&K) and Gilgit-Baltistan (GB), for a period of 20 years, commencing May 28, 2008, 1,658,520 (December 31, 2017: 1,658,520)
at an agreed license fee of Rs 109,270 thousand. During the year 2015, PTA allocated additional spectrum ordinary shares of Rs 10 each
for WLL services in AJ&K and GB for Rs 98,487 thousand. The duration of the License shall be for the
remaining period of the existing WLL licenses. The cost of the licenses is being amortized, on a straight Shares held 40% (December 31, 2017: 40%) 23,539 23,539
line basis, over the period of the licenses. Less: accumulated impairment loss on investment 15.1.1 (23,539) (14,996)
- 8,543
14.4 IPTV license has been renewed by Pakistan Electronic Media Regulatory Authority (PEMRA) effective from 8,884,857 7,893,400
its last renewal date i.e. November 02, 2016, at an agreed license fee of Rs 37,000 thousand. The cost of
the license is being amortized, on a straight line basis, over a period of 10 years.
15.1.1 Accumulated impairment loss - January 01, 2018 14,996 14,996
2018 2017
Accumulated impairment loss recorded during the year 8,543 -
Note Rs ‘000 Rs ‘000 Accumulated impairment loss - December 31, 2018 23,539 14,996
15. Long term investments All subsidiaries and associated companies are incorporated in Pakistan.
Investments in subsidiaries and associate 15.1 8,884,857 7,893,400 Investments in subsidiaries and associated companies have been made in accordance with the requirements
Other investments 15.2 83,900 83,900 of the Companies Act, 2017 (repealed Companies Ordinance, 1984).
8,968,757 7,977,300
100 101
2018 2017 16.3 Reconciliation of carrying amounts of loans to executives and other employees:
As at As at
15.2 Other investments January 01, 2018 Disbursements Repayments Write offs December 31, 2018
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Fair value through other comprehensive
income (FVOCI) - unquoted Executives * - 107,658 (14,235) - 93,423
Thuraya Satellite Telecommunication Company - Dubai, UAE Other employees* 599,598 440,245 (147,822) - 892,021
3,670,000 (December 31, 2017: 3,670,000) 599,598 547,903 (162,057) - 985,444
ordinary shares of AED 1 each 63,900 63,900
Alcatel - Lucent Pakistan Limited - Islamabad As at As at
2,000,000 (December 31, 2017: 2,000,000) January 01, 2017 Disbursements Repayments Write offs December 31, 2017
ordinary shares of Rs 10 each 20,000 20,000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
15.2.1 83,900 83,900
Executives * - - - - -
Other employees* 476,060 278,395 (153,981) (876) 599,598
15.2.1 At January 01, 2018, the Company designated the investments shown as equity securities as FVOCI because
these equity securities represents investments that the Company intends to hold for the long term for 476,060 278,395 (153,981) (876) 599,598
strategic purposes. In 2017, these investments were classified as available for sale.
2018 2017
2018 2017 Rs ‘000 Rs ‘000
Maximum amount of loan to executives and other employees
16. Long term loans and advances - considered good outstanding at any time during the year:
Loans to PTML - unsecured 16.1 6,000,000 5,000,000 Executives 93,423 -

Loans to Ubank - unsecured 16.2 4,000,000 - Other Employees 919,954 599,598
Loans to employees - secured 16.3 985,444 599,598 16.4 These loans and advances are for house building and purchase of vehicles, motor cycles and bicycles.
Imputed interest (203,790) (156,290) These loans are recoverable in equal monthly installments spread over a period of 5 to 10 years and are
16.4 781,654 443,308 secured against retirement benefits of the employees.
10,781,654 5,443,308 These balances include loans aggregating Rs 156,693 thousand (December 31, 2017: nil) provided to 88
Others 74,333 57,819 employees having individual balance exceeding Rupees one million. Loans to executive employees include
loans aggregating Rs 13,573 thousand (2017: nil) provided to 2 key management personnel. The maximum
10,855,987 5,501,127 aggregate amount of loans to key management personnel outstanding at any time during the year was
Current portion shown under current assets Rs 17,426 thousand (2017: nil). The Company has applied to the Securities and Exchange Commission of
Loans to employees - secured 20 (165,848) (99,975) Pakistan for exemption from disclosure requirments under paragraphs VI.19 and VI.21 of the 4th Schedule
to the Companies Act, 2017.
10,690,139 5,401,152
* Comparative figures have been restated to reflect changes in the definition of executives as per Companies
16.1 This represents unsecured loan of Rs 6,000,000 thousand (December 31, 2017: Rs 5,000,000 thousand) to Act, 2017.
Pak Telecom Mobile Limited (PTML) a wholly owned subsidiary of the Company, under subordinated debt
agreement. It is recoverable in twelve equal quarterly installments commencing after a grace period of 17. Contract Cost
four years in 2022, and carries mark-up at the rate of three month KIBOR plus 24 basis points. Maximum Management expects that incremental costs for obtaining new subscribers are recoverable. The company
aggregate amount outstanding at any time during the year amounted to Rs 6,000,000 thousand. has therefore capitalized them as contract costs. These costs are amortized over the expected average
customer life. There was no impairment loss in relation to the costs capitalized.
16.2 This represents unsecured loan of Rs 4,000,000 thousand (December 31, 2017: nil) to U-Microfinance
2018 2017
Bank Ltd a wholly owned subsidiary of the Company, under subordinated debt agreement. The loan is
Rs ‘000 Rs ‘000
recoverable in 4 semi-annual installments commencing after a grace period of five years in 2024, and Restated
carries mark-up at the rate of three month KIBOR plus 2%. Maximum aggregate amount outstanding at
any time during the year amounted to Rs 4,000,000 thousand. Cost to obtain a contract 196,610 178,819
Cost to fulfill a contract 1,261,397 1,021,366
17.1 1,458,007 1,200,185
Current maturity of contract costs (1,093,505) (900,139)
364,502 300,046
102 103
2018 2017 19.1 These include amounts due from the following related parties:
Restated Up to More than 2018 2017
6 months 6 months Rs ‘000 Rs ‘000
17.1 Movement during the year
Balance at the beginning of the year 1,200,185 1,033,932 Pak Telecom Mobile Limited 330,122 - 330,122 925,100
Capitalization during the year 2,251,475 1,864,747 U Microfinance Bank Limited 1,512 - 1,512 472
3,451,660 2,898,679 GoP related entities 64,847 1,246,150 1,310,997 1,290,212
Amortization during the year (1,993,653) (1,698,494) 396,481 1,246,150 1,642,631 2,215,784
19.2 These include amounts due from the following related parties:
18. Stores and spares
Up to More than 2018 2017
Stores and spares 7,342,604 4,899,323 6 months 6 months Rs ‘000 Rs ‘000
Provision for obsolescence 18.1 (1,275,029) (1,265,754)
6,067,575 3,633,569 Etisalat - UAE 948,434 1,804,282 2,752,716 893,675
Etisalat - Afghanistan 63,262 - 63,262 39,237
18.1 Provision for obsolescence Etihad Etisalat Company 14,316 - 14,316 -
GoP related entities 21,350 60,624 81,974 102,119
Balance at beginning of the year 1,265,754 1,302,176
Provision during the year 27.2 9,275 51,138 1,047,362 1,864,906 2,912,268 1,035,031
1,275,029 1,353,314 19.3 The maximum aggregate amount of receivable due from related parties at the end of any month during
Provision reversed during the year - (87,560) the year was Rs 7,318,760 thousand.
2018 2017
2018 2017 Note Rs ‘000 Rs ‘000
19.4 Provision for doubtful debts
19. Trade debts and contract assets Balance at beginning of the year 8,167,181 7,997,652
Trade debts 10,969,915 10,943,840 Provision for the year 28.5 2,116,863 1,946,019
Contract asset 5,208,608 5,096,384 10,284,044 9,943,671
16,178,523 16,040,224 Write off against provision (3,008,751) (1,776,490)
Domestic
Considered good 19.1 11,954,206 12,965,152 These amounts are interest free and are accrued in the normal course of business.
Considered doubtful 7,217,817 8,101,911
2018 2017
19,172,023 21,067,063 Note Rs ‘000 Rs ‘000
International
Considered good 19.2 4,224,318 3,075,072 20. Loans and advances - considered good
Considered doubtful 57,475 65,270 Current portion of long term loans to employees 16 165,848 99,975
4,281,793 3,140,342 Advances to suppliers and contractors 20.1 1,575,574 1,411,694
Others 21,048 35,137
23,453,816 24,207,405
Provision for doubtful debts 19.4 (7,275,293) (8,167,181) 1,762,470 1,546,806
16,178,523 16,040,224 20.1 These include Rs 27,095 thousand (December 31, 2017: Rs 52,533 thousand) to TF Pipes Limited, a related
party.
104 105
2018 2017 23.3 This represents payments under protest on account of FED on interconnect charges. Since Appellate
Note Rs ‘000 Rs ‘000 Tribunal Inland Revenue (ATIR) has decided the case in favor of PTCL, tax department has filed reference
Restated in Honorable Islamabad High Court.
21. Income tax recoverable 23.4 The maximum aggregate amount of other receivable due from related parties at the end of any month
Balance at beginning of the year 15,253,394 14,261,078 during the year was Rs 10,601 thousand.
Current tax charge for the year - P&L (3,488,880) (4,684,008)
Tax credit on re-measurement losses - OCI 1,573,712 561,745 23.5 This amount includes TSA fee receivable from PTML of Rs 7,129,511 thousand (December 31, 2017:
Tax paid during the year 3,140,097 2,869,694 Rs 5,147,462 thousand).
Consideration paid to PTML for purchase of tax losses 21.1 - 2,244,885 2018 2017
Balance at end of the year 16,478,323 15,253,394 Note Rs ‘000 Rs ‘000
21.1 The Company had purchased the tax loss for the financial year 2015, amounting to Rs 7,015,266 thousand 24. Short term investments
having a tax impact of Rs 2,244,885 thousand from its subsidiary PTML, allowed under the Group relief Market treasury bills - Amortized cost 980,221 -
clause 59B of the Income Tax Ordinance, 2001. Investment in mutual funds - FVTPL 3,950,149 -
Investment in mutual funds - Available for sale 2,527,000
22. Receivable from the Government of Pakistan (GoP) Term deposits - Amortized cost
This represents the balance amount receivable from the Government of Pakistan, on account of its agreed maturity up to 6 months - 3,080,778
share in the Voluntary Separation Scheme, offered to the Company’s employees during the year ended 4,930,370 5,607,778
June 30, 2008.
2018 2017 25. Cash and bank balances
Cash in hand 258,774 85
23. Prepayments and other receivables Balances with banks:
Prepayments Deposit accounts - local currency 25.1 829,885 13,743,769
- Pakistan Telecommunication Authority - related party 43,130 45,616 Current accounts
- Prepaid rent and others 293,563 393,243 Local currency 1,967,619 96,517
336,693 438,859 Foreign currency- USD 16,746 thousand
(December 31, 2017: USD 3,653 thousand) 2,318,748 402,928
Other Receivables
Due from related parties 23.1 10,505,985 8,086,897 4,286,367 499,445
Federal Excise Duty (FED) 23.2 2,816,935 2,816,935 25.2 5,375,026 14,243,299
Others 468,811 517,962
25.1 The balances in deposit accounts, carry mark-up ranging between 3.00% and 8.50% (December 31, 2017:
14,128,424 11,860,653
3% and 8.5%) per annum. These deposit accounts include Rs 110 thousand (December 31, 2017: Rs
1,130,877 thousand ) with U Microfinance Bank Limited - a related party. The maximum aggregate amount
Up to More than 2018 2017 outstanding at the end of any month during the year amounts to Rs 110 thousand.
6 months 6 months Rs ‘000 Rs ‘000
25.2 Bank balances include Rs 15,343 thousand (December 31, 2017: Rs 39,076 thousand) carrying profit
23.1 Pak Telecom Mobile Limited - Note 23.5 1,073,322 6,075,147 7,148,469 5,194,148 ranging from 2.4% to 4% (December 31, 2017: 2.4% to 4%) per annum from Shariah arrangements.
Etisalat, UAE - 71,305 71,305 71,305
2018 2017
Pakistan Telecommunication Note Rs ‘000 Rs ‘000
Employees Trust 2,777 - 2,777 7,712 Restated
PTCL Employees GPF Trust - - - 55,748
Smart Sky (Pvt) Limited 150 - 150 - 26. Revenue
DVCOM Data (Pvt) Limited 75 3,226,108 3,226,183 2,734,024
Interest on subordinated loan to PTML 55,726 - 55,726 23,960 Broadband & IPTV 26,853,805 25,221,483
Interest on subordinated loan to Ubank 1,375 - 1,375 - Voice services 14,279,300 15,406,854
Wireless data 3,069,397 4,483,576
1,133,425 9,372,560 10,505,985 8,086,897
Revenue from retail customers 44,202,502 45,111,913
Corporate 6,917,675 6,117,562
23.2 Federal Excise Duty 3,283,111 3,283,111
Carrier and wholesale 11,926,751 10,495,735
Provision for doubtful amount (466,176) (466,176)
International 26.1 7,052,698 7,894,392
23.3 2,816,935 2,816,935
Total Revenue 26.2 70,099,626 69,619,602
106 107
26.1 International revenue represents revenue from foreign network operators, for calls that originate outside 28.1 This includes Rs 288,226 thousand (December 31, 2017: Rs 312,730 thousand) in respect of employees
Pakistan, and has been shown net of interconnect costs relating to other operators and Access Promotion retirement benefits.
Charges, aggregating to Rs 967,317 thousand (December 31, 2017: Rs 2,268,616 thousand). 28.2 This represents the Company’s share of the amount payable to Etisalat - UAE, a related party, under an
26.2 Revenue is net of trade discount of Rs 99,840 thousand (December 31, 2017:Rs 173,847 thousand) and agreement for technical services, at the rate of 3.5%, of the PTCL group’s consolidated revenue.
Federal Excise Duty / Sales Tax of Rs 9,269,614 thousand (December 31, 2017: Rs 7,161,128 thousand). 2018 2017
Rs ‘000 Rs ‘000
2018 2017
Note Rs ‘000 Rs ‘000 28.3 This includes auditors’ remuneration as follows:
Restated
Statutory audit, including half yearly review 7,000 7,000
27. Cost of services Out of pocket expenses 500 500
Salaries, allowances and other benefits 27.1 11,923,645 11,483,633 7,500 7,500
Outsourced staff cost 1,122,463 998,689
Interconnect costs 1,702,758 1,902,068 28.4 This represents the Company’s contribution to the National Information Communication Technology
Foreign operators costs and satellite charges 7,751,196 7,043,864 Research and Development Fund (National ICT R&D Fund), at the rate of 0.5% of its gross revenue less
Fuel and power 4,253,145 4,259,471 inter operator payments and related PTA / FAB mandated payments, in accordance with the terms and
Cost of devices sold 1,731,041 1,327,284 conditions of its license to provide telecommunication services.
Subscribers acquisition cost 1,709,868 1,572,636
Rent, rates and taxes 2,037,486 2,185,768 28.5 This amount is net of recoveries amounting to Rs 160,982 thousand (December 31, 2017: Rs 250,708
Repairs and maintenance 4,052,458 3,775,135 thousand).
Printing and stationery 478,786 457,546 28.6 Other expenses include impairment of investment in TF Pipes amounting to Rs 8,543 thousand (December
Security service charges 634,551 657,652 31, 2017: nil).
Depreciation on property, plant and equipment 13.4 13,240,311 13,258,895
Amortization of intangible assets 14 414,837 537,802 Other expenses also include following donations that exceed Rs 500,000:
Impairment on property, plant and equipment 13.5 739,646 1,046,393
2018 2017
Annual license fee to Pakistan
Name of Donees Rs ‘000 Rs ‘000
Telecommunication Authority (PTA) 398,657 398,336
Other expenses 27.2 67,046 113,341 World Wildlife Fund 2,950 -
52,257,894 51,018,513 Roshni Homes Trust 500 -
The Kaghan Memorial Trust - 3,812
27.1 This includes Rs 2,828,801 thousand (December 31, 2017: Rs 3,069,286 thousand) in respect of employees 3,450 3,812
retirement benefits.
27.2 This includes provision for obsolete stores of Rs 9,275 thousand (December 31, 2017: Rs 51,138 thousand). 2018 2017
2018 2017
Restated
29. Selling and marketing expenses
28. Administrative and general expenses
Salaries, allowances and other benefits 29.1 1,192,364 1,148,364
Salaries, allowances and other benefits 28.1 1,214,900 1,170,068
Outsourced staff cost 112,246 99,869
Outsourced staff cost 168,370 149,803
Sales and distribution charges 536,065 491,913
Fuel and power 320,119 320,594
Advertisement and publicity 782,592 813,332
Rent, rates and taxes 140,206 119,062
Fuel and power 94,515 94,655
Travelling and conveyance 112,939 117,760
Depreciation on property, plant and equipment 13.4 71,130 72,986
Technical services assistance fee 28.2 2,383,565 2,361,541
Other expenses 82,508 85,202
Legal and professional charges 28.3 288,129 747,145
Depreciation on property, plant and equipment 13.4 213,388 218,958 2,871,420 2,806,321
Contribution to R&D and USF 28.4 1,165,647 1,256,890
Provision against doubtful debts 28.5 1,955,881 1,695,310 29.1 This includes Rs 282,880 thousand (December 31, 2017: Rs 306,929 thousand) in respect of employees
Postage and courier services 319,221 267,127 retirement benefits.
Other expenses 28.6 173,823 193,220
8,456,188 8,617,478
108 109
2018 2017 2018 2017

32.1 Reconciliation of effective tax rate
30. Other income
Profit before tax (Rupees in thousand) 10,757,169 12,873,873
Income from financial assets:
Return on bank deposits 30.1 680,623 1,591,527 % %
Late payment surcharge from subscribers 280,251 304,568
Interest on subordinated long term loans Applicable tax rate 29.00 30.00
to subsidiaries 406,361 23,960
Super tax charge 3.52 3.17
Gain on mutual funds (FVTPL) 238,552 -
Impact of change in tax rate (2.20) (1.82)
Dividend income from Ubank 114,286 -
Dividend chargeable at lower tax rate (0.40) -
1,720,073 1,920,055 Others 1.08 3.65
Income from non-financial assets: 2.00 5.00
Write back of liabilities 30.2 1,580,167 2,538,492 Average effective tax rate 31.00 35.00
Government grants recognized 30.3 488,005 798,668
Pre-deposit income 272,612 326,085 The applicable income tax rate was reduced from 30% to 29% during the year.
Late delivery charges from vendors 209,643 13,834
Gain on disposal of property, plant and equipment 82,116 143,857 32.2 The Company has filed income tax returns under self assessment scheme under section 114 (1) of ITO
Scrap sales 193,865 1,312 2001 and all three years’ assessments are under process.
Recovery from written off receivables 68,220 80,243
Rental income 81,055 32,616 As per the management’s assessment, sufficient tax provision has been made in the Company’s financial
Others 101,117 146,032 statements. The comparison of tax provision as per the financial statements viz-a-viz tax return for last
three years is as follows:
4,796,873 6,001,194
Tax Tax
charge in liability as
30.1 Return on bank deposits includes Rs 227 thousand (December 31, 2017: Rs 314 thousand) earned from
accounts per return
Shariah arrangements. Financial year Rs ‘000 Rs ‘000
30.2 Liabilities written back on successful settlement and court decision in favor of the Company.
2017 - restated 4,684,008 1,156,152
30.3 This amount is net of operating expenditure subsidy amounting to Rs 30,236 thousand ( December 31, 2017 2016 4,455,826 3,196,045
: nil) 2015 5,264,291 1,105,730
2018 2017
Rs ‘000 Rs ‘000
2018 2017
Restated
31. Finance costs
Bank and other charges 183,879 189,545 33. Earnings per share - basic and diluted
Imputed interest on employee loans 46,929 38,066
Exchange loss 323,020 77,000 Profit for the year Rupees in thousand 7,422,447 8,368,017
553,828 304,611 Weighted average number
of ordinary shares Numbers in thousand 5,100,000 5,100,000
2018 2017
Note Rs ‘000 Rs ‘000 Earnings per share Rupees 1.46 1.64
Restated
34. Non-funded finance facilities
32. Taxation
The Company has non-funded finance facilities available with banks, which include facilities to avail letters
Current 3,488,880 4,684,008 of credit and letters of guarantee. The aggregate facility of Rs 19,800,000 thousand (December 31, 2017:
Deferred 7.1 (154,158) (178,152) Rs 16,500,000 thousand) and Rs 17,800,000 thousand (December 31, 2017: Rs 17,300,000 thousand) is
3,334,722 4,505,856 available for letters of credit and letters of guarantee respectively, out of which the facilities availed at the
year end are Rs 4,162,650 thousand (December 31, 2017: Rs 4,216,000 thousand) and Rs 9,210,000 thousand
(December 31, 2017: Rs 6,845,906 thousand) respectively. The letter of guarantee facilities are secured
by a hypothecation charge over certain assets of the Company, amounting to Rs 29,968,000 thousand
(December 31, 2017: Rs 26,718,000 thousand).
110 111
2018 2017 37. Remuneration of Directors, Chief Executive Officer and Executives
Rs ‘000 Rs ‘000
Restated The aggregate amounts charged in the financial statements for remuneration, including all benefits, to the
Chairman, Chief Executive Officer and Executives of the Company are as follows:
35. Cash generated from operations
Chairman Chief Executive Officer Executives
Key management Other
Adjustments for non-cash charges and other items: personnel executives
Depreciation and amortization 13,939,666 14,088,641
2018 2017 2018 2017 2018 2017 2018 2017
Impairment on PPE 739,646 1,046,393
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Amortization of contract cost 1,993,653 1,698,494 Restated
Provision for obsolete stores and spares 9,275 51,138
Provision for doubtful debts 1,955,881 1,695,310 Managerial remuneration - - 196,544 203,358 264,074 265,236 473,634 379,568
Impairment on investment 8,543 - Honorarium 300 300 - - - - - -
Provision for employees retirement benefits 3,399,906 3,688,945 Bonus paid - - 61,280 79,429 52,809 32,388 59,536 49,137
Gain on disposal of property, plant and equipment (77,039) (143,857) Retirement benefits - - 21,263 18,240 23,141 16,934 43,271 32,272
Return on bank deposits (680,623) (1,591,527) Housing - - 11,047 11,699 89,117 86,491 164,916 135,448
Imputed interest on long term loans 46,587 38,066 Utilities - - - - 19,858 19,220 37,018 31,049
Return on subordinated long term loans to subsidiaries (406,361) (23,960)
300 300 290,134 312,726 448,999 420,269 778,375 627,474
Dividend income (114,286) -
Release of deferred government grants (518,241) (798,668)
Number of persons 1 1 1 1 38 40 196 164
31,053,776 32,622,848
Effect of cash flows due to working capital changes Tax on salary of the Chief Executive Officer amounting to Rs 74,955 thousand (2017: Rs 91,085 thousand) is
Decrease / (increase) in current assets: borne by the Company as per contract terms.
Stores and spares (2,443,281) (941,913)
The Company also provides free medical and limited residential telephone facilities, to all its Executives,
Trade debts (2,094,181) (3,507,560)
including the Chief Executive Officer. The Chairman is entitled to free transport and a limited residential
Loans and advances (163,880) (831,232)
telephone facility, whereas, the Directors of the Company are provided only with limited telephone facilities;
Prepayments and other receivables (2,322,992) (547,524)
certain executives are also provided with the Company maintained cars.
Contract cost (2,251,475) (1,864,747)
(9,275,809) (7,692,976) Aggregate amount charged in the financial statements for the year ended December 31, 2018 as fee to 9
Increase in current liabilities: directors is Rs 58,250 thousand, for attending Board of Directors and subcommittee meetings.
Trade and other payables 5,645,871 7,706,201
Security deposits 25,593 397 38. Rates of exchange
27,449,431 32,636,470 Assets in US dollars have been translated into Rupees at USD 1 = Rs 138.60 (December 31, 2017: USD 1 =
Rs 110.30), while liabilities in US dollars have been translated into Rupees at USD 1 = Rs 139.10 (December
36. Reconciliation of movement of liabilities to cash flow arising from financing activities: 31, 2017: USD 110.50).
Liabilities Equity
Long-term Revenue
Financing Reserves Total
Rs ‘000 Rs ‘000 Rs ‘000
Balance as at January 01, 2018 210,187 34,101,786 34,311,973

Dividend declared during the year 5,100,000 - 5,100,000
Dividend paid during the year (5,045,351) - (5,045,351)
Total equity related changes - (1,530,434) (1,530,434)
Balance as at December 31, 2018 264,836 32,571,352 32,836,188
2018 2017
Rs ‘000 Rs ‘000
36.1 Cash and cash equivalents

Short term investments 24 4,930,370 2,527,000
Cash and bank balances 25 5,375,026 14,243,299
10,305,396 16,770,299
112 113
39. Employees’ provident fund The Company is exposed to currency risk arising from various currency exposures, primarily with respect
to the United States Dollar (USD), Arab Emirates Dirham (AED) and EURO (EUR). Currently, the Company’s
Details of the Company’s employees provident fund are given below:
foreign exchange risk exposure is restricted to the amounts receivable from / payable to foreign entities.
2018 2017 The Company’s exposure to currency risk is as follows:
Rs ‘000 Rs ‘000
2018 2017
Total assets 3,962,627 3,940,869 Rs ‘000 Rs ‘000
Cost of investments made 3,562,865 3,478,444
Percentage of investments made 89.91 88.27 USD
Fair value of investments 3,803,300 3,658,399 Trade and other payables (4,178,979) (4,012,680)
Trade debts 4,281,793 3,140,342
2018 2017 Cash and bank balances 2,318,748 402,928
Rs ‘000 Percentage Rs ‘000 Percentage
Net exposure 2,421,562 (469,410)
Break up of investments - at cost
Mutual funds 1,100,000 30.9 1,100,000 31.6 AED
Pakistan investment bonds 875,000 24.6 - 0.0 Trade and other payables (73,556) (57,893)
Term finance certificates 224,000 6.3 - 0.0
Term deposits 1,322,623 37.0 2,357,926 67.8 EUR
Interest bearing accounts 41,242 1.2 20,518 0.6 Trade and other payables (4,360) (3,348)
3,562,865 100.0 3,478,444 100.0
The following significant exchange rates were applied during the year:
Investments out of the provident fund have been made in accordance with the provisions of section 218 of
2018 2017
the Companies Act, 2017 and the rules formulated for this purpose.
Rupees per USD
40. Financial instruments and risk management Average rate 122.42 105.54
Reporting date rate
40.1 Financial risk factors
Assets 138.60 110.30
The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, other Liabilities 139.10 110.50
price risk and interest rate risk), credit risk and liquidity risk. The Company’s overall risk management
Rupees per AED
program focuses on the unpredictability of financial markets and seeks to minimize potential adverse
Average rate 33.34 28.73
effects on its financial performance.
Reporting date rate 37.87 30.08
Risk management is carried out by the Board of Directors (the Board). The Board has prepared a ‘Risk Rupees per EUR
Management Policy’ covering specific areas such as foreign exchange risk, interest rate risk, credit risk Average rate 144.06 119.46
and investment of excess liquidity. All treasury related transactions are carried out within the parameters Reporting date rate 159.10 131.97
of this policy.
If the functional currency, at the reporting date, had fluctuated by 5% against the USD, AED and EUR with
(a) Market risk
all other variables held constant, the impact on profit after taxation for the year would have been Rs 80,787
(i) Currency risk thousand (December 31, 2017: Rs 17,246 thousand) respectively lower / higher, mainly as a result of
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate exchange gains / losses on translation of foreign exchange denominated financial instruments. Currency
because of changes in foreign exchange rates. Currency risk arises mainly from future commercial risk sensitivity to foreign exchange movements has been calculated on a symmetric basis.
transactions, or receivables and payables that exist due to transactions in foreign currencies.
(ii) Other price risk
Other price risk represents the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices (other than those arising from interest rate risk or currency
risk), whether those changes are caused by factors specific to the individual financial instrument or its
issuer, or factors affecting all similar financial instruments traded in the market.
The Company is exposed to equity securities price risk, because of the investments held by the Company
in money market mutual funds, and classified in the statement of financial position as FVTPL. To manage
its price risk arising from investments in mutual funds, the Company diversifies its portfolio.
Other financial assets include investments categorized as fair value through profit or loss of Rs 3,950,149
thousand (December 31, 2017: Rs 2,527,000 thousand ) which were subject to price risk.
114 115
If redemption price on mutual funds, at the year end date, fluctuate by 5% higher / lower with all other The credit risk on liquid funds is limited, because the counter parties are banks with reasonably high credit
variables held constant, total comprehensive income for the year would have been Rs 136,248 thousand ratings. In case of trade debts, the Company believes that it is not exposed to major concentrations of
(December 31, 2017: Rs 82,128 thousand) higher / lower, mainly as a result of higher / lower redemption credit risk, as its exposure is spread over a large number of counter parties and subscribers. The long term
price on units of mutual funds. loans include a subordinated loan of Rs 6,000,000 thousand (December 31, 2017: Rs 5,000,000 thousand)
to the subsidiary-PTML and a loan of Rs 4,000,000 thousand to the subsidiary Ubank (December 31, 2017:
(iii) Interest rate risk nil). Impairment loss on trade debts and contract assets arising from contract with customers amounts to
Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will Rs 1,955,881 thousand (December 31, 2017: Rs 1,695,310 thousand)
fluctuate because of changes in market interest rates.
The credit quality of bank balances and short term investments, that are neither past due nor impaired,
At the date of the statement of financial position, the interest rate profile of the Company’s interest bearing can be assessed by reference to external credit ratings (if available) or to historical information about
financial instruments is: counterparty default rate:
2018 2017
Rs ‘000 Rs ‘000 Rating Rating
Short term Long term Agency
Financial assets
Fixed rate instruments: National Bank of Pakistan A1+ AAA PACRA
Bank Alfalah Limited A1+ AA+ PACRA
Staff loans 985,444 599,598 MCB Bank Limited A1+ AAA PACRA
Short term investments - T Bills / term deposits 980,221 5,607,778 Soneri Bank Limited A1+ AA- PACRA
Bank balances - deposit accounts 829,885 13,743,769 Habib Metropolitan Bank Limited A1+ AA+ PACRA
2,795,550 19,951,145 The Bank of Punjab A1+ AA PACRA
Habib Bank Limited A-1+ AAA JCR-VIS
Variable rate instruments: Askari Bank Limited A1+ AA+ PACRA
Allied Bank Limited A1+ AAA PACRA
Subordinated long term loan to PTML 6,000,000 5,000,000
United Bank Limited A-1+ AAA JCR-VIS
Subordinated long term loan to Ubank 4,000,000 -
Bank Islami Pakistan Limited A1 A+ PACRA
Bank Al-Habib Limited A1+ AA+ PACRA
Fair value sensitivity analysis for fixed rate instruments Faysal Bank Limited A1+ AA PACRA
The Company does not account for any fixed rate financial assets and liabilities at fair value. Therefore, Citi Bank, N.A P-1 A1 Moody’s
a change in interest rates at the date of the statement of financial position would not affect the total Albaraka Bank (Pakistan) Limited A1 A PACRA
comprehensive income of the Company. Mobilink Microfinance Bank Limited A1 A PACRA
Summit Bank Limited A-1 A- JCR-VIS
Cash flow sensitivity analysis for variable rate instruments Dubai Islamic Bank Pakistan Limited A-1 AA- JCR-VIS
JS Bank Limited A1+ AA- PACRA
If interest rates on long-term loans to subsidiaries ( PTML and Ubank) at the year end date, fluctuate by
Sindh Bank Limited A-1+ AA JCR-VIS
1% higher / lower with all other variables held constant, profit after taxation for the year would have been
SME Bank Limited B B- PACRA
Rs 37,430 thousand (December 31, 2017: Rs 2,431 thousand ) higher / lower, mainly as a result of higher SilkBank Limited A-2 A- JCR-VIS
/ lower markup income on floating rate loans / investments. Standard Chartered Bank (Pakistan) Limited A1+ AAA PACRA
Meezan Bank Limited A-1+ AA+ JCR-VIS
(b) Credit risk The Bank of Khyber A1 A JCR-VIS
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the First Women Bank Limited A2 A- PACRA
other party, by failing to discharge an obligation. The maximum exposure to credit risk at the reporting date Samba Bank Limited A-1 AA JCR-VIS
is as follows: U Microfinance Bank Limited A-2 A JCR-VIS
2018 2017 Khushhali Microfinance Bank Limited A-1 A+ JCR-VIS
Rs ‘000 Rs ‘000 Telenor Microfinance Bank Limited A-1 A+ JCR-VIS
Mutual Funds:
Long term loans and advances 10,690,139 5,401,152 - ABL Cash Fund - AA(f) JCR-VIS
Trade debts and contract assets 16,178,523 16,040,224 - HBL Money Market Fund - AA(f) JCR-VIS
Loans and advances 1,575,574 1,411,694
Other receivables 10,505,985 8,604,859 Due to the Company’s long standing business relationships with these counterparties, and after giving due
Short term investments 4,930,370 5,607,778 consideration to their strong financial standing, management does not expect non-performance by these
Bank balances 5,116,252 14,243,299 counter parties on their obligations to the Company. Accordingly, the credit risk is minimal.
48,996,843 51,309,006
116 117
(c) Liquidity risk FVOCI - FVTPL - Assets at

equity equity amortized
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with instruments instruments cost Total
financial liabilities. Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
The Company follows an effective cash management and planning policy to ensure availability of funds,
and to take appropriate measures for new requirements. 40.3 Financial instruments by categories - 2018
Financial assets as per statement of
The following are the contractual maturities of financial liabilities as at December 31, 2018: financial position
Carrying Less than One to five More than Long term other investments 83,900 - - 83,900
amount one year years five years Debt securities- treasury bills - - 980,221 980,221
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Long term loans and advances - - 10,690,139 10,690,139
Trade debts - - 16,178,523 16,178,523
Security deposits 579,039 579,039 - - Loans and advances - - 1,762,470 1,762,470
Trade and other payables 61,873,638 61,873,638 - - Receivable from the Government of Pakistan - - 2,164,072 2,164,072
Other receivables - - 14,128,424 14,128,424
62,452,677 62,452,677 - -
Short term investments - 3,950,149 - 3,950,149
Cash and bank balances - - 5,375,026 5,375,026
The following are the contractual maturities of financial liabilities as at December 31, 2017:
Financial liabilities as per statement of
Carrying Less than One to five More than financial position Amortized cost
amount one year years five years
Trade and other payables 61,873,638
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Securities deposits 579,039
Security deposits 553,446 553,446 - - Dividend payable 264,836
Trade and other payables 54,893,315 54,893,315 - -
Available Loans and
55,446,761 55,446,761 - - for sale receivables Total
40.2 Fair value of financial instruments Financial instruments by categories - 2017

