worldcall financial analysis

Financial Reporting Presentation Worldcall Telecom:

Financial Reporting Presentation Worldcall Telecom

Worldcall Telecommunication:

Worldcall Telecommunication WTL ,an telecommunication company launched its business in June 1996 Initially the business was stated with payphone operations Then with shifts in technology, innovation dedication led us to growth in diversified business with a range of service design to serve the need of the local market In 2008 worldcall become an associate company of omantel after acquisition of major shares

Mission Statement :

Mission Statement MISSION STATEMENT Wct will demonstrate quality in all aspects of its bu ssiness in a manner to be seen in as a way of life They are committed to always remain ahead in delivering quality product and services confirfimg to the requirememt of their entire internal and external customer VISION STATEMENT To be become number one national alternative telecom provider and a leading multi-service operator with regional international footprint.

Competitors :

Competitors PTCL Wi-Tribe Wateen

Balance Sheet as at 31 december2009:

Balance Sheet as at 31 december2009 Assets: Non Current assets: Tangible fixed assets : Note 2008 2009 property plant and equipment 3 12,110,704 9,901,500 Capital work in progress 4 1,530,854 2,541,796 Intangible assets : 5 4,767,265 4,928,080 Investment property 6 76,162 76,162 Long term investment 7 _ 41995 long term deposit 8 68,801 76,483 Total assets 13641558 22443296

Property, Plant and Equipment: :

Property, Plant and Equipment: Property, plant and equipment, except freehold land are stated at cost less accumulated depreciation and any identified impairment loss Depreciation on all property, plant an equipment is charged to profit on the straight line method. Residual value and useful life of assets are reviewed atleast each financial year an adjusted if impact of depreciation is significant. Depreciation on additions to property, plant and equipment is charged from the month in which an asset is acquired. No depreciation is charged for the month in which the asset is disposed off.

Cont…:

Cont… Capital work in progress Stated at cost less any identified impairment loss. Intangible assets: These are stated at cost less accumulated amortization and any identified impairment loss. Charged from the month in which an asset is acquired or capitalized. Amortization charge during the period /year as follow Note 2009 2008 Direct cost 32 100,329 49,287 capitalized during the year /period 60,486 30,596 investment property Investment properties are initially recognized at cost, being the fair value of the consideration given, subsequent to initial recognition these are stated at fair value. The fair value is determined annually by an independent approved value

Current Assets:

Current Assets Note 2009 2008 Stock in trade 317,614 418575 Trade debts 9 182,105 143,253 Loans advances 10 2,116,744 975888 Deposit and prepayments 11 589,790 441,185 Other receivable 12 181,918 231,650 short term investment available for sale 13 15,890 186,398 income tax recoverable net 378,439 344,072 cash and bank balances 14 336,480 564,188 Total assets 4,262,091 3437898

Current Assets:

Current Assets Stores and spares Useable stores and spares are valued principally at weighted average cost, while items considered obsolete are carried at nil value. Stock in trade Cost is determined on weighted average basis. Net realizable value is the estimated selling price in ordinary course of business, less estimated incidental selling cost. Trade debts Trade debts and other receivables are recognized initially at fair value and subsequently measured at amortized cost less any identified impairment loss. A provision for impairment of trade and other receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables.

Currents Liabilities:

Currents Liabilities Note 2008 2oo9 Current maturities of non C. liabilities 15 1858,591 5151,49 Running finance under mark-up Arrangement-secured 16 1,045,660 427,240 Trade and other payables 17 2,239,121 1,862,419 Interest and mark –up accrued 18 166,605 175,371 Total liabilities 5309977 2,9801,79

Non current liabilities:

Non current liabilities Note 2009 2008 Term finance certificates secured 19 3,364,861 4,018,133 Deferred taxation 20 398,122 553400 Retirement benefit 21 175,942 158,214 Liabilities against assets 22 18542 63,444 Long term payables 23 2,125,22 502,674 Long term deposit 24 44,160 4,6111 License fee payable - 972,125 Contingencies commitments 25 6,126,817 63,14,101

Slide 13:

Term finance certificates Term finance certificates are stated at amortized cost using effective interest rate. Deferred taxation Deferred tax is provided using the balance sheet liability method in respect of all temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of the taxable profit.

Share capital and reserves:

Share capital and reserves Authorized capital Note 2009 2008 (900,000,000 )31 dec 2008:900000000 900000 900000 ordinary share of 10 each Issued subscribed and paid up capital 26 8,605,716 8,605,716 Share premium 27 837,335 837,335 Fair value reserve 70,475 230,713 Accumulated profit 1,674,903 2172,537 1,104,7479 11384875 Surplus revaluation 28 331,554 324,759 1,1354,053 1,170,9634

Profit and loss account for the year ended 31 December 2009 :

Profit and loss account for the year ended 31 December 2009 Note 2009 2008 Revenue net 29 8,408,275 3,091,482 Direct cost 30 ( 7,036,603) (3,226,0757) Gross profit Operating cost 1,356,317 1,133,279 Operating profit/loss 15,355 302,554 Finance cost 32 523,025 163,182 Impairment loss on available 13 167,865 - for sale financial assets Other operating income 33 133,473 98,568

cont… Cont…:

cont… Cont… Note 2009 2008 Other expense 33 81,461 23,113 loss before taxation 623,523 390,281 Taxation 35 132,704 90,993 Loss after taxation ( 490,819 ) (299,288 ) Loss per share 36 (0.57) (0.35)

Slide 17:

Finance cost: It is the price of obtaining loan capital. Finance cost is accounted for on an accrual basis. Impairment losses: The carrying amount of the Company's assets except for, inventories, investment property and deferred tax asset, are reviewed at each balance sheet date to determine whether there is any indication of impairment loss. If any such indication exists, the asset's recoverable amount is estimated in order to determine the extent of the impairment loss, if any. For goodwill, the recoverable amount is estimated at each balance sheet date.