The carrying values of all financial assets and liabilities reflected in the financial statements, approximate Financial assets as per statement of
their fair values. Fair value is determined on the basis of objective evidence at each reporting date. financial position
Long term other investments 83,900 - 83,900
Fair value measurements are categorized into Level 1, 2 and 3 based on the degree to which the inputs to
Long term loans and advances - 5,401,152 5,401,152
the fair value measurements are observable and significance of the inputs to the fair value measurement
in its entirety, which is as follows: Trade debts - 16,040,224 16,040,224
Loans and advances - 1,546,806 1,546,806
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. Receivable from the Government of Pakistan - 2,164,072 2,164,072
Other receivables - 11,860,653 11,860,653
Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either Short term investments 2,527,000 - 2,527,000
directly (i.e., as prices) or indirectly (i.e., derived from prices). Cash and bank balances - 14,243,299 14,243,299
Level 3 - Inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs). Financial liabilities as per statement of Other
financial position financial liabilities
Details of the Company’s assets’ fair value hierarchy as at December 31, 2018 are as follows: Trade and other payables 54,893,315
Securities deposits 553,446
Level 1 Level 2 Level 3 Total
Dividend payable 210,187
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
40.4 Capital risk management

Long term other investments 2018 - - 83,900 83,900
The Board’s policy is to maintain an efficient capital base so as to maintain investor, creditor and market
Investment in mutual funds 2018 3,950,149 - - 3,950,149
confidence, and to sustain the future development of the Company’s business. The Board of Directors
Long term other investments 2017 - - 83,900 83,900 monitors the return on capital employed, which the Company defines as operating income divided by total
Investment in mutual funds 2017 2,527,000 - - 2,527,000 capital employed. The Board of Directors also monitors the level of dividends to ordinary shareholders.
There has been no transfers from one level of hierarchy to another level during the year.
118 119
The Company’s objectives when managing capital are: Chief Executive, directors and key management personnel
The Company also has transactions with Chief Executive Officer, Directors and other key management
(i) to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide personnel transactions with whom are disclosed in note 16 and 37 to these financial statements.
returns for shareholders and benefits for other stakeholders; and
(ii) to provide an adequate return to shareholders. Following particulars relate to holding and associated companies incorporated outside Pakistan with
whom the Company had entered into transactions during the year:
The Company manages the capital structure in the context of economic conditions and the risk
Auditor’s
characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company
opinion on
may, for example, adjust the amount of dividends paid to shareholders, issue new shares, or sell assets to latest available
reduce debt. Country of Name of Operational financial
Names Registered Address Incorporation Chief Executive Status statements
For working capital and capital expenditure requirements, the Company primarily relies on internal cash
generation and does not have any significant borrowings.
- Holding Company
Etisalat International Pakistan P.O. Box 300, United Arab Mr Abdulrahim Operational Unmodified
41. Transactions with related parties Abu Dhabi Emirates Al Nooryani opinion
The Government of Pakistan and Etisalat International Pakistan (EIP), UAE are the majority shareholders
- Associated Companies
of the Company. Additionally, the Company’s subsidiaries Pak Telecom Mobile Limited, U Microfinance
Emirates Telecommunication P.O. Box 3838, United Arab Saleh Abdulla Operational Unmodified
Bank Limited, DVCOM Data (Private) Limited, Smart Sky (Private) Limited, associate T.F. Pipes Limited,
Corporation Abu Dhabi Emirates Al Abdooli opinion
Directors, Chief Executive Officer, key management personnel and employee funds are also related parties
of the Company. The remuneration of the Directors, Chief Executive Officer and Executives is given in note Etisalat - Afghanistan Ehasan Plaza, near Afghanistan Mr Salah Operational Unmodified
37 to the financial statements. The amounts due from and due to these related parties are shown under Hajji Yaqoub Square, Zerguerras opinion
respective receivables and payables. The Company had transactions with the following related parties Shar-e-Naw, Kabul
during the year: P.O. Box # 800
Etisalat - Egypt P.O. Box 11, Building S4 Egypt Mr Hazem Operational Unmodified
Aggregate % of
shareholding in the
El Teseen St, Metwally opinion
Particulars Company 5th Compound
New Cairo,
Shareholders Etihad Etisalat Company P.O. Box 23088, Kingdom of Mr Ahmed Abou Operational Unmodified
The Government of Pakistan 62.18% Riyadh Saudi Arabia Doma opinion
Etisalat International Pakistan 26%
Subsidiaries 2018 2017
Pak Telecom Mobile Limited Not applicable Rs ‘000 Rs ‘000
U Microfinance Bank Limited Not applicable
DVCOM Data (Private) Limited Not applicable Details of transactions with related parties
Smart Sky (Pvt) Limited Not applicable
Shareholders
Associated undertakings Technical services assistance fee 2,383,565 2,361,541
Emirates Telecommunication Corporation Not applicable
Subsidiaries
Etisalat - Afghanistan Not applicable
Sale of goods and services 5,151,501 5,080,119
Etisalat - Egypt Not applicable
Purchase of goods and services 2,882,301 3,410,346
Etihad Etisalat Company Not applicable
Return on deposit 4,532 83,961
TF Pipes Limited Not applicable
Mark up on long term loans 406,361 23,960
Telecom Foundation Not applicable
Associated undertakings
Employees retirement benefits plans
Pakistan Telecommunication Employees Trust Not applicable
Purchase of goods and services 939,814 797,728
Pakistan Telecommunication Company Limited Employees Gratuity Fund Not applicable
Employees retirement benefits plans 2,779,570 5,253,506
Other related parties
Pakistan Telecommunication Authority Not applicable Other related parties
Universal Service Fund Not applicable Sale of goods and services 1,789,345 1,676,921
National ICT R&D Fund Not applicable Charge under license obligations 1,564,303 1,655,227
Pakistan Electronic Media Regulatory Authority Not applicable
120 121
42. Offsetting of financial assets and liabilities Impact of changes in accounting policy
Gross amount Amount not in Net as per As previously

subject Offset Net amount scope of statement of reported Adjustments As restated
to setoff offsetting financial position Rs ‘000 Rs ‘000 Rs ‘000
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 December 31,2017
As at December 31, 2018 ASSETS
Contract cost - 1,200,185 1,200,185
Trade debts 14,514,210 (8,203,905) 6,310,305 17,143,511 23,453,816
Income tax recoverable 15,263,357 (9,963) 15,253,394
Trade creditors (9,352,869) 8,203,905 (1,148,964) (11,084,413) (12,233,377)
Others 170,894,840 - 170,894,840
As at December 31, 2017 Total Assets 186,158,197 1,190,223 187,348,419
Trade debts 10,294,641 (7,556,453) 2,738,188 21,469,217 24,207,405 EQUITY AND LIABILITIES
Trade creditors (8,628,339) 7,556,453 (1,071,886) (11,153,841) (12,225,727)
EQUITY
Share Capital 51,000,000 - 51,000,000
43. Number of employees
Reserves 30,304,065 - 30,304,065
2018 2017 Retained Earnings 3,647,809 149,911 3,797,720
Number Number
84,951,874 149,911 85,101,785
Total number of persons employed at end of the year 16,506 16,585
Average number of employees during the year 16,522 16,546 LIABILITIES
Deferred income tax 7,086,423 59,038 7,145,461
Trade and other payables 62,002,745 981,273 62,984,018
44. Change in accounting policy and its impact on financial statements Others 32,117,155 - 32,117,155
The following table summarizes the impacts of adopting IFRS 15 on the Company’s financial statements. 101,206,323 1,040,311 102,246,634
Total equity and liabilities 186,158,197 1,190,222 187,348,419
Impact of changes in accounting policy
As previously
reported Adjustments As restated December 31, December 31,
Rs ‘000 Rs ‘000 Rs ‘000 2017 2017
Impact of changes in accounting policy
i) Statement of Financial Position
As previously
January 01,2017 reported Adjustments As restated
Rs ‘000 Rs ‘000 Rs ‘000
ASSETS
Contract cost - 1,033,932 1,033,932 ii) STATEMENT OF PROFIT OR LOSS
Others 182,636,563 - 182,636,563
Revenue 69,757,391 (137,789) 69,619,602
Total Assets 182,636,563 1,033,932 183,670,495 Cost of services (51,043,742) 25,229 (51,018,513)
EQUITY AND LIABILITIES Gross profit 18,713,649 (112,560) 18,601,089
EQUITY Administrative and general expenses (8,617,478) - (8,617,478)
Share Capital 51,000,000 - 51,000,000 Selling and marketing expenses (2,947,347) 141,026 (2,806,321)
Reserves 30,118,360 - 30,118,360
Retained Earnings 1,894,739 131,408 2,026,147 (11,564,825) 141,026 (11,423,799)
83,013,099 131,408 83,144,507 Operating profit 7,148,824 28,466 7,177,290

Other income 6,001,194 - 6,001,194
LIABILITIES Finance costs (304,611) - (304,611)
Deferred income tax 7,264,575 59,038 7,323,613 Profit before tax 12,845,407 28,466 12,873,873
Trade and other payables 59,142,912 843,486 59,986,398 Taxation (4,495,894) (9,962) (4,505,856)
Others 33,215,977 - 33,215,977 Profit after tax 8,349,513 18,504 8,368,017
99,623,464 902,524 100,525,988
Total equity and liabilities 182,636,563 1,033,932 183,670,495
122 123
December 31, December 31, 45. Corresponding figures

2017 2017
Impact of changes in accounting policy Following corresponding figures have been reclassified for better presentation.
As previously
reported Adjustments As restated Statement of financial position
Rs ‘000 Rs ‘000 Rs ‘000
Reclassification From Reclassification To Rs ‘000
iii) STATEMENT OF CASH FLOWS
Current liabilities Current liabilities
For the year ended December 31, 2017 Trade & other payables Dividend payable 210,187
Profit before tax 12,845,407 28,466 12,873,873 Current liabilities Non-Current liabilities
Trade & other payables Advances from customers 1,223,912
Adjustments for non-cash charges and other items
Contract cost - 1,698,494 1,698,494 Non-Current liabilities Current liabilities
Others 18,050,482 - 18,050,482 Security deposits Security deposits 553,446
18,050,482 1,698,494 19,748,976 Non-Current Assets Non-Current Assets
Long term loans and advances Capital work in progress 2,286,440
Operating profit before working capital changes 30,895,888 1,726,960 32,622,848 Investment in finance lease Long term loans and advances 17,268
Contract cost - (1,864,747) (1,864,747) Current Assets Current Assets
Trade and other payables 7,568,413 137,787 7,706,200 Investment in finance lease Loans and advances 35,137
Others (5,827,831) - (5,827,831)
Cash generated from operations 32,636,470 - 32,636,470
46. Date of authorization for issue
Retirement benefits and income taxes paid etc. (15,951,786) - (15,951,786)
Net cash generated from operating activities 16,684,684 - 16,684,684 These financial statements were authorized for issue by the Board of Directors of the Company on February
12, 2019.
Cash flow from investing activities
Net cash flow from investing activities (719,549) - (719,549)
Cash flow form financing activities
Net cash generated from financing activities (5,096,980) - (5,096,980)
Net increase in cash and cash equivalents 10,868,155 - 10,868,155

Cash and cash equivalents at the beginning of the year 5,902,144 - 5,902,144
Cash and cash equivalents at the end of the year 16,770,299 - 16,770,299
Chief Financial Officer President & CEO Chairman
124 125
NOTES
126
INDEPENDENT AUDITORS’ REPORT
To the members of Pakistan Telecommunication Company Limited
Opinion
We have audited the annexed consolidated financial statements of Pakistan Telecommunication Company Limited (PTCL) and
its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2018, and the
consolidated statement of profit or loss, the consolidated statement of comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated
financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion, consolidated financial statements give a true and fair view of the consolidated financial position of the Group
as at 31 December 2018, and of its consolidated financial performance and its consolidated cash flows for the year then
ended in accordance with the accounting and reporting standards as applicable in Pakistan.
Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics
Standards Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered
Accountants of Pakistan (the Code), and we have fulfilled our other ethical responsibilities in accordance with the Code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to Note 18.7 to the consolidated financial statements, which describes that the matters relating to certain
employees’ rights under the PTCL pension scheme are pending with various courts. No provision for any effects on the Group
that may result has been made in the consolidated financial statements. Our opinion is not modified in respect of this matter.
128 129
Key Audit Matters S.

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the No.
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the 2 Income tax recoverable
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters. Refer notes 5.32 and 28 to the consolidated Our audit procedures in relation to the matter included:
financial statements.
Following are the Key audit matters: • Consulting our tax specialist to assess the
As at 31 December 2018, income tax reasonableness of the Group’s conclusions on
S. recoverable is stated at Rs 23,791,348 recoverability of income tax recoverable;
No.
thousand.
1 Revenue from telecommunication services • Reviewing the status of significant pending tax
The Group has a significant amount of income matters, including the Group’s assessment of the
Refer notes 5.28 and 33 to the consolidated Our audit procedures to assess the recognition of revenue, tax recoverable arising mainly from payments potential liabilities;
financial statements. amongst others, included the following: of income tax in excess of income tax liabilities
and a number of tax assessments are pending • Comparing refund applications filed for refund of
The Group has reported revenue amounting • Obtaining an understanding of the process relating
at different appellate forums. tax relating to preceding years with the amounts
to Rs 126,160,386 thousand mainly from to recognition of revenue and testing the design, recorded in the consolidated financial statements;
telecommunication services for the year ended implementation and operating effectiveness of Because of the likelihood and potential
31 December 2018. key internal controls over recording of revenue magnitude of misstatements to the • Inspecting correspondence with tax authorities to
including involving our internal specialists to test completeness and accuracy of the tax expense identify any pending taxation matters relating to the
The Group mainly provides telecommunication key automated application and general information and the current tax liability, this requires years to which the refund relates;
services in which there is an inherent risk technology controls; special audit consideration.
around the accuracy of revenue recorded by • Testing computation of current income tax provisions;
the IT billing systems given the complexity of • Comparing a sample of transactions comprising of and
the systems and the significance of volumes various revenue streams recorded during the year
with relevant underlying supporting documents and • Testing, on a sample basis, whether advance tax paid
of data processed by the systems.
cash receipts; is in accordance with the Income Tax Ordinance, 2001
and amounts recorded in the books of account are
We identified recognition of revenue as a key • Comparing the amount of revenue recognised with supported by underlying documentations.
audit matter because (i) revenue is one of the relevant system generated reports and corresponding
key performance indicator of the Group and validation by the Group’s revenue assurance function; 3 Cost capitalisation for
gives rise to an inherent risk that revenue property, plant and equipment
could be subject to misstatement to meet • Assessing the appropriateness of accounting policies
expectations or targets and (ii) recognition and for revenue recognition and relevant contract assets Refer notes 5.17 (a) and 19 to the consolidated Our audit procedures in relation to the matter, amongst
measurement of revenue and contract related and liabilities for compliance with applicable financial statements. others, included the following:
assets may involve significant judgement financial reporting framework including their correct
due to adoption of IFRS 15 ‘Revenue from application during the year; The Group has recorded additions to property, • Assessing the design, implementation and
Contracts with Customers’ by the Group plant and equipment amounting to Rs operating effectiveness of key internal controls
during the year. • Inspecting manual journal entries relating to revenue 28,324,305 thousand during the current year. over capitalisation of property, plant and equipment
recognised during the year and the corresponding including transfers from capital work in progress to
underlying documentation for those journal entries The Group continues to incur capital operating fixed assets;
which were considered to be material or met certain expenditure in connection with the expansion
specified risk-based criteria; and of its network coverage and improvements to • Comparing, on sample basis, costs capitalised during
network quality. the year with underlying supporting documentation;
• Considering the appropriateness of disclosures in
the consolidated financial statements. The initial recognition and classification of • Assessing the nature of cost incurred met the criteria
property, plant and equipment, and certain for capitalisation under accounting framework;
elements of expenditure as either assets or
expenses involves subjective judgments or • Comparing, on sample basis, the cost of completed
uncertainties. projects from capital work in progress to operating
fixed assets with supporting documentation including
completion certificates, where relevant, and
comparing the date of capitalisation with supporting
documentation; and
• Assessing whether the depreciation has been

correctly computed from the date of capitalisation.
130 131
S. Information Other than the Financial Statements and Auditors’ Report Thereon
No. Management is responsible for the other information. Other information comprises the information included in the annual
4 Recoverability of trade debts report for the year ended 31 December 2018, but does not include the consolidated financial statements and our auditors’
report thereon.
Refer notes 5.27.4 and 25 to the consolidated Our audit procedures to assess the valuation of trade
financial statements. debts included the following: Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
As at 31 December 2018, the Group’s gross • Obtaining an understanding of and testing the design
trade debtors were Rs 26,539,414 thousand and implementation of management’s key internal In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
against which allowances for doubtful debts controls relating to credit control, debt collection in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements
of Rs 7,635,531 thousand were recorded. and making allowances for doubtful debts; or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We identified the recoverability of trade • Agreeing, on a sample basis, the balances used in We have nothing to report in this regard.
debtors as a key audit matter because it management’s estimate of expected credit loss with
involves significant management judgment the books of account of the Group;
and estimates in determining the allowance
of expected credit loss. • Testing the assumptions and estimates made by the Responsibilities of Management and the Board of Directors for the consolidated Financial Statements
management for the allowances for doubtful debts;
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance
and
with accounting and reporting standards as applicable in Pakistan and Companies Act, 2017 and for such internal control
• Evaluating that the allowance for doubtful debt is as management determines is necessary to enable the preparation of consolidated financial statements that are free from
in accordance with the requirements of applicable material misstatement, whether due to fraud or error.
financial reporting framework.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as
5 Cash and bank balances Our procedures in relation to cash and bank, amongst a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Refer note 32 to the consolidated financial other, included the following:
statements. The Board of Directors is responsible for overseeing the Group’s financial reporting process.
• Obtaining bank reconciliation statements of the cash
As at 31 December 2018, the Group has cash collection bank accounts for the year-end balances
and bank balances of Rs 9,157,769 thousand. for PTCL and, on a sample basis, testing the accuracy
of reconciliation statements and reconciling items;
Cash and bank balances was considered a
key audit matter since the collections against • Reviewing transactions in the bank statements
the Group’s revenue represent voluminous of collection accounts and testing a sample of
transactions. transactions as to whether they represents cash
receipts;
Although, bank reconciliation statements as
at 31 December 2018 have been prepared, • For a sample of banks, tracing the transfer of funds
historic reconciliations of collection bank to the main collection accounts maintained;
accounts are in progress for PTCL.
• Obtaining the bank confirmations directly from the
banks and comparing the balance confirmed by the
bank with the balance of statement of respective
bank account at the reporting date; and
• The reconciling balance at PTCL level as at year-end

was deemed not material.
132 133
Auditors’ Responsibilities for the Audit of the consolidated Financial Statements We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs as
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on
applicable in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
our independence, and where applicable, related safeguards.
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in
the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgement and maintain
these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in
professional skepticism throughout the audit. We also:
extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, Other Matter
misrepresentations, or the override of internal control.
Prior Year Financial Statements Audited by Predecessor Auditor
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal The consolidated financial statements of the Group for the year ended 31 December 2017, were audited by another auditor
control. who expressed an unmodified opinion on those consolidated financial statements on 14 February 2018.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related The engagement partner on the audit resulting in this independent auditors’ report is Atif Zamurrad Malik.
disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as
a going concern. KPMG Taseer Hadi & Co.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation. Islamabad
04 March 2019
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
134 135
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
2018 2017 2018 2017

Restated Restated
Equity and liabilities Assets

Equity Non-current assets
Share capital and reserves Property, plant and equipment 19 177,479,128 169,777,238
Share capital 6 51,000,000 51,000,000 Intangible assets 20 31,177,147 34,164,307
Revenue reserves 208,656,275 203,941,545
Insurance reserve 2,985,696 2,806,993
General reserve 27,497,072 27,497,072
Unappropriated profit 1,535,145 5,109,744 Long term investments 21 83,900 93,600
32,017,913 35,413,809 Long term loans and advances 22 706,390 429,346
Statutory and other reserves 221,601 84,837 Contract cost 23 461,145 338,231
Unrealized loss on available for sale investments (29) (28) 209,907,710 204,802,722
83,239,485 86,498,618
Liabilities Current assets
Non-current liabilities
Stock in trade, stores and spares 24 6,281,620 3,827,171
Long term loans from banks 7 24,408,332 25,584,999 Trade debts and contract assets 25 18,903,883 16,805,595
Subordinated debt 8 599,640 600,000 Loans to banking customers 26 17,019,838 10,554,358
Customers deposits 9 3,400,885 3,884,344 Loans and advances 27 1,864,766 1,648,699
Liability against assets subject to finance lease 10 15,558 - Contract costs 23 1,842,504 1,207,882
Deferred income tax 11 8,975,585 10,634,558 Income tax recoverable 28 23,791,348 19,828,318
Employees retirement benefits 12 28,594,794 23,590,276 Receivable from GoP 29 2,164,072 2,164,072
Deferred government grants 13 18,720,796 15,619,006 Deposits, prepayments and other receivables 30 10,986,451 9,653,825
Advances from customer 1,112,453 1,223,912 Short term investments 31 17,198,237 9,394,153
Long term vendor liability 14 26,951,860 31,150,659 Cash and bank balances 32 9,157,769 15,057,748
112,779,903 112,287,754 109,210,488 90,141,821
Current liabilities
Trade and other payables 15 81,325,176 74,742,890
Customer deposits 9 17,133,725 6,937,146
Interest accrued 966,161 503,096
Short term running finance 16 1,225,137 834,233
Current portion of:
Long term loans from banks 7 7,176,667 4,001,154
Liability against assets subject to finance lease 10 3,287 10,146
Long term vendor liability 14 13,532,709 7,474,057
Security deposits 17 1,471,112 1,445,262
Dividend payable 264,836 210,187
123,098,810 96,158,171
Total equity and liabilities 319,118,198 294,944,543 Total assets 319,118,198 294,944,543
Contingencies and commitments 18

The annexed notes 1 to 52 are an integral part of these consolidated financial statements.
136 137
CONSOLIDATED STATEMENT OF CONSOLIDATED STATEMENT OF
PROFIT OR LOSS COMPREHENSIVE INCOME
2018 2017 2018 2017

Restated Restated
Revenue 33 126,160,386 117,019,265 Profit for the year 5,710,004 4,317,653

Cost of services 34 (91,788,250) (90,538,326)
Other comprehensive income for the year
Gross profit 34,372,136 26,480,939
Items that will not be reclassified to consolidated
Administrative and general expenses 35 (18,646,757) (17,336,472) statement of profit or loss:
Selling and marketing expenses 36 (6,735,399) (6,132,586)
Remeasurement loss on employees retirement benefits (5,449,234) (1,887,585)
(25,382,156) (23,469,058) Tax effect 1,580,098 566,275
Operating profit 8,989,980 3,011,881 (3,869,136) (1,321,310)
Other income 37 5,721,522 9,842,166
Finance costs 38 (7,762,017) (6,457,612) Items that may be subsequently reclassified to consolidated
6,949,485 6,396,435 statement of profit or loss:
Share of loss from associate - (7,624) (Loss) / gain on equity instrument arising during the year (40) 3,178
Profit before tax 6,949,485 6,388,811 Loss / (gain) on disposal of investment transferred to income for the year 28 (4,736)
Provision for income tax 39 (1,239,481) (2,071,158) Tax effect 11 467
Profit after tax 5,710,004 4,317,653 Unrealized loss on equity instrument - net of tax (1) (1,091)
Other comprehensive income for the year - net of tax (3,869,137) (1,322,401)
Total comprehensive income for the year 1,840,867 2,995,252
138 139
CONSOLIDATED STATEMENT OF CONSOLIDATED STATEMENT OF
CASH FLOWS CHANGES IN EQUITY
2018 2017 Issued, subscribed and

paid-up capital Revenue reserves Unrealized gain/(loss)
Note Rs ‘000 Rs ‘000 Insurance General Unappropriated Statutory and on available for Total
Restated Class ‘A’ Class ‘B’ reserve reserve profit other reserves sale investments
(Rupees in ‘000)
Cash flows from operating activities
Cash generated from operations 41 38,101,454 46,059,502

Balance as at December 31, 2016
Employees retirement benefits paid (1,154,995) (934,328) as previously reported 37,740,000 13,260,000 2,621,288 27,497,072 7,047,199 20,096 1,063 88,186,718
Payment of voluntary separation scheme (10,869) (4,711,600) Impact of change in accounting
Advances from customers (111,459) - policy - Note 49 - - - - 416,648 - - 416,648
Payment made to Pakistan Telecommunication Balance as at January 01, 2017 - Restated 37,740,000 13,260,000 2,621,288 27,497,072 7,463,847 20,096 1,063 88,603,366
Employees Trust (PTET) (2,779,570) (5,253,506)
Finance costs paid (639,251) (1,519,312) Total comprehensive income for the year
Income tax paid (5,281,375) (4,795,882) Profit for the year - - - - 4,317,653 - - 4,317,653
Other comprehensive income - net of tax - - - - (1,321,310) - (1,091) (1,322,401)
Net cash inflows from operating activities 28,123,935 28,844,874
- - - - 2,996,343 - (1,091) 2,995,252
Cash flows from investing activities
Distribution to owners of the Holding
Capital expenditure (36,931,047) (29,212,116) Company
Acquisition of intangible assets (459,834) (615,098)
Interim dividend for the year ended
Proceeds from disposal of property, plant and equipment 266,029 367,389 December 31, 2017 - Re 1.00 per share - - - - (5,100,000) - - (5,100,000)
Short term investments - net 5,080,779 19,919,222
- - - - (5,100,000) - - (5,100,000)
Long term loans and advances (319,885) (497,412) Others
Return on long term loans and short term investments 883,015 1,688,481 Transfer to insurance reserve - - 185,705 - (185,705) - - -
Government grants received 4,368,167 5,307,086 Transfer to statutory and other reserves - - - - (64,741) 64,741 - -
Net cash outflows from investing activities (27,112,776) (3,042,448) Balance as at December 31, 2017 - Restated 37,740,000 13,260,000 2,806,993 27,497,072 5,109,744 84,837 (28) 86,498,618
Cash flows from financing activities Total comprehensive income for the year
Loans from banks - net 1,998,846 2,611,153 Profit for the year - - - - 5,710,004 - - 5,710,004
Subordinated debt (360) 600,000 Other comprehensive income - net of tax - - - - (3,869,136) - (1) (3,869,137)
License fee payable - (15,733,070) - - - - 1,840,868 - (1) 1,840,867
Finance cost paid on borrowings (2,951,987) (4,975,089)
Distribution to owners of the Holding
Customers deposits 9,713,119 3,241,500
Company
Vendor liability 1,859,853 (42,505)
Liability against assets subject to finance lease 8,700 (26,143) Interim dividend for the year ended
December 31, 2018 - Re 1.00 per share - - - - (5,100,000) - - (5,100,000)
Dividend paid (5,045,351) (5,096,980)
- - - - (5,100,000) - - (5,100,000)
Net cash inflows / (outflows) from financing activities 5,582,820 (19,421,134) Others
Net increase in cash and cash equivalents 6,593,979 6,381,292 Transfer to insurance reserve - - 178,703 - (178,703) - - -
Transfer to statutory and other reserves - - - - (136,764) 136,764 - -
Cash and cash equivalents at beginning of the year 18,536,890 12,155,598
Balance as at December 31, 2018 37,740,000 13,260,000 2,985,696 27,497,072 1,535,145 221,601 (29) 83,239,485
Cash and cash equivalents at end of the year 41.2 25,130,869 18,536,890
140 141
CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS
1. Legal status and nature of business 1.3 The principal business units of the Group include the following:
1.1 Constitution and ownership Business units Geographical locations

The consolidated financial statements of the Pakistan Telecommunication Company Limited and its PTCL Headquarters G-8/4, Islamabad
subsidiaries (the Group) comprise of the financial statements of: PTCL Business Zone- North Telecom House F-5/1, Islamabad
PTCL Business Zone- Central 131, Tufail Road, Lahore
Pakistan Telecommunication Company Limited (PTCL) PTCL Business Zone- South Hatim Alvi Road Clifton, Karachi
PTML Head Quarter Ufone Tower, Blue Area, Islamabad
Pakistan Telecommunication Company Limited (the Holding Company) was incorporated in Pakistan on
Ubank- Head Quarter F-7 Markaz, Islamabad
December 31, 1995 and commenced business on January 01, 1996. The Holding Company, which is listed
DVCOM Data Hatim Alvi Road Clifton, Karachi
on the Pakistan Stock Exchange Limited (PSX), was established to undertake the telecommunication
Smart Sky G-8/4, Islamabad
business formerly carried on by Pakistan Telecommunication Corporation (PTC). PTC’s business was
transferred to the Holding Company on January 01, 1996 under the Pakistan Telecommunication (Re-
1.4 Summary of significant transactions and events:
organization) Act, 1996, on which date, the Holding Company took over all the properties, rights, assets,
obligations and liabilities of PTC, except those transferred to the National Telecommunication Corporation PTCL
(NTC), the Frequency Allocation Board (FAB), the Pakistan Telecommunication Authority (PTA) and the During 2018, the Holding Company continues its comprehensive network transformation project with
Pakistan Telecommunication Employees Trust (PTET). The registered office of the Holding Company is several additional exchanges fully transformed in different parts of Pakistan to provide reliable high
situated at PTCL Headquarters, G-8/4, Islamabad. internet speed and improve customer experience. This has contributed 6% growth in the broadband &
IPTV revenue. With the acquisition of new customers under managed services, cloud infrastructure, IT and
Pak Telecom Mobile Limited (PTML) security solutions, corporate business continues to perform strongly and has shown significant growth of
PTML was incorporated in Pakistan on July 18, 1998, as a public limited company to provide cellular mobile 13% over same period last year. In order to arrest decline in EVO revenue, a drive to convert EVO customers
telephony services in Pakistan. PTML commenced its commercial operations on January 29, 2001, under to Charji / LTE was carried out which has resulted in higher subscriber acquisition cost and cost of devices
the brand name of Ufone. It is a wholly owned subsidiary of the Holding Company. The registered office of sold, as compared to last year.
PTML is situated at Ufone Tower, Jinnah Avenue, Blue Area, Islamabad.
During the year, there was a significant devaluation of Pak Rupee against US Dollar which has resulted
U Microfinance Bank Limited (Ubank) in increase in cable and satellite and network maintenance charges under cost of services and exchange
loss of Rs 323,020 thousand. Re-measurement loss amounting to Rs 5,426,593 thousand on employees
The Holding Company acquired 100% ownership of Ubank on August 30, 2012 to offer services of digital retirement benefits has been recognized during the year due to lower than expected returns on plan assets.
commerce and branchless banking. Ubank was incorporated on October 29, 2003 as a public limited
company. The registered office of Ubank is situated at Jinnah Super Market F-7 Markaz, Islamabad. The financial strength of the Holding Company has been acknowledged through an independent rating
exercise as a result of which JCR-VIS has assigned PTCL a long-term credit rating of AAA which will
DVCOM Data (Private) Limited (DVCOM Data) enhance stakeholders’ confidence.
The Holding Company acquired 100% ownership of DVCOM Data effective from April 01, 2015. DVCOM Data
Interim cash dividend @ 10% (Re. 1.00 per share) was declared and paid during the year.
has a Wireless Local Loop (WLL) License of 1900 MHz spectrum in nine telecom regions of Pakistan. The
registered office of DVCOM Data is located at PTCL Headquarters South, Hatim Alvi Road Clifton, Karachi.
PTML
During the year, there was a significant devaluation of Pak Rupee against US Dollar. This has negatively
Smart Sky (Private) Limited (Smart Sky)
affected US Dollar denominated liabilities and vendor contracts of PTML resulting in an increased exchange
Smart Sky was incorporated in Pakistan on October 12, 2015 as a private limited company to provide Direct- loss in the consolidated statement of profit or loss.
to-Home (DTH) television services through out the country under the license from Pakistan Electronic
Media Regulatory Authority (PEMRA). Auction for DTH license was held on 23 November 2016, in which In 2018, PTML has incurred significant capital expenditure for network expansion and capacity enhancement.
Smart sky had actively participated. PEMRA has announced the three winning companies of DTH Licenses. During the year, 1,880 sites in 32 cities were upgraded from 2G to 3G under U900 expansion program, a
Later on, the honorable Lahore High Court has declared whole process of DTH auction as null and void spectrum re-farming initiative, while 1,784 sector splits were added to the network as part of capacity
and advised PEMRA to restart the whole process. Smart sky is a wholly owned subsidiary of the Holding enhancement. Further, 119 sites were also added to the network under Universal Service Fund (USF) lots.
Company. The registered office of Smart Sky is located at PTCL Headquarters, G-8/4, Islamabad.
Ubank
1.2 Activities of the Group During the year advances amounting to Rs 148,000 thousand were written off against provision by Ubank.
Ubank obtained borrowings amounting to Rs 4,500,000 thousand. 41 new branches were opened during
The Group principally provides telecommunication and broadband internet services in Pakistan. The
the year.
Holding Company owns and operates telecommunication facilities and provides domestic and international
telephone services throughout Pakistan. The Holding Company has also been licensed to provide such
DVCOM Data
services to territories in Azad Jammu and Kashmir and Gilgit-Baltistan. PTML provides cellular mobile
DVCOM Data has incurred loss before tax amounting to Rs 1,671,964 thousand during the year. During the
telephony services throughout Pakistan and Azad Jammu and Kashmir. Principal business of Ubank,
year as per order of Supreme Court dated May 15, 2018 against Civil Petition No. 1558 of 2018 the Holding
incorporated under Microfinance Institutions Ordinance, 2001, is to provide nationwide microfinance and
Company has furnished the bank guarantee to PTA on behalf of DVCOM Data (Private) Limited.
branchless banking services.
142 143
Smart Sky
Amendments to IFRS 2 ‘Share-based Payment’ - Effective from accounting period beginning
During the year, Smart Sky earned markup income amounting to Rs 3,649 thousand (December 31, 2017:
Clarification on the classification and measurement of on or after January 01, 2018.
Rs 2,806 thousand) on its deposit.
share-based payment transactions
2. Statement of compliance
Amendments to IFRS 4 ‘Insurance Contracts’ - Applying Effective from accounting period beginning
These consolidated financial statements have been prepared in accordance with the accounting and IFRS 9 Financial Instruments with IFRS 4 Insurance on or after January 01, 2018.
reporting standards as applicable in Pakistan. The accounting and reporting standards as applicable in Contracts.
Pakistan comprise of:
IFRS 9: ‘Financial Instruments’, This standard contains Effective from accounting period beginning
– International Financial Reporting Standards (IFRS Standards) issued by the International Accounting
the requirements for on or after January 01, 2018. SECP has
Standards Board (IASB) as notified under the Companies Act, 2017.”
a) the classification and measurement of financial assets adopted for local application from accounting
– Provisions of and directives issued under the Companies Act, 2017. and liabilities, period beginning on or after July 01, 2018.
b) impairment methodology, and
Where the provisions of and directives issued under the Companies Act, 2017 differ from the IFRS Standards, c) general hedge accounting. This standards will
the provisions of and directives issued under the Companies Act, 2017 have been followed. supersede IAS 39 ‘Financial Instruments: Recognition
and Measurement’.
The applicable financial reporting framework for consolidated subsidiaries also includes the following: This standard has not been adopted by Ubank as it is not
part of approved accounting and reporting standards for
– Microfinance Institutions Ordinance, 2001 (the MFI Ordinance);
Banks.
– Directives issued by the Securities and Exchange Commission of Pakistan (SECP) and State Bank of
Pakistan (SBP); and ‘Amendments to IAS 40 ‘Investment Property’- Clarification Effective from accounting period beginning
on transfers of property to or from investment property. on or after January 01, 2018. Earlier
Where the requirements of the Companies Act, 2017, the MFI Ordinance and the directives issued by the application is permitted.
SECP and SBP differ with the requirements of IFRS Standards, the requirements of the Companies Act,
2017, the Microfinance Ordinance, 2001, or the requirements of the said directives shall prevail. IFRIC 22 ‘Foreign Currency Transactions and Advance Effective from accounting period beginning
Consideration’- Provides guidance on transactions where on or after January 01, 2018. Earlier
These financial statements are consolidated financial statements of the Group. In addition to these
consideration against non-monetary prepaid asset/ application is permitted.
consolidated financial statements, the Holding Company and subsidiary companies PTML, Ubank, DVCOM
deferred income is denominated in foreign currency.
Data, and Smart Sky prepare separate statutory financial statements.
2.1 Standards, interpretations and amendments adopted during the year

(b) New accounting standards / amendments and IFRS interpretations that are not yet effective
The following amendments to existing standards have been published that are applicable to the Group’s
financial statements covering year beginning on or after the following dates: IFRS 16 ‘Leases’
This standard replaces existing leasing guidance, including IAS 17 ‘Leases’, IFRIC 4 ‘Determining whether
a) New accounting standards / amendments and IFRS interpretations that are effective for the year ended
an Arrangement contains a Lease’, SIC-15 ‘Operating Leases - Incentives’ and SIC-27 ‘Evaluating the
December 31, 2018.
Substance of Transactions Involving the Legal Form of a Lease’.
IFRS 15 ‘Revenue from Contracts with Customers’ Effective from accounting period beginning IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognizes a
This standard establishes a single comprehensive model on or after January 01, 2018. Securities and right-of-use asset representing its right to use the underlying asset and a lease liability representing its
for entities to use in accounting for revenue arising from Exchange Commission of Pakistan (SECP) obligation to make lease payments. There are recognition exemptions for short-term leases and leases of
contracts with customers. It will supersede the following has adopted for local application from low-value items. Lessor accounting remains similar to the current standard i.e. lessors continue to classify
revenue standards and interpretation upon its effective accounting period beginning on or after July leases as finance or operating leases.
date: IAS 18 Revenue, IAS 11 Construction Contracts, IFRIC 01, 2018.
13 Customer Loyalty Programs, IFRIC 15 Agreements The Group is currently in the process of analysing the potential impact of its lease agreements that will
for the Construction of Real Estate, IFRIC 18 Transfers result in recognition of right-of-use assets and lease liabilities on the adoption of the standard.
of Assets from Customers and SIC 31 Revenue-barter
Amendments to the following International Financial Reporting Standards (IFRS Standards) as notified
Transaction Involving Advertising Services.
under the Companies Act, 2017 and interpretations thereto are not yet effective and are not likely to have
Detailed disclosure of the effects of IFRS 15 is given in an impact on the Group’s financial statements:
note 49.
Amendment to IFRS 3 ‘Business Combinations’ Effective from accounting period beginning
The following standards, amendments and interpretations thereto as notified under the Companies Act, on or after January 01, 2020.
2017 are either not relevant to the Group’s operations or are not likely to have significant impact on the
Group’s financial statements.
144 145
Amendments to IFRS 10 ‘Consolidated Financial Effective from accounting period beginning 4. Critical accounting estimates and judgments
Statements’ and IAS 28 ‘Investments in Associates and on or after January 01, 2019. The preparation of consolidated financial statements in conformity with approved accounting and reporting
Joint Ventures’ - Sale or contribution of assets between an standards requires the use of certain critical accounting estimates. It also requires management to
investor and its associate or joint venture. exercise its judgment in the process of applying the Group’s accounting policies. Estimates and judgments
are continually evaluated and are based on historic experience, including expectations of future events that
IFRS 17, ‘Insurance Contracts’ Effective from accounting period beginning
are believed to be reasonable under the circumstances. The areas involving a higher degree of judgment
on or after January 01, 2021.
or complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements, are as follows:
Amendments to IAS 1 ‘Presentation of Financial Effective from accounting period beginning
Statements’ on or after January 01, 2020.
(a) Provision for employees retirement benefits
IAS 8: ‘Accounting Policies, Changes in Accounting Effective from accounting period beginning The actuarial valuation of pension, gratuity, medical, accumulating compensated absences and benevolent
Estimates and Errors’ on or after January 01, 2020. grant plans requires the use of certain assumptions related to future periods, including increase in future
salary, pension / medical costs, expected long term returns on plan assets, rate of increase in benevolent
Amendments to IAS 19 ‘Employee Benefits’ - Plan Effective from accounting period beginning grant and the discount rate used to discount future cash flows to present values.
amendments, curtailments of Settlements. on or after January 01, 2019.
(b) Recognition of government grants
Amendments to IAS 28 - Long-term Interests in Associates Effective from accounting period beginning The Group recognizes government grants when there is reasonable assurance that grants will be received
and Joint Ventures on or after January 01, 2019. and the Group will be able to comply with conditions associated with grants.
IFRIC 23 ‘Uncertainty over Income Tax Treatments’ Effective from accounting period beginning (c) Provision for income tax
on or after January 01, 2019.
The Group recognizes income tax provision using estimates based upon expert opinions of its tax and legal
advisors. Differences, if any, between the recorded income tax provision and the Group’s tax liability, are
(c ) Annual Improvements to IFRS Standards 2015 - 2017 Cycle recorded on the final determination of such liability. Deferred income tax is calculated at the rates that are
The improvements address amendments to following approved accounting standards but are not likely expected to apply to the periods when the temporary differences reverse, based on tax rates that have been
to have an impact on Group’s financial statements. The amendments are effective from annual period enacted or substantively enacted, by the date of the consolidated statement of financial position.
beginning on or after January 01, 2019.
(d) Provisions and contingent liabilities
- IFRS 3 Business Combinations
- IFRS 11 Joint Arrangements Management exercises judgment in measuring and recognizing provisions and exposures to contingent
- IAS 12 Income Taxes liabilities related to pending litigation or other outstanding claims. Judgment is necessary in assessing the
- IAS 23 Borrowing Costs likelihood that a pending claim will succeed, or a liability will arise, and to quantify the possible range of
the financial settlement. Because of the inherent uncertainty in this evaluation process, actual losses may
Other than the aforesaid standards, interpretations and amendments, IASB has also issued the following be different from the originally estimated provision.
standards which have not been adopted locally by the Securities and Exchange Commission of Pakistan:
(e) Useful life and residual value of fixed assets
- IFRS 1 First-time Adoption of International Financial Reporting Standards
The Group reviews the useful lives and residual values of fixed assets on a regular basis. Any change in
- IFRS 14 Regulatory Deferral Accounts
estimates may affect the carrying amounts of the respective items of property, plant and equipment and
- IFRS 17 Insurance Contracts
intangible assets, with a corresponding effect on the related depreciation / amortization charge.
2.2 The Companies Act, 2017 specified certain disclosures to be included in these consolidated financial
(f) Impairment of non - financial assets
statements. The Group has presented the required disclosures in these consolidated financial statements
and re-presented and reclassified certain comparatives. However, there was no change in the reported Management exercises judgment in measuring the recoverable amount of assets at each reporting date
amounts of consolidated profit or loss and other comprehensive income and the amounts presented in the to determine whether there is any indication of impairment loss. If any such indication exists, recoverable
consolidated statement of financial position due to these re-presentations / reclassifications. Additional amount is estimated to determine the extent of impairment of such assets.
disclosures include but are not limited to, management assessment of sufficiency of tax provision in the
consolidated financial statements, change in threshold for identification of executives, additional disclosure (g) Provision for stores and spares
requirements for related parties etc. A provision against stores and spares is recognized after considering their physical condition and expected
future usage. It is reviewed by the management on regular basis.
3. Basis of measurement
These consolidated financial statements have been prepared under the historical cost convention, as (h) Provision for doubtful receivables and contract assets
modified by accounting policies related to employees’ retirement benefits, long term loans, liability against A provision against overdue receivable balances is recognized after considering the pattern of receipts from,
assets subject to finance lease and certain financial assets and financial liabilities (including derivative and the future financial outlook of, the concerned receivable party. It is reviewed by the management on a
financial instruments) at fair value through profit or loss. regular basis. Contract assets arise when the Group performs its performance obligations by transferring
goods or services to a customer before the customer pays consideration or before payment is due.
146 147
(i) Provision against loans to banking customers b) Associates

Ubank maintains a provision against loans as per the requirements of the Prudential Regulations (the Associates are entities over which the Group has significant influence, but not control, and generally
Regulations) for microfinance banks and assesses the adequacy of provision against delinquent portfolio. accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates
Any change in the criteria / rate for provision may affect the carrying amount of the loans with a corresponding are accounted for using the equity method of accounting, and are initially recognized at cost. The Group’s
effect on the mark-up / interest carried and provision charged. investment in associates includes goodwill identified on acquisition, net of any accumulated impairment
loss.
(j) Revenue from contracts with customers
The Group’s share of its associates’ post-acquisition profits or losses is recognized in the consolidated
The Group applies probability approach and constrains the unused resources pertaining to remaining statement of profit and loss, and its unrealized gains on transactions between the Group and its associates
performance obligations as at the reporting date for recognition of revenue against cash consideration are eliminated to the extent of the Group’s interest in the associates. Unrealized losses on the assets
received. Contract cost comprises incremental cost of acquiring the customers and the Group estimates transferred are also eliminated to the extent of the Group’s interest and considered an impairment indicator
the average life of the customer for amortization of capitalized contract cost. of such asset. Accounting policies of the associates are changed where necessary to ensure consistency
with the policies adopted by the Group.
5. Summary of significant accounting policies
The significant accounting policies adopted in the preparation of these consolidated financial statements 5.2 (a) IFRS 15 ‘Revenue from Contracts with Customers’
are set out below. These policies have been consistently applied to all the years for which financial The Group has adopted IFRS 15 with a date of initial application of January 01, 2018 other than Ubank . As a
information is presented in these consolidated financial statements except for the changes as disclosed in result, the Group has changed its accounting policy for revenue recognition. The Group has applied IFRS 15
para 5.2 in accordance with the retrospective transitional approach and accordingly the comparative periods have
been restated. As a result, the Group has changed its accounting policies as detailed below:
5.1 Consolidation
Impact of IFRS 15 ‘Revenue from Contracts with Customers’
a) Subsidiaries
Installation charges
Subsidiaries are entities over which the Group has the power to govern the financial and operating policies Installation charges for provision of voice, broadband, IPTV and corporate services were previously
generally accompanying a shareholding of more than one half of the voting rights. The consolidated financial being recognized as revenue when billed. Under IFRS 15, these charges are required to be deferred and
statements include Pakistan Telecommunication Company Limited and all companies in which it directly recognized as revenue over the average customer life.
or indirectly controls, beneficially owns or holds more than 50% of the voting securities or otherwise has
power to elect and appoint more than 50% of its directors. The existence and effect of potential voting Contract cost
rights that are currently exercisable or convertible are considered when assessing whether the Group The Group previously recognized cost of acquiring a customer as distribution and selling cost and cost
controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to of fulfilling a contract as cost of sales when they were incurred. Under IFRS 15, the Group capitalizes the
the Group. They are de-consolidated from the date control ceases to exist. incremental costs of obtaining and fulfilling a contract, if they are expected to be recovered. The capitalized
cost is amortized over the average customer life. Applying the practical expedient of IFRS 15, the Group
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. recognizes the incremental cost of obtaining and fulfilling a contract as expense when incurred if the
The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at amortization period of assets is less than one year.
acquisition date fair value and amount of any non controlling interest in the acquiree. For each business
combination, the acquirer measures the non controlling interest in the acquiree either at fair value or at Contract assets
the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed. The contract assets primarily relate to the Group’s rights to consideration for postpaid services provided to
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously subscribers but not billed at the reporting date. The contract assets are transferred to trade debts when
held equity interest in the acquiree is remeasured to fair value as at the acquisition date through profit the rights become unconditional.
or loss. Any contingent consideration to be transferred by the acquirer is recognized at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration, which is deemed to Contract liability
be an asset or liability, will be recognized in accordance with IFRS 9, either in profit or loss or charged to A contract liability is the obligation of the Group to transfer goods or services to a customer for which the
other comprehensive income. If the contingent consideration is classified as equity, it is remeasured until Group has received consideration or an amount of consideration is due from the customer. If a customer
it is finally settled within equity. pays consideration before the Group transfers goods or services to the customer, a contract liability is
recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are recognized as revenue when the Group discharges its obligation under the contract.
measured initially at their fair value at the acquisition date, irrespective of the extent of any non controlling
interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net Upfront maintenance and service fee
assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets The upfront maintenance and service fee was previously treated as a separate revenue item. Under IFRS 15,
of the subsidiary acquired, the difference is recognized directly in income. it has to be recognized as revenue on discharge of respective performance obligations. It will therefore be
allocated to the respective performance obligations i.e. voice, data, value added services and messaging.
Inter-company transactions, balances and unrealized gains on transactions between Group companies
are eliminated. Unrealized losses on assets transferred are also eliminated and considered an impairment Discount on prepaid cards and load
indicator of such assets. Accounting policies of subsidiaries have been changed where necessary to ensure The discount on prepaid cards and load was previously shown as a deduction to gross revenue. Under
consistency with the policies adopted by the Group. IFRS 15, it is allocated to the respective performance obligations viz. voice, data, value added services and
messaging.
148 149
Sale of handsets There is no change in the carrying amounts of financial assets and financial liabilities at the initial
Handset revenue is recognized separately from the handset cost as a separate performance obligation. application date of IFRS 9, except for a change in accounting classification as disclosed in the above table.
Previously, handset cost net of handset revenue was recognized in distribution and selling costs as
customer acquisition cost. Impairment of financial assets
IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘Expected Credit Loss’ (ECL) model. The new
The Group has not presented a third statement of financial position as at the beginning of the the preceding impairment model applies to financial assets measured at amortized cost, contract assets and debt
period (i.e. January 01, 2017) as the Group believes that the effect of restatement and reclassifications is investments at FVOCI. Under IFRS 9 credit losses are recognized earlier than under IAS 39, however, it has
not material. Effect of adoption of IFRS 15 has been disclosed in note 49. no significant impact on the Group’s financial statements.
5.2(b) IFRS 9 ‘Financial Instruments’ 5.3 Functional and presentation currency
The Group has adopted IFRS 9 with a date of initial application of January 01, 2018 other than Ubank. It has Items included in the consolidated financial statements of the Group are measured using the currency of the
no significant impact on the Group’s financial statements. primary economic environment in which the Group operates (the functional currency). These consolidated
IFRS 9 sets out requirements for recognizing and measuring financial assets, financial liabilities and financial statements are presented in Pakistan Rupees (Rs), which is the Group’s functional currency.
some contracts to buy or sell non-financial items. This standard replaces IAS 39 ‘Financial Instruments: 5.4 Foreign currency transactions and translations
Recognition and Measurement’.
Foreign currency transactions are translated into the functional currency, using the exchange rates
Classification and measurement of financial assets and financial liabilities prevailing on the date of the transaction. Monetary assets and liabilities, denominated in foreign
IFRS 9 contains three principal classification categories for financial assets: measured at amortised cost, currencies, are translated into the functional currency using the exchange rate prevailing on the date of
fair value through profit or loss (FVTPL) and fair value through other comprehensive income (FVOCI). The the consolidated statement of financial position. Foreign exchange gains and losses resulting from the
classification of financial assets under IFRS 9 is generally based on the business model in which a financial settlement of such transactions, and from the translation of monetary items at year end exchange rates,
asset is managed and its contractual cash flow characteristics. IFRS 9 eliminates the previous IAS 39 are charged to consolidated statement of profit or loss for the year.
categories of held to maturity, loans and receivables and available for sale.
5.5 Fair value measurement
IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of ‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly
financial liabilities. transaction between market participants at the measurement date in the principal or, in its absence, the
The following table and the accompanying notes explain the original measurement categories under IAS 39 most advantageous market to which the Group has access at that date. The fair value of a liability reflects
and new measurement categories under IFRS 9 for each class of the Group’s financial assets and financial its non-performance risk.
liabilities as at January 01, 2018. A number of Group’s accounting policies and disclosures require the measurement of fair values, for both
Original classification New classification
financial and non-financial assets and liabilities.
Financial assets Note under IAS 39 under IFRS 9
When it is available, the Group measures the fair value of an instrument using the quoted price in an active
Long term investments 21 Available for sale FVOCI market for that instrument. A market is regarded as active if transactions for the asset or liability take
Long term loans 22 Loans and receivables Amortized cost place with sufficient frequency and volume to provide pricing information on an ongoing basis.
Trade debts 25 Loans and receivables Amortized cost
If there is no quoted price in an active market, then the Group uses valuation techniques that maximize
Contract assets 25 Loans and receivables Amortized cost
the use of relevant observable inputs and minimize the use of unobservable inputs. The chosen valuation
Receivable from Govt. of Pakistan 29 Loans and receivables Amortized cost
technique incorporates all of the factors that market participants would take into account in pricing a
Deposits 30 Loans and receivables Amortized cost
transaction.
Other receivables 30 Loans and receivables Amortized cost
Interest accrued 30 Loans and receivables Amortized cost If an asset or a liability measured at fair value has a bid price and an ask price, then the Group measures
Forward exchange contracts 30 Held to maturity FVTPL assets and long positions at a bid price and liabilities and short positions at an ask price.
Short term investment T Bills 31 Loans and receivables Amortized cost
Short term investment Units of Mutual Funds 31 Available for sale FVTPL The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction
Cash and bank balances 32 Loans and receivables Amortized cost price i.e. the fair value of the consideration given or received. If the Group determines that the fair value
on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted
Financial liabilities price in an active market for an identical asset or liability nor based on a valuation technique for which
Loans from banks 7 Other financial liabilities Amortized cost any unobservable inputs are judged to be insignificant in relation to the measurement, then the financial
Subordinated debts 8 Other financial liabilities Amortized cost instrument is initially measured at fair value, adjusted to defer the difference between the fair value on
Vendor liabilities 14 Other financial liabilities Amortized cost initial recognition and the transaction price. Subsequently, that difference is recognized in the consolidated
Trade and other payables 15 Other financial liabilities Amortized cost profit or loss on an appropriate basis over the life of the instrument but no later than when the valuation is
Interest accrued Other financial liabilities Amortized cost wholly supported by observable market data or the transaction is closed out.
Short term running finance 16 Other financial liabilities Amortized cost
Security deposits 17 Other financial liabilities Amortized cost
150 151
5.6 Dividend distribution The main features of these benefits provided by the Group in the Holding Company and its subsidiaries -
The distribution of the final dividend, to the Group’s shareholders, is recognized as a liability in the PTML and Ubank are as follows:
consolidated financial statements in the period in which the dividend is approved by the Group’s
PTCL
shareholders; the distribution of the interim dividend is recognized in the period in which it is declared by
the Board of Directors of the Holding Company. (a) PTCL Employees GPF Trust
5.7 Insurance reserve The Holding Company operates an approved funded provident plan covering its permanent employees.
For the purpose of this plan, a separate trust, the “PTCL Employees GPF Trust” (the Trust), has been
The Group has created an insurance reserve for any losses to the Group’s asset resulting from theft, fire,
established. Monthly contributions are deducted from the salaries of employees and are paid to the Trust
natural or other disasters. Appropriations out of profits to this reserve, are made at the discretion to the
by the Holding Company. In line with the Trust’s earnings for a year, the Board of Trustees approves a profit
Board of Directors.
rate for payment to the members. The Holding Company contributes to the fund, the differential, if any, of
5.8 Statutory reserve the interest paid / credited for the year and the income earned on the investments made by the Trust.
In compliance with the requirements of the Regulation R-4, Ubank maintains statutory reserve to which (b) Defined benefit plans
an appropriation equivalent to 20% of the profit after tax is made till such time the reserve fund equals the
The Holding Company provides the following defined benefits:
paid up capital of Ubank. However, thereafter, the contribution is reduced to 5% of the profit after tax.
(i) Pension plans
5.9 Depositors’ protection fund
The Holding Company accounts for an approved funded pension plan operated through a separate
In compliance with the requirements of section 19 of the Microfinance Institutions Ordinance 2001, Ubank trust, the “Pakistan Telecommunication Employees Trust” (PTET), for its employees recruited prior to
contributes 5% of annual profit after tax to the Depositors’ Protection Fund for the purpose of providing January 01, 1996 when the Holding Company took over the business from PTC. The Holding Company
security or guarantee to the persons depositing money in Ubank. also operates an unfunded pension scheme for employees recruited on a regular basis, on or after
January 01, 1996.
5.10 Cash reserve
In compliance with the requirements of the Regulation R-3A, Ubank maintains a cash reserve equivalent (ii) Gratuity plan
to not less than 5% of its deposits (including demand deposits and time deposits with tenure of less than 1 The Holding Company operates an approved funded gratuity plan for its New Terms and Conditions
year) in a current account opened with the State Bank of Pakistan (SBP) or its agent. (NTCs) employees and contractual employees.
5.11 Statutory liquidity requirement (iii) Medical benefits plan

The Holding Company provides a post retirement medical facility to pensioners and their families.
In compliance with the requirements of the Regulation R-3B, Ubank maintains liquidity equivalent to at Under this unfunded plan, all ex-employees, their spouses, their children up to the age of 21 years
least 10% of its total demand liabilities and time liabilities with tenure of less than one year in the form (except unmarried daughters who are not subject to the 21 years age limit) and their parents residing
of liquid assets i.e. cash, gold, unencumbered treasury bills, Pakistan Investment Bonds and Government with them and any other dependents, are entitled to avail the benefits provided under the scheme. The
of Pakistan sukuk bonds. Treasury bills and Pakistan Investment Bonds held under depositors’ protection facility remains valid during the lives of the pensioner and their spouse. Under this facility there are no
fund are excluded for the purposes of determining liquidity. annual limits to the cost of medicines, hospitalized treatment and consultation fees.
5.12 Borrowings and borrowing costs (iv) Accumulated compensated absences
Borrowings are recognized equivalent to the value of the proceeds received by the Group. Any difference, The Holding Company provides a facility to its employees for accumulating their annual earned leaves.
between the proceeds (net of transaction costs) and the redemption value, is recognized in income, over Accumulated leaves can be encashed at the end of the employees’ service, based on the latest drawn
the period of the borrowings, using the effective interest method. gross salary as per Holding Company policy.
Borrowing costs, which are directly attributable to the acquisition and construction of a qualifying asset, (v) Benevolent grants
which are assets that necessarily take a substantial period of time to get ready for their intended use or The Holding Company pays prescribed benevolent grants to eligible employees / retirees and their
sale, are capitalized as part of the cost of that asset. All other borrowing costs are charged to income for heirs.
the year.
The liability recognized in the consolidated statement of financial position in respect of defined benefit
5.13 Customer deposits plans, is the present value of the defined benefit obligations at the date of the consolidated statement of
Deposits with Ubank are initially recorded at the amounts of proceeds received. Mark-up accrued on financial position less the fair value of plan assets.
deposits is recognized separately as part of other liabilities and is charged to the consolidated statement The defined benefit obligations are calculated annually, by an independent actuary using the projected unit
of profit or loss over the period. credit method. The most recent valuations were carried out as at December 31, 2018. The present value
5.14 Employees retirement benefits of a defined benefit obligation is determined, by discounting the estimated future cash outflows, using the
interest rates of high quality corporate bonds that are nominated in the currency in which the benefits will
The Group provides various retirement / post retirement benefit schemes to its employees. The plans be paid, and that have terms to maturity approximating the terms of the related liability. Remeasurement
are generally funded through payments determined by periodic actuarial calculations or up to the limits gains and losses arising from experience adjustments and changes in actuarial assumptions are
allowed in the Income Tax Ordinance, 2001. The Group has constituted both defined contribution and recognized in other comprehensive income for the year except remeasurement gains and losses arising
defined benefit plans. on compensated absences which are recognized in consolidated statement of profit or loss.
152 153
PTML (ii) Provident fund

Bank operates a defined contribution provident fund scheme for permanent employees. Contributions
(i) Gratuity plan to the fund are made on monthly basis by Bank and employees at an agreed rate of salary (8% of the
PTML operates a funded gratuity scheme, a defined benefit plan, for all permanent employees which basic salary of the employee), the fund is managed by its Board of Trustees. The contribution of Ubank
has been approved by the Commissioner of Income Tax in accordance with Part III of Sixth Schedule is charged to profit or loss .
to the Income Tax Ordinance, 2001. Gratuity is payable to each permanent employee with a minimum
qualifying service period of three years. 5.15 Government grants
The liability recognized in the consolidated statement of financial position in respect of defined benefit Government grants are recognized at their fair values, as deferred income, when there is reasonable
plan is the present value of the defined benefit obligation at the end of the reporting period less the assurance that the grants will be received and the Group will be able to comply with the conditions
fair value of plan assets. Defined benefit obligation is based on actuarial valuation by independent associated with the grants.
actuary based on projected unit credit method. The present value of the defined benefit obligation
is determined by discounting the estimated future cash outflows using interest rates of government Grants that compensate the Group for expenses incurred, are recognized on a systematic basis in the
bonds that are denominated in Pakistan rupee and have terms to maturity approximating the terms of income for the year in which the related expenses are recognized. Grants that compensate the Group for
the related liability. the cost of an asset are recognized in income on a systematic basis over the expected useful life of the
related asset.
The current service cost of the defined benefit plan, recognized in the profit or loss for the year reflects
the increase in the defined benefit obligation resulting from employee service in the current year. 5.16 Trade and other payables
Past service costs are recognized immediately in the profit or loss for the year. The net interest cost is Liabilities for creditors and other amounts payable are carried at cost, which is the fair value of the
calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair consideration to be paid in the future for the goods and/or services received, whether or not billed to the
value of plan assets, and is recognized in the profit or loss for the year. Group.
Actuarial gains and losses arising for experience adjustments and changes in actuarial assumptions 5.17 Non current Assets
are charged or credited to other comprehensive income in the period in which they arise.
(a) Property, plant and equipment
(ii) Provident fund Property, plant and equipment, except freehold land and capital work in progress, is stated at cost less
PTML operates an approved contributory provident fund, a defined contribution plan, for all permanent accumulated depreciation and any identified impairment losses; freehold land is stated at cost less
employees which has been approved by the Commissioner of Income Tax in accordance with Part III of identified impairment losses, if any. Cost includes expenditure, related overheads, mark-up and borrowing
Sixth Schedule to the Income Tax Ordinance, 2001. PTML’s obligation for contribution to the provident costs that are directly attributable to the acquisition of the asset.
fund is charged to profit or loss for the year.
Subsequent costs, if reliably measurable, are included in the asset’s carrying amount, or recognized as
Ubank a separate asset as appropriate, only when it is probable that future economic benefits associated with
the cost will flow to the Group. The carrying amount of any replaced parts as well as other repair and
(i) Gratuity plan maintenance costs, are charged to income during the period in which they are incurred.
Ubank operates defined benefit plan comprising an unfunded gratuity scheme covering all eligible
employees completing the minimum qualifying period of service (three years) as specified by the Capital work in progress is stated at cost less impairment loss, if any. It consists of expenditure incurred in
scheme. respect of tangible and intangible fixed assets in the course of their construction and installation.
Ubank’s net liability in respect of this defined benefit plan is calculated by estimating the amount Depreciation on assets is calculated, using the straight line method, to allocate their cost over their
of future benefit that employees have earned in the current and prior periods and discounting that estimated useful lives.
amount.
Depreciation on additions to property, plant and equipment, is charged from the month in which the
The calculation of defined benefit liability is performed annually by a qualified actuary using the relevant asset is acquired or capitalized, while no depreciation is charged for the month in which the asset
projected unit credit method (PUC). is disposed off. Impairment loss, if any, or its reversal, is also charged to income for the year. Where an
impairment loss is recognized, the depreciation charge is adjusted in future periods to allocate the asset’s
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses are revised carrying amount, less its residual value, over its estimated useful life.
recognized immediately in other comprehensive income. Bank determines the net interest expense on
the net defined benefit liability for the year by applying the discount rate used to measure the defined An item of property and equipment is derecognized upon disposal or when no future economic benefits
benefit liability at the beginning of the annual period to the then-net defined benefit liability, taking are expected from its use or disposal. The gain or loss on disposal of an asset, calculated as the difference
into account any changes in the net defined benefit liability during the year as a result of contributions between the sale proceeds and the carrying amount of the asset, is recognized in income for the year.
and benefit payments. Net interest expense and other expenses related to defined benefit plan are
Assets subject to finance lease are stated at the lower of present value of minimum lease payments at
recognized in profit or loss account.
inception of the lease period and their fair value less accumulated impairment losses and accumulated
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that depreciation at the annual rates specified. The outstanding obligation under finance lease less finance
relates to past service or the gain or loss on curtailment is recognized immediately in the consolidated charges allocated to future periods is shown as liability. Finance charges are calculated at interest rates
profit or loss . Bank recognizes gains and losses on the settlement of a defined benefit plan when the implicit in the lease and are charged to the consolidated statement of profit or loss in the year in which
settlement occurs. these are incurred.
154 155
(b) Intangible assets 5.21 Stores and spares

(i) Goodwill Store and spares are stated at the lower of cost and net realizable value. Cost is determined using the
Goodwill is initially measured at cost being the excess of the consideration transferred, over the fair weighted average method. Items in transit are valued at cost, comprising invoice values and other related
value of subsidiary’s identifiable assets acquired and liabilities assumed. charges incurred up to the date of the consolidated statement of financial position.
(ii) Licenses 5.22 Trade debts and contract assets

These are carried at cost less accumulated amortization and any identified impairment losses. Trade debts are carried at their original invoice amounts, less any estimates made for doubtful debts based
Amortization is calculated using the straight line method, to allocate the cost of the license over its on a review of all outstanding amounts at the year end. Bad debts are written off as per Group policy.
estimated useful life, and is charged to consolidated statement of profit or loss for the year.
Effect of adoption of IFRS 15 on opening balances has been disclosed in note 49.
The amortization on licenses acquired during the year, is charged from the month in which a license is
acquired / capitalized, while no amortization is charged in the month of expiry / disposal of the license. 5.23 Loans to banking customers
(iii) Computer software Loan to banking customers are stated net of provision for non-performing advances. The outstanding
These are carried at cost less accumulated amortization, and any identified impairment losses. principal and mark-up of the loans and advances, payments against which are overdue for 30 days or more
Amortization is calculated, using the straight line method, to allocate the cost of software over their are classified as non-performing loans (NPLs). The unrealized interest / profit / mark-up / service charges
estimated useful lives, and is charged to income for the year. Costs associated with maintaining on NPLs is suspended and credited to interest suspense account. Further, the NPLs are classified into
computer software, are recognized as an expense as and when incurred. following categories as prescribed in the Regulations:
The amortization on computer software acquired during the year, is charged from the month in which Other assets especially mentioned
the software is acquired or capitalized, while no amortization is charged for the month in which the These are advances, payments against which are overdue for 30 days or more but less than 60 days.
software is disposed off.
Substandard
If payment for an intangible asset is deferred beyond normal credit terms, it is recognized at the cash
These are advances, payments against which are overdue for 60 days or more but less than 90 days.
price equivalent. The difference between the cash price equivalent and the total payments is recognized as
interest expense over the period of credit. Doubtful
5.18 Impairment of non-financial assets These are advances, payments against which are overdue for 90 days or more but less than 180 days.
Assets that have indefinite useful lives, for example freehold land, are not subject to depreciation and are Loss
tested annually for impairment. Assets that are subject to depreciation are reviewed for impairment on
the date of consolidated statement of financial position, or whenever events or changes in circumstances These are advances, payments against which are overdue for 180 days or more.
indicate that the carrying amount may not be recoverable. An impairment loss is recognized, equal to the In addition Ubank maintains a watch list of all accounts overdue for 5-29 days. However, such accounts are
amount by which the asset’s carrying amount exceeds its recoverable amount. An asset’s recoverable not treated as non-performing for the purpose of classification / provisioning.
amount is the higher of its fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows. In accordance with the Regulations, Ubank maintains specific provision of outstanding principal net of cash
Non-financial assets that suffered an impairment, are reviewed for possible reversal of the impairment collaterals and gold (ornaments and bullion) realizable without recourse to a Court of Law at the following
at each consolidated statement of financial position date. Reversals of the impairment loss are restricted rates:
to the extent that asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortization, if no impairment loss has been recognized. An impairment Other assets especially mentioned nil
loss, or the reversal of an impairment loss, are both recognized in the consolidated statement of profit or Substandard 25% of outstanding principal net of cash collaterals
loss for the year. Doubtful 50% of outstanding principal net of cash collaterals
Loss 100% of outstanding principal net of cash
5.19 Long term loans collaterals
Long term loans are initially recognized at present value of loan amount disbursed to employees. On initial
recognition, the discount representing difference between loan disbursed and its present value is charged
In addition to above, a general provision is made equivalent to 1% (2017: 1%) of the net outstanding balance
in the consolidated statement of profit or loss. Subsequently, the unwinding of discount on present value
(advance net of specific provisions) in accordance with the requirement of the Regulations.
of loans is recognized as income over the loan term using the effective interest method.
General and specific provision is charged to statement of profit or loss in the period in which they occur.
5.20 Stock in trade
Stock in trade is valued at the lower of cost and net realizable value. Cost comprises the purchase price of Non-performing advances are written off one month after the loan is classified as “Loss”. However, Ubank
items of stock, including import duties and other related costs. Cost is determined on a weighted average continues its efforts for recovery of the written off balances.
basis. Net realisable value is the estimated selling price in the ordinary course of business less estimated
cost necessary to make the sale. Under exceptional circumstances management reschedules repayment terms for clients who have suffered
catastrophic events and who appear willing and able to fully repay their loans. The classification made as
per Regulation is not changed due to such rescheduling.
156 157
5.24 Cash and cash equivalents 5.27.2 Recognition and measurement

Cash and cash equivalents are carried at cost. Cash and cash equivalents comprise cash in hand, cash with Trade and other receivables are initially recognized when they are originated. All other financial assets and
banks and short term finances under mark up arrangements with banks. Cash equivalents are short term financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of
highly liquid investments, that are readily convertible to known amounts of cash and which are subject to the instrument.
an insignificant risk of change in value.
A financial asset (unless it is a trade receivable without a significant financing component) or financial
5.25 Provisions liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL),
Provisions are recognized when the Group has a present legal or constructive obligation as a result of transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a
past events, it is probable that an outflow of resources embodying economic benefits will be required to significant financing component is initially measured at the transaction price.
settle the obligation and a reliable estimate of the amount can be made. Provisions are reviewed at each 5.27.3 Subsequent measurement and gains and losses
consolidated statement of financial position date and are adjusted to reflect the current best estimate.
(i) Financial assets at These assets are subsequently measured at amortized cost using the
5.26 Contingent liabilities amortized costs effective interest method. The amortized cost is reduced by impairment
A contingent liability is disclosed when the Group has a possible obligation as a result of past events, losses. Interest income, foreign exchange gains and losses and impairment
the existence of which will be confirmed only by the occurrence or non-occurrence, of one or more are recognized in profit or loss. Any gain or loss on derecognition is recognized
uncertain future events, not wholly within the control of the Group; or when the Group has a present legal in profit or loss.
or constructive obligation, that arises from past events, but it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, or the amount of the obligation (ii) Financial assets at Debt investments are subsequently measured at fair value. Interest income
cannot be measured with sufficient reliability. FVOCI calculated using effective interest method, foreign exchange gains and losses
and impairment are recognized in profit or loss. Other net gains and losses
5.27 Financial instruments are recognized in OCI. On derecognition, gains and losses accumulated in OCI
5.27.1 Classification are reclassified to profit or loss.
The Group classifies its financial assets other than for Ubank on initial recognition in the following Equity investments are subsequently measured at fair value. Interest income
categories: at amortized cost, at fair value through profit or loss (FVTPL) and at fair value through other calculated using effective interest method, foreign exchange gains and losses
comprehensive income (FVOCI). Financial assets are not reclassified subsequent to their initial recognition and impairment are recognized in profit or loss. Other net gains and losses
unless the Group changes its business model for managing financial asset, in which case all affected are recognized in OCI. On derecognition, gains and losses accumulated in OCI
financial assets are reclassified on the first day of the first reporting period following the change in the are reclassified to profit or loss.
business model.
(iii) Financial assets at These assets are subsequently measured at fair value. Net gains and losses,
(i) Amortized cost FVTPL including any interest or dividend income, are recognized in profit or loss.
A financial asset is measured at amrotized cost if it meets both of the following conditions and is not
designated as at FVTPL: (i) It is held within a business model whose objective is to hold assets to Financial assets of the Group include trade debts, contract assets, long term loans, deposits, other
collect contractual cash flows; and (ii) Its contractual terms give rise on specified dates to cash flows receivables, short term investments and forward exchange contracts.
that are solely payments of principal and interest on the principal amount outstanding.
5.27.4 Impairment of financial assets
(ii) Fair value through other comprehensive income The Group recognizes loss allowance for Expected Credit Losses (ECLs) on financial assets measured at
A debt investment is measured at FVOCI if it meets both of the following conditions and is not amortized cost and contract assets. The Group measures loss allowances at an amount equal to lifetime
designated as at FVTPL: (i) It is held within a business model whose objective is achieved by both ECLs. The gross carrying amount of a financial asset is written off when the Group has no reasonable
collecting contractual cash flows and selling financial assets; and (ii) Its contractual terms give rise on expectations of recovering a financial asset in its entirety or a portion thereof.
specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. Lifetime ECLs are those that result from all possible default events over the expected life of a financial
instrument. The maximum period considered when estimating ECLs is the maximum contractual period
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably over which the Group is exposed to credit risk.
elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an
investment by investment basis. At each reporting date, the Group assesses whether the financial assets carried at amortized cost are
credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental
(iii) Fair value through profit or loss impact on the estimated future cash flows of the financial asset have occurred.
All financial assets not classified as measured at amortized cost or FVOCI as described above are
measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying
irrevocably designates a financial asset that otherwise meets the requirements to be measured at amount of the assets.
amortized cost or at FVOCI as FVTPL if doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise. The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations
of recovering a financial asset in its entirety or a portion thereof.
158 159
5.27.5 Financial liabilities a customer can benefit from it. The consideration is allocated between separate product and services (i.e.
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified distinct performance obligations, “POs”) in a bundle based on their stand-alone selling prices.
as FVTPL if it is classified as held-for-trading, it is derivative or it is designated as such on initial recognition.
Product and services may be sold separately or in bundled packages. For bundled packages, the Group
Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest
accounts for individual products and services separately if they are distinct i.e. if the product or service is
expense, are recognized in consolidated profit or loss. Other financial liabilities are subsequently measured
separately identifiable from other items in the bundled package and a customer can benefit from it. The
at amortized cost using the effective interest method. Interest expense and foreign exchange gains and
consideration is allocated between separate products and services in a bundle based on their stand-alone
losses are recognized in conslidated statement of profit or loss. Any gain or loss on derecognition is also
selling prices.
recognized in consolidated profit or loss. The financial liabilities of the Group include subordinated debt,
long term loans from banks, long term vendor liability, short term security deposits, interest accrued, The stand-alone selling prices are determined based on the observable price at which the Group sells the
short term running finance and trade and other payables. products and services on a stand-alone basis. For items that are not sold separately, the Group estimates
stand-alone selling prices using other methods (i.e. adjusted market assessment approach, cost plus
5.27.6 Derecognition
margin approach or residual approach).
Financial assets
The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial Nature and timing of satisfaction of performance obligations
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
Products and services Nature and timing of satisfaction of performance obligations
substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the
Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not
Voice, Broadband, IPTV The Holding Company recognizes revenue as and when these services are
retain control of the financial asset.
provided (i.e. actual usage by the customer).
Financial liabilities Devices The Holding Company recognizes revenue when the control of the device is
The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, transferred to the customer. This usually occurs at the contract inception
or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows when the customer takes the possession of the device.
of the modified liability are substantially different, in which case a new financial liability based on the
modified terms is recognized at fair value. On derecognition of a financial liability, the difference between Installation charges Installation services provided for service fulfillment are not distinct POs and
the carrying amount extinguished and the consideration paid (including any non-cash assets transferred the amount charged for installation service is recognized over the average
or liabilities assumed) is recognized in profit or loss. customer life.
Corporate services Revenue is recognized over the period when these services are provided to the
5.27.7 Derivative financial instruments
customers. Where hardware (e.g. routers) are provided as part of the contract,
Derivative financial instruments are initially recognized at fair value on the date on which the derivative the Holding Company recognizes these as distinct POs only if the customer
contract is entered into and are subsequently re-measured at fair value using valuation techniques. All can benefit from them either by selling for more than scrap value or using
derivative financial instruments are carried as assets when fair value is positive and liabilities when fair with services from other service providers.
value is negative. Any change in the fair value of derivative financial instruments is taken to the consolidated
profit or loss . Carrier and Wholesale Revenue from C&WS services is recognized when the services are rendered.
(C&WS)
5.27.8 Offsetting Mobile telecommunication Mobile telecommunication services include voice, data and messaging
Financial assets and liabilities are offset and the net amount is reported in the consolidated statement of services services. Group recognizes revenue as and when these services are provided.
financial position, if the Group has a legally enforceable right to set off the recognized amounts, and the These services are either prepaid or billed, in which case they are paid for on a
Group either intends to settle on a net basis, or realize the asset and settle the liability simultaneously. monthly basis. Revenue for SIM activation and special numbers is recognized
on the date of activation.
5.28 (a) Revenue recognition
Equipment revenue Group recognizes revenue when the control of the device is transferred to the
Revenue is measured at an amount that reflects the consideration to which the Group expects to be entitled customer. This usually occurs at the contract inception when the customer
in exchange for transferring promised goods or services to a customer, excluding amounts collected on takes the possession of the device.
behalf of third parties.
Corporate revenue Revenue is recognized over the period when services are provided to the
Revenue is recognized when the Group satisfies the performance obligations by transferring a promised customers. Where hardware are provided as part of the contract, the Group
good or service to a customer. Goods or services are transferred when the customer obtains control of the recognizes these as distinct performance obligation only if the hardware is
assets. not locked and if the customer can benefit from them either by selling for
more than scrap value or using with services from other service providers.
The Group mainly generates revenue from providing telecommunication services such as data, voice, IPTV,
connectivity services, interconnect, information and communication technology (ICT), digital solutions and International revenue Revenue is recognized over the period when services are provided to
equipment sales, messaging services, sales of mobile devices etc. customers.
Wholesale revenue Wholesale revenue mainly comprises revenue from call center services,
Services are offered separately and as bundled packages along with other services and/or devices.
application-to-person messaging services, etc. the Group recognizes revenue
For bundled packages, the Group accounts for individual products and services separately if they are as and when these services are provided.
distinct i.e. if a product or service is separately identifiable from other items in the bundled package and if
160 161
Principal versus agent presentation (a) Current
When the Group sells goods or services as a principal, revenue and related cost is reported on a gross The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
basis in revenue and operating costs. If the Group sells goods or services as an agent, revenue and related the date of the consolidated statement of financial position. Management periodically evaluates positions
cost are recorded in revenue on a net basis, representing the margin earned. taken in tax returns, with respect to situations in which applicable tax regulation is subject to interpretation,
and establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax
Whether the Group is considered to be the principal or an agent in the transaction depends on analysis authorities.
by management of both the legal form and substance of the agreement between the Company and its
business partners; such judgments impact the amount of reported revenue and operating expenses but do (b) Deferred
not impact reported assets, liabilities or cash flows. Deferred income tax is accounted for using the balance sheet liability method in respect of all temporary
differences arising between the carrying amounts of assets and liabilities in the consolidated financial
5.28 (b) Ubank revenue recognition statements and the corresponding tax bases used in the computation of taxable profit.
(i) Mark-up / income on loans to banking to customers Deferred income tax liabilities are recognized for all taxable temporary differences and deferred tax assets
Mark-up / income / return / service charges on advances is recognized on accrual / time proportion are recognized to the extent that it is probable that taxable profits will be available against which the
basis using effective interest method at Bank’s prevailing interest rates for the respective loan products. deductible temporary differences, unused tax losses and tax credits can be utilized.
Mark-up / income on advances is collected with loan instalments. Due but unpaid service charges /
income are accrued on overdue advances for period up to 30 days. After 30 days, overdue advances Deferred income tax is calculated at the rates that are expected to apply to the year when the differences
are classified as non-performing and recognition of unpaid service charges / income ceases. Further, reverse, and the tax rates that have been enacted, or substantively enacted, at the date of the consolidated
accrued mark-up on non-performing advances are reversed and credited to suspense account. statement of financial position.
Subsequently, mark-up recoverable on non-performing advances is recognized on a receipt basis in
accordance with the requirements of the Regulations. Application processing fee is recognized as 5.33 Operating segments
income when service is performed. Operating segments are reported in a manner consistent with the internal reporting of the Group in note
47 to the consolidated financial statements.
(ii) Income from investment
Mark-up / return on investments is recognized on time proportion basis using effective interest method.
Where debt securities are purchased at premium or discount, the related premiums or discounts are
amortized through the profit or loss account over the remaining period of maturity of said investment.
Gain or loss on sale of securities is accounted for in the period in which the sale occurs.
(iii) Fee, commission and brokerage income

Fee, commission and brokerage income are recognized as services are performed.
(iv) Income on inter bank deposits

Income on interbank deposits in saving accounts are recognized in the consolidated statement of profit
or loss using the effective interest method.
5.29 Income on bank deposits

Return on bank deposits is recognized using the effective interest method.
5.30 Dividend income

Dividend income is recognized when the right to receive payment is established.
5.31 Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases are charged to consolidated profit
or loss on a straight line basis over the period of the lease.
5.32 Taxation
The tax expense for the year comprises of current and deferred income tax, and is recognized in income
for the year, except to the extent that it relates to items recognized directly in the consolidated statement
of comprehensive income, in which case the related tax is also recognized in the consolidated statement
of comprehensive income.
162 163
6. Share capital 7. Long term loans from banks

6.1 Authorized share capital These represent secured loans from following banks:
2018 2017 2018 2017 Quarterly /
(Number of shares ‘000) Rs ‘000 Rs ‘000 Repayment semi annual
Annual commencement repayment Outstanding loan
mark-up rate date installments balance
11,100,000 11,100,000 “A” class ordinary shares of Rs 10 each 111,000,000 111,000,000
3,900,000 3,900,000 “B” class ordinary shares of Rs 10 each 39,000,000 39,000,000 2018 2017
3-month KIBOR plus Interest Principal Note Rs ‘000 Rs ‘000
15,000,000 15,000,000 150,000,000 150,000,000
Allied Bank Limited 0.25% July 2014 July 2017 12 500,000 833,333
6.2 Issued, subscribed and paid up capital United Bank Limited 0.25% July 2014 July 2016 16 575,000 850,000
2018 2017 2018 2017 MCB Bank Limited 0.25% July 2014 July 2017 12 500,000 833,333
(Number of shares ‘000) Rs ‘000 Rs ‘000 MCB Bank Limited 0.25% July 2014 July 2018 12 3,333,333 4,000,000
Faysal Bank Limited 0.25% July 2014 July 2018 12 1,666,667 2,000,000
3,774,000 3,774,000 “A” class ordinary shares of Rs 10 each 37,740,000 37,740,000 Bank Al-Habib Limited 0.25% July 2014 July 2018 12 833,333 1,000,000
issued as fully paid for consideration Bank Alfalah Limited 0.25% July 2014 July 2018 12 833,333 1,000,000
other than cash - note 6.3 and note 6.5. Allied Bank Limited 0.25% March 2015 March 2019 12 2,000,000 2,000,000
1,326,000 1,326,000 “B” class ordinary shares of Rs 10 each 13,260,000 13,260,000 United Bank Limited 0.25% March 2015 March 2019 12 1,000,000 1,000,000
issued as fully paid for consideration Meezan Bank Limited 0.25% August 2015 August 2019 12 2,000,000 2,000,000
other than cash - note 6.3 and note 6.6. Habib Bank Limited
- Islamic banking 0.25% September 2015 September 2019 12 2,000,000 2,000,000
5,100,000 5,100,000 51,000,000 51,000,000 Dubai Islamic Bank Limited 0.25% October 2015 October 2019 12 1,000,000 1,000,000
Habib Bank Limited
6.3 These shares were initially issued to the Government of Pakistan, in consideration for the assets and - Islamic banking 0.25% March 2016 March 2020 12 1,000,000 1,000,000
liabilities transferred from Pakistan Telecommunication Corporation (PTC) to the Holding Company, under United Bank Limited 0.25% May 2016 May 2020 12 2,000,000 2,000,000
the Pakistan Telecommunication (Re-organization) Act, 1996, as referred to in note 1.1. Allied Bank Limited 0.25% May 2016 May 2020 12 3,000,000 3,000,000
MCB Bank Limited 0.24% March 2018 March 2022 12 1,000,000 1,000,000
6.4 Except for voting rights, the “A” and “B” class ordinary shares rank pari passu in all respects. “A” class MCB Bank Limited 0.24% March 2018 March 2022 12 1,500,000 -
ordinary shares carry one vote and “B” class ordinary shares carry four votes, for the purposes of election United Bank Limited 0.25% July 2014 July 2018 12 833,333 1,000,000
of directors. “A” class ordinary shares cannot be converted into “B” class ordinary shares; however, “B” 7.1 25,574,999 26,516,666
class ordinary shares may be converted into “A” class ordinary shares, at the option, exercisable in writing 6-Month KIBOR plus
and submitted to the Holding Company, by the holders of three fourths of the “B” class ordinary shares. In Pak Oman Investment
the event of termination of the license issued to the Holding Company, under the provisions of Pakistan Co. Limited 2.00% April 2016 April 2017 5 7.2 100,000 300,000
Telecommunication (Re-organization) Act, 1996, the “B” class ordinary shares shall be automatically Bank Alfalah Limited 1.50% September 2016 September 2017 5 7.3 120,000 240,000
converted into “A” class ordinary shares. United Bank Limited 1.50% December 2016 December 2017 5 7.4 40,000 80,000
Allied Bank Limited 1.10% September 2017 September 2018 6 7.5 1,250,000 1,500,000
6.5 The Government of Pakistan, through an “Offer for Sale” document, dated July 30, 1994, issued to its Faysal Bank Limited 1.00% August 2018 September 2019 8 7.6 1,000,000 -
domestic investors, a first tranche of vouchers exchangeable for “A” class ordinary shares of the Holding Faysal Bank Limited - II 0.75% June 2019 June 2020 6 7.7 1,000,000 -
Company. Subsequently, through an Information Memorandum dated September 16, 1994, a second Allied Bank Limited - II 0.95% June 2019 June 2020 6 7.8 2,000,000 -
tranche of vouchers was issued to international investors, also exchangeable, at the option of the voucher Commercial Paper 9-Month KIBOR + 1.00% September 2018 September 2018 7.9 - 949,487
holders, for “A” class ordinary shares or Global Depository Receipts (GDRs) representing “A” class ordinary National Bank of Pakistan 3-Month KIBOR + 0.75% March 2019 7.10 500,000 -
shares of the Holding Company. Out of 3,774,000 thousand “A” class ordinary shares, vouchers against
601,084 thousand “A” class ordinary shares were issued to the general public. Till December 31, 2018, 6,010,000 3,069,487
599,547 thousand (December 31, 2017: 599,545 thousand) “A” class ordinary shares had been exchanged 31,584,999 29,586,153
for such vouchers. Current portion (7,176,667) (4,001,154)
24,408,332 25,584,999
6.6 In pursuance of the privatization of the Holding Company, a bid was held by the Government of Pakistan on
June 08, 2005 for sale of “B” class ordinary shares of Rs 10 each, conferring management control. Emirates
7.1 Loans are secured by way of first charge ranking pari passu by way of hypothecation over all present and
Telecommunication Corporation (Etisalat), UAE was the successful bidder. The 26% (1,326,000,000 shares)
future movable equipment and other assets (excluding land, building and license) of PTML. The unavailed
“B” class ordinary shares, along with management control, were transferred with effect from April 12,
available facility of PTML from MCB Bank Limited as of December 31, 2018 was Rs 2,000,000 thousand.
2006, to Etisalat International Pakistan (EIP), UAE, which, is a subsidiary of Etisalat.
3-month KIBOR stands at 10.55% at December 31, 2018 ( December 31,2017:6.16%)
7.2 This represent outstanding balance of term finance loan of Rs 500,000 thousand carrying markup of
6-month KIBOR plus 2.0% (2017: 6-month KIBOR plus 2.0%) per annum payable semi-annually. This is
164 165
secured against first pari passu charge on present and future advances of Ubank with 25% margin over 8. Subordinated debt
facility amount and post dated cheques of principal repayments. This loan is repayable in 5 equal semi- This represents term finance certificates (TFCs) of Rs 600,000 thousand distributed in 120,000 TFCs of
annual instalments of Rs 100,000 thousand each. Repayments have started from April 2017. Rs 5,000 each issued as subordinated loan in June 2017. The loan is availed as TIER-II subordinated debt
for inclusion in Ubank’s Supplementary Capital. The facility tenure is 7 years and is priced at 6 Month
7.3 This represent outstanding balance of term finance loan of Rs 300,000 thousand carrying markup of
KIBOR + 3.50%. The instrument is structured to redeem 0.02% of principal, semi-annually, over the first 60
6-month KIBOR plus 1.5% (2017: 6-month KIBOR plus 1.5%) per annum payable semi-annually. This is
months and remaining principal of 24.95% each of the issue amount respectively, in four equal instalments
secured against first pari passu charge on present and future advances of Ubank for Rs 400,000 thousand
starting from 66th month. The TFCs are subordinated as to the payment of principal and profit to all other
registered with SECP and State Bank of Pakistan guarantee through SBP Microfinance guarantee facility
indebtness of Ubank. The rating of these certificates issued by JCR-VIS is A- with a stable outlook.
covering 60% loss sharing on pricipal amount disbursed. This loan is repayable in 5 equal semi-annual
instalments of Rs 60,000 thousand each. Repayments have started from September 2017. 2018 2017
Rs ‘000 Rs ‘000
7.4 This represents outstanding balance of term finance loan of Rs 100,000 thousand carrying markup of
6-month KIBOR plus 1.5% (2017: 6-month KIBOR plus 1.5%) per annum payable semi-annually. This is 9. Customers deposits
secured 100% against first pari passu charge on present and future curent assets of Ubank with 25%
margin as well as assignment on revenue, charge amount of Rs 133,330 thousand. This loan is repayable Fixed deposits 12,243,826 7,313,253
in 5 equal semi-annual instalments of Rs 20,000 thousand each. Repayments have started from December Saving deposits 6,208,686 2,375,025
2017. Current deposits 2,082,098 1,133,212
20,534,610 10,821,490
7.5 This represents outstanding balance of term finance facility under syndicate financing through Allied Bank Current portion (17,133,725) (6,937,146)
Limited of Rs 1,500,000 thousand carrying markup of 6-month KIBOR plus 1.10% (2017: 6-month KIBOR
plus 1.10%) per annum payable semi-annually. These are secured against first pari passu charge over 3,400,885 3,884,344
all present and future assets of Ubank with 25% margin. This loan is repayable in 6 equal semi-annual
instalments of Rs 250,000 thousand each. Repayments have started from September 2018. 10. Liability against assets subject to finance lease
7.6 This represent term finance loan of Rs 1,000,000 thousand carrying markup of 6-month KIBOR plus 1% The minimum lease payments due under the lease agreements are payable in monthly installments up to
per annum (2017: nil) payable semi-annually. These are secured against first pari passu charge on book September 2023. These have been discounted at the annual applicable implicit rate of interest. The amount
debts, advances and receivables of Ubank with 25% margin and Microfinance Credit Guarantee Facility of future lease payments and the period in which these will become due are as follows:
(MCGF) from State Bank of Pakistan at 25%. This loan is repayable in 8 equal semi-annual instalments of Finance lease liabilities Present value of Interest cost Future
Rs 125,000 thousand each commencing from September 2019. minimum lease for future minimum lease
payments periods payments
7.7 This represent term finance loan of Rs 1,000,000 thousand carrying markup of 6-month KIBOR plus
Rs ‘000 Rs ‘000 Rs ‘000
0.75% per annum (2017: nil). This is secured against first pari passu charge on book debts, advances and
receivables of Ubank for Rs 1,333,000 thousand (25% margin). Initial disbursement on ranking charge will
2018
be upgraded to first pari passu within 90 days from the date of this offer letter dated December 21, 2018.
Not later than one year 3,287 2,019 5,306
This loan is repayable in 6 semi-annual instalments of Rs 166,660 thousand each after grace period of 01
Later than one year and not later than five years 15,558 3,375 18,933
year.
18,845 5,394 24,239
7.8 This represents term finance facility under syndicate financing through Allied Bank Limited of Rs 2,000,000
2017
thousand carrying markup of 6-month KIBOR plus 0.95% per annum (2017: nil) payable semi-annually in
Not later than one year 10,146 604 10,750
arrears. This is secured against first pari passu charge over all present and future assets excluding land
Later than one year and not later than five years - - -
and building of Ubank but not limited to advances and investments beyond CRR and SLR requirements of
Ubank with 25% margin. Disbursement was initially made against a ranking charge which was upgraded 10,146 604 10,750
to 1st pari pasu with in 120 days of first disbursement. This loan is repayable in 06 equal semi-annual
instalments with the first principal repayment falling due on eighteenth month from the first disbursement Ubank has leased vehicles from commercial banks for a period of five years. These carry finance charges
date. The loan was drawn on December 31, 2018. at six month KIBOR plus 0.9% (2017: nil). The rentals are payable in equal monthly instalments in advance
upto September 2023. At the end of the lease term, Ubank has the option to acquire the assets on payment
7.9 This represents short term borrowings issued at discount under Commercial Paper Programe through of all instalments. The facility is secured by way of ownership of leased assets.
United Bank Limited of Rs 949,480 thousand carrying markup of 9-month KIBOR plus 1.0%. These are
unsecured loans facility.
7.10 This represents running finance facility through National Bank of Pakistan Limited of Rs 500,000 thousand
carrying markup of 3-month KIBOR plus 0.75% per annum (2017: nil). This is secured against first pari passu
charge on all current and future book debts, advances and receivables of Ubank. The initial disbursement
was made against ranking charge which was upgraded to first pari passu charge within 120 days from date
of disbursement. Markup is repayable on quarterly basis from March 2019.
166 167
168
12.
11.
Others
Others
Funded - PTCL
Unfunded - PTCL
Deferred income tax
Provision for receivables
Benevolent grants - PTCL

Balance at end of the year
Movement during the year
Provision for receivables

Accelerated tax depreciation
Accelerated tax amortization
Accelerated tax depreciation

Accelerated tax amortization
Liabilities for pension obligations

Employees retirement benefits
Balance at the beginning of the year
Post retirement medical facility - PTCL

Deferred tax liability / (asset) relating to:
Gratuity funded - PTCL, PTML and Ubank

Charge/(reversal) for the year in respect of
Accumulated compensated absences - PTCL

Provision for stock in trade, stores and spares
Provision for stock in trade, stores and spares
12.1
12.1
12.1
12.1
12.1
12.1
Note
28,594,794
3,719,452
11,108,005
1,503,324
338,356
11,925,657
5,510,435
6,415,222
8,975,585
398,163
590,582
10,634,558
8,975,585
1,416,281
12,348,368
Rs ‘000
2018
(1,658,973)
(879,624)
(80,415)
(1,687,679)
(2,083,144)
(2,231,693)
(474,227)
23,590,276
3,599,770
10,939,243
1,491,597
168,958
7,390,708
4,611,138
2,779,570
10,634,558
2,728,965
17,165
7,532
12,271,086
10,634,558
825,699
14,036,047
Restated
Rs ‘000
2017
(1,636,528)
(804,246)
(3,585,944)
(1,203,520)
(2,629,856)
(393,812)
CONSOLIDATED FINANCIAL STATEMENTS
12.1 The latest actuarial valuations of the Group’s defined benefit plans, were conducted at December 31, 2018 using the projected unit credit method.
Details of obligations for defined benefit plans are as follows:
2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
a) The amounts recognized

in the consolidated statement of
financial position:
Present value of defined
benefit obligations 115,539,324 112,027,257 5,510,435 4,611,138 2,144,171 1,867,642 1,503,324 1,491,597 11,108,005 10,939,243 3,719,452 3,599,770 139,524,711 134,536,647
Fair value of plan assets - note 12.3 (109,124,102) (109,247,687) - - (1,805,815) (1,698,684) - - - - - - (110,929,917) (110,946,371)
Liability at end of the year - note 12.2 6,415,222 2,779,570 5,510,435 4,611,138 338,356 168,958 1,503,324 1,491,597 11,108,005 10,939,243 3,719,452 3,599,770 28,594,794 23,590,276
b) Changes in the present value

of defined benefit obligations:
Balance at beginning of the year 112,027,257 109,098,686 4,611,138 3,242,085 1,867,642 1,527,839 1,491,597 1,430,188 10,939,243 10,757,583 3,599,770 3,491,524 134,536,647 129,547,905
Interest expense 10,785,606 11,587,763 459,459 355,054 167,539 140,368 131,467 133,532 1,060,317 1,153,417 347,789 354,960 12,952,177 13,725,094
Actuarial gain - - - - - - (138,274) (99,291) - - - - (138,274) (99,291)
11,576,050 12,518,879 721,005 615,715 429,396 366,711 73,427 110,594 1,135,956 1,228,855 386,939 399,851 14,322,773 15,240,605
Remeasurements:
Gain due to change
(Gain) / loss due to

experience adjustments 278,405 1,780,902 211,394 1,154,799 (9,061) 73,653 - - (295,049) (503,257) (23,497) (69,699) 162,192 2,436,398
Benefits paid (8,342,388) (7,510,771) (33,102) (28,646) (143,806) (100,561) (61,700) (49,185) (672,145) (543,938) (243,760) (221,906) (9,496,901) (8,455,007)
Balance at end of the year 115,539,324 112,027,257 5,510,435 4,611,138 2,144,171 1,867,642 1,503,324 1,491,597 11,108,005 10,939,243 3,719,452 3,599,770 139,524,711 134,536,647
169
170
2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
c) Charge for the year

Profit or loss:
Net interest expense 138,978 288,943 459,459 355,054 11,374 (10,721) 131,467 133,532 1,060,317 1,153,417 347,789 354,960 2,149,384 2,275,185
Actuarial gain - - - - - - (138,274) (99,291) - - - - (138,274) (99,291)
Contribution from deputationists/
employees (3,341) (2,969) - - - - - - - - (18,955) (19,169) (22,296) (22,138)
926,081 1,217,090 721,005 615,715 273,231 215,622 73,427 110,594 1,135,956 1,228,855 367,984 380,682 3,497,684 3,768,558
Other comprehensive income
Remeasurements:
Loss on remeasurement of assets 5,207,395 3,639,048 - - 79,647 45,393 - - - - - - 5,287,042 3,684,441
Gain due to change

adjustments 278,405 1,780,902 211,394 1,154,799 (9,061) 73,653 - - (295,049) (503,257) (23,497) (69,699) 162,192 2,436,398
5,485,800 1,559,511 211,394 781,984 70,586 119,046 - - (295,049) (503,257) (23,497) (69,699) 5,449,234 1,887,585
6,411,881 2,776,601 932,399 1,397,699 343,817 334,668 73,427 110,594 840,907 725,598 344,487 310,983 8,946,918 5,656,143
d) Significant actuarial assumptions at the

date of consolidated statement of
financial position:
Discount rate 10.00% 10.00% 10.00% 10.00% 9% to 14% 9% to 10.75% 9.00% 9.00% 10.00% 10.00% 10.00% 10.00%
Future salary / medical cost increase 8.00% 8.00% 8.00% 8.00% 8% to 13% 7.25% to 9.75% 8.00% 8.00% 9.00% 9.00% 8.00% 8.00%
Future pension increase 6.25% 6.25% 6.25% 6.25% - - - - - - - -
Rate of increase in benevolent grants - - - - - - - - - - 2.00% 2.0%
Average duration of obligation 21 years 21 years 30 years 30 years 6-17.2 years 6-17.69 years 6 to 7 years 6 to 7 years 23 years 24 years 17 years 17 years
Expected mortality rate SLIC 2001-2005 SLIC 2001-2005 SLIC 2001-2005 SLIC 2001-2005 SLIC 2001-2005 SLIC 2001-2005
Expected withdrawal rate Based on experience Based on experience Based on experience Based on experience Based on experience Based on experience
12.2 The Holding Company has accounted for pension increases, as approved by the Board of Trustees in accordance with the law and rules for
calculating the pension liability in the financial statements.
- Sukuks
Liabilities
Benefits paid
- Telehouse
Fixed assets
Other assets
- PIBs floating
- Term deposits
during the year
- Telecom tower
on behalf of fund
- Equity Securities
Provision for Zakat

Investment property
Amount due to PTCL

Balance at end of the year
Staff retirement benefits

- Special saving accounts
- Cash and bank balances
Accrued & other liabilities

- Term finance certificates
Expected return on plan assets
Cash and cash equivalents

Balance at beginning of the year
Total payment made to members
Contributions made by the Group
- Defense saving certificates

- Pakistan Investment Bonds
Loss on remeasurement of assets
Debt instruments - unquoted

12.3 Changes in the fair value of plan assets
Rs ‘000
2018
2,779,570
(5,207,395)
(8,342,388)
Defined benefit
pension plan - funded
109,124,102
110,497,409
3,022,750
6,346
9,177,149
1,886,122
7,291,027
21,114,417
4,356,373
81,000
680,960
1,226,970
1,237,541
13,531,573
77,176,747
3,048,762
2,183,794
71,944,191
Rs ‘000
10,646,628 11,298,820
109,247,687 103,845,180
Rs ‘000
2017
5,253,506
109,124,102 109,247,687
(1,373,307)
(1,186,366)
(130,504)
(2,777)
(53,660)
(3,639,048)
(7,510,771)
2018
156,165
1,698,684
Rs ‘000
2018
81,629
92,790
1,805,815
(79,647)
(143,806)
12.4 Plan assets for funded defined pension plan comprise of the following:
100.00
(1.25)
(1.08)
(0.12)
0.00
(0.05)
101.25
2.77
0.01
8.41
1.73
6.68
19.33
3.99
0.07
0.62
1.12
1.13
12.40
70.73
2.79
2.00
65.94
Percentage
Defined benefit
gratuity plan - funded
Rs ‘000
2017
53,265
59,526
(45,393)
(100,561)
109,247,687
110,426,050
2,341,537
6,597
9,172,707
1,881,680
7,291,027
5,259,400
429,724
-
-
-
-
4,829,676
93,645,809
3,045,689
1,944,002
88,656,118
Rs ‘000
(1,178,363)
(1,011,539)
(115,506)
(7,712)
(43,606)
Rs ‘000
2018
81,629
2,872,360
2017
(5,287,042)
(8,486,194)
Total
plan assets
100.00
(1.08)
(0.93)
(0.10)
(0.01)
(0.04)
101.08
2.14
0.01
8.39
1.72
6.67
4.81
0.39
0.00
0.00
0.00
0.00
4.42
85.73
2.79
1.78
81.16
Percentage
151,089 10,802,793 11,449,909
1,580,758 110,946,371 105,425,938
Rs ‘000
2017
53,265
5,313,032
1,698,684 110,929,917 110,946,371

(3,684,441)
(7,611,332)
171
12.5 Plan assets for defined gratuity fund comprise of the following: The above sensitivity analyses are based on changes in assumptions while holding all other assumptions
constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated.
2018 2017 When calculating the sensitivity of defined benefit obligation to significant actuarial assumptions, the same
Rs ‘000 Percentage Rs ‘000 Percentage method (present value of the defined benefit obligation calculated with the projected unit credit method at
the end of the reporting period) has been applied when calculating the pension liability recognized within
Units of mutual funds 752,591 41.67 745,954 43.91 the consolidated statement of financial position.
Term deposit receipts 967,114 53.56 890,038 52.40
Other assets 1,686 0.09 7,540 0.44 12.8 Through its defined benefit pension plans, the Group is exposed to a number of actuarial and investment
Bank balances 84,424 4.68 55,152 3.25 risks, the most significant of which include, interest rate risk, property market risk, longevity risk for
1,805,815 100.00 1,698,684 100.00 pension plan and salary increase risk for all the plans.
12.6 During the next financial year, the minimum expected contribution to be paid to the funded pension plan 2018 2017
and funded gratuity plan by the Group are Rs 6,415,222 thousand and Rs 338,356 thousand respectively. Rs ‘000 Rs ‘000
12.7 Sensitivity analysis 13. Deferred government grants

The calculations of the defined benefit obligations is sensitive to the significant actuarial assumptions
set out in note 12.1 (d). The table below summarizes how the defined benefit obligations at the end of the
Received during the year 4,368,167 5,307,086
reporting period would have increased / (decreased) as a result of change in the respective assumptions.
19,987,173 16,877,741
Impact on defined benefit obligation Income recognized during the year (1,266,377) (1,258,735)
1% increase 1% decrease Balance at end of the year 18,720,796 15,619,006
in assumption in assumption
Rs ‘000 Rs ‘000 This represent grants received from the Universal Service Fund, as assistance towards the development
of telecommunication infrastructure in rural areas, comprising telecom infrastructure projects for basic
Future salary / medical cost telecom access, transmission and broadband services spread across the country.
Pension - funded 1,411,462 (1,299,741)
Pension - unfunded 508,907 (456,138)
14. Long term vendor liability
Gratuity - funded 258,323 (136,579)
Accumulated compensated absences - unfunded 134,497 (120,341) This represents amount payable to a vendor in respect of procurement of network and allied assets which
Post-retirement medical facility - unfunded 1,337,877 (1,110,967) comprises of:
2018 2017
Discount rate Note Rs ‘000 Rs ‘000
Pension - funded (8,725,020) 10,268,330
Pension - unfunded (759,539) 944,442 Obligation under acceptance of bills of exchange 14.1 35,259,954 33,696,431
Gratuity - funded (131,627) 256,305 Other accrued liabilities 5,224,615 4,928,285
Post-retirement medical facility - unfunded (1,233,645) 1,509,631 40,484,569 38,624,716
Benevolent grants - unfunded (26,193) 28,630 Current portion (13,532,709) (7,474,057)
Future pension 26,951,860 31,150,659
Pension - funded 8,771,950 (7,534,933)
Pension - unfunded 404,873 (341,801) 14.1 These include liability of Rs 16,916,356 thousand (December 31, 2017: Rs 14,432,462 thousand) carrying
Benevolent grants interest in the range of 6.43% to 9.34% per annum (December 31, 2017: 5.50% to 5.91% per annum).
Benevolent grants - unfunded 30,671 (28,418)
Expected mortality rates

Increase by Decrease by
1 year 1 year
Rs ‘000 Rs ‘000
Pension - funded (2,652,871) 2,636,892

Pension - unfunded (70,997) 69,090
Post-retirement medical facility - unfunded (308,721) 309,901
Benevolent grants - unfunded (100,047) 100,429
172 173
2018 2017 18. Contingencies and commitments

Restated Contingencies
PTCL
15. Trade and other payables
Indirect Taxes
Trade creditors 15.1 9,067,968 9,143,876 18.1 Against the decision of Appellate Tribunal Inland Revenue (ATIR) upholding tax authorities’ decision to
Accrued and other liabilities 39,867,741 37,745,340 impose FED amounting to Rs 365,098 thousand on Technical Services Assistance fee assuming that the
Technical services assistance fee 16,763,367 12,347,648 fee is against franchise arrangement for the period from July 2008-09 & 2010-11, the Holding Company
Advances from customers / contract liabilty 8,506,360 9,227,389 has filed reference in the Honorable Islamabad High Court. Accordingly, the stay order was granted by the
Retention money / payable to contractors and suppliers 15.2 6,000,635 5,142,146 Honorable Islamabad High Court. Similarly, against an order of the Punjab Revenue Authority (PRA) for
Income tax collected from subscribers / deducted at source 35 736,425 276,370 the services sales tax, a demand of Rs 461,629 thousand on Technical Services Assistance fee was raised
Sales tax payable 345,385 841,030 assuming that the fee is against franchise arrangement for the period from October 2012 to December
Payable to GPF Trust 37,295 19,091 2014. The appeal is sub judice before the Commissioner Appeals - PRA, and the stay order from the
81,325,176 74,742,890 Honorable Lahore High Court is also in place against any coercive measures.
18.2 Based on an audit of certain monthly returns of FED, a demand of Rs 1,289,957 thousand was raised on the
15.1 Trade creditors include payables to the following related parties: premise that the Holding Company did not apportion the input tax between allowable and exempt supplies.
Etisalat - UAE 776,306 403,758 The Holding Company is in appeal before ATIR, which is pending adjudication. Meanwhile, the Honorable
Etisalat’s subsidiaries and associates 108,459 82,496 Islamabad High Court has granted a stay order in this regard against any coercive measures.
Emirates data clearing house 3,478 7,008 18.3 Against the decision of Sindh Revenue Board (SRB) imposing sales tax of Rs 4,417,000 thousand on revenues
Telecom Foundation 57,649 57,611 from international incoming calls from Nov, 2012 to Dec, 2013, the appeal is pending adjudication before
TF Pipes Limited 4,271 5,558 the Commissioner Appeals. A stay order has been obtained from Honorable Sindh High Court against any
GoP related entities 1,208,447 1,224,020 coercive action by SRB.
15.2 Retention money / payable to contractors and suppliers 18.4 Against the decision of the Customs Appellate Tribunal imposing additional custom duties, a reference
TF Pipes Limited 2,751 7,832 as well as writ petition against the decision is pending before the Honorable Sindh High Court. Further,
through the petition filed before the Honorable Sindh High Court, a stay order has been obtained against
These balances relate to the normal course of Group’s business and are interest free. order of the Tribunal. The Honorable Sindh High Court has stayed the recovery of the levies amounting to
Rs 932,942 thousand. Further, the Collector of Customs imposed additional duties and taxes amounting
16. Short term running finance to Rs 1,622,593 thousand against which the Holding Company has filed an appeal before the Customs
Short term running finance facilities available under mark-up arrangements with banks amounts to Appellate Tribunal.
Rs 3,150,000 thousand (December 31, 2017: Rs 3,000,000 thousand), out of which the amount availed at
the year end was nil (December 31, 2017: nil). The current balance of Rs 1,225,137 thousand represents Income Tax
bank overdrawn as at December 31, 2018 (December 31, 2017: Rs 834,233 thousand). These facilities are 18.5 For the tax years 2007, 2009, 2010 and 2011, Taxation Officer disallowed certain expenses and tax credits.
secured by first ranking pari passu charge by way of hypothecation over all present and future assets of The impugned orders were challenged at the relevant appellate forums which allowed partial relief thereof.
PTML, excluding land, building and licenses. After taking into account the orders of CIR (Appeals), ATIR as well as rectification orders tax impact of
the disallowances is Rs 6,988,912 thousand. On the remaining outstanding items of tax years 2007, 2009
17. Security deposits and 2011, appeals are pending adjudication, since year 2011, 2017 and 2014, before ATIR and references
of aforementioned four years are pending adjudication, since year 2011, 2012 and 2017, in the Honorable
These security deposits are received from customers for services to be provided and are refundable / Islamabad High Court as well.
adjustable on termination of their relationship with the Group.
18.6 For the tax years 2012 to 2017 Taxation Officer disallowed certain expenses having tax impact of Rs
37,198,443 thousand. The Holding Company’s appeals for tax years 2012 and 2015 having tax impact of
Rs 13,148,836 thousand are remanded back by ATIR in the year 2018 for afresh assessment. For Tax Year
2013 & 2014 appeal is pending adjudication before ATIR since 2018. For Tax Year 2016 and 2017, the Holding
Company has been granted stay orders by the Honorable Islamabad High Court and ATIR respectively since
2018 against any coercive measures.
Others
18.7 In 2010, Pakistan Telecommunication Employees Trust (PTET) board approved the pension increase which
was less than the increase notified by the Government of Pakistan (GoP). Thereafter, pensioners filed
several Writ Petitions. After a series of hearings, on 12 June 2015 the Apex Court decided the case in the
interest of pensioners. On 13 July 2015, Review Petition was filed in Supreme Court of Pakistan against the
Judgment of 12 June 2015.
The Honorable Supreme Court of Pakistan (Apex Court) disposed the Review Petitions filed by the Holding
Company, the Pakistan Telecommunication Employees Trust (PTET) and the Federal Government
(collectively, the Review Petitioners) vide the order dated 17 May 2017. Through the said order, the Apex
174 175
Court directed the Review Petitioners to seek remedy under section 12(2) CPC (Civil Procedure Code) which before the Supreme Court (SC), on which the SC has directed the IHC to respond to all legal questions
shall be decided by the concerned Court in accordance with the law, and to pursue all grounds of law and framed by the tax department in their earlier appeals.
facts in other cases pending before High Courts. The Review Petitioners have filed the applications under 18.13 Since April 2011, PTML is subject to amendment of assessments under section 122(5A) and 161 of the
section 12(2) CPC before respective High Courts. However, PTET has implemented the Apex court decision Income Tax Ordinance, 2001 for tax years 2008 till 2018, on account of verification of expenses and tax
dated 12 June 2015 to the extent of 343 pensioners who were the petitioners in the main case. Some of withholding. The proceedings are pending before CIR-A, ATIR and IHC.
the interveners (pensioners) seeking the same relief as allowed vide order dated 12 June 2015 have been
directed by the Apex Court’s to approach the appropriate forum on 10 May 2018. Under the circumstances, 18.14 Since December 2006, PTML has been contesting various notices and orders in front of the Federal,
management of the Holding Company, on the basis of legal advice, believes that the Holding Company’s Provincial and Azad Jammu and Kashmir Tax Authorities, CIR-A, ATIR and the High Courts in respect of
obligations against benefits is restricted to the extent of pension increases as determined solely by the Income Tax, FED and Federal and Provincial Sales Taxes.
Board of Trustees of the PTET in accordance with the Pakistan Telecommunication (Re-Organization) Act, DVCOM Data
1996 and the Pension Trust Rules of 2012 and accordingly, no provision has been recognized in these 18.15 After dismissal of the writ petition by the Honorable Islamabad High Court, wherein the vires of Act and
consolidated financial statements. regulation were challenged, DVCOM Data has filed CPLA against the judgment passed by Islamabad
18.8 The Holding Company implemented policy directives of Ministry of Information Technology conveyed by High Court before the Honorable Supreme Court of Pakistan. In compliance of interim order dated 15
the Pakistan Telecommunication Authority regarding termination of all international incoming calls into May 2018 passed by the Supreme Court in CPLA N0.1558/2018, a bank guarantee in favour of Pakistan
Pakistan. On suspension of these directives by the Honorable Lahore High Court, the Honorable Supreme Telecommunication Authority (PTA) for an amount of Rs 675,000 thousands on behalf of DVCOM Data has
Court of Pakistan dismissed the pertinent writ petitions by directing Competition Commission of Pakistan been provided under protest whereas the balance amount of the imposed Late Payment Additional Fee of
(CCP) to decide the case. The Honorable Sindh High Court suspended the adverse decision of CCP and the Rs 1,697,082 thousands has also been paid to PTA under protest.
case is pending for adjudication. No provision on account of above contingencies has been made in these consolidated financial statements
18.9 A total of 1,677 cases (December 31, 2017: 1,821) against the Holding Company involve Regulatory, Telecom as the management and the tax/ legal advisors of the Group are of the view that these matters will eventually
Operators, Employees and Subscribers. Because of number of cases and their uncertain nature, it is not be settled in favor of the Group.
possible to quantify their financial impact. Management and Legal advisors of the Holding Company are 2018 2017
of the view that the outcome of these cases is expected to be favorable and liability, if any, arising on the Note Rs ‘000 Rs ‘000
settlement is not likely to be material.
18.16 Bank guarantees and bid bonds issued in favour of:
PTML
Universal Service Fund (USF) against government grants 11,510,895 11,705,469
Indirect Taxes Pakistan Telecommunication Authority against 3G and 2G licenses 537,204 919,471
18.10 Since May 2010, the tax authorities (FBR) have raised multiple Federal Excise Duty (FED) demands by Others 2,740,542 1,862,422
assessing PTML’s payments of technical services fee to Etisalat as fee for “Franchise Services”. PTML
is contesting such assessments and demands for the period from July 2006 till December 2015 before 14,788,641 14,487,362
Commissioner Inland Revenue (Appeals) [CIR-A], Appellate Tribunal Inland Revenue (ATIR) and the
Islamabad High Court (IHC). Management is of the view that payments of technical services fee are outside 18.17 Commitments
the ambit of the Federal Excise Act, 2005 and lack the “franchiser-franchisee” arrangement, essential for 18.17.1 Standby letter of guarantee 18.17.2 7,425 6,365
the payments to be considered franchise services fee. Against the demands created by the tax authorities, Letter of credit for purchase of stock 60,922 48,780
PTML has paid Rs 501,541 thousand in prior years under protest and carried as receivable from taxation Contracts for capital expenditure 10,129,879 7,793,694
authorities as reflected in these consolidated financial statements. The total exposure in the case is Rs
10,198,226 7,848,839
1,913,000 thousand (December 31, 2017: Rs 1,628,000 thousand).
18.11 The tax authorities in April 2012 showed intent to charge FED on payment of interconnect charges by all 18.17.2 This represents letter of guarantee issued on behalf of Ubank to China Union Pay International Company
telecom operators. PTML and other telecom operators contested this position on the basis that such charge Limited for interbank settlements.
was contrary to the substance of the related mandatory arrangement under Calling Party Pays (CPP) 18.17.3 All property rentals are under cancellable operating lease arrangements and are due as follows:
regime. Further, such levy of FED is in disregard to the fact that Duty on full price for the service (including
2018 2017
the interconnect part) has already been charged, collected and paid to Government by telecom operator
(calling party). PTML and three other operators had petitioned the IHC to seek the correct interpretation of
the law on the matter. IHC passed its judgment in favour of the petitioners. An intra-court appeal has been
filed by the taxation authorities against this judgment which is currently pending before IHC. Not later than one year 3,663,674 3,778,342
Income Tax Later than one year and not later than five years 15,248,113 14,700,359
18.12 The taxation authorities (FBR) had raised demands aggregating to Rs 1,830,000 thousand for tax years 2008 Later than five years 12,032,817 12,309,156
to 2014, by dissallowing advance income tax paid by PTML on import of telecommunication equipment, on 30,944,604 30,787,857
the premise that the same was final tax and could not be adjusted against normal tax liability. The earliest
case was instituted in December 2011. PTML contends that these demands are not based on sound taxation 19. Property, plant and equipment
principles: PTML’s telecommunication services have been subject to normal tax since inception and the
imported equipment is used in-house for provision of those services, not sold as commercial imports. On Operating fixed assets 19.1 156,293,468 157,193,242
PTML’s tax references filed before the IHC against the unfavourable order of the ATIR, the IHC remanded Capital work in progress 19.6 21,185,660 12,583,996
the cases back to ATIR for fresh hearing. The tax authorities responded by filing constitutional petition 177,479,128 169,777,238
176 177
178
19.1 Operating fixed assets
Land Buildings on Computer Vehicles Leased

Freehold Freehold Leasehold Lines and Apparatus, plant Office and electrical Furniture Submarine network and
- note 19.2 Leasehold land land wires and equipment equipment equipment and fittings Owned Leased cables allied systems Total

Cost 1,652,943 90,026 12,421,504 2,572,001 126,460,972 346,044,353 1,902,679 9,522,875 753,926 2,634,702 - 12,174,690 153,889 516,384,560
Accumulated depreciation and impairment - (33,140) (5,040,059) (1,738,113) (102,079,869) (229,576,338) (879,613) (7,996,066) (525,628) (2,048,176) - (7,641,269) (132,460) (357,690,731)
Net book value 1,652,943 56,886 7,381,445 833,888 24,381,103 116,468,015 1,023,066 1,526,809 228,298 586,526 - 4,533,421 21,429 158,693,829

Additions - - 209,287 213,876 4,957,910 18,297,800 323,601 1,038,704 106,603 359,377 - 5,492,357 - 30,999,515
Disposals
Cost (9) - - (5,865) - (2,458,259) - (224,467) (133) (64,051) - - - (2,752,784)
Accumulated depreciation - - - 5,865 - 2,378,006 - 215,282 133 54,754 - - - 2,654,040
(9) - - - - (80,253) - (9,185) - (9,297) - - - (98,744)
Depreciation charge for the year - note 19.4 - (1,277) (314,115) (192,191) (3,360,848) (23,645,780) (158,148) (1,031,416) (41,268) (333,034) - (869,386) (20,519) (29,967,982)
Impairment charge - note 19.5 - - - - - (2,433,376) - - - - - - - (2,433,376)
Net book value 1,652,934 55,609 7,276,617 855,573 25,978,165 108,606,406 1,188,519 1,524,912 293,633 603,572 - 9,156,392 910 157,193,242

Cost 1,652,934 90,026 12,630,791 2,780,012 131,418,882 361,883,894 2,226,280 10,337,112 860,396 2,930,028 - 17,667,047 153,889 544,631,291
Accumulated depreciation and impairment - (34,417) (5,354,174) (1,924,439) (105,440,717) (253,277,488) (1,037,761) (8,812,200) (566,763) (2,326,456) - (8,510,655) (152,979) (387,438,049)
Net book value 1,652,934 55,609 7,276,617 855,573 25,978,165 108,606,406 1,188,519 1,524,912 293,633 603,572 9,156,392 910 157,193,242

Additions - - 246,010 217,007 5,334,152 19,757,647 323,435 1,314,149 244,963 407,897 26,363 452,682 - 28,324,305
Disposals - note 19.3
Cost - - - (202,369) - (4,969,148) - (190,496) (2,605) (144,012) - - - (5,508,630)

Accumulated depreciation - - - 179,692 - 4,836,235 - 184,047 2,550 143,241 - - - 5,345,765
- - - (22,677) - (132,913) - (6,449) (55) (771) - - - (162,865)
Depreciation charge for the year - note 19.4 - (1,277) (318,064) (214,035) (3,517,130) (21,677,766) (174,931) (1,026,969) (69,380) (212,653) (1,027) (1,107,426) (910) (28,321,568)
Impairment charge - note 19.5 - - - - - (739,646) - - - - - - - (739,646)
Net book value 1,652,934 54,332 7,204,563 835,868 27,795,187 105,813,728 1,337,023 1,805,643 469,161 798,045 25,336 8,501,648 - 156,293,468

Cost 1,652,934 90,026 12,876,801 2,794,650 136,753,034 376,672,393 2,549,715 11,460,765 1,102,754 3,193,913 26,363 18,119,729 153,889 567,446,966
Accumulated depreciation and impairment - (35,694) (5,672,238) (1,958,782) (108,957,847) (270,858,665) (1,212,692) (9,655,122) (633,593) (2,395,868) (1,027) (9,618,081) (153,889) (411,153,498)
Net book value 1,652,934 54,332 7,204,563 835,868 27,795,187 105,813,728 1,337,023 1,805,643 469,161 798,045 25,336 8,501,648 - 156,293,468
Annual rate of depreciation (%) - 1 to 3.3 2.5 2.5 7 10 to 33 10 20 to 33.33 10 20 20 6.67 to 8.33 13.33
Others
equipment
equipment
Motor Vehicles
Aggregate of others
Apparatus, plant and
having net book value

Computer and electrical
not exceeding Rs 500,000
as follows:
Cost of services
Cost
Rs ‘000
5,508,630
2,303,903
203,180
179,488
23,692
192,291
2,449
2,959
13,865
28,427
14,022
104,776
25,793
89,728
89,728
2,719,528
245,788
2,490
2,426,852
44,398
Rs ‘000
5,345,765
2,303,389
182,242
174,802
7,440
184,048
2,449
1,579
13,747
22,766
12,992
104,749
25,766
88,958
88,958
2,587,128
198,971
939
2,363,857
23,361
depreciation
Accumulated
Selling and marketing expenses

value
Administrative and general expenses

162,865
514
20,938
4,686
16,252
8,243
-
1,380
118
5,661
1,030
27
27
770
770
132,400
46,817
1,551
62,995
21,037
Rs ‘000
Net book
19.3 Disposal of property, plant and equipment:
Sale
266,029
82,876
1,398
1,398
-
12,053
61
1,459
768
6,045
1,627
34
2,059
53,745
53,745
115,957
7,971
1,605
102,527
3,854
Rs ‘000
103,164
82,362
3,810
61
79
650
384
597
7
2,032
52,975
52,975
54
39,532
Rs ‘000
(19,540)
(3,288)
(16,252)
(16,443)
(38,846)
(17,183)
Gain / (loss)
19.4 The depreciation charge for the year has been allocated
Auction
Auction
Auction
Auction
Auction
Auction
Auction
Auction
Auction
Auction,
Insurance
Insurance
Insurance
36
35
34
Note
Insurance and
Employee Sale
Employee Sale
Particulars
Misc. buyers
Misc. buyers
Misc. buyers
Misc. buyers
Misc. buyers
Misc. buyers
Misc. buyers
Misc. buyers
Misc. buyers
Misc. buyers
proceeds on disposal Mode of disposal of purchaser
Employee Sale Various buyers

Various buyers
28,321,568
71,130
1,282,050
26,968,388
Rs ‘000
2018
EFU General Insurance Co.
from the Securities and Exchange Commission of Pakistan from these disclosure requirments.
Relationship
Third party vendor

Third party vendor
Third party vendor
Third Party vendor
Third Party vendor
Third Party vendor
Third Party vendor
Third party vendor

Third party vendor
Third party vendor
Third party vendor
Third Party vendor
29,967,982
72,986
1,272,349
28,622,647
Rs ‘000
2017
Company’s employees
Company’s employees
to disclose the details of properties in the financial statements as required under paragrapghs VI.1(ii) and
Telecommunication (Re-organisation) Act, 1996; however, the title to and possession and control of certain
VI.12 of the 4th Schedule to the Companies Act, 2017 and the Group is in process of obtaining exemption
revenue records. The Holding Company has initiated the process of transfer of titles to freehold land, in its
in view of large number of properties i.e. over three thousand, located across Pakistan, it is impracticable
freehold land properties were not formally transferred in the name of the Holding Company in the land
own name, in previous years, which is still ongoing and shall be completed in due course of time. Further,
19.2 As explained in note 1, the property and rights vesting in the operating assets, as at January 01, 1996, were
transferred to the Holding Company from the Pakistan Telecommunication Corporation under the Pakistan
179
19.5 The carrying amount of certain items of apparatus, plant and equipment and lines and wires have been The estimated recoverable amount of the CGUs exceed their carrying amounts. The group estimates that
reduced to their recoverable amount through recognition of an impairment loss of Rs 739,646 thousand reasonably possible changes in the assumptions would not cause the recoverable amount of the CGUs to
(December 31, 2017: Rs 2,433,376 thousand). This loss has been included in ‘cost of services’ in the decline below their carrying amounts.
consolidated statement of profit or loss. The impairment charge arose due to obsolescence of WLL assets, Licenses and Computer
servers, and other assets classified in apparatus, plant and equipment. spectrum software Total
Note Rs ‘000 Rs ‘000 Rs‘000
2018 2017
Note Rs ‘000 Rs ‘000 20.2 Other intangible assets
19.6 Capital work in progress
Cost 44,871,714 4,151,112 49,022,826
Buildings 719,882 693,864 Accumulated amortization (10,216,302) (2,964,616) (13,180,918)
Lines and wires 5,338,033 4,009,433
Apparatus, plant and equipment 9,634,287 5,224,467 Net book value 34,655,412 1,186,496 35,841,908
Others 5,493,458 2,656,232
19.6.1 21,185,660 12,583,996 Opening net book value 34,655,412 1,186,496 35,841,908
Additions 37,000 578,098 615,098
19.6.1 Movement during the year Amortization charge for the year (2,980,032) (582,559) (3,562,591)
Balance at beginning of the year 12,583,996 12,106,215 Closing net book value 31,712,380 1,182,035 32,894,415
Additions during the year 36,843,096 31,752,955
Transfers during the year
- Operating fixed assets (27,813,894) (30,691,345) Cost 44,908,714 4,729,210 49,637,924
- Intangible assets (427,538) (583,829) Accumulated amortization (13,196,334) (3,547,175) (16,743,509)
Balance at end of the year 21,185,660 12,583,996 Net book value 31,712,380 1,182,035 32,894,415

Addition in capital work in progress includes an amount of Rs 2,227,581 thousand (December 31, 2017: Rs
Opening net book value 31,712,380 1,182,035 32,894,415
1,891,967 thousand), in respect of direct overheads relating to development of assets.
Additions - 459,834 459,834
2018 2017
Amortization charge for the year 20.8 (2,978,896) (468,098) (3,446,994)
Note Rs ‘000 Rs ‘000 Closing net book value 28,733,484 1,173,771 29,907,255
20. Intangible assets As at December 31, 2018

Goodwill on acquisition of Ubank 20.1 78,790 78,790 Cost 44,908,714 5,189,044 50,097,758
Goodwill on acquisition of DVCOM Data 20.1 1,191,102 1,191,102 Accumulated amortization (16,175,230) (4,015,273) (20,190,503)
Other intangible assets 20.2 29,907,255 32,894,415 Net book value 20.3 28,733,484 1,173,771 29,907,255
31,177,147 34,164,307 Amortization rate per annum (%) 4 - 20 6.67 - 33.33
20.1 Goodwill
These represent excess of the amount paid over fair value of net assets of DVCOM Data and Ubank on its
acquisition on April 01, 2015 and August 30, 2012 respectively. The recoverable amount of goodwill is tested
for impairment annually based on its value in use, determined by discounting the future cash flows to be
generated by the respective cash generating units (CGU).
The key assumption used in the estimation of the recoverable amount is discount rate which is assumed at
13%.
The cash flow projections included specific estimates for five years and a terminal growth rate thereafter.
The terminal growth rate was determined based on management’s estimate of the long-term compound
annual EBITDA growth rate, consistent with the assumptions that a market participant would make.
Budgeted growth was based on expectations of future outcomes taking into account past experience,
adjusted for anticipated revenue growth. Revenue growth was projected taking into account the average
growth levels experienced in the recent years and the estimated sales volume and price growth for the next
five years.
180 181
2018 2017 2018 2017

20.3 Breakup of net book value as at year end is as follows: 21. Long term investments
Licenses and spectrum - PTCL Investment in associate 21.1 - 9,700
Other investments 21.2 83,900 83,900
WLL spectrum 20.4 1,029,213 1,208,210
Telecom 20.4 19,945 29,919 83,900 93,600
WLL and LDI License 20.5 125,023 138,418
IPTV 20.6 28,983 32,683 21.1 Investment in associate - unquoted
2G & 3G Licenses - PTML 20.7 26,641,668 29,259,746 As on December 31, 2018 the Group holds 1,658,520 (December 31, 2017: 1,658,520) ordinary shares in TF
WLL licenses- DVCOM Data 888,252 1,040,524 Pipes Limited with it’s registered office situated in Islamabad, Pakistan, The Group’s share holding in TF
Licenses - Ubank 400 2,880 Pipes Limited constitutes 40% (December 31, 2017: 40%) of total ordinatry shares of TF Pipes Limited. TF
28,733,484 31,712,380 Pipes Limited is treated as an associate due to the Group’s significant influence over it due to 40% voting
Computer software 1,173,771 1,182,035 right.
2018 2017
29,907,255 32,894,415 Rs ‘000 Rs ‘000
20.4 The Pakistan Telecommunication Authority (PTA) has issued a license to the Holding Company, to provide Reconciliation of carry amount
telecommunication services in Pakistan, for a period of 25 years, commencing January 01,1996, at an
Balance at the beginning of the year 9,700 17,324
agreed license fee of Rs 249,344 thousand. In June 2005, PTA modified the previously issued license to
Impairment of Investment (9,700) -
provide telecommunication services to include a spectrum license at an agreed license fee of Rs 3,646,884
Group’s share of post acquisition loss for the year - (7,624)
thousand. This license allows the Holding Company to provide Wireless Local Loop (WLL) services in
Pakistan, over a period of 20 years, commencing October 2004. The cost of the license is being amortized Balance at the end of the year - 9,700
on a straight line basis over the period of the license.
The following table summarizes the financial information of TF Pipes Limited as included in its audited
20.5 PTA has issued a license under section 5 of the Azad Jammu and Kashmir Council Adaptation of Pakistan financial statements for the year ended June 30, 2018. The information relating to revenue, profit and other
Telecommunication (Re-organization) Act, 1996, the Northern Areas Telecommunication (Re-organization) comprehensive income also include amounts for the year ended June 30, 2018.
Act, 2005 and the Northern Areas Telecommunication (Re-organization) (Adaptation and Enforcement)
2018 2017
Order 2006, to the Holding Company to establish, maintain and operate a telecommunication system in Rs ‘000 Rs ‘000
Azad Jammu & Kashmir (AJ&K) and Gilgit-Baltistan (GB), for a period of 20 years, commencing May 28,
2008, at an agreed license fee of Rs 109,270 thousand. During the year 2015, PTA allocated additional Percentage of ownership (%) 40% 40%
spectrum for WLL services in AJ&K and GB for Rs 98,487 thousand. The duration of the license shall be for
the remaining period of the existing WLL licenses. The cost of the licenses is being amortized, on a straight Total assets 92,324 125,703
line basis, over the period of the licenses. Total liabilities 85,955 101,453
Net assets 6,369 24,250
20.6 IPTV license has been renewed by Pakistan Electronic Media Regulatory Authority (PEMRA) effective from Non-controlling interests - -
its last renewal date i.e. November 02, 2016, at an agreed license fee of Rs 37,000 thousand. The cost of
the license is being amortized, on a straight line basis, over a period of 10 years. Net assets attributable to ordinary shareholders (100%) 6,369 24,250
20.7 (i) The PTML acquired a license for 3G cellular operations throughout Pakistan excluding AJ&K and GB Group’s share of net assets (40%) 2,548 9,700
in May 2014, at a fee of USD 147,500 thousand. The term of the license is 15 years from the date of its Goodwill - -
acqusition. Carrying amount of interest in associate - 9,700
(ii) The PTML’s license for 2G cellular operations throughout Pakistan excluding AJ&K and GB, was renewed
in April 2014 at a fee of USD 291,000 thousand. The term of the license is 15 years from the date of its Sales for the year ended 116,958 109,534
acqusition. Loss after tax (100%) (15,796) (20,675)
Group’s share of net loss for the year (40%) (6,318) (8,270)
20.8 The amortization charge for the year has been allocated as follows:
2018 2017 Other Comprehensive Income (OCI):
Note Rs ‘000 Rs ‘000 Loss on re-measurement of defined benefit liability 2,084 999
Total OCI 2,084 999
Cost of services 34 3,185,187 3,308,152
Administrative and general expenses 35 261,807 254,439 Group’s share of OCI (40%) 834 400
3,446,994 3,562,591
Investment in associate has been made in accordance with the requirements of the Companies Act, 2017
(repealed Companies Ordinance 1984).
182 183
2018 2017 22.2 Reconciliation of carrying amounts of loans to executives and other employees:
As at As at
January 01, 2018 Disbursements Repayments Write offs December 31, 2018
21.2 Other investments
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Fair value through other comprehensive income (FVOCI) - unquoted
Thuraya Satellite Telecommunication Company - Dubai, UAE Executives* 56,499 107,658 (34,603) - 129,554
3,670,000 (December 31, 2017: 3,670,000) Other employees* 599,598 440,245 (147,822) - 892,021
ordinary shares of AED 1 each 63,900 63,900 656,097 547,903 (182,425) - 1,021,575
Alcatel - Lucent Pakistan Limited - Islamabad, Pakistan As at As at
2,000,000 (December 31, 2017: 2,000,000) January 01, 2017 Disbursements Repayments Write offs December 31, 2017
ordinary shares of Rs 10 each 20,000 20,000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
21.2.1 83,900 83,900
Executives* 84,624 - (28,125) - 56,499
Other employees* 476,060 278,395 (153,981) (876) 599,598
21.2.1 At January 01, 2018, the Holding Company designated the investments shown as equity securities as FVOCI
because these equity securities represents investments that the Holding Company intends to hold for the 560,684 278,395 (182,106) (876) 656,097
long term for strategic purposes. In 2017 these investments were classified as available for sale.
2018 2017
Rs ‘000 Rs ‘000
2018 2017
Maximum amount of loan to executives and other employees
outstanding at any time during the year
22. Long-term loans and advances - considered good
Executives 129,659 46,259
Loans to employees - secured Other employees 919,954 599,598
PTCL 22.1 985,444 599,598
PTML 22.1 36,131 56,499 * Comparative figures have been restated to reflect changes in the definition of executives as per Companies
22.2 1,021,575 656,097 Act, 2017.
Imputed interest (206,996) (163,584)
23. Contract cost
814,579 492,513
Management expects that incremental costs for obtaining new subscribers are recoverable. The Group
Others 74,333 57,819
has therefore capitalized them as contract costs. These costs are amortized over the expected average
888,912 550,332 customer life. There was no impairment loss in relation to the costs capitalized.
Current portion shown under current assets 2018 2017
Loans to employees - secured 27 (182,522) (120,986) Note Rs ‘000 Rs ‘000
706,390 429,346 Restated
22.1 These loans and advances are for house building and purchase of vehicles, motor cycles and bicycles. Cost to obtain a contract 1,042,252 524,747
These loans are recoverable in equal monthly installments spread over a period of 5 to 10 years and are Cost to fulfill a contract 1,261,397 1,021,366
secured against retirement benefits of the employees. 2,303,649 1,546,113
Current maturity of contract costs (1,842,504) (1,207,882)
These balances include loans aggregating Rs 170,527 thousand (December 31, 2017: Rs 20,235 thousand)
provided to 95 employees having individual balance exceeding Rupees one million. Loans to executive 461,145 338,231
employees include loans aggregating to Rs 35,868 thousand (December 31, 2017: Rs 36,263 thousand) Movement during the year
provided to 13 key management personnel. The maximum aggregate amount of loans to key management
personnel outstanding at any time during the year was Rs 53,689 thousand (December 31, 2017: Rs 46,259 Balance at the beginning of the year 1,546,113 1,441,418
thousand). The Holding Company has applied to the Securities and Exchange Commission of Pakistan Capitalization during the year 3,461,489 2,344,872
for exemption from disclosure requirments under paragraphs VI.19 and VI.21 of the 4th Schedule to the 5,007,602 3,786,290
Companies Act, 2017. Amortization during the year (2,703,953) (2,240,177)
184 185
2018 2017 2018 2017

Restated
24. Stock in trade, stores and spares
25. Trade debts and contract assets
Stores and spares 24.1 6,067,575 3,633,569
Stock in trade 24.2 214,045 193,602 Trade debts 13,455,206 11,459,186
Contract assets 5,448,677 5,346,409
6,281,620 3,827,171
18,903,883 16,805,595
24.1 Stores and spares 7,342,604 4,899,323
Domestic
Provision for obsolescence 24.1.1 (1,275,029) (1,265,754)
Considered good - secured 25.1 615,064 483,021
6,067,575 3,633,569
- unsecured 25.2 14,064,502 13,247,502
Considered doubtful 7,578,055 8,421,324
24.1.1 Provision for obsolescence
22,257,621 22,151,847
Provision during the year 34 9,275 51,138 International
1,275,029 1,353,314 Considered good - unsecured 25.2 4,224,318 3,075,072
Provision reversed during the year - (87,560) Considered doubtful - unsecured 57,475 65,270
Balance at end of the year 1,275,029 1,265,754 4,281,793 3,140,342
Provision for doubtful debts 25.4 (7,635,531) (8,486,594)
24.2 Stock in trade 18,903,883 16,805,595
SIM cards 110,786 115,069
Mobile phones and accessories 90,460 94,479 25.1 These are secured against customer and dealer deposits aggregating to Rs 767,558 thousand (December
Scratch cards 48,955 29,161 31, 2017: Rs 777,358 thousand). The normal credit period of debtors is not more than one month.
ATM cards 7,569 1,845
25.2 These include amounts due from the following related parties:
257,770 240,554
Provision for slow moving stock 24.2.1 (43,725) (46,952)
Up to More than
214,045 193,602
6 months 6 months 2018 2017
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
24.2.1 Provision for slow moving stock
Balance at beginning of the year 46,952 43,999 Etisalat - UAE 1,200,481 1,804,282 3,004,763 1,023,705
(Reversal) / provision during the year (3,227) 2,953 Etisalat - Afghanistan 63,262 - 63,262 39,237
Etihad Etisalat Company 14,316 - 14,316 -
Balance at end of the year 43,725 46,952
Etisalat other subsidiaries
and associates 1,003 - 1,003 3,099
GoP related entities 21,350 60,624 81,974 102,119
3,165,318 1,168,160
25.3 The maximum aggregate amount of receivable due from related parties at the end of any month during
the year was Rs 7,791,686 thousand.
186 187
2018 2017 2018 2017

Restated
25.4 Provision for doubtful debts
Balance at beginning of the year 8,486,594 8,265,302 28. Income tax recoverable
Provision for the year 35 2,157,688 1,997,782 Balance at beginning of the year 19,828,320 18,173,381
10,644,282 10,263,084 Current tax charge for the year - P&L 39 (2,892,071) (5,947,572)
Tax credit on re-measurement losses - OCI 1,573,712 561,744
Write off against provision (3,008,751) (1,776,490) Tax paid during the year 5,281,387 4,795,880
Balance at end of the year 7,635,531 8,486,594 Consideration paid against PTML losses - 2,244,885
These amounts are interest free and are accrued in the normal course of business.
29. Receivable from the Government of Pakistan - Considered good
2018 2017
Note Rs ‘000 Rs ‘000 This represents the balance amount receivable from the Government of Pakistan, on account of its agreed
share in the Voluntary Separation Scheme, offered to the Holding Company’s employees during the year
26. Loans to banking customers ended June 30, 2008.
Loans to banking customers 17,225,244 10,648,713 2018 2017
Provisions held 26.1 (205,406) (94,355) Note Rs ‘000 Rs ‘000
Restated
17,019,838 10,554,358
30. Deposits, prepayments and other receivables
26.1 Provision against non-performing loans to
banking customers Deposits 202,395 208,004
Balance at the beginning of the year 94,355 48,381 Prepayments
Provision during the year 35 259,714 86,252 - Pakistan Telecommunication Authority - a related party 43,130 45,616
Loans written off against provision (148,663) (40,278) - Prepaid rent and others 30.1 2,493,868 2,326,391
205,406 94,355 2,536,998 2,372,007
27. Loans and advances Other receivables

Due from related parties 30.2 302,417 258,193
Loans Accrued interest receivable 30.3 1,826,626 1,256,068
Current portion of long term loans to employees - secured 22 182,522 120,986 Federal Excise Duty (FED) 30.4 3,844,402 3,000,639
Forward exchange contracts 30.5 345,772 155,791
Advances - considered good
Others - net of provision 1,927,841 2,403,123
Advances to employees 27.1 35,354 17,068
Advances to suppliers and contractors 27.2 1,625,842 1,475,508 10,986,451 9,653,825
Others 21,048 35,137
30.1 This includes prepaid rent of Rs 89,836 thousand (December 31, 2017: Rs 83,959 thousand) paid to Pakistan
1,682,244 1,527,713 Telecommunication Employees Trust, a related party of the Group.
1,864,766 1,648,699
Up to More than
27.1 These include advances to executives and key management personnel amounting to Rs 1,869 thousand 6 months 6 months 2018 2017
(December 31, 2017: Rs 5,568 thousand) and Rs 307 thousand (December 31, 2017: Rs 117 thousand) 30.2 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
respectively.
- Etisalat - UAE - 71,305 71,305 71,305
2018 2017
Rs ‘000 Rs ‘000 - Pakistan Telecommunication
Restated Employees Trust 2,777 - 2,777 7,712
- PTCL employees GPF Trust - - - 55,748
27.2 These include amounts due from the following related parties: - USF Grants - 228,335 228,335 123,428
TF Pipes Limited 27,095 52,533 302,417 258,193
Pakistan MNP Database (Guarantee) Limited 15,650 10,900
The maximum aggregate amount of other receivable due from related parties at the end of any month
during the year was Rs 10,601 thousand.
188 189
2018 2017 31.1 Term deposit receipts carry interest at the rate of 10.75% to 13% (December 31, 2017: 8% to 8.55%) per
30.3 Note Rs ‘000 Rs ‘000 annum.
Return on bank deposits - 146,161 31.2 This represents investment in 39,146 thousand units (December 31, 2017: nil) of ABL cash fund. Net asset
Interest receivable on loans to employees - secured - 37,979 value of these units as at December 31, 2018 was 10.218 per unit.
Mark up accrued on advances and investments 1,826,626 1,071,928
31.3 This represents Market Treasury Bills having yield of 10.28% (December 31, 2017: 5.99% to 6.00%) maturing
1,826,626 1,256,068 in February 2019.
30.4 Federal Excise Duty 30.4.1 4,310,578 3,466,815 2018 2017

Provision for doubtful amount (466,176) (466,176) Note Rs ‘000 Rs ‘000
3,844,402 3,000,639 32. Cash and bank balances

30.4.1 (i) This includes payments under protest on account of FED on interconnect charges. Since Appellate Cash in hand 892,602 385,444
Tribunal Inland Revenue (ATIR) has decided the case in favour of the Holding Company, tax department Balances with banks:
has filed reference in Honorable Islamabad High Court. Local currency
(ii) This includes federal excise duty on technical service fee of Rs 501,541 thousand (December 31, 2017: Current account maintained with SBP 32.1 904,261 463,463
Rs 501,541 thousand) paid by PTML to the taxation authority under protest. Current accounts 32.2 1,994,624 111,110
Saving accounts 32.3 2,548,828 13,329,903
30.5 This represents fair value of forward foreign exchange contracts entered into by PTML to hedge its foreign 5,447,713 13,904,476
currency exposure. As at December 31, 2018, PTML had forward exchange contracts to purchase USD
28,756 thousand (December 31, 2017: USD 48,028 thousand) at various maturity dates matching the Foreign currency
anticipated payment dates for network liability. Current accounts (USD 16,746 thousand: December 31, 2017:
USD 3,653 thousand) 2,318,748 402,929
30.6 (i) This includes receivable from executives and key management personnel amounting to Rs 3,206 Saving accounts (USD 3,254 thousand: December 31, 2017:
thousand (December 31, 2017: Rs 10,004 thousand) and Rs 162 thousand (December 31, 2017: Rs 406 USD 2,895 thousand, Euro 289 thousand: December 31, 2017:
thousand) respectively. Euro 341 thousand) 498,706 364,899
2,817,454 767,828
(ii) This includes amount receivable from SBP in respect of insurance premium paid by Ubank for livestock
and crop loans under AC&MFD circular no. 01 of 2013 dated November 01, 2013. 32.4 9,157,769 15,057,748
2018 2017
32.1 This includes balance maintained with SBP to comply with the requirement of Prudential Regulations for
microfinance banks to maintain minimum cash reserve not less than 5% (2017: 5%) of Ubank’s time and
demand deposits with tenure of less than 1 year. This also includes Rs 44,729 thousand (December 31,
31. Short term investments
2017: Rs 17,376 thousand) maintained with SBP under Depositors’ Protection Fund.
Amortized cost
Market treasury bills 980,221 - 32.2 This includes Rs 7,425 thousand (December 31, 2017: Rs 6,365 thousand) placed under lien with a bank in
respect of standby letter of guarantee issued to Union Pay International.
Term deposits receipts
- maturity up to 6 months - 3,080,778 32.3 These carry mark-up ranging between 3% to 12.15% (December 31, 2017: 3% to 8.5%) per annum.
- maturity up to 12 months 9,900,000 2,000,000 32.4 Bank balances include Rs 15,343 thousand (December 31, 2017: Rs 39,076 thousand) carrying profit
31.1 9,900,000 5,080,778 ranging from 2.4% to 4% (December 31, 2017: 2.4% to 4%) per annum from Shariah arrangements.
Fair value through profit or loss (FVTPL)

Money market funds 31.2 400,043 -
Units of mutual fund 3,950,149 -
4,350,192 -
Available for sale investments
Units of mutual fund 2,527,000
Market treasury bills 31.3 1,967,824 1,786,375
1,967,824 4,313,375
17,198,237 9,394,153
190 191
2018 2017 2018 2017

Restated Restated
33. Revenue 35. Administrative and general expenses

Broadband & IPTV 26,774,445 25,149,277 Salaries, allowances and other benefits 35.1 3,762,084 3,321,332
Cellular and other wireless 55,560,763 50,486,303 Outsourced staff cost 1,389,347 1,213,432
Fixed line voice services 13,045,010 14,194,530 Fuel and power 384,642 358,788
Banking 4,582,291 2,795,342 Rent, rates and taxes 695,899 602,748
Revenue from retail customers 99,962,509 92,625,452 Technical services assistance fee 35.2 4,415,614 4,099,655
Legal and professional charges 35.3 541,787 919,661
Corporate 9,019,720 7,653,685 Depreciation on property, plant and equipment 19.4 1,282,050 1,272,349
Carrier and wholesale 8,830,971 7,153,061 Amortization of intangible assets 20.8 261,807 254,439
International 33.1 8,347,186 9,587,067 Contribution to R&D and USF 35.4 1,166,603 1,257,843
Total Revenue 33.2 126,160,386 117,019,265 Provision for doubtful debts 35.5 1,996,706 1,747,073
Provision for non-performing loans 26 259,714 86,252
33.1 International revenue includes revenue from foreign network operators, for calls that originate outside Other expenses 35.6 2,490,504 2,202,900
Pakistan, and has been shown net of interconnect cost relating to other operators and Access Promotion 18,646,757 17,336,472
Charges, aggregating to Rs 967,317 thousand (December 31, 2017: Rs 2,268,616 thousand).
35.1 This includes Rs 337,789 thousand (December 31, 2017: Rs 359,038 thousand) in respect of employees
33.2 Revenue is net of trade discount amounting to Rs 2,035,840 thousand (December 31, 2017: Rs 2,114,847
thousand) and Federal Exise Duty / Sales tax amounting to Rs 12,896,614 thousand (December 31, 2017:
Rs 14,171,128 thousand). 35.2 This represents the amount payable to Etisalat - UAE, a related party, under an agreement for technical
2018 2017 services at the rate of 3.5% of the Group’s consolidated revenue.
Note Rs ‘000 Rs ‘000 2018 2017
Restated Rs ‘000 Rs ‘000
34. Cost of services 35.3 This includes auditors’ remuneration as follows:

Salaries, allowances and other benefits 34.1 12,835,387 12,358,397 Statutory audit, including half yearly review 9,800 9,800
Outsourced staff cost 1,111,901 984,890 Out of pocket expenses 870 770
Security cost 1,239,733 1,248,148 Other services 600 3,772
Interconnect cost 6,958,693 6,621,793
Foreign operators cost and satellite charges 8,030,130 7,300,366 11,270 14,342
Fuel and power 9,916,235 9,330,211
Cost of devices sold 1,828,421 1,419,915 35.4 This represents the Group’s contribution to the National Information Communication Technology,
Subscriber acquisition cost 2,420,168 2,114,319 Research and Development Fund (“National ICT R&D Fund”), at the rate of 0.5% of its gross revenues less
Rent, rates and taxes 3,289,550 3,146,231 inter operator payments and related PTA / FAB mandated payments, in accordance with the terms and
Repair and maintenance 7,857,101 7,300,600 conditions of its licenses to provide telecommunication services.
Depreciation on property, plant and equipment 19.4 26,968,388 28,622,647
35.5 This amount is net of recoveries amounting to Rs 160,982 thousand (December 31, 2017: Rs 250,709
Amortization of intangible assets 20.8 3,185,187 3,308,152
thousand).
Impairment on property, plant and equipment 19.5 739,646 2,433,376
Annual license fee to Pakistan 35.6 (i) Other expenses also include following donations in excess of Rs 500,000:
Telecommuncation Authority (PTA) 1,630,958 1,467,407
Markup / interest expense - Ubank 1,671,611 1,152,285 2018 2017
Others 34.2 2,105,141 1,729,589 Rs ‘000 Rs ‘000
91,788,250 90,538,326 Name of Donees

World Wildlife Fund 2,950 -
34.1 This includes Rs 2,849,948 thousand (December 31, 2017: Rs 3,082,607 thousand) in respect of employees
Roshni Homes Trust 500 -
The Kaghan Memorial Trust - 3,812
34.2 This includes provision for obsolete store of Rs 9,275 thousand (December 31, 2017: Rs 51,138 thousand). 3,450 3,812
192 193
(ii) Other expenses include impairment of investment in TF Pipes Limited amounting to Rs 9,700 thousand 37.1 Return on bank deposits includes Rs 227 thousand (December 31, 2017: Rs 314 thousand) earned from
(December 31, 2017:nil). Shariah arrangements.
2018 2017 37.2 This represents liabilities written back on successful settlement and court decision in favour of the Holding
Note Rs ‘000 Rs ‘000 Company.
Restated
37.3 This amount is net of operating expenditure subsidy amounting to Rs 30,236 thousand (December 31, 2017:
36. Selling and marketing expenses nil).
Salaries, allowances and other benefits 36.1 2,021,639 1,935,728 2018 2017
Outsourced staff cost 112,246 99,869 Note Rs ‘000 Rs ‘000
Sales and distribution charges 949,518 864,616
Advertisement and publicity 3,348,385 2,895,350 38. Finance cost
Depreciation on property, plant and equipment 19.4 71,130 72,986
Others 232,481 264,037 Interest on:
Long term loans from banks 1,934,887 1,646,697
6,735,399 6,132,586 Long term vendor liability 998,249 606,782
License fee 38.1 475,000 -
36.1 This includes Rs 302,114 thousand (December 31, 2017: Rs 324,720 thousand) in respect of employees Imputed deferred interest on license fee payable 38.2 - 2,583,426
retirement benefits. Bank and other charges 323,147 259,593
2018 2017 Exchange loss 3,983,805 1,323,048
Note Rs ‘000 Rs ‘000 Imputed interest on employee loans 46,929 38,066
7,762,017 6,457,612
37. Other income
Income from financial assets: 38.1 This represents Group share of late payment fee on DVCOM Data WLL license.
Return on bank deposits 37.1 1,043,292 2,062,064
38.2 In 2017, the liability against 2G license fee was paid by PTML in full as early settlement before maturity. As
Interest on investment in Government securities 93,753 82,003
a consequence thereof, the remaining amount of imputed interest was recognized as an expense.
Late payment surcharge from subscribers on overdue bills 280,251 304,568
Gain on fair value remeasurement of forward exchange contracts 189,981 233,448 2018 2017
Gain on mutual funds (FVTPL) 238,552 - Rs ‘000 Rs ‘000
Gain on disposal of available for sale investments 8,328 74,396 Restated
Others 18,967 12,409
1,873,124 2,768,888
39. Provision for income tax
Charge / (credit) for the year
Income from non financial assets
Current 2,892,071 5,947,572
Gain on disposal of property, plant and equipment 103,164 247,384
Deferred (1,652,590) (3,876,414)
Late delivery charges from vendors 209,643 13,834
Recovery from written off receivables 68,220 80,243 1,239,481 2,071,158
Write back of activation tax liability - 2,423,068
Write back of liabilities 37.2 1,580,167 2,538,492
Government grants recognized 37.3 1,236,141 1,258,735
Scrap sales 193,865 1,312
Pre-deposit income 272,612 326,085
Rental income 81,055 32,616
Others 103,531 151,509
3,848,398 7,073,278
5,721,522 9,842,166
194 195
39.1 Reconciliation of effective tax rate 2018 2017

Rs ‘000 Rs ‘000
The numerical reconciliation between the average effective tax rate and the applicable tax rate is as follows:
Restated
2018 2017
Percentage Percentage 41. Cash generated from operations
Applicable tax rate 29.00 30.00
Adjustments for non-cash charges and other items:
Turnover tax not recognized as deferred tax asset - prior period - 0.23 Depreciation and amortization 31,768,562 33,530,573
Reversal of turnover tax of prior period (11.43) (6.17) Impairment of property, plant and equipment 739,646 2,433,376
Impact of change in tax rate (5.12) (5.81) Amortization of contract cost 2,703,953 2,240,177
Tax effect of amounts that are not deductible for tax purposes 5.06 7.75 Provision for obsolete stores and spares 9,275 51,138
Others (0.18) 5.53 Provision for doubtful trade debts and other receivables 1,996,706 1,747,073
(Reversal) / Provision for slow moving stock (3,227) 2,953
(11.67) 1.53 Impairment on investment 9,700 -
Average effective tax rate charged to the consolidated Provision for non performing advances 259,714 86,252
statement of profit or loss 17.33 31.53 Employees retirement benefits 3,489,849 3,768,558
Gain on disposal of property, plant and equipment (103,164) (268,645)
The applicable income tax rate was reduced from 30% to 29% during the year on account of changes made Loss on disposal of capital work in progress - 21,260
to the Income Tax Ordinance, 2001. Return on bank deposits and government securities (1,137,045) (2,144,067)
Gain on disposal of investments measured at fair value
39.2 The Group has filed income tax returns under self assessment scheme under section 114 (1) of ITO 2001 through profit or loss (FVTPL) (238,552) -
and all three years’ assessments are under process. Gain on disposal of investments measured at fair value
through OCI (FVOCI) (77,988) (74,396)
As per the management’s assessment, sufficient tax provision has been made in the consolidated financial Release of deferred government grants (1,266,377) (1,258,735)
statements. The comparison of tax provision as per the consolidated financial statements viz-a-viz tax Finance cost 4,054,303 6,417,355
return for last three years is as follows: Imputed interest on loans and advances 46,929 48,819
Tax Tax Imputed interest on finance lease (4,088) (10,753)
charge in liability as Share of loss from associate - 7,624
accounts per return
Financial year Rs ‘000 Rs ‘000 49,197,681 52,987,373
Effect on cash flow due to working capital changes
2017 - restated 5,947,572 2,171,297
2016 5,542,713 3,725,631 (Increase) / decrease in current assets:
2015 6,255,056 1,603,733 Stock in trade, stores and spares (2,460,497) (964,117)
Trade debts and contract assets (4,094,994) (3,544,101)
40. Non-funded finance facilities Loans to banking customers (6,465,480) (5,025,937)
Loans and advances (475,781) (945,837)
The Holding Company has non-funded financing facilities available with banks, which include facilities to Contract cost (3,461,489) (2,344,872)
avail letters of credit and letters of guarantee. The aggregate facility of Rs 19,800,000 thousand (December Deposits, prepayments and other receivables (762,069) 1,473,463
31, 2017: Rs 16,500,000 thousand) and Rs 17,800,000 thousand (December 31, 2017: Rs 17,300,000
thousand) is available for letters of credit and letters of guarantee respectively, out of which the facilities (17,720,310) (11,351,401)
availed at the year end are Rs 4,162,650 thousand (December 31, 2017: Rs 4,216,000 thousand) and Rs Increase / (decrease) in current liabilities:
9,210,000 thousand (December 31, 2017: Rs 6,845,906 thousand) respectively. The letter of guarantee Trade and other payables 6,598,233 4,471,446
facility is secured by a hypothecation charge over certain assets of the Holding Company, amounting to Rs Security deposits 25,850 (47,916)
29,968,000 thousand (December 31, 2017: Rs 26,718,000 thousand). 6,624,083 4,423,530
38,101,454 46,059,502
196 197
41.1. Reconciliation of movement of liabilities to cash flows arising from financing activities Tax on salary of the Chief Executive Officer amounting to Rs 74,955 thousand (December 31, 2017: Rs
91,085 thousand) is borne by the the Holding Company as per contract terms.
Liabilities Equity
The Group also provides free medical and limited residential telephone facilities, to all its executives,
Liability
including the Chief Executive Officer. The Chairman is entitled to free transport and a limited residential
Sub- against assets
telephone facility, whereas, the Directors of the Group are provided only with limited telephone facilities.
ordinated Loans from Vendor subject to Customer Dividend Interest Revenue
Certain executives are also provided with the company maintained cars.
loan banks liability finance lease deposits payable accrued reserve Total
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 The aggregate amount charged in the consolidated financial statements for the year as fee paid to 13 non
executive directors (December 31, 2017: 12 non executive directors) is Rs 95,310 thousand (December 31,
Balance at January 1, 2018 600,000 29,586,153 38,624,716 10,146 10,821,490 210,187 503,096 35,413,809 115,769,597 2017: Rs 128,880 thousand) for attending the Board of Directors, and its sub-committee meetings.
Changes from financing cash flows 43. Rates of exchange

Draw-downs / additions - 6,150,513 9,692,218 - 9,713,120 5,100,000 463,065 - 31,118,916
Assets in US dollars have been translated into Rupees at USD 1 = Rs 138.60 (December 31, 2017: USD 1 =
Repayments (360) (4,151,667) (7,832,365) (18,788) - (5,045,351) - - (17,048,531)
Rs 110.30), while liabilities in US dollars have been translated into Rupees at USD 1 = Rs 139.10 (December
(360) 1,998,846 1,859,853 (18,788) 9,713,120 54,649 463,065 - 14,070,385 31, 2017: USD 1 = Rs 110.50).
Other changes
44. Financial risk management
Interest cost on lease facilities - - - 640 - - - - 640
Liability related changes - - - 485 - - - - 485 44.1 Financial risk factors
Lease facility availed - - - 26,363 - - - - 26,363
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, other
Total liability related other changes - - - 27,488 - - - - 27,488 price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program
Total equity related changes - - - - - - - (3,395,896) (3,395,896) focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on its
Balance at December 31, 2018 599,640 31,584,999 40,484,569 18,846 20,534,610 264,836 966,161 32,017,913 126,471,574 financial performance.
Risk management is carried out by the Board of Directors (the Board). The Board has prepared a ‘Risk
2018 2017 Management Policy’ covering specific areas such as foreign exchange risk, interest rate risk, credit risk
Rs ‘000 Rs ‘000
and investment of excess liquidity. All treasury related transactions are carried out within the parameters
of this policy.
41.2 Cash and cash equivalents
Short term investments 31 17,198,237 4,313,375 a) Market risk
Cash and bank balances 32 9,157,769 15,057,748
(i) Currency risk
Short term running finance 16 (1,225,137) (834,233)
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
25,130,869 18,536,890 because of changes in foreign exchange rates. Currency risk arises mainly from future commercial
transactions, or receivables and payables that exist due to transactions in foreign currencies.
42. Remuneration of Directors, Chief Executive Officer and executives
The aggregate amounts charged in the consolidated financial statements for remuneration, including all
benefits, to the Chairman, Chief Executive Officer and Executives of the Group are as follows:
Chairman Chief Executive Officer Executives

Key management Other
personnel executives
2018 2017 2018 2017 2018 2017 2018 2017
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Restated Restated
Managerial remuneration - - 196,544 203,358 587,758 617,575 1,063,321 913,289

Honorarium 300 300 - - - - - -
Bonus - - 61,280 79,429 133,627 185,370 195,120 198,701
Retirement benefits - - 21,263 18,240 56,062 45,998 110,821 93,348
Housing - - 11,047 11,699 231,999 203,561 403,110 350,426
Utilities - - - - 39,413 35,009 71,046 61,760
300 300 290,134 312,726 1,048,859 1,087,513 1,843,418 1,617,524
Number of persons 1 1 1 1 75 76 411 363
198 199
The Group is exposed to currency risk arising from various currency exposures, primarily with respect The Group is exposed to equity securities price risk because of the investments held by the Group in
to the United States Dollar (USD), Arab Emirates Dirham (AED) and EURO (EUR). Currently, the Group’s money market mutual funds and classified in the consolidated statement of financial position as FVTPL. To
foreign exchange risk exposure is restricted to the amounts receivable from / payable to foreign entities. manage its price risk arising from investments in mutual funds, the Group diversifies its portfolio.
The Group’s exposure to currency risk is as follows:
Financial assets include investments of Rs 6,318,016 thousand (December 31, 2017: Rs 4,313,375 thousand)
2018 2017 which were subject to price risk.
Rs ‘000 Rs ‘000
If redemption price on mutual funds / MTBs / PIBs, at the year end date, fluctuate by 5% higher / lower
USD with all other variables held constant, total comprehensive income for the year would have been Rs 217,972
Trade and other payables (4,381,787) (4,256,664) thousand (December 31, 2017: Rs 146,655 thousand) higher / lower, mainly as a result of higher / lower
Long term vendor liability (18,343,534) (19,742,925) redemption price on units of mutual funds.
Trade debts 4,332,382 3,379,142
Cash and bank balances 2,815,827 722,357 (iii) Interest rate risk
Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will
Net exposure (15,577,112) (19,898,090)
fluctuate because of changes in market interest rates.
EUR At the date of the consolidated statement of financial position, the interest rate profile of the Group’s
Trade and other payables (55,307) (99,026) interest bearing financial instruments at the year end :
Trade debts 88,777 48,477 2018 2017
Cash and bank balances 45,874 44,920 Rs ‘000 Rs ‘000
Net exposure 79,344 (5,629)
Financial assets
AED Fixed rate instruments:
Trade and other payables (73,556) (57,893) Staff loans 1,021,575 656,097
Short term investments - term deposits 17,198,237 9,394,153
2018 2017 Bank balances - savings accounts 3,047,534 13,247,638
Market treasury bills 980,221 -
The following significant exchange rates were applied during the year: 22,247,567 23,297,888
Rupees per USD Floating rate instruments:
Average rate 122.42 105.54 Bank balances - savings accounts - 447,164
Reporting date rate Loans to banking customers 17,019,838 10,554,358
Assets 138.60 110.30
Liabilities 139.10 110.50 17,019,838 11,001,522
Rupees per EUR 39,267,405 34,299,410

Average rate 144.06 119.46 Financial liabilities
Reporting date rate
Fixed rate instruments:
Assets 158.52 131.73
Liabilities 159.10 131.97 Customers deposits 20,534,610 10,821,490
Rupees per AED Floating rate instruments:
Average rate 33.34 28.73 Long term loans from banks 31,584,999 29,586,153
Reporting date rate 37.87 30.08 Liability against assets subject to finance lease 18,845 10,146
Long term vendor liability 16,916,356 14,432,462
If the functional currency, at the reporting date, had fluctuated by 5% against the USD, AED and EUR Short term running finance 1,225,137 834,233
with all other variables held constant, the impact on profit after taxation for the year would have been 49,745,337 44,862,994
Rs 538,727 thousand (December 31, 2017: Rs 648,752 thousand) respectively higher / lower, mainly as a
result of exchange gains / losses on translation of foreign exchange denominated financial instruments. 70,279,947 55,684,484
Currency risk sensitivity to foreign exchange movements has been calculated on a symmetric basis.
(ii) Other price risk

Other price risk represents the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices (other than those arising from interest rate risk or currency
risk), whether those changes are caused by factors specific to the individual financial instrument or its
issuer, or factors affecting all similar financial instruments traded in the market.
200 201
Fair value sensitivity analysis for fixed rate instruments The credit quality of bank balances and short term investments, that are neither past due nor impaired,
The Group does not account for any fixed rate financial assets and liabilities at fair value. Therefore, a can be assessed by reference to external credit ratings (if available) or to historical information about
change in interest rates at the date of consolidated statement of financial position would not affect the total counterparty default rate:
comprehensive income of the Group. Rating Rating
Short term Long term Agency
Cash flow sensitivity analysis for floating rate instruments
National Bank of Pakistan A1+ AAA PACRA
If interest rates on variable rate instruments of the Group, at the year end date, fluctuate by 1% higher /
Bank Alfalah Limited A1+ AA+ PACRA
lower with all other variables held constant, profit after taxation for the year would have been Rs 225,806
MCB Bank Limited A1+ AAA PACRA
thousand (December 31, 2017: Rs 220,100 thousand) lower / higher, mainly as a result of higher / lower
Soneri Bank Limited A1+ AA- PACRA
markup income on floating rate loans/investments.
Habib Metropolitan Bank Limited A1+ AA+ PACRA
Habib Bank Limited A-1+ AAA JCR-VIS
(b) Credit risk
Faysal Bank Limited A1+ AA PACRA
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the Askari Bank Limited A1+ AA+ PACRA
other party, by failing to discharge an obligation. The maximum exposure to credit risk at the reporting date HSBC Bank Middle East P-1 A2 Moody’s
is as follows: Al Baraka Bank Pakistan Limited A1 A PACRA
2018 2017 Allied Bank Limited A1+ AAA PACRA
Rs ‘000 Rs ‘000 United Bank Limited A-1+ AAA JCR-VIS
BankIslami Pakistan Limited A1 A+ PACRA
Long term loans and advances 888,912 550,332 Bank Al-Habib Limited A1+ AA+ PACRA
Trade debts and contract assets 18,903,883 16,805,595 Summit Bank Limited A-1 A- JCR-VIS
Loans to banking customers 17,019,838 10,554,358 Dubai Islamic Bank (Pakistan) Limited A-1 AA- JCR-VIS
Loans and advances 1,682,244 1,527,713 Citibank, N.A P-1 A1 Moody’s
Deposits and other receivables 4,605,051 4,281,179 SME Bank Limited B B- PACRA
Short term investments 17,198,237 6,867,153 Silkbank Limited A-2 A- JCR-VIS
Bank balances 8,265,167 14,672,304 Standard Chartered Bank (Pakistan) Limited A1+ AAA PACRA
68,563,332 55,258,634 JS Bank Limited A1+ AA- PACRA
Meezan Bank Limited A-1+ AA+ JCR-VIS
Sindh Bank Limited A-1+ AA JCR-VIS
The credit risk on liquid funds is limited, because the counter parties are banks with reasonably high credit
The Bank of Khyber A-1 A JCR-VIS
ratings. In case of trade debts, the Group believes that it is not exposed to a major concentration of credit
Samba Bank Limited A-1 AA JCR-VIS
risk, as its exposure is spread over a large number of counter parties and subscribers.
First Women Bank Limited A2 A- PACRA
The Bank of Punjab A1+ AA PACRA
The First Microfinance Bank Limited A-1 A+ JCR-VIS
Khushhali Microfinance Bank Limited A-1 A+ JCR-VIS
Telenor Microfinance Bank Limited A-1 A+ JCR-VIS
Mobilink Microfinance Bank Limited A1 A PACRA
NRSP Microfinance Bank Limited A1 A PACRA
Mutual Funds
- HBL Cash Management Fund - AA(f) JCR-VIS
- ABL Cash Management Fund - AA(f) JCR-VIS
- UBL Cash Management Fund - AA(f) JCR-VIS
- MCB Cash Management Optimizer Fund - AA(f) JCR-VIS
Due to the Group’s long standing business relationships with these counter parties, and after giving due
consideration to their strong financial standing, management does not expect non-performance by these
counter parties on their obligations to the Group. Accordingly, the credit risk is minimal.
(c) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with
financial liabilities.
The Group follows an effective cash management and planning policy to ensure availability of funds, and to
take appropriate measures for new requirements.
202 203
The following are the contractual maturities of financial liabilities as at December 31, 2018: FVOCI - FVTPL - FVTPL - Financial assets at
equity equity debt amortized
Carrying Less than One to five More than instruments instruments instruments cost Total
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Long term loans from banks 31,584,999 7,176,667 23,575,332 833,000 44.3 Financial instruments by categories - 2018
Liability against assets subject to Financial assets as per consolidated statement
finance lease 18,846 3,287 15,559 - of financial position
Security deposits 1,471,112 575,416 - 895,696 Long term other investments 83,900 - - - 83,900
Long term vendor liability 40,484,569 13,532,709 26,951,860 - Debt securities- treasury Bills - - 1,967,824 980,221 2,948,045
Trade and other payables 72,082,391 72,082,391 - - Long term loans and advances - - - 706,390 706,390
Interest accrued 1,023,261 1,023,261 - - Trade debts - - - 18,903,883 18,903,883
Short term running finance 1,225,137 1,225,137 - - Loans to banking customers - - - 17,019,838 17,019,838
Customers deposits 20,534,609 17,133,725 3,400,884 - Loans and advances - - - 1,864,766 1,864,766
168,424,924 112,752,593 53,943,635 1,728,696 Receivable from the Government of Pakistan - - - 2,164,072 2,164,072
The following are the contractual maturities of financial liabilities as at December 31, 2017: Other receivables - - - 4,605,051 4,605,051
Short term investments - 4,350,192 - 9,900,000 14,250,192
Carrying Less than One to five More than Cash and bank balances - - - 9,157,769 9,157,769
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Financial liabilities as per statement of
Long term loans from banks 29,586,153 4,001,154 25,584,999 - financial position Amortized cost
Liability against assets subject to Loans from Banks 31,584,999
finance lease 10,146 10,146 - - Vendor liability 40,484,569
Security deposits 1,445,262 1,445,262 - - Trade and other payables 72,082,391
Long term vendor liability 38,624,716 7,474,057 31,150,659 - Securities deposits 1,471,112
Trade and other payables 65,239,131 65,239,131 - - Dividend payable 264,836
Interest accrued 503,096 503,096 - - Interest accrued 966,161
Short term running finance 834,233 834,233 - - Short term running finance 1,225,137
Customers deposits 10,821,490 6,937,146 3,884,344 -
147,064,227 86,444,225 60,620,002 - Available FVTPL Loans and
for sale debt instruments receivables Total
44.2 Fair value of financial instruments
Financial instruments by categories - 2017
The carrying values of all financial assets and liabilities reflected in the consolidated financial statements
approximate their fair values. Fair value is determined on the basis of objective evidence at each reporting date. Financial assets as per consolidated statement
of financial position
Fair value measurements are categorized into Level 1, 2 and 3 based on the degree to which the inputs to the
fair value measurements are observable and significance of the inputs to the fair value measurement in its Long term other investments 83,900 - 83,900
entirety, which is as follows: Debt securities- treasury Bills - 1,786,375 - 1,786,375
Long term loans and advances - 429,346 429,346
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Trade debts - 16,805,595 16,805,595
Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, Loans to banking customers 10,554,358 10,554,358
either directly (i.e., as prices) or indirectly (i.e., derived from prices). Loans and advances - 1,648,699 1,648,699
Level 3 - Inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs). Receivable from the Government of Pakistan - 2,164,072 2,164,072
Details of the Group’s assets’ fair value hierarchy as at December 31 are as follows: Other receivables - 4,281,179 4,281,179
Level 1 Level 2 Level 3 Total
Short term investments 4,313,375 5,080,778 9,394,153
Cash and bank balances - 15,057,748 15,057,748
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Financial liabilities as per statement of Other
Long term other investments 2018 - - 83,900 83,900 financial position financial liabilities
Market Treasury Bills 2018 - 1,967,824 - 1,967,824 Loans from banks 29,586,153
Investment in mutual funds 2018 4,350,192 - - 4,350,192 Vendor liability 38,624,716
Forward exchange contracts 2018 - 345,772 - 345,772 Trade and other payables 65,239,131
Long term other investments 2017 - - 83,900 83,900 Securities deposits 1,445,262
Market Treasury Bills 2017 - 1,786,375 - 1,786,375 Dividend payable 210,187
Investment in mutual funds 2017 2,527,000 - - 2,527,000 Interest accrued 503,096
Forward exchange contracts 2017 - 155,791 - 155,791 Short term running finance 834,233
204 205
44.4 Capital Risk Management 46. Transactions with related parties

The Board’s policy is to maintain an efficient capital base so as to maintain investor, creditor and market The Government of Pakistan and Etisalat International Pakistan (EIP), UAE are the majority shareholders
confidence, and to sustain the future development of the Group’s business. The Board monitors the return of the Group. Additionally, the Group’s associate T.F. Pipes Limited, directors, chief executive, key
on capital employed, which the Group defines as operating income divided by total capital employed. The management personnel and employee funds are also related parties of the Group. The remuneration of
Board also monitors the level of dividends to ordinary shareholders. the directors, chief executive and executives is given in note 42 to the financial statements. The amounts
due from and due to these related parties are shown under respective receivables and payables. The Group
The Group’s objectives when managing capital are: had transactions with the following related parties during the year:
(i) to safeguard the Group’s ability to continue as a going concern, so that it can continue to provide
Aggregate % of
returns for shareholders and benefits for other stakeholders; and
shareholding in the
(ii) to provide an adequate return to shareholders. Particulars Company
The Group manages the capital structure in the context of economic conditions and the risk characteristics Shareholders
of the underlying assets. In order to maintain or adjust the capital structure, the Group may, for example, The Government of Pakistan 62.18%
adjust the amount of dividends paid to shareholders, issue new shares, or sell assets to reduce the debt. Etisalat International Pakistan 26%
Associated undertakings
2018 2017
Rs ‘000 Rs ‘000
Emirates Telecommunication Corporation Not applicable
Etisalat - Afghanistan Not applicable
Etihad Etisalat Company Not applicable
45. Employees’ provident funds Etisalat - Egypt Not applicable
Details of the Group’s employees’ provident funds are given below: Emirates Data Clearing House Not applicable
T. F. Pipes Limited Not applicable
Total assets 4,825,744 4,835,765 Telecom Foundation Not applicable
Cost of investments made 4,373,166 4,290,483 Pakistan MNP Database (Guarantee) Limited Not applicable
Percentage of investments made 90.6% 88.7%
Fair value of investments 3,910,517 4,502,437 Employees retirement benefit plans
Pakistan Telecommunication Employees Trust Not applicable
2018 2017
PTCL - Employees Provident Fund Not applicable
PTML - Employees Provident Fund Not applicable
Break up of investments - at cost Rs ‘000 Percentage Rs ‘000 Percentage PTCL - Employees Gratuity Fund Not applicable
PTML - Employees Gratuity Fund Not applicable
Ubank - Employees Provident Fund Not applicable
Mutual funds 1,100,000 25.15 1,650,000 38.45
Ubank - Employees Gratuity Fund Not applicable
Pakistan Investment Bonds 875,000 20.01 - -
Term Finance Certificates 224,000 5.12 - - Other related parties
Term Deposit Receipts 2,025,707 46.33 2,557,926 59.61 Pakistan Telecommunication Authority Not applicable
Interest bearing accounts 148,459 3.39 83,157 1.94 Universal Service Fund - The Government of Pakistan Not applicable
National ICT R&D Fund Not applicable
4,373,166 100.00 4,291,083 100.00
Pakistan Electronic Media Regulatory Authority Not applicable
Investments out of the provident funds have been made in accordance with the provisions of section 218 of
the Companies Act, 2017 and the rules formulated for this purpose.
206 207
Chief Executive, directors and key management personnel 47. Operating segment information
The Group also has transactions with Chief Executive Officer, directors and other key management 47.1 Management has determined the operating segments based on the information that is presented to the
personnel which includes chief officers and general managers, transactions with whom are disclosed in Board of Directors for allocation of resources and assessment of performance. The Group is organized into
note 22 and 42 to these financial statements. three operating segments i.e. fixed line communications (Wire line), wireless communications (Wireless)
and banking. The reportable operating segments derive their revenue primarily from voice, data and other
Following particulars relate to holding and associated companies incorporated outside Pakistan with services.
whom the Group had entered into transactions during the year:
47.2 The Board of Directors monitor the results of the above mentioned segments for the purpose of making
Auditor’s
decisions about the resources to be allocated and for assessing performance based on consolidated
opinion on
latest available
comprehensive income for the year.
Country of Name of Operational financial
Names Registered Address Incorporation Chief Executive Status statements 47.3 The segment information for the reportable segments is as follows:
Wireline Wireless Banking Total
- Holding Company Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Etisalat International Pakistan P.O.Box 300 United Arab Mr Abdulrahim Operational Unmodified
Abu Dhabi Emirates Al Nooryani opinion Year ended December 31, 2018
- Associated Companies Segment revenue 67,029,626 61,074,833 4,582,653 132,687,112
Emirates Telecommunication P.O. Box 3838 United Arab Saleh Abdulla Operational Unmodified Inter - segment revenue (5,153,395) (1,372,969) (362) (6,526,726)
Corporation Abu Dhabi Emirates Al Abdooli opinion
Revenue from external customers 61,876,231 59,701,864 4,582,291 126,160,386
Etisalat - Afghanistan Ehasan Plaza, near Afghanistan Mr Salah Operational Unmodified
Hajji Yaqoub Square, Zerguerras opinion Segment results 7,012,502 (1,849,557) 547,059 5,710,004
Shar-e-Naw, Kabul
P.O. Box # 800 Year ended December 31, 2017
Etisalat - Egypt P.O. Box 11, Building S4 Egypt Mr Hazem Operational Unmodified Segment revenue 65,024,663 55,912,924 2,796,249 123,733,836
El Teseen St, Metwally opinion Inter - segment revenue (5,080,120) (1,633,544) (907) (6,714,571)
5th Compound
New Cairo, Revenue from external customers 59,944,543 54,279,380 2,795,342 117,019,265
Etihad Etisalat Company P.O. Box 23088, Kingdom of Mr Ahmed Abou Operational Unmodified Segment results 7,777,837 (3,719,150) 258,966 4,317,653
Riyadh Saudi Arabia Doma opinion
Information on assets and liabilities of the segments is as follows:
2018 2017
Rs ‘000 Rs ‘000 Wireline Wireless Banking Total
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
Details of Transactions with related parties
Shareholders
Technical services assistance fee 4,415,614 4,095,674 Segment assets 153,781,516 130,528,440 34,808,242 319,118,198
Associates Segments liabilities 107,867,014 100,141,609 27,870,090 235,878,713
Purchase of goods and services 1,143,350 984,026 As at December 31, 2017
Expenses reimbursed to Pakistan Segment assets 147,094,539 130,180,198 17,669,806 294,944,543
MNP Database (Guarantee) Limited 26,550 19,961
Rentals paid to Pakistan Telecommunication Employees Trust (PTET) 533,142 498,263 Segments liabilities 98,479,563 94,924,868 15,041,494 208,445,925
Employees retirement benefits plans
Contribution to PTET 2,779,570 5,253,506
Contribution to Gratuity Fund - 59,526
Other related parties
Sales of goods and services 1,789,345 1,676,921
Charge under license obligations 1,564,303 1,655,227
208 209
47.4 Other segment information is as follows: 49. Change in accounting policy and its impact on consolidated financial statements
Wireline Wireless Banking Total The following table summarizes the impacts of adopting IFRS 15 on the Groups’s Financial Statements.
Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
i) Consolidated Statement of Financial Position
Year ended December 31, 2018
Depreciation 12,983,836 15,221,250 116,482 28,321,568 Impact of changes in accounting policy
Amortization 398,244 3,030,486 18,264 3,446,994 As previously
Finance cost 530,007 7,209,396 22,614 7,762,017 reported Adjustments As restated
Interest income 638,519 89,781 408,745 1,137,045 Rs ‘000 Rs ‘000 Rs ‘000
Income tax expense 3,201,333 (2,199,081) 237,229 1,239,481
January 01, 2017
Year ended December 31, 2017 Assets
Depreciation 12,602,279 17,306,144 59,559 29,967,982 Contract costs - 1,441,417 1,441,417
Amortization 500,156 3,047,924 14,511 3,562,591 Others 302,611,576 - 302,611,576
Finance cost 282,381 6,164,831 10,400 6,457,612 Total assets 302,611,576 1,441,417 304,052,993
Interest income 1,394,483 452,641 296,943 2,144,067
Income tax expense 4,191,143 (2,268,624) 148,639 2,071,158 Equity and liabilities
Share of loss from associates 7,624 - - 7,624 Equity
Share capital 51,000,000 - 51,000,000
47.5 The Group’s customer base is diverse with no single customer accounting for more than 10% of net Reserves 30,139,519 - 30,139,519
revenues. Unappropriated profit 7,047,199 416,648 7,463,847
47.6 The amount of revenue from external parties, total segment assets and segment liabilities are measured 88,186,718 416,648 88,603,366
in a manner consistent with that of the financial information reported to the Board of Directors. Liabilities
48. Number of employees Trade and other payables 70,001,837 843,487 70,845,324
2018 2017 Others 132,333,217 - 132,333,217
Number Number
214,424,858 1,024,769 215,449,627
Total number of persons employed at year end 19,567 18,999 302,611,576 1,441,417 304,052,993
Average number of employees during the year 19,313 18,359
December 31, 2017
Assets
Contract costs - 1,546,113 1,546,113
Income tax recoverable 19,838,281 (9,963) 19,828,318
Deposits, prepayments and other receivables 9,660,732 (6,907) 9,653,825
Others 263,916,287 - 263,916,287
Total assets 293,415,300 1,529,243 294,944,543
Equity and liabilities

Equity
Share capital 51,000,000 - 51,000,000
Reserves 30,388,874 - 30,388,874
Unappropriated profit 4,717,685 392,059 5,109,744
86,106,559 392,059 86,498,618
Liabilities
Trade and other payables 69,384,175 97,091 69,481,266
Unearned income - contract liability 5,818,447 877,277 6,695,724
Others 121,634,377 - 121,634,377
207,308,741 1,137,184 208,445,925
Total Equity and liabilities 293,415,300 1,529,243 294,944,543
210 211
ii) Consolidated Statement of Profit or Loss 50. Offsetting of financial assets and liabilities
December 31, December 31, Gross amount Amount not in Net as per
2017 2017 subject Offset Net amount scope of statement of
Impact of changes in accounting policy to setoff offsetting financial position
As previously Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000
reported Adjustments As restated
Rs ‘000 Rs ‘000 Rs ‘000 As at December 31, 2018
Trade debts 12,995,896 (6,527,197) 6,468,699 20,070,715 26,539,414
For the year ended 31 December 2017 Trade creditors (7,929,630) 6,527,197 (1,402,433) (7,665,535) (9,067,968)
Revenue 117,026,533 (7,268) 117,019,265
Cost of services (90,113,595) (424,731) (90,538,326) As at December 31, 2017
Gross profit 26,912,938 (431,999) 26,480,939 Trade debts 7,813,324 (5,348,941) 2,464,383 22,827,806 25,292,189
Trade creditors (6,645,866) 5,348,941 (1,296,925) (7,846,949) (9,143,874)
Administrative and general expenses (17,362,501) 26,029 (17,336,472)
Selling and marketing expenses (6,505,461) 372,875 (6,132,586)
(23,867,962) 398,904 (23,469,058) 51. Corresponding figures
Operating profit 3,044,976 (33,095) 3,011,881 Following corresponding figures have been reclassified for appropriate presentation of balances.
Other income 9,842,166 - 9,842,166
Consolidated Statement of Financial Position
Finance costs (6,457,612) - (6,457,612)
Profit before taxation 6,429,530 (33,095) 6,396,435 Reclassification From Reclassification To Rs ‘000
Share loss from Associate (7,624) - (7,624)
6,421,906 (33,095) 6,388,811 Current liabilities Current liabilities
Provision for income tax (2,079,664) 8,506 (2,071,158) Trade and other payables Dividend payable 210,187
Profit after taxation 4,342,242 (24,589) 4,317,653 Current liabilities Non-Current liabilities
Trade and other payables Advances from customers 1,223,912
iii) Consolidated Statement of Cash Flows Non-Current liabilities Current liabilities
Security deposits Security deposits 553,446
For the year ended December 31, 2017
Non-Current Assets Non-Current Assets
Profit before taxation 6,421,906 (33,095) 6,388,811 Long term loans and advances Capital work in progress 2,286,440
Adjustments for non-cash and other items Investment in finance lease Long term loans and advances 17,268
Contract cost - 2,240,177 2,240,177 Current Assets Current Assets
Others 44,358,385 - 44,358,385 Investment in finance lease Loans and advances 35,137
44,358,385 2,240,177 46,598,562
Operating profit before working capital changes 50,780,291 2,207,082 52,987,373 52. Date of authorization for issue
Contract costs - (2,344,872) (2,344,872) These consolidated financial statements were authorized for issue by the Board of Directors of the Holding
Trade and other payables 4,333,656 137,790 4,471,446 Company on February 12, 2019.
Working capital changes (7,248,948) (1,805,497) (9,054,445)
Cash generated from operations 47,864,999 (1,805,497) 46,059,502
Finance cost, income tax and others (22,237,633) 5,023,005 (17,214,628)
Net cash generated from operating activities 25,627,366 3,217,508 28,844,874
Cash flow from investing activities

Net cash used in investing activities (3,042,448) - (3,042,448)
Cash flow form financing activities
Net cash generated from financing activities (16,203,626) (3,217,508) (19,421,134)
Net increase in cash and cash equivalents 6,381,292 - 6,381,292
Cash and cash equivalents at beginning of the year 12,155,598 - 12,155,598
Cash and cash equivalents at end of the year 18,536,890 - 18,536,890
Chief Financial Officer President & CEO Chairman
212 213
NOTES
214 215
PATTERN OF
SHAREHOLDING
No. of Shareholdings Total shares

shareholders From To held
24,741 1 100 2,441,157

8,800 101 500 2,718,493
2,848 501 1,000 2,520,932
3,335 1,001 5,000 9,159,234
1,020 5,001 10,000 8,458,229
373 10,001 15,000 4,822,308
262 15,001 20,000 4,842,434
203 20,001 25,000 4,817,428
112 25,001 30,000 3,201,318
75 30,001 35,000 2,472,310
58 35,001 40,000 2,250,910
34 40,001 45,000 1,469,190
131 45,001 50,000 6,465,119
23 50,001 55,000 1,223,703
35 55,001 60,000 2,052,923
23 60,001 65,000 1,440,754
20 65,001 70,000 1,373,366
23 70,001 75,000 1,697,090
17 75,001 80,000 1,342,100
9 80,001 85,000 755,000
15 85,001 90,000 1,321,500
12 90,001 95,000 1,118,500
64 95,001 100,000 6,378,656
14 100,001 105,000 1,436,500
11 105,001 110,000 1,191,000
5 110,001 115,000 563,500
8 115,001 120,000 952,000
6 120,001 125,000 743,106
5 125,001 130,000 647,017
12 130,001 135,000 1,601,360
5 135,001 140,000 695,000
5 140,001 145,000 715,500
23 145,001 150,000 3,445,028
8 150,001 155,000 1,214,401
4 155,001 160,000 636,200
5 160,001 165,000 814,500
1 165,001 170,000 168,500
6 170,001 175,000 1,042,500
4 175,001 180,000 706,600
3 180,001 185,000 551,117
5 185,001 190,000 941,500
2 190,001 195,000 388,600
23 195,001 200,000 4,594,000
3 205,000 210,000 625,000
4 210,001 215,000 856,000
3 215,001 220,000 659,000
2 225,000 230,000 450,000
4 235,001 240,000 950,500
5 245,000 250,000 1,245,000
2 250,001 255,000 500,800
3 255,001 260,000 773,000
1 260,001 265,000 264,500
2 265,001 270,000 536,500
2 275,000 280,000 550,900
1 280,001 285,000 280,200
1 285,001 290,000 287,500
8 295,001 300,000 2,395,000
4 300,001 305,000 1,206,500
2 305,001 310,000 619,500
2 310,001 315,000 626,000
1 315,001 320,000 319,500
1 325,001 330,000 325,232
1 335,000 340,000 335,000
4 345,001 350,000 1,399,000
216 217
PATTERN OF
SHAREHOLDING
No. of Shareholdings Total shares Shareholdings

shareholders From To held No. of Total shares
shareholders From To held
3 350,001 355,000 1,063,900
1 360,000 365,000 360,000 1 2,505,001 2,510,000 2,508,000
2 365,001 370,000 734,384 1 2,540,000 2,545,000 2,540,000
3 370,001 375,000 1,120,000 1 2,615,001 2,620,000 2,617,562
1 385,001 390,000 387,073 1 2,665,001 2,670,000 2,666,000
7 395,001 400,000 2,798,500 1 3,080,001 3,085,000 3,084,050
1 400,001 405,000 401,000 1 3,345,001 3,350,000 3,347,600
2 405,001 410,000 819,000 1 3,380,001 3,385,000 3,384,139
3 420,001 425,000 1,269,000 1 3,540,000 3,545,000 3,540,000
1 435,000 440,000 435,000 1 4,400,001 4,405,000 4,400,500
1 450,000 455,000 450,000 1 4,500,000 4,505,000 4,500,000
1 465,001 470,000 469,500 1 4,990,001 4,995,000 4,993,000
1 475,000 480,000 475,000 1 5,425,001 5,430,000 5,427,500
7 495,001 500,000 3,499,000 1 6,005,001 6,010,000 6,008,000
1 505,001 510,000 509,877 1 6,080,001 6,085,000 6,084,000
1 525,000 530,000 525,000 1 6,325,001 6,330,000 6,329,000
1 550,001 555,000 551,000 1 6,390,001 6,395,000 6,390,500
1 560,000 565,000 560,000 1 6,515,001 6,520,000 6,518,500
1 575,001 580,000 578,000 1 8,095,001 8,100,000 8,097,500
1 590,001 595,000 593,000 1 8,655,001 8,660,000 8,658,000
1 600,000 605,000 600,000 1 9,755,001 9,760,000 9,756,500
1 605,001 610,000 608,000 1 10,725,000 10,730,000 10,725,000
1 630,001 635,000 630,500 1 10,910,000 10,915,000 10,910,000
1 635,001 640,000 639,500 1 16,225,001 16,230,000 16,227,500
1 690,001 695,000 690,400 1 27,185,001 27,190,000 27,188,000
3 700,000 705,000 2,104,500 1 28,235,000 28,240,000 28,235,000
1 705,001 710,000 709,500 1 29,985,001 29,990,000 29,987,000
1 735,000 740,000 735,000 1 31,270,001 31,275,000 31,274,500
1 775,000 780,000 775,000 1 34,360,001 34,365,000 34,361,854
1 785,001 790,000 787,000 1 55,890,001 55,895,000 55,893,800
2 795,001 800,000 1,596,500 1 57,060,001 57,065,000 57,060,074
1 810,001 815,000 810,500 1 196,385,001 196,390,000 196,387,991
1 835,001 840,000 838,000 1 407,805,001 407,810,000 407,809,524
4 1,000,000 1,005,000 4,006,000 1 918,190,001 918,195,000 918,190,476
1 1,060,001 1,065,000 1,063,600 1 2,974,680,001 2,974,685,000 2,974,680,002
1 1,080,001 1,085,000 1,083,103
3 1,095,000 1,100,000 3,295,000 42,570 5,100,000,000
1 1,100,001 1,105,000 1,100,500
1 1,145,001 1,150,000 1,145,700
1 1,170,001 1,175,000 1,172,000
1 1,195,001 1,200,000 1,195,292
1 1,250,000 1,255,000 1,250,000
1 1,270,001 1,275,000 1,272,000
1 1,325,001 1,330,000 1,326,000
1 1,445,000 1,450,000 1,445,000
1 1,500,000 1,505,000 1,500,000
1 1,535,001 1,540,000 1,537,000
1 1,545,001 1,550,000 1,547,000
1 1,700,000 1,705,000 1,700,000
1 1,860,001 1,865,000 1,861,500
1 1,920,001 1,925,000 1,922,000
1 2,000,000 2,005,000 2,000,000
1 2,005,001 2,010,000 2,006,000
1 2,050,000 2,055,000 2,050,000
1 2,075,000 2,080,000 2,075,000
1 2,100,000 2,105,000 2,100,000
1 2,200,000 2,205,000 2,200,000
1 2,235,000 2,240,000 2,235,000
1 2,250,000 2,255,000 2,250,000
1 2,310,001 2,315,000 2,314,000
1 2,405,001 2,410,000 2,409,500
1 2,435,001 2,440,000 2,439,884
2 2,500,000 2,505,000 5,000,000
218 219
CATEGORIES OF INFORMATION OF
SHAREHOLDERS SHAREHOLDERS
AS AT DECEMBER 31, 2018 AS AT DECEMBER 31, 2018
S. No. of Shares S. Number of Number of

No. Categories of Shareholders Shareholders Held Percentage No. Shareholder’s category shareholders shares held
1 Directors, Chief Executive Officer, i. Associated Companies, Undertaking and Related Parties
and their spouses and minor children 9 9 0.00 (name wise details)
2 President of Pakistan 2 3,171,067,993 62.18 ETISALAT INTERNATIONAL PAKISTAN (LLC) - FIRST CDC ACCOUNT 1 918,190,476
ETISALAT INTERNATIONAL PAKISTAN (LLC) SECOND CDC ACCOUNT 1 407,809,524
3 Associated Companies, Undertakings TOTAL 2 1,326,000,000
and related Parties 2 1,326,000,000 26.00
ii. Mutual Funds (name wise details)
4 NIT and ICP 3 3,400 0.00
CDC - TRUSTEE AKD INDEX TRACKER FUND 1 127,017
5 Banks, Development Financial Institutions, CDC - TRUSTEE AKD OPPORTUNITY FUND 1 2,500,000
Non Banking Financial Institutions 21 121,504,087 2.38 CDC - TRUSTEE AL MEEZAN MUTUAL FUND 1 200,000
CDC - TRUSTEE ALFALAH GHP INCOME MULTIPLIER FUND - MT 1 2,000
6 Insurance Companies 18 73,227,936 1.44 CDC - TRUSTEE APIF - EQUITY SUB FUND 1 425,000
7 Modarabas and Mutual Funds 38 24,924,243 0.49 CDC - TRUSTEE ATLAS INCOME FUND - MT 1 172,500
CDC - TRUSTEE FIRST HABIB STOCK FUND 1 130,000
8 Shareholders holding 10% 4 4,497,067,993 88.18 CDC - TRUSTEE HBL EQUITY FUND 1 150,000
CDC - TRUSTEE HBL IPF EQUITY SUB FUND 1 100,000
9 General Public : CDC - TRUSTEE HBL ISLAMIC EQUITY FUND 1 300,000
a. local 42,001 138,700,495 2.72 CDC - TRUSTEE HBL MULTI - ASSET FUND 1 100,000
b. Foreign 234 37,108,358 0.73 CDC - TRUSTEE HBL PF EQUITY SUB FUND 1 150,500
CDC - TRUSTEE MCB DCF INCOME FUND 1 2,508,000
10 Others 242 207,463,479 4.07 CDC - TRUSTEE MEEZAN ISLAMIC FUND 1 100,000
Total (excluding : shareholders holding 10%) 42,570 5,100,000,000 100.00 CDC - TRUSTEE MEEZAN TAHAFFUZ PENSION FUND - EQUITY SUB FUND 1 108,000
CDC - TRUSTEE NAFA INCOME FUND - MT 1 4,000
CDC - TRUSTEE NAFA ISLAMIC ACTIVE ALLOCATION EQUITY FUND 1 1,095,000
Trades in PTCL Shares CDC - TRUSTEE NAFA ISLAMIC ASSET ALLOCATION FUND 1 4,400,500
CDC - TRUSTEE NAFA ISLAMIC PRINCIPAL PROTECTED FUND - II 1 8,000
The Directors, Chief Executive Officer, Chief Financial Officer, Company Secretary, Head of Internal Audit and CDC - TRUSTEE NAFA ISLAMIC STOCK FUND 1 560,000
their spouses and minor children have not traded in PTCL shares during the year ended December 31, 2018. CDC - TRUSTEE NATIONAL INVESTMENT (UNIT) TRUST 1 2,439,884
CDC - TRUSTEE NBP AITEMAAD REGULAR PAYMENT FUND 1 551,000
CDC - TRUSTEE NIT INCOME FUND - MT 1 1,000
CDC - TRUSTEE NIT STATE ENTERPRISE FUND 1 1,083,103
CDC - TRUSTEE NIT-EQUITY MARKET OPPORTUNITY FUND 1 3,384,139
CDC-TRUSTEE FIRST HABIB ISLAMIC STOCK FUND 1 100,500
CDC-TRUSTEE NAFA SAVINGS PLUS FUND - MT 1 13,500
GOLDEN ARROW SELECTED STOCKS FUND LIMITED 1 1,700,000
MCBFSL - TRUSTEE AKD ISLAMIC STOCK FUND 1 1,100,000
SAFE WAY FUND LIMITED 1 400,000
TOTAL 30 23,913,643
iii. Directors and their spouses

MR. ABDULRAHIM A. AL NOORYANI 1 1
MR. SERKAN OKANDAN 1 1
MR. MUDASSAR HUSSAIN 1 1
MR. HESHAM ABDULLA QASSIM AL QASSIM 1 1
MR. HATEM DOWIDAR 1 1
MR. KHALIFA AL FORAH AL SHAMSI 1 1
MR. ARIF AHMED KHAN 1 1
MR. MAROOF AFZAL 1 1
MR. RIZWAN MALIK 1 1
TOTAL 9 9
220 221
INFORMATION AS REQUIRED UNDER NOTICE OF THE
CODE OF CORPORATE GOVERNANCE TWENTY FOURTH ANNUAL GENERAL MEETING
Number of Number of Notice is hereby given that the twenty fourth Annual General Meeting (the ‘meeting’) of Pakistan Telecommunication
S. No. Shareholder’s category shareholders shares held Company Limited (the ‘Company’) will be held on Thursday, April 25, 2019 at 10:30 a.m. at S.A. Siddiqui Auditorium,
PTCL Headquarters, Sector G-8/4, Islamabad, to transact the following business:
iv. Public Sector Companies and Corporations
TOTAL 4 113,627,274 Ordinary Business:
1. To confirm minutes of the 5th Extraordinary General Meeting held on October 31, 2018.
v. Banks, Development Financial Institutions,
Non-Banking Financial Institutions, Insurance Companies, 2. To receive, consider and adopt the Audited Accounts for the year ended December 31, 2018, together
Takaful, Modaraba and Pension Funds with the Auditors’ and Directors’ reports.
3. To approve the interim cash dividend of 10% (Re. 1 per Ordinary Share) earlier declared and has
TOTAL 51 145,472,126 already been paid to the shareholders for the year ended December 31, 2018.
vi. Shareholders holding five percent or more 4. To appoint Auditors for the financial year ending December 31, 2019 and to fix their remuneration.
voting Rights in the Listed Company
(name wise details) 5. To transact any other business with the permission of the Chair.
ETISALAT INTERNATIONAL PAKISTAN (LLC) - FIRST CDC ACCOUNT 1 918,190,476
ETISALAT INTERNATIONAL PAKISTAN (LLC) SECOND CDC ACCOUNT 1 407,809,524
PRESIDENT OF PAKISTAN 1 2,974,680,002
PRESIDENT OF PAKISTAN 1 196,387,991
TOTAL 4 4,497,067,993
By order of the Board
Islamabad Saima Akbar Khattak

Dated: February 12, 2019 Company Secretary
222 223
NOTICE OF THE NOTICE OF THE
TWENTY FOURTH ANNUAL GENERAL MEETING TWENTY FOURTH ANNUAL GENERAL MEETING
Notes: A. For Attending the Meeting

(i) In case of individuals, the account holder or sub account holder and/or the person whose securities
1. Participation in the Annual General Meeting are in group account and their registration details are uploaded as per the Regulations, shall
authenticate his/her identity by showing his/her original CNIC or original passport at the time of
Any member of the Company entitled to attend and vote at this meeting may appoint another person as
attending the Meeting.
his/her proxy to attend and vote on his/her behalf. A corporate entity, being a member, may appoint any
person, regardless whether he is a member or not, as its proxy. In case of corporate entities, a resolution of (ii) In case of corporate entity, a resolution of the Board of Directors / Power of Attorney with specimen
the Board of Directors /Power of Attorney with specimen signatures of the person nominated to represent signature of the nominee shall be produced (unless the same has been provided to the Company
and vote on behalf of the corporate entity shall be submitted to the Company along with a completed proxy earlier) at the time of the Meeting.
form. Proxies in order to be effective must be received by the Company at the Registered Office not less
than 48 hours before the time fixed for holding the meeting. B. For appointing Proxies
(i) In case of individuals, the account holder or sub-account holder and/or the person whose securities
2. Closure of Share Transfer Books
are in group account and their registration details are uploaded as per the Regulations shall submit
The Share Transfer Books of the Company will remain closed from April 17, 2019 to April 25, 2019 (both the proxy form as per the above requirement.
days inclusive). Transfers received by our Share Registrar, FAMCO Associates (Pvt.) Limited at 8-F, Next to
Hotel Faran, Nursery, Block-6, P.E.C.H.S., Shahra-e-Faisal, Karachi at the close of business on April 16, (ii) The proxy form shall be witnessed by two persons, whose names, addresses and CNIC numbers
2019 will be treated in time for the purpose of attending the meeting. shall be stated on the proxy form.
(iii) Attested copies of CNICs or passports of the beneficiary owner and the proxy shall be attached with
3. Change of Address
the proxy form.
Members holding shares in physical form are requested to notify any change in address immediately to our
Share Registrar, FAMCO Associates (Pvt.) Limited. Members holding shares in CDC/Participants accounts (iv) The proxy shall produce his/her original CNIC or original passport at the time of the Meeting.
are requested to update their addresses with CDC or their Participants/Stock Brokers.
(v) In case of corporate entity, a resolution of the Board of Directors / Power of Attorney with specimen
4. Notice to shareholders who have not provided their CNICs signature should be submitted along with the proxy form to the Company.
As per directives of the Securities and Exchange Commission of Pakistan (“SECP”) issued vide S.R.O No. 7. Consent for Video Conference Facility
831(I)/2012 dated July 5, 2012, the dividend warrants should bear the Computerized National Identity Card
Number (“CNIC”) of the registered shareholder or the authorized person, except in case of minor(s) and Members can also avail video conference facility in Karachi & Lahore. In this regard please fill the following
corporate shareholder(s). Members who have not yet submitted photocopies of their valid CNICs are once and submit to registered address of the Company at least 10 days before holding of the meeting.
again requested to provide the same with their respective folio numbers to Company’s Share Registrar,
FAMCO Associates (Pvt.) Limited to ensure disbursement of their dividend withheld with the Company.
Members holding shares in CDC/Participants accounts are also requested to update their CNIC/NTN with The video facility will be provided only if the Company receives consent from members holding in aggregate
CDC or their Participants/Stock Brokers. 10% or more shareholding residing at Karachi or Lahore, to participate in the meeting through video
conference at least 10 days prior to date of meeting, the Company will arrange video conference facility in
5. Payment of dividend electronically (e-mandate) that city subject to availability of such facility in that city.
Under the provisions of Section 242 of the Companies Act, 2017, it is mandatory for a listed Company to
pay cash dividend to its shareholders only through electronic mode directly into bank account designated The Company will intimate members regarding venue of video conference facility at least 5 days before the
by the entitled shareholders. date of meeting along with complete information necessary to enable them to access such facility.
In order to receive dividends directly into their bank account, shareholders holding shares in physical form
are requested to fill in Electronic Credit Mandate Form available on Company’s website and send it duly I/we ______________ of __________________, being a member of Pakistan Telecommunication Company
signed along with a copy of CNIC to the Company’s Share Registrar, FAMCO Associates (Pvt.) Limited at Limited holder of __________ Ordinary Shares(s) as per Registered Folio No. ___________ hereby opt for
8-F, Next to Hotel Faran, Nursery, Block-6, P.E.C.H.S., Shahra-e-Faisal, Karachi.
video conference facility at ____________.
Shareholders who hold shares with CDC or Participants / Stock Brokers, are advised to provide the mandate
to CDC or their Participants/ Stock Brokers.
6. Further Guidelines for CDC Account Holders

CDC account holders will have to follow the guidelines issued by the SECP through its Circular 1 of January
Signature of member
26, 2000, stated herein below:
224 225
NOTICE OF THE
TWENTY FOURTH ANNUAL GENERAL MEETING FORM OF PROXY
PAKISTAN TELECOMMUNICATION COMPANY LIMITED
8. Electronic transmission of Audited Financial Statements and Notice of AGM I / We

The shareholders of the Company in their general meeting held on April 27, 2017 consented to receive
of
audited financial statements along with notice of annual general meeting electronically through CD/DVD/
USB instead of receiving the same in hard copies. Soft copies of the Annual Audited Financial Statements being a member of Pakistan Telecommunication Company Limited, and a holder of
and Notice of the AGM are available on Company’s official website www.ptcl.com.pk.
Ordinary Shares as per Share Register Folio No. ____________________________________ and / or CDC Participant 1.D. No.
9. Deduction of withholding tax on the amount of dividend
The following information is being disseminated for information of the members in accordance with the _________________________________ hereby appoint Mr./Mrs./Miss
instructions of the SECP promulgated vide its Circular No. 19/2014 of October 24, 2014;
of _________________________________________________ as my / our proxy to vote for me / us and on my / our behalf at
(i) The Government of Pakistan through Finance Act has made certain amendments in section 150 of the Twenty Fourth Annual General Meeting of the Company to be held on Thursday, April 25, 2019 at 10:30 a.m. and at any
the Income Tax Ordinance, 2001 whereby different rates are prescribed for deduction of withholding adjournment thereof.
tax on the amount of dividend paid by the companies. These tax rates are as under:
Signed this ______________________ day of ______________________ 2019.
a) For filers of income tax returns: 15% Five Rupees
b) For non-filers of income tax returns: 20% Revenue stamp
For beneficial owners as per CDC List.

All shareholders whose names are not entered into the Active Tax-payers List (ATL) provided on the website
of FBR, despite the fact that they are filers, are advised to make sure that their names are entered into ATL
before the date for payment of future cash dividend otherwise tax on their cash dividend will be deducted 1. Witness 2. Witness
as per the rates prescribed by the authority.
(ii) For any further query / problem / information, the investors may contact Company’s Share Registrar S i g n a t u r e S i g n a t u r e
FAMCO Associates (Pvt.) Limited, 8-F, Next to Hotel Faran, Nursery, Block-6, P.E.C.H.S., Shahra-e-Faisal,
Karachi (Ph. # +9221- 34380101 and +9221-34380102. Email: info.shares@famco.com.pk). Name Name
(iii) The corporate shareholders having CDC accounts are required to have their National Tax Number (“NTN”)
updated with their respective participants, whereas corporate physical shareholders should send a Address Address
copy of their NTN certificate to Company or its Share Registrar, FAMCO Associates (Pvt.) Limited. The
shareholders while sending NTN or NTN certificates, as the case may be, must quote company name and
their respective folio numbers.
CNIC No. CNIC No.
or Passport No. or Passport No.
Notes:
i) The proxy need not be a member of the Company. iv) If a proxy is granted by a member who has
ii) The instrument appointing a proxy must be duly deposited his / her shares into Central Depository
stamped, signed and deposited at the office of the Company of Pakistan Limited, the proxy must
Company Secretary PTCL, Headquarters, Sector be accompanied with participant’s ID number
G-8/4, Islamabad, not less than 48 hours before and account / sub-account number along with
the time fixed for holding the meeting. attested copies of the Computerized National
Identity Card (CNIC) or the Passport of the
iii) Signature of the appointing member should match beneficial owner. Representatives of corporate
with his / her specimen signature registered with members should bring the usual documents
the Company. required for such purpose.
226
FORM OF PROXY
AFFIX
CORRECT
POSTAGE
To,
The Company Secretary, 10:30 2019 25 24
PTCL Headquarters, Sector G-8/4,
Islamabad-44000
.2 .1

PTCL Ar 2018 PDF

Uploaded by

Copyright:

Available Formats

PTCL Ar 2018 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PTCL Ar 2018 PDF

Uploaded by

Copyright:

Available Formats

PTCL

Pakistan Telecommunication Company Limited

02 Auditors’ Report to the Members 61-67

Statement of Financial Position 68-69

The Management Team

Operating & Financial Highlights

Operating & Financial Highlights Operating & Financial Highlights

Profit before Tax (PBT) Profit after Tax (PAT)

Earnings per Share Dividend per Share

2013 2014 2015 2016 2017 2018

Operating & Financial Highlights

Revenue Trade Debts

CURRENT ASSETS & CURRENT LIABILITIES (RUPEES IN BILLION)

Current Assets Current Liabilities

TOTAL ASSETS VS SHAREHOLDERS' EQUITY (RUPEES IN BILLION)

181.91 179.57 180.38 182.64 187.35

Total Assets Shareholders’ Equity

Further, performance of the Board and its sub-committees during 2018

Maroof Afzal 2019 04

Islamabad: March 04, 2019

Group CEO’s Message

WE SEEK & VALUE

Content & Multimedia

Carrier and Wholesale Services

Pak Telecom Mobile Limited - Ufone

U Microfinance Bank Limited - Ubank

Accordingly, the present Board consists of 9 directors:

Challenges and Way Forward Rashid Naseer Khan Maroof Afzal

2018‫  ہ    ے‬

COMPOSITION COMPOSITION COMPOSITION COMPOSITION

FUNCTIONS FUNCTIONS FUNCTIONS

• Composition of Board Committees is as of February 12, 2019

KPMG Taseer Hadi & Co.

KPMG Taseer Hadi & CO.

Brainstorming Session with NIC Startup at PTCL HQ

Smart Tube well

Report on the audit of the financial statements

Basis for Opinion

Key Audit Matters S.

• Assessing whether the depreciation has been

• Obtaining the bank confirmations directly from the

• The reconciling balance as at the year-end was

2018 2017 2018 2017

Equity and liabilities Assets

Share capital and reserves

Contingencies and commitments 12

The annexed notes 1 to 46 are an integral part of these financial statements.

2018 2017 2018 2017

Revenue 26 70,099,626 69,619,602 Profit for the year 7,422,447 8,368,017

Other income 30 4,796,873 6,001,194

Earnings per share - basic and diluted (Rupees) 33 1.46 1.64

The annexed notes 1 to 46 are an integral part of these financial statements.

2018 2017 Issued, subscribed and

Distribution to owners of the Company

The annexed notes 1 to 46 are an integral part of these financial statements.

(e) Provision for stores and spares Contract assets

Impairment of financial assets 5.9 Contingent liabilities

5.8 Provisions (ii) Computer software

(a) Current (iv) Accumulated compensated absences

2018‫ ہ ے‬