Foreign currencies::

Foreign currencies: All monetary assets and liabilities in foreign currencies are translated into rupees at exchange rates prevailing at the balance sheet date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated into rupees at exchange rates prevailing at the date of transaction. Non-monetary assets and liabilities denominated in foreign currency that are stated at fair value are translated into rupees at exchange rates prevailing at the date when fair values are determined.

Accounting convention and basis of preparation:

Accounting convention and basis of preparation These financial statements have been prepared under the historical cost convention, except for revaluation of investment properties, plant and equipment, intangible assets and certain financial assets at fair value, and recognition of certain employee benefits and financial liabilities at present value.

Direct cost:

Direct cost Interconnect, settlement and other charges 4,825,698 1,230,561 Bandwidth and other PTCL charges 364,520 142,470 Depreciation 3.6 1,110,074 446,153 Amortization of intangible assets 5.4 100,329 49,287 Power consumption and pole 305,545 111,420 Security services 30,745 8,852 PTA c 30.1 65,131 28,463 Cable license fee 32,607 16,790 Salaries and other ben 21,669 7,113 Inventory consu 11,501 8,547 Stores and spares consumed 57,752 61,811 Annual spectrum fee 23,883 8,942 Content c 62,152 21,262 Network maintenance & insurance

Operating cost:

O perating cost Salaries, wages and benefits 626,012 289,199 Marketing, advertisement and selling expenses 109,314 79,432 Rent, rates and taxes 92,374 40,069 Communications 17,459 12,746 Transportation 62,108 43,804 Legal and professiona 50,075 5,364 Insurance 45,114 20,760 Utilities 45,575 21,043 Printing and stationery 10,681 10,652 Entertainment 18,350 12,920 Travel and conveyance 76,656 36,840 Repairs and maintenance 23,651 9,193 Provision for doubtful debts

Con:

C on Donations 31.1 37 77 Fees and subscriptions 3,343 820 Directors meeting f 5,624 - Postage and courier 2,639 2,137 Newspapers and periodicals 428 345 Auditor's remuneratio 31.2 6,675 2,353 Depreciation 3.6 75,761 40,308 Miscellaneous 27,904 8,284 1,356,317 1,133,279

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31.2 Auditor's remuneration Statutory audit 3,750 2,330 Half year revie 1,000 - International reporting 1,750 - Out of pocket expenses 175 23 6,675 2,353 Finance cost Mark-up on long term loans 32.1 30,346 25,515 Mark-up on short term loans 99,119 15,483 Interest on PTA license fee 128,656 58,571 Financial charge on leased liabilities 15,892 13,154 Mark up on Term Finance Certificates 32.1 242,377 46,269 Bank charges and commission 6,635 4,190 523,025 163,182 Finance cost Mark-up on long term loans 32.1 30,346 25,515 Mark-up on short term loans 99,119 15,483 Interest on PTA license fee 128,656 58,571 Financial charge on leased liabilities 15,892 13,154 Mark up on Term Finance Certificates 32.1 242,377 46,269 Bank charges and commission 6,635 4,190 523,025 163,182

Slide 25:

Finance cost Mark-up on long term loans 32.1 30,346 25,515 Mark-up on short term loans 99,119 15,483 Interest on PTA license fee 128,656 58,571 Financial charge on leased liabilities 15,892 13,154 Mark up on Term Finance Certificates 32.1 242,377 46,269 Bank charges and commission 6,635 4,190 523,025 163,182

Slide 26:

Income from financial assets Income on deposit and saving accounts 35,556 28,242 Dividend income 961 1,016 Mark-up on advance to associated company 5,090 2,621 41,607 31,879 Income from non-financial assets Rental income from investment property 5,158 2,378 Scrap sales 577 248 Gain on sale of property, plant and equipment 6,224 46,814 Miscellaneous 79,907 17,249 91,866 66,689 133,473 98,568

Otherexpense :

O therexpense Provision for impairment of long term investment - 9,466 Provision for winding up cost of subsidiary 51,981 - Exchange loss 29,480 13,647 Taxation for the year/period Current 35.1 22, 573 196 Deferred (155,277) (91,189) (132,704) (90,993) Taxation for the year/period Current 35.1 22,573 196 Deferred (155,277) (91,189) (132,704) (90,993)

Slide 28:

Loan and advances Loans and advances granted by banks help in meeting short-term and long term financial needs of business enterprises

Deferred:

Deferred Deferred tax is provided using the balance sheet liability method in respect of all temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of the taxable profit. deferred tax liability generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilized. The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Deferred tax assets and liabilities are calculated at the rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited in the profit and loss account, except in the case of items credited or charged to equity in which case it is included in equity. generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilized . The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized . Deferred tax assets and liabilities are calculated at the rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited in the profit and loss account, except in the case of items credited or charged to equity in which case it is included in equity